As filed with the Securities and Exchange Commission on April 19, 2001.

File No. 33-64945
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)

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

Massachusetts 6311 04-2664016
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Industrial Classification Identification No.)
Organization) Code Number)

200 Clarendon Street
Insuance and Separate Account Dept.- Law Sector
Boston, Massachusetts 02117
(617) 572-9196
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)

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

Arnold R. Bergman, Esquire
John Hancock Life Insurance Company
Insuance and Separate Account Dept.- Law Sector
John Hancock Place
Boston, Massachusetts 02117
(Name, address including zip code, and telephone number)

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

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: (X)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CROSS REFERENCE SHEET

Form S-1 Item Prospectus Caption
------------- ------------------

1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus..............................Outside Front Cover Page

2. Inside Front and Outside Back
Cover Pages of Prospectus.............................Inside Front Cover

3. Summary Information, Risk
Factors and Ratio of Earnings to
Fixed Charges.........................................Basic Information; How will
the value of my investment in the
contract change over time? What
fees and charges will be deducted from my
contract? Experts and financial statements.

4. Use of Proceeds.......................................How the guarantee period works

5. Determination of Offering Price.......................Not Applicable

6. Dilution..............................................Not Applicable

7. Selling Security Holders..............................Not Applicable

8. Plan of Distribution..................................Distribution of the Contracts

9. Description of Securities to be
Registered............................................What is the contract? What annuity
benefits does the contract provide?
Who should purchase a contract, The
accumulation period.

10. Interests of Named Experts and
Counsel...............................................Not Applicable

11. Information with Respect to the
Registrant............................................Description of JHVLICO

12. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities...................................... Not Applicable

PROSPECTUS DATED MAY 1, 2001

--------------------------------------------------------------------
REVOLUTION ACCESS VARIABLE ANNUITY
--------------------------------------------------------------------

a deferred combination fixed and variable annuity contract
issued by
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY ("JHVLICO")

The contract enables you to earn fixed rates of interest that we guarantee
for stated periods of time ("guarantee periods") and investment-based
returns in the following variable investment options:

- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------

Equity Index........................................... SSgA Funds Management, Inc.
Growth & Income........................................ Independence Investment LLC and Putnam Investment Management LLC
Large Cap Value........................................ T. Rowe Price Associates, Inc.
Large Cap Value CORE(SM)............................... Goldman Sachs Asset Management
Large Cap Growth....................................... Independence Investment LLC
Large Cap Aggressive Growth............................ Alliance Capital Management L.P.
Large/Mid Cap Value.................................... Wellington Management Company, LLP
Fundamental Growth..................................... Putnam Investment Management LLC
Mid Cap Growth......................................... Janus Capital Corporation
Small/Mid Cap CORE(SM)................................. Goldman Sachs Asset Management
Small/Mid Cap Growth................................... Wellington Management Company, LLP
Small Cap Equity....................................... Capital Guardian Trust Company
Small Cap Value........................................ T. Rowe Price Associates, Inc.
Small Cap Growth....................................... John Hancock Advisers, Inc.
V.A. Relative Value.................................... John Hancock Advisers, Inc.
AIM V.I. Value......................................... A I M Advisors, Inc.
AIM V.I. Growth........................................ A I M Advisors, Inc.
Fidelity VIP Growth.................................... Fidelity Management & Research Company
Fidelity VIP Contrafund(R)............................. Fidelity Management & Research Company
MFS Investors Growth Stock............................. MFS Investment Management(R)
MFS Research........................................... MFS Investment Management(R)
MFS New Discovery...................................... MFS Investment Management(R)
International Opportunities............................ T. Rowe Price International, Inc.
International Equity................................... Goldman Sachs Asset Management
Fidelity VIP Overseas.................................. Fidelity Management & Research Company
Emerging Markets Equity................................ Morgan Stanley Dean Witter Investment Management, Inc.
Janus Aspen Worldwide Growth........................... Janus Capital Corporation
Real Estate Equity..................................... Independence Investment LLC and Morgan Stanley Dean Witter Investment
Management, Inc.
Health Sciences........................................ Putnam Investment Management LLC
V.A. Financial Industries.............................. John Hancock Advisers, Inc.
V.A. Technology........................................ John Hancock Advisers, Inc.
Managed................................................ Independence Investment LLC and Capital Guardian Trust Company
Global Balanced........................................ Capital Guardian Trust Company
Short-Term Bond........................................ Independence Investment LLC
Bond Index............................................. Mellon Bond Associates, LLP
Active Bond............................................ John Hancock Advisers, Inc.
V.A. Strategic Income.................................. John Hancock Advisers, Inc.
High Yield Bond........................................ Wellington Management Company, LLP
Global Bond............................................ Capital Guardian Trust Company
Money Market........................................... Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------

The variable investment options shown on page 1 are those available as of
the date of this prospectus. We may add, modify or delete variable investment
options in the future.

When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of one or more of the
following: the John Hancock Declaration Trust, the John Hancock Variable Series
Trust I, the AIM Variable Insurance Funds, Fidelity's Variable Insurance
Products Fund (Service Class) and Variable Insurance Products Fund II (Service
Class), the Janus Aspen Series (Service Shares Class), and the MFS Variable
Insurance Trust (Initial Class) (together, "the Series Funds"). In this
prospectus, the investment options of the Series Funds are referred to as funds.
In the prospectuses for the Series Funds, the investment options may also be
referred to as "funds," "portfolios" or "series."

Each Series Fund is a so-called "series" type mutual fund registered with
the Securities and Exchange Commission ("SEC"). The investment results of each
variable investment option you select will depend on those of the corresponding
fund of one of the Series Funds. Each of the funds is separately managed and has
its own investment objective and strategies. Attached at the end of this
prospectus is a prospectus for each Series Fund. The Series Fund prospectuses
contain detailed information about each available fund. Be sure to read those
prospectuses before selecting any of the variable investment options shown on
page 1.

For amounts you don't wish to invest in a variable investment option, you
can choose among several guarantee periods, each of which has its own guaranteed
interest rate and expiration date. If you remove money from a guarantee period
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 guarantee period. This is known as a "market
value adjustment."

JOHN HANCOCK ANNUITY SERVICING OFFICE
-------------------------------------

Mail Delivery Phone:
------------- ------
1-800-824-0335
529 Main Street
Charlestown, MA 02129 Fax:
----
1-617-886-3070

Contracts are not deposits or obligations of, or insured, endorsed, or
guaranteed by the U.S. government, any bank, the Federal Deposit Insurance
Corporation, the federal Reserve Board, or any other agency, entity or person,
other than JHVLICO. They involve investment risks including the possible loss of
principal.

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

Please note that the SEC has not approved or disapproved securities, or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged the
prospectus in the following way:

. The first section contains an "Index Of Key Words."

. Behind the index is the "Fee Table." This section highlights the various
fees and expenses you will pay directly or indirectly, if you purchase a
contract.

. The next section is called "Basic Information." It contains basic
information about the contract presented in a question and answer format.
You should read the Basic Information before reading any other section of
the prospectus.

. Behind the Basic Information is "ADDITIONAL INFORMATION." This section
gives more details about the contract. It generally does not repeat
information contained in the Basic Information.

The Series Funds' prospectuses are attached at the end of this prospectus. You
should save these prospectuses for future reference.

- --------------------------------------------------------------------------------
IMPORTANT NOTICES

This is the prospectus - it is not the contract. The prospectus simplifies many
contract provisions to better communicate the contract's essential features.
Your rights and obligations under the contract will be determined by the
language of the contract itself. On request, we will provide the form of
contract for you to review. In any event, when you receive your contract, we
suggest you read it promptly.

We've also filed with the SEC a "Statement of Additional Information," dated
May 1, 2001. This Statement contains detailed information not included in the
prospectus. Although a separate document from this prospectus, the Statement of
Additional Information has the same legal effect as if it were a part of this
prospectus. We will provide you with a free copy of the Statement upon your
request. To give you an idea what's in the Statement, we have included a copy
of the Statement's table of contents on page 49.

The contracts are not available in all states. 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.

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

INDEX OF KEY WORDS

We define or explain each of the following key words used in this prospectus on
the pages shown below:

Key word Page

Accumulation units...................................... 26
Annuitant............................................... 11
Annuity payments........................................ 14
Annuity period.......................................... 14
Contract year........................................... 12
Date of issue........................................... 12
Date of maturity........................................ 26
Funds................................................... 2
Guarantee period........................................ 13
Investment options...................................... 15
Market value adjustment................................. 13
Premium payments........................................ 11
Surrender............................................... 18
Surrender value......................................... 18
Total value of your contract............................ 13
Variable investment options............................. cover
Withdrawal.............................................. 18

FEE TABLE

The following fee table shows the various fees and expenses that you will
pay, either directly or indirectly, if you purchase a contract. The table does
not include charges for premium taxes (which may vary by state) or fees for any
optional benefit riders that you select.

Annual Contract Fee (applies only to Contracts of less than $50,000) $ 30

Annual Contract Expenses (as a % of the average total value of the contract)

. Asset-based Charge (for administration and mortality and expense
risks) 1.25%

This charge doesn't apply to amounts held in the guarantee periods.

Annual Fund Expenses (based on % of average net assets)

The funds must pay investment management fees and other operating expenses.
These fees and expenses are different for each fund and reduce the investment
return of each fund. Therefore, they also indirectly reduce the return you will
earn on any variable investment options you select. We may also receive payments
from a fund or its affiliates at an annual rate of up to approximately 0.35% of
the average net assets that holders of our variable life insurance policies and
variable annuity contracts have invested in that fund. Any such payments do not,
however, result in any charge to you in addition to what is disclosed below.

The following figures for the funds are based on historical fund expenses,
as a percentage (rounded to two decimal places) of each fund's average daily
net assets for 2000, except as indicated in the Notes appearing at the end of
this table. Expenses of the funds are not fixed or specified under the terms of
the policy, and those expenses may vary from year to year.

Total Fund Total Fund
Investment Distribution Other Operating Operating Operating
Management and Service Expenses With Expense With Expense Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement
- --------- ---------- -------------- --------------- ------------- -------------

John Hancock Variable Series
Trust I (Note 1):
Equity Index................................................ 0.13% N/A 0.06% 0.19% 0.19%
Growth & Income............................................. 0.68% N/A 0.08% 0.76% 0.76%
Large Cap Value............................................. 0.75% N/A 0.05% 0.80% 0.80%
Large Cap Value CORE (SM)................................... 0.75% N/A 0.10% 0.85% 1.90%
Large Cap Growth............................................ 0.36% N/A 0.10% 0.46% 0.46%
Large Cap Aggressive Growth................................. 0.90% N/A 0.10% 1.00% 1.05%
Large/Mid Cap Value......................................... 0.95% N/A 0.10% 1.05% 1.36%
Fundamental Growth*......................................... 0.90% N/A 0.10% 1.00% 1.04%
Mid Cap Growth.............................................. 0.81% N/A 0.04% 0.85% 0.85%
Small/Mid Cap CORE (SM)..................................... 0.80% N/A 0.10% 0.90% 1.23%
Small/Mid Cap Growth........................................ 0.75% N/A 0.10% 0.85% 0.85%
Small Cap Equity*........................................... 0.90% N/A 0.10% 1.00% 1.03%
Small Cap Value*............................................ 0.95% N/A 0.10% 1.05% 1.29%
Small Cap Growth............................................ 0.75% N/A 0.07% 0.82% 0.82%
International Opportunities................................. 0.83% N/A 0.10% 0.93% 1.09%
International Equity........................................ 1.00% N/A 0.10% 1.10% 1.76%
Emerging Markets Equity..................................... 1.22% N/A 0.10% 1.32% 2.49%
Real Estate Equity.......................................... 1.01% N/A 0.09% 1.10% 1.10%
Health Sciences............................................. 1.00% N/A 0.10% 1.10% 1.10%
Managed..................................................... 0.66% N/A 0.09% 0.75% 0.75%
Global Balanced............................................. 1.05% N/A 0.10% 1.15% 1.44%
Short-Term Bond............................................. 0.30% N/A 0.06% 0.36% 0.36%
Bond Index.................................................. 0.15% N/A 0.10% 0.25% 0.27%

-------------
Total Fund
Investment Distribution and Other Operating Operating
Management Service Expenses With Expense With
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement
- --------- ---------- ---------------- -------------- -------------

John Hancock Variable Series Trust I - continued (Note 1):
Active Bond........................................................... 0.62% N/A 0.10% 0.72%
High Yield Bond....................................................... 0.65% N/A 0.10% 0.75%
Global Bond........................................................... 0.85% N/A 010% 0.95%
Money Market.......................................................... 0.25% N/A 0.04% 0.29%

John Hancock Declaration Trust (Note 2):
V.A. Relative Value................................................... 0.60% N/A 0.19% 0.79%
V.A. Financial Industries............................................. 0.80% N/A 0.10% 0.90%
V.A. Technology....................................................... 0.80% N/A 0.25% 1.05%
V.A. Strategic Income................................................. 0.60% N/A 0.16% 0.76%

Aim Variable Insurance Funds:
AIM V.I. Value........................................................ 0.61% N/A 0.23% 0.84%
AIM V.I. Growth....................................................... 0.61% N/A 0.22% 0.83%

Variable Insurance Products Fund - Service Class (Note 3):
Fidelity VIP Growth................................................... 0.57% 0.10% 0.09% 0.76%
Fidelity VIP Overseas................................................. 0.72% 0.10% 0.17% 0.99%

Variable Insurance Products Fund II - Service Class (Note 3):
Fidelity VIP Contrafund(R)............................................ 0.57% 0.10% 0.09% 0.76%

MFS Variable Insurance Trust - Initial Class shares (Note 4):
MFS Investors Growth Stock**.......................................... 0.75% 0.00% 0.16% 0.91%
MFS Research.......................................................... 0.75% 0.00% 0.10% 0.85%
MFS New Discovery..................................................... 0.90% 0.00% 0.16% 1.06%

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

Notes To Annual Fund Expenses
(1) Under its current investment management agreements with the John Hancock
Variable Series Trust I, John Hancock Life Insurance Company reimburses
a fund when the fund's "other fund expenses" exceed 0.10% of the fund's
average daily net assets (0.00% for Equity Index). Percentages shown for
the Health Sciences Fund are estimates because the fund was not in
operation in 2000. Percentages shown for the Growth & Income,
Fundamental Growth, Small Cap Equity, Real Estate Equity, Managed,
Global Balanced, Active Bond and Global Bond funds are calculated as if
the current management fee schedules, which apply to these funds
effective November 1, 2000, were in effect for all of 2000. Percentages
shown for the Small Cap Value and Large Cap Value funds are calculated
as if the current management fee schedules, which apply to these funds
effective May 1, 2001, were in effect for all of 2000. "CORE(SM)" is a
service mark of Goldman, Sachs & Co.

* Fundamental Growth was formerly "Fundamental Mid Cap Growth," Small Cap
Equity was formerly "Small Cap Value," and Small Cap Value was formerly
"Small/Mid Cap Value."

(2) Percentages shown for John Hancock Declaration Trust funds reflect the
investment management fees currently payable and other fund expenses
allocated in 2000. John Hancock Advisers, Inc. has agreed to limit
temporarily other expenses of each fund to 0.25% of the fund's average
daily assets, at least until April 30, 2002.

(3) Actual annual class operating expenses were lower for each of the Fidelity
VIP funds shown because a portion of the brokerage commissions that the
fund paid was used to reduce the fund's expenses, and/or because through
arrangements with the fund's custodian, credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. See the accomanying prospectus of the fund for details.

(4) MFS Variable Insurance Trust funds have an expense offset arrangement
which reduces each fund's custodian fee based upon the amount of cash
maintained by the fund with its custodian and dividend disbursing agent.
Each fund may enter into other such arrangements and directed brokerage
arrangements, which would also have the effect of reducing the fund's
expenses. "Other Operating Expenses" do not take into account these
expense reductions, and are therefore higher than the actual expenses of
the funds. Had these fee reductions been taken into account, total Fund
Operating Expenses with Reimbursement would equal 0.90% for MFS Investors
Growth Stock, 0.84% for MFS Research and 1.05% for MFS New Discovery. MFS
Investment Management(R) (also doing business as Massachusetts Financial
Services Company) has contractually agreed, subject to reimbursement, to
bear expenses for the MFS Investors Growth Stock and New Discovery funds,
such that the funds' "Other Expenses" (after taking into account the
expense offset arrangement describe above) do not exceed 0.15% for
Investors Growth Stock and 0.15% for New Discovery of the average daily
net assets during the current fiscal year.

** MFS Investors Growth Stock was formerly "MFS Growth Series."

(5) Percentages shown for the Janus Aspen fund are based upon expenses for the
fiscal year ended December 31, 2000, restated to reflect a reduction in
the management fee for the Worldwide Growth fund. Expenses are shown
without the effect of any expense offset arrangement.

Examples

The examples on the following two pages illustrate the current expenses you
would pay, directly or indirectly, on a $1,000 investment allocated to one of
the variable investment options, assuming a 5% annual return on assets. These
examples do not include any applicable premium taxes or any fees for optional
benefit riders. The examples should not be considered representations of past or
future expenses; actual charges may be greater or less than those shown above.
The examples assume fund expenses at rates set forth above for 2000, after
reimbursements. The annual contract fee has been included as an annual
percentage of assets.

If you "surrender" (turn in) your contract at the end of the applicable time
period, you would pay:

- ---------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------
Equity Index $16 $48 $ 83 $182
- ---------------------------------------------------------------------
Growth & Income $21 $66 $113 $243
- ---------------------------------------------------------------------
Large Cap Value $22 $67 $115 $247
- ---------------------------------------------------------------------
Large Cap Value CORE(SM) $22 $69 $117 $252
- ---------------------------------------------------------------------
Large Cap Growth $18 $57 $ 97 $212
- ---------------------------------------------------------------------
Large Cap Aggressive Growth $24 $73 $125 $268
- ---------------------------------------------------------------------
Large/Mid Cap Value $24 $75 $128 $273
- ---------------------------------------------------------------------
Fundamental Growth $24 $73 $125 $268
- ---------------------------------------------------------------------
Mid Cap Growth $22 $69 $117 $252
- ---------------------------------------------------------------------
Small/Mid Cap CORE(SM) $23 $70 $120 $257
- ---------------------------------------------------------------------
Small/Mid Cap Growth $22 $69 $117 $252
- ---------------------------------------------------------------------
Small Cap Equity $24 $73 $125 $268
- ---------------------------------------------------------------------
Small Cap Value $24 $75 $128 $273
- ---------------------------------------------------------------------
Small Cap Growth $22 $68 $116 $249
- ---------------------------------------------------------------------
V.A. Relative Value $22 $67 $114 $246
- ---------------------------------------------------------------------
AIM V.I. Value $22 $68 $117 $251
- ---------------------------------------------------------------------
AIM V.I. Growth $22 $68 $116 $250
- ---------------------------------------------------------------------
Fidelity VIP Growth $21 $66 $113 $243
- ---------------------------------------------------------------------
Fidelity VIP Contrafund(R) $21 $66 $113 $243
- ---------------------------------------------------------------------
MFS Investors Growth Stock $23 $70 $120 $258
- ---------------------------------------------------------------------
MFS Research $22 $69 $117 $252
- ---------------------------------------------------------------------
MFS New Discovery $24 $75 $128 $274
- ---------------------------------------------------------------------
International Opportunities $23 $71 $122 $261
- ---------------------------------------------------------------------
International Equity $25 $76 $130 $278
- ---------------------------------------------------------------------
Fidelity VIP Overseas $24 $73 $125 $267
- ---------------------------------------------------------------------
Emerging Markets Equity $27 $83 $141 $299
- ---------------------------------------------------------------------
Janus Aspen Worldwide Growth $23 $72 $123 $263
- ---------------------------------------------------------------------
Real Estate Equity $25 $76 $130 $278
- ---------------------------------------------------------------------
Health Sciences $25 $76 $130 $278
- ---------------------------------------------------------------------
V.A. Financial Industries $23 $70 $120 $257
- ---------------------------------------------------------------------
V.A. Technology $24 $75 $128 $273
- ---------------------------------------------------------------------
Managed $21 $65 $112 $242
- ---------------------------------------------------------------------
Global Balanced $25 $78 $133 $283
- ---------------------------------------------------------------------
Short-Term Bond $17 $54 $ 92 $201
- ---------------------------------------------------------------------
Bond Index $16 $50 $ 87 $189
- ---------------------------------------------------------------------
Active Bond $21 $65 $111 $239
- ---------------------------------------------------------------------
V.A. Strategic Income $21 $66 $113 $243
- ---------------------------------------------------------------------
High Yield Bond $21 $65 $112 $242
- ---------------------------------------------------------------------
Global Bond $23 $72 $123 $263
- ---------------------------------------------------------------------
Money Market $17 $51 $ 89 $193
- ---------------------------------------------------------------------

If you begin receiving payments under one of our annuity payment options at
the end of the applicable time period, or if you do not surrender your contact,
you would pay:

----------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------
Equity Index $16 $48 $ 83 $182
----------------------------------------------------------------------------
Growth & Income $21 $66 $113 $243
----------------------------------------------------------------------------
Large Cap Value $22 $67 $115 $247
----------------------------------------------------------------------------
Large Cap Value CORE(SM) $22 $69 $117 $252
----------------------------------------------------------------------------
Large Cap Growth $18 $57 $ 97 $212
----------------------------------------------------------------------------
Large Cap Aggressive Growth $24 $73 $125 $268
----------------------------------------------------------------------------
Large/Mid Cap Value $24 $75 $128 $273
----------------------------------------------------------------------------
Fundamental Growth $24 $73 $125 $268
----------------------------------------------------------------------------
Mid Cap Growth $22 $69 $117 $252
----------------------------------------------------------------------------
Small/Mid Cap CORE(SM) $23 $70 $120 $257
----------------------------------------------------------------------------
Small/Mid Cap Growth $22 $69 $117 $252
----------------------------------------------------------------------------
Small Cap Equity $24 $73 $125 $268
----------------------------------------------------------------------------
Small Cap Value $24 $75 $128 $273
----------------------------------------------------------------------------
Small Cap Growth $22 $68 $116 $249
----------------------------------------------------------------------------
V.A. Relative Value $22 $67 $114 $246
----------------------------------------------------------------------------
AIM V.I. Value $22 $68 $117 $251
----------------------------------------------------------------------------
AIM V.I. Growth $22 $68 $116 $250
----------------------------------------------------------------------------
Fidelity VIP Growth $21 $66 $113 $243
----------------------------------------------------------------------------
Fidelity VIP Contrafund(R) $21 $66 $113 $243
----------------------------------------------------------------------------
MFS Investors Growth Stock $23 $70 $120 $258
----------------------------------------------------------------------------
MFS Research $22 $69 $117 $252
----------------------------------------------------------------------------
MFS New Discovery $24 $75 $128 $274
----------------------------------------------------------------------------
International Opportunities $23 $71 $122 $261
----------------------------------------------------------------------------
International Equity $25 $76 $130 $278
----------------------------------------------------------------------------
Fidelity VIP Overseas $24 $73 $125 $267
----------------------------------------------------------------------------
Emerging Markets Equity $27 $83 $141 $299
----------------------------------------------------------------------------
Janus Aspen Worldwide Growth $23 $72 $123 $263
----------------------------------------------------------------------------
Real Estate Equity $25 $76 $130 $278
----------------------------------------------------------------------------
Health Sciences $25 $76 $130 $278
----------------------------------------------------------------------------
V.A. Financial Industries $23 $70 $120 $257
----------------------------------------------------------------------------
V.A. Technology $24 $75 $128 $273
----------------------------------------------------------------------------
Managed $21 $65 $112 $242
----------------------------------------------------------------------------
Global Balanced $25 $78 $133 $283
----------------------------------------------------------------------------
Short-Term Bond $17 $54 $ 92 $201
----------------------------------------------------------------------------
Bond Index $16 $50 $ 87 $189
----------------------------------------------------------------------------
Active Bond $21 $65 $111 $239
----------------------------------------------------------------------------
V.A. Strategic Income $21 $66 $113 $243
----------------------------------------------------------------------------
High Yield Bond $21 $65 $112 $242
----------------------------------------------------------------------------
Global Bond $23 $72 $123 $263
----------------------------------------------------------------------------
Money Market $17 $51 $ 89 $193
----------------------------------------------------------------------------

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked
questions about the contract. Here are the page numbers where the questions and
answers appear:

Question Starting on page
-------- ----------------

What is the contract?.......................................................... 11

Who owns the contract?......................................................... 11

Is the owner also the annuitant?............................................... 11

How can I invest money in a contract?.......................................... 11

How will the value of my investment in the contract change over time?.......... 13

What annuity benefits does the contract provide?............................... 14

To what extent can JHVLICO vary the terms and conditions of its contracts?..... 14

What are the tax consequences of owning a contract?............................ 14

How can I change my contract's investment allocations?......................... 15

What fees and charges will be deducted from my contract?....................... 17

How can I withdraw money from my contract?..................................... 18

What happens if the annuitant dies before my contract's date of maturity?...... 19

What other benefits can I purchase under a contract?........................... 20

Can I return my contract?...................................................... 22

What is the contract?

The contract is a deferred payment variable annuity contract. 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 "date
of maturity." 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 buying the contract will be 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?

Again, that's up to you. The annuitant is the person upon whose death the
contract's death benefit becomes payable. Also, the annuitant receives payments
from us under any annuity option that commences during the annuitant's lifetime.
In many cases, the same person is both the annuitant and the owner of a
contract. However, you are free to name another person as annuitant or joint
annuitant. You could also name as joint annuitants two persons other than
yourself.

How can I invest money in a contract?

Premium payments

We call the investments you make in your contract premiums or premium
payments. In general, you need at least a $25,000 initial premium payment to
purchase a contract. If you purchase your contract through the automatic
investment plan, different minimums may apply. If you choose to contribute more
money into your contract, each subsequent premium payment must be at least $200
($100 for the annuity direct deposit program). If your contract's total value
ever falls to zero, we may terminate it. Therefore, you may need to pay more
premiums to keep the contract in force.

Applying for a contract

An authorized representative of the broker-dealer or financial institution
through whom you purchase your contract will assist you in (1) completing an
application or placing an order for a contract and (2) transmitting it, along
with your initial premium payment, to the John Hancock Annuity Servicing Office.

Once we receive your initial premium payment and all necessary information,
we will issue your contract and invest your initial premium payment within two
business days. If the information is not in good order, we will contact you to
get the necessary information. If for some reason, we are unable to complete
this process within 5 business days, we will either send back your money or get
your permission to keep it until we get all of the necessary information.

In certain situations, we will issue a contract upon receiving the order of
your broker-dealer or financial institution but delay the effectiveness of the
contract until we receive your signed application. (What we mean by "delaying
effectiveness" is that we will not allow allocations to the variable investment
options until we receive your signed application.) In those situations, if we do
not receive your signed application within our required time period, we will
deem the contract void from the beginning and return your premium payment.

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.

Limits on premium payments

You can make premium payments of up to $1,000,000 in any one contract year.
The total of all new premium payments and transfers that you allocate to any
one variable 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 premium payments at any time before the date of maturity. However,

you may not make any premium
if your contract is used to fund payments after the annuitant
reaches age
------------------------------------------------------------------
a "tax qualified plan"* 70 1/2**
------------------------------------------------------------------
a non-tax qualified plan 85
------------------------------------------------------------------

* as that term is used in "Tax Information," beginning on page 29.
** except for a Roth IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than age
84. We may waive any of these limits, however.

Ways to make premium payments

Premium 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."

We will not accept credit card checks. Nor will we accept starter or third
party checks that fail to meet our administrative requirements.

Premium payments after the initial premium payment should be sent to the
John Hancock Annuity Servicing Office at the address shown on page 2 of this
prospectus. We will also accept premium payments by wire. We will accept your
initial premium payment by exchange from another insurance company. You can find
information about wire payments under "Premium payments by wire," below.

You can find information about other methods of premium payment by
contacting your broker-dealer or by contacting the John Hancock Annuity
Servicing Office.

Once we have issued your contract and it becomes effective, we credit you
with any additional premiums you pay as of the day we receive them at the John
Hancock Annuity Servicing Office.

Premium payments by wire

If you purchase your contract through a broker-dealer firm or financial
institution, you may transmit your initial premium payment by wire order. Your
wire orders must include information necessary to allocate the premium payment
among your selected investment options.

If your wire order is complete, we will invest the premium payment in your
selected investment options as of the day we received the wire order. If the
wire order is incomplete, we may hold your initial premium payment for up to 5
business days while attempting to obtain the missing information. If we can't
obtain the information within 5 business days, we will immediately return your
premium payment, unless you tell us to hold the premium payment

for 5 more days pending completion of the application. Nevertheless, until we
receive and accept a properly completed and signed application, we will not:

. issue a contract;

. accept premium payments; or

. allow other transactions.

After we issue your contract, subsequent premium payments may be
transmitted by wire through your bank. Information about our bank, our account
number, and the ABA routing number may be obtained from the John Hancock Annuity
Servicing Office. Banks may charge a fee for wire services.

How will the value of my investment in the contract change over time?

Prior to a contract's date of maturity, 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 table
beginning on page 5. 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 have credited
to your contract in any variable investment option. We describe these charges
under "What fees and charges will be deducted from my contract?" beginning on
page 20.

The amount you've invested in a guarantee period will earn interest at the
rate we have set for that period. The interest rate depends upon the length of
the guarantee period you select. We currently make available various guarantee
periods with durations of up to ten years. As long as you keep your money in a
guarantee period 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 guarantee period 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 had on the market value of a debt instrument with
terms comparable to that guarantee period. 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')" beginning
on page 25.

At any time before the date of maturity, the total value of your contract
equals:

. the total amount you invested,

. 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 guarantee
period,

. 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 guarantee period.

What annuity benefits does the contract provide?

If your contract is still in effect on its date of maturity, 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 date of maturity.

Therefore you should exercise care in selecting your date of maturity and
your choices that are in effect on that date.

You should carefully review the discussion under "The annuity period,"
beginning on page 26, for information about all of these choices you can make.

To what extent can JHVLICO vary the terms and conditions of its 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 reside. 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, guarantee periods, 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 "Certain changes" in the Additional Information 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:

. partial withdrawal (including systematic withdrawals)

. full withdrawal ("surrender")

. payment of death benefit proceeds as a single sum upon the annuitant's
death

. periodic payments under one of our annuity payment options

In addition, if you elect the accumulated value enhancement rider, the
Internal Revenue Service might take the position that the annual charge for this
rider is deemed a withdrawal from the contract which is subject to income tax
and, if applicable, the special 10% penalty tax for withdrawals before the age
of 59 1/2.

How much you will be taxed on a 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 tax qualified retirement plan for which the contract is
being used, if any, and

. the circumstances under which the payments are made.

If your contract is issued in connection with a tax-qualified retirement
plan, all or part of your premium payments may be tax-deductible.

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 premiums you paid or on any earnings under the contract.

The favorable tax benefits available for annuity contracts issued in
connection with tax-qualified plans are also generally available for other types
of investments of tax-qualified plans, such as investments in mutual funds,
equities and debt instruments. You should carefully consider whether the
expenses under an annuity contract issued in connection with a tax-qualified
plan, and the investment options, death benefits and lifetime annuity income
options provided under such an annuity contract, are suitable for your needs and
objectives.

How can I change my contract's investment allocations?

Allocation of premium payments

When you apply for your contract, you specify the variable investment
options or guarantee periods (together, your investment options) in which your
premium payments will be allocated. You may change this investment allocation
for future premium payments at any time. Any change in allocation will be
effective as of receipt of your request at the John Hancock Annuity Servicing
Office.

Currently, you may use a maximum of 18 investment options over the life of
your contract. For purposes of this limit, each contribution or transfer of
assets into a variable investment option or guarantee period that you are not
then using or have not previously used counts as one "use" of an investment
option. Renewing a guarantee period upon its expiration does not count as a new
use, however, if the new guarantee period has the same number of years as the
expiring one.

Transferring your assets

Up to 12 times during each year of your contract, you may transfer, free of
any charge,

. all or part of the assets held in one variable investment option to any
other available variable investment option or guarantee period, or

. all or part of the assets held in one guarantee period to any other
available guarantee period or variable investment option (these transfers
may, however, incur a market value adjustment--either positive or
negative.)

Currently, we impose no charge for transfers of more than 12 per contract
year. However, we reserve the right to impose a charge of up to $25 on any
transfers in excess of the 12 free transfers or to prohibit any such transfers
altogether. Transfers under our strategic rebalancing or dollar-cost averaging
programs do not count toward the 12 you are allowed each year. However, you may
not:

. transfer more than $1,000,000 in a contract year into any one variable
investment option or guarantee period, without our prior approval,

. make any transfer that would cause you to exceed the above-mentioned
maximum of 18 investment options,

. make any transfers, during the annuity period, to or from a guarantee
period, or

. make any transfer during the annuity period that would result in more than
four investment options being used at once.

We reserve the right to prohibit a transfer less than 30 days prior to the
contract's date of maturity.

The contract you are purchasing was not designed for professional market
timing organizations or other persons that use programmed or frequent transfers.
The use of such transfers may be disruptive to a fund. We reserve the right to
reject any premium payment or transfer request from any person, if in our
judgment, a fund

would be unable to invest effectively in accordance with its investment
objectives and policies, or would otherwise be potentially adversely affected.

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
John Hancock Annuity Servicing Office at the location shown on page 2.

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.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

Telephone transfers

Once you have completed a written authorization, you may request a transfer
by telephone or by fax. If the fax request option becomes unavailable, another
means of telecommunication will be substituted.

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

The contract you are purchasing was not designed for professional market
timing organizations or other persons or entities that use programmed or
frequent transfers. For reasons such as that, we reserve the right to change our
telephone transaction policies or procedures at any time. We also reserve the
right to suspend or terminate the privilege altogether.

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 dollar-cost averaging program:

. You may elect the program only if the total value of your contract equals
$15,000 or more.

. The amount of each transfer must equal at least $250.

. You may change your dollar-cost averaging 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 guarantee periods are not permitted.

. We reserve the right to suspend or terminate the program at any 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 elected will shift
the percentage allocations among them. The strategic rebalancing program will
periodically transfer your account value among the variable investment options
to reestablish the preset percentages you have chosen. 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 our Annuity
Servicing Office. 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 guarantee periods 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.

What fees and charges will be deducted from my contract?

Asset-based charge

We deduct a daily asset-based charge that compensates us primarily for our
administrative expenses and for the mortality and expense risks that we assume
under the contracts. On an annual basis, this charge equals 1.25% of the value
of the assets you have allocated to the variable investment options. (This
charge does not apply to assets you have in our guarantee periods.)

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

Prior to the date of maturity of your contract, we will deduct $30 each
year from your contract if it has a total value on the contract anniversary of
less than $50,000. We deduct this annual contract fee at the beginning of each
contract year after the first contract year. We also deduct it if you surrender
your contract, unless your total value is $50,000 or more at the time of
surrender. We take the deduction proportionally from each variable investment
option and each guarantee period you are then using. We reserve the right to
increase the annual contract fee to up to $50.

Premium taxes

We make deductions for any applicable premium or similar taxes based on the
amount of a premium payment. Currently, certain local jurisdictions assess a tax
of up to 5% of each premium payment.

premium 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.

Other charges

We offer, subject to state availability, four optional benefit riders. We
charge a separate monthly charge for each rider selected. At the beginning of
each month, we charge an amount equal to 1/12/th/ of the following annual
percentages:

----------------------------------------------------------------------------------------------------------
Enhanced death benefit 0.15% of your contract's total value
----------------------------------------------------------------------------------------------------------

0.40% of your initial premium payment (we reserve
Accumulated value enhancement the right to increase this percentage on a uniform
basis for all riders issued in the same state)
----------------------------------------------------------------------------------------------------------
Guaranteed retirement income benefit 0.30% of your contract's total value
----------------------------------------------------------------------------------------------------------

We deduct the charge proportionally from each of your investment options,
based on your value in each.

How can I withdraw money from my contract?

Surrenders and partial withdrawals

Prior to your contract's date of maturity, 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.

The surrender value of a contract is 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. We will determine the amount
surrendered or withdrawn as of the date we receive your request at the John
Hancock Annuity Servicing Office.

Certain surrenders and withdrawals may result in taxable income to you or
other tax consequences as described under "Tax information," beginning on page
29. 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.

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.

Systematic withdrawal plan

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 that would apply
to an otherwise comparable non-systematic withdrawal. See "How will the value of
my investment in the contract change over time?" beginning on page 13. The same
tax consequences also generally will apply.

The following conditions apply to systematic withdrawal plans:

. You may elect the plan only if the total value of your contract equals
$25,000 or more.

. 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 that $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.

What happens if the annuitant dies before my contract's date of maturity?

If the annuitant dies before your contract's date of maturity, we will pay
a death benefit to the contract's beneficiary. If you have named more than one
annuitant, the death benefit will be payable upon the death of the surviving
annuitant prior to the date of maturity.

If your 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 who is the annuitant 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. (For a description of what happens upon the death of an
owner who is not the annuitant, see "Distribution requirements following death
of owner," beginning on page 28.)

We will pay a "standard" death benefit, unless you have chosen an "enhanced
death benefit rider," as discussed below.

Standard death benefit

The standard death benefit is the greater of:
-------

. the total value of your contract, adjusted by any then-applicable market
value adjustment, or

. the total amount of premium payments made, minus any partial withdrawals.

We calculate the death benefit value as of the day we receive, in proper
order at the John Hancock Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Unless you have elected an optional method of settlement, we will pay the
death benefit in a single sum to the beneficiary you chose prior to the
annuitant's death. If you have not elected an optional method of settlement, the
beneficiary may do so. However, if the death benefit is less than $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,"
beginning on page 28.

Enhanced death benefit rider

If you are under age 80 when you apply for your contract, you may elect to
enhance the standard death benefit by purchasing an enhanced death benefit
rider.

Under this rider, if the annuitant dies before the contract's date of
maturity, we will pay the beneficiary the greatest of:

. the amount of each premium you have paid, accumulated at 5% effective
annual interest (less any partial withdrawals you have taken and not
including any interest on such amounts after they are withdrawn);

. the highest total value of your contract (adjusted by any market value
adjustment) as of any anniversary of your contract to date, plus any
----
premium payments you have made since that anniversary, minus any
-----
withdrawals you have taken since that anniversary; or

. the total value of your contract (adjusted by any market value adjustment)
as of the date we receive due proof of the annuitant's death.

For these purposes, however, we count only those contract anniversaries
that occur (1) before we receive proof of death and (2) before the annuitant
------ ------
attains age 80 1/2.

You may elect this rider only when you apply for the contract and only if
----
this rider is available in your state. As long as the rider is in effect, you
will pay a monthly charge for this benefit. For a description of this charge,
refer to page 18 under "Other charges." 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.

This rider (and related charges) will terminate on the contract's date of
maturity, upon your surrendering the contract, or upon your written request that
we terminate it.

What other benefits can I purchase under a contract?

In addition to the enhanced death benefit rider discussed above, we
currently make available two other optional benefits if your state permits and
you are under age 75 when you apply for a contract. These optional benefits are
provided under riders that contain many terms and conditions not set forth
below. Therefore, you should refer directly to each rider for more complete
information. We will provide you with a copy on request.

Accumulated value enhancement

Under this rider, we will make a contribution to the total value of the
contract on a monthly basis if the covered person (who must be 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 rider 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 rider (the "benefit limit"). The rider must be in effect for 7 years before
any increase will occur.

You may elect this rider only when you apply for the contract. There is a
monthly charge for this rider. The charge is described under "Other charges" on
page 18.

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
premium 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 date of maturity,
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.

If you purchase this rider:

. you and your immediate family will also have access toa national program
designed to help the elderly maintain their independent living by providing
advice about an array of elder care services available to seniors, and

. 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.

In certain marketing materials, this rider may be referred to as
"CARESolutions Plus."

Guaranteed retirement income benefit

Under this rider, we will guarantee the amount of annuity payments you
receive, if the following conditions are satisfied:

. The date of maturity 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 date of
maturity and the date of maturity 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 date of
maturity and the date of maturity must be on or before the annuitant's 90th
birthday.

You cannot elect this rider at any time after your contract is issued. If
you elect 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 do decide to add this rider to your contract, and if you do
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.

If you exercise your rights under this rider, we guarantee that the amount
we apply to this annuity payment option will be the same amount as if your
premium payments had earned a return prescribed by the rider, rather than the
return they earned in the subaccounts you actually chose. Under this rider, we
would apply that guaranteed amount to the fixed annuity payment option specified
in the rider in the same manner and on the same terms as if you had, in the
absence of this rider, elected to apply total contract value in the same amount
to that same annuity payment option.

There is a monthly charge for this rider, which is described at page 21
under "Other charges." 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 have the right to cancel your contract within 10 days
(or longer in some states ) after you receive it. To cancel your contract,
simply deliver or mail it to:

. JHVLICO at the address shown on page 2, or

. the JHVLICO representative who delivered the contract to you.

In most states, you will receive a refund equal to the total value of your
contract on the date of cancellation, 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
will receive a refund of any premiums you've paid. The date of cancellation will
be the date we receive the contract.

ADDITIONAL INFORMATION

This Section of the Prospectus provides additional information that is not
contained in the Basic Information Section on Pages 11 through 22.

Contents of this section Starting on page

Description of JHVLICO................................ 24

Who should purchase a contract?....................... 24

How we support the variable investment options........ 24

How we support the guarantee periods.................. 25

How the guarantee periods work........................ 25

The accumulation period............................... 26

The annuity period.................................... 26

Variable investment option valuation procedures....... 28

Distribution requirements following death of owner.... 28

Miscellaneous provisions.............................. 29

Tax information....................................... 29

Further information about JHVLICO..................... 33

Management's discussion and analysis.................. 35

Performance information............................... 47

Reports............................................... 47

Voting privileges..................................... 47

Certain changes....................................... 47

Distribution of contracts............................. 48

Experts............................................... 48

Registration statement................................ 49

Condensed Financial Information....................... 50

JHVLICO financial statements.......................... 55

Appendix A - Details About Our Guarantee Periods...... 108

Description of JHVLICO

We are JHVLICO, a stock life insurance company organized, in 1979, under the
laws of the Commonwealth of Massachusetts. We have authority to transact
business in all states, except New York. We are a wholly-owned subsidiary of
John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life
insurance company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock became a
subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-
traded corporation. John Hancock's home office is at John Hancock Place, Boston,
Massachusetts 02117. At year end 2000, John Hancock's assets were approximately
$88 billion and it had invested approximately $575 million in JHVLICO in
connection with JHVLICO's organization and operation.

It is anticipated that John Hancock will from time to time make additional
capital contributions to JHVLICO to enable us to meet our reserve requirements
and expenses in connection with our business. John Hancock is committed to make
additional capital contributions if necessary to ensure that we maintain a
positive net worth.

Who should purchase a contract?

We designed these contracts for individuals doing their own retirement
planning, including purchases under plans and trusts that do not qualify for
special tax treatment under the Internal Revenue Code of 1986 (the "Code"). We
provide general federal income tax information for contracts not purchased in
connection with a tax qualified retirement plan beginning on page 24. We also
designed the contracts for purchase under:

. traditional individual retirement annuity ("IRA") plans satisfying the
requirements of Section 408 of the Code;

. non-deductible IRA plans ("Roth IRAs") satisfying the requirements of Section
408A of the Code;

. SIMPLE IRA plans adopted under Section 408(p) of the Code;

. Simplified Employee Pension plans ("SEPs") adopted under Section 408(k) of
the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by public
school systems and certain other tax-exempt organizations; and

. pension or profit-sharing plans qualified under section 401(a) of the Code.

In certain circumstances, we may also make the contracts available for
purchase under deferred compensation plans maintained by a state or political
subdivision or tax exempt organization under Section 457 of the Code.

When a contract forms part of a tax-qualified plan it becomes subject to
special tax law requirements, as well as the terms of the plan documents
themselves, if any. Additional requirements may apply to plans that cover a
"self-employed individual" or an "owner-employee". Also, in some cases, certain
requirements under "ERISA" (the Employee Retirement Income Security Act of 1974)
may apply. Requirements from any of these sources may, in effect, take
precedence over (and in that sense modify) the rights and privileges that an
owner otherwise would have under a contract. Some such requirements may also
apply to certain retirement plans that are not tax-qualified.

We may include certain requirements from the above sources in endorsements or
riders to the affected contracts. In other cases, we do not. In no event,
however, do we undertake to assure a contract's compliance with all plan, tax
law, and ERISA requirements applicable to a tax-qualified or non tax-qualified
retirement plan. Therefore, if you use or plan to use a contract in connection
with such a plan, you must consult with competent legal and tax advisers to
ensure that you know of (and comply with) all such requirements that apply in
your circumstances.

To accommodate "employer-related" pension and profit-sharing plans, we
provide "unisex" purchase rates. That means the annuity purchase rates are the
same for males and females. Any questions you have as to whether you are
participating in an "employer-related" pension or profit-sharing plan should be
directed to your employer. Any question you or your employer have about unisex
rates may be directed to the John Hancock Annuity Servicing Office.

How we support the variable investment options

We hold the fund shares that support our variable investment options in John
Hancock Variable Annuity Account JF (the "Account"), a separate account
established by JHVLICO under Massachusetts law. The Account is registered as a
unit investment trust under the Investment Company Act of 1940 ("1940 Act").

The Account's assets, including the Series Funds' shares, belong to JHVLICO.
Each contract provides that amounts we hold in the Account pursuant to the
contracts cannot be reached by any other persons who may have claims against us.

All of JHVLICO's general assets also support JHVLICO's obligations under the
contracts, as well as all of its other obligations and liabilities. These
general assets consist of all

JHVLICO's assets that are not held in the Account (or in another separate
account) under variable annuity or variable life insurance contracts that give
their owners a preferred claim on those assets.

How we support the guarantee periods

All of JHVLICO's general assets (discussed above) support its obligations
under the guarantee periods (as well as all of its other obligations and
liabilities). To hold the assets that support primarily the guarantee periods,
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 guarantee periods belong to us; any favorable investment
performance on the assets allocated to the guarantee periods belongs to us.
Instead, you earn interest at the guaranteed interest rate you selected,
provided that you don't surrender, transfer, or withdraw your assets prior to
the end of your selected guarantee period.

How the guarantee periods work

Amounts you allocate to the guarantee periods earn interest at a guaranteed
rate commencing with the date of allocation. At the expiration of the guarantee
period, we will automatically transfer its total value to the Money Market
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 guarantee period or periods
of the same or different duration as the expiring guarantee period, 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
John Hancock Annuity Servicing Office at least 30 days prior to the end of the
expiring guarantee period. We will notify you of the end of the guarantee period
at least 30 days prior to its expiration. The first day of the new guarantee
period or other reallocation will begin the day after the end of the expiring
guarantee period.

We currently make available guarantee periods with durations up to ten years.
If you select a guarantee period that extends beyond your contract's date of
maturity, 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 guarantee periods for new allocations to or from those that are available
at any time.

Guaranteed interest rates

Each guarantee period has its own guaranteed rate. We may, at our discretion,
change the guaranteed rate for future guarantee periods. These changes will not
affect the guaranteed rates being paid on guarantee periods that have already
commenced. Each time you allocate or transfer money to a guarantee period, a new
guarantee period, 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 will not make available any
guarantee period offering a guaranteed rate below 3%.

- --------------------------------------------------------------------------------
We make the final determination of guaranteed rates to be declared. We cannot
predict or assure the level of any future guaranteed rates.
- --------------------------------------------------------------------------------

You may obtain information concerning the guaranteed rates applicable to the
various guarantee periods, and the durations of the guarantee periods offered at
any time, by calling the John Hancock Annuity Servicing Office at the telephone
number shown on page 2.

Calculation of market value adjustment ("MVA")

If you withdraw, surrender, transfer, or otherwise remove money from a
guarantee period 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 guarantee period. If the value in that guarantee period 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.

Here is how the MVA works:

- --------------------------------------------------------------------------------
We compare

. the guaranteed rate of the guarantee period from which the assets are
being taken with

. the guaranteed rate we are currently offering for guarantee periods of
the same duration as remains on the guarantee period 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 guarantee
period 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.

The accumulation period

Your value in our variable investment options

Each premium 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 date of maturity, 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 guarantee periods

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments or transferred amounts allocated to the
guarantee period, minus

. the amount of any withdrawals or transfers paid out of the guarantee period,
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 guarantee period, plus

. interest compounded daily on any amounts in the guarantee period from time to
time at the effective annual rate of interest we have declared for that
guarantee period.

The annuity period

Annuity payments are made to the annuitant, if still living. If more than one
annuitant is living at the date of maturity, the payments are made to the
younger of them.

Date of maturity

Your contract specifies the date of maturity, when payments from one of our
annuity options are scheduled to begin. You initially choose a date of maturity
when you complete your application for a contract. Unless we otherwise permit,
the date of maturity must be:

. at least 6 months after the date the first premium 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 date of
maturity. The John Hancock Annuity Servicing Office must receive your new
selection at least 31 days prior to the new date of maturity, however. Also, if
you are selecting or changing your date of maturity for a contract issued under
a tax qualified plan, special limits apply. (See "Contracts purchased for a tax-
qualified plan," beginning on page 31.)

Choosing fixed or variable annuity payments

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 guarantee periods. 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 guarantee periods as of
the date of maturity 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 date
of maturity, we will divide your contract's value among the four investment
options with the largest values (considering all guarantee periods 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 guarantee period
amounts on the date of maturity, 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 date of maturity pursuant to Option A: "life annuity with 10
years guaranteed" (discussed under "Annuity options" on page 28).

Prior to the date of maturity, you may select a different annuity option.
However, if the total value of your contract on the date of maturity is not at
least $5,000, Option A: "life annuity with 10 years guaranteed" 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.

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 amount we first, in accordance with the procedures described above,
calculate the amount to be applied to the fixed annuity option as of the date of
maturity. We then divide the difference by $1,000 and 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 guarantee 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.

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 date of maturity, the following
two options are not available without our consent:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the 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.

Distribution requirements following death of owner

contract has joint owners, these provisions apply upon the death of the first to
die.)

In most cases, these provisions do not cause a problem if you are also the
annuitant under your policy. If you have designated someone other than yourself
as the annuitant, however, your heirs will have less discretion than you would
have had in determining when and how the contract's value would be paid out.

- --------------------------------------------------------------------------------
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.

. 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 the 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 with payments commencing within one year of your death.

If you are the last surviving annuitant, as well as the owner, the entire
interest in the contract on the date of your death equals the death benefit that
then becomes payable. If you are the owner 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 with payments commencing within one year of
your 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.

Notice of the death of an owner or annuitant should be furnished promptly to
the John Hancock Annuity Servicing Office.

Miscellaneous provisions

Assignment; change of owner or beneficiary

To qualify for favorable tax treatment, certain contracts can't be sold;
assigned; discounted; or pledged as collateral for a loan, as security for the
performance of an obligation, or for any other purpose, unless the owner is a
trustee under section 401(a) of the Internal Revenue Code.

Subject to these limits, while the annuitant is alive, you may designate
someone else as the owner by written notice to the John Hancock Annuity
Servicing Office. You choose the beneficiary in the application for the
contract. You may change the beneficiary by written notice no later than receipt
of due proof of the death of the annuitant. Changes of owner or beneficiary will
take effect when we receive them, whether or not you or the annuitant is then
alive. However, these changes are subject to:

. the rights of any assignees of record and

. certain other conditions referenced in the contract.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser before
taking any such action.

Tax information

Our income taxes

We are taxed as a life insurance company under the Internal Revenue Code (the
"Code"). The Account is taxed as part of our operations and is not taxed
separately.

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 Account.
Currently, we do not anticipate making a charge for 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.

Contracts not purchased to fund a tax qualified plan

Undistributed gains

We believe the contracts will 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 owned other than by a natural person does not generally
qualify as an annuity for tax purposes. Any increase in value therefore would
constitute ordinary taxable income to such an owner in the year earned.

Annuity payments

When we make payments under a contract in the form of an annuity, each
payment will result in taxable ordinary income to the payee, to the extent that
each such payment exceeds an allocable portion of your "investment in the
contract" (as defined in the Code). 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.

The Code prescribes the allocable portion of each such annuity payment to be
excluded from income according to one formula if the payments are variable and a
somewhat different formula if the payments are fixed. In each case, speaking
generally, the formula seeks to allocate an appropriate amount of the investment
in the contract to each payment. After the entire "investment in the contract"
has been distributed, any remaining payment is fully taxable.

Surrenders and withdrawals before date of maturity

When we make a single sum payment from a 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 or if no annuity payment option is selected for a death
benefit payment.

When you take a partial withdrawal from a contract, including a payment under
a systematic withdrawal plan, 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 the special penalty tax
for premature withdrawals as explained below. When only the investment in the
contract remains, any subsequent withdrawal made before the date of maturity
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
JVLICO or its affiliates to the owner within the same calendar year will be
treated as if they were a single contract.

Penalty for premature withdrawals

The taxable portion of any withdrawal or single sum payment may also trigger
an additional 10% penalty tax. The penalty tax does not apply to payments made
to you after age 59 1/2, or on account of your death or disability. Nor will it
apply to withdrawals in substantially equal periodic payments over the life of
the payee (or over the joint lives of the payee and the payee's beneficiary).

Accumulated value enhancement rider

If you have elected the accumulated value enhancement rider, the Internal
Revenue Service might take the position that each charge associated with this
rider is deemed a withdrawal from the contract which would be subject to income
tax and, if you have not yet attained age 59 1/2, the special 10% penalty tax
for withdrawals from contracts before the age of 59 1/2. You should consult a
competent tax adviser before electing this rider.

Puerto Rico annuity contracts not purchased to fund a tax qualified plan

Under the Puerto Rico tax laws, distributions from a contract not purchased
to fund a tax qualified plan ("Non-Qualified Contract") before annuitization are
treated as non-taxable return of principal until the principal is fully
recovered. Thereafter, all distributions are fully taxable. Distributions after
annuitization are treated as part taxable income and part non-taxable return of
principal. The amount excluded from gross income after annuitization 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. Puerto Rico does not currently impose an early
withdrawal penalty tax. Generally, Puerto Rico does not require income tax to be
withheld from distributions of income.

Diversification requirements

Each of the funds of the Series Funds intends to qualify as a regulated
investment company under Subchapter M of the Code and meet the investment
diversification tests of Section 817(h) of the Code and the underlying
regulations. Failure to do so could result in current taxation to you on gains
in your contract for the year in which such failure occurred and thereafter.

The Treasury Department or the Internal Revenue Service may, at some future
time, issue a ruling or regulation presenting situations in which it will deem
contract owners to exercise "investor control" over the fund shares that are
attributable to their contracts. The Treasury Department has said informally
that this could limit the number or frequency of transfers among variable
investment options. This could cause you to be taxed as if you were the direct
owner of your allocable portion of fund shares. We reserve the right to amend
the contracts or the choice

of investment options to avoid, if possible, current taxation to the owners.

Contracts purchased for a tax qualified plan

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 tax-qualified plan.
Trustees and administrators of tax qualified plans may, however, generally
invest and reinvest existing plan assets without regard to such Code imposed
limitations on contributions. In addition, certain distributions from tax
qualified plans may be transferred directly to another plan, unless funds are
added from other sources, without regard to such limitations.

Tax-free rollovers

You may make a tax-free rollover from:

. a traditional IRA to another traditional IRA,

. any tax-qualified plan to a traditional IRA,

. any tax-qualified plan to another tax-qualified plan of the same type (i.e.
403(b) to 403(b), corporate plan to corporate plan, etc.), and

. from a regular IRA to a Roth IRA, subject to special restrictions discussed
below.

Your existing plan administrator does not have to withhold tax if you roll
over your entire distribution and you request payment to be made directly to the
successor plan. Otherwise, 20% mandatory withholding will apply and reduce the
amount you can roll over to the new plan, unless you add funds to the rollover
from other sources. Consult a qualified tax adviser before taking such a
distribution.

Traditional IRAs

A traditional individual retirement annuity (as defined in Section 408 of the
Code) generally permits an eligible purchaser to make annual contributions which
cannot exceed the lesser of:

. 100% of compensation includable in your gross income, or

. $2,000 per year.

You may also purchase an IRA contract for the benefit of your spouse
(regardless of whether your spouse has a paying job). You can generally
contribute up to $2,000 for each of you and your spouse (or, if less, your
combined compensation).

You may be entitled to a full deduction, a partial deduction or no deduction
for your traditional IRA contribution on your federal income tax return.

The amount of your deduction is based on the following factors:

. whether you or your spouse is an active participant in an employer sponsored
retirement plan,

. your federal income tax filing status, and

. your "Modified Adjusted Gross Income."

Your traditional IRA deduction is subject to phase out limits, based on your
Modified Adjusted Gross Income, which are applicable according to your filing
status and whether you or your spouse are active participants in an employer
sponsored retirement plan. You can still contribute to a traditional IRA even if
your contributions are not deductible.

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 any
annuity payment, may be excluded from your taxable income when you receive the
proceeds. In general, all other amounts paid out from a traditional IRA contract
(in the form of an annuity, a single sum, or partial withdrawal), are taxable to
the payee as ordinary income. As in the case of a contract not purchased under a
tax-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 similar to those described above for such non-qualified
contracts).

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.

Roth IRAs

In general, you may make purchase payments of up to $2,000 each year for a
type of non-deductible IRA contract, known as a Roth IRA. Any contributions made
during the year for any other IRA you have will reduce the amount you otherwise
could contribute to a Roth IRA. Also, the $2000 maximum for a Roth IRA phases
out for single taxpayers with adjusted gross incomes between $95,000 and
$110,000, for married taxpayers filing jointly with adjusted gross incomes
between $150,000 and $160,000, and for a married taxpayer filing separately with
adjusted gross income between $0 and $10,000.

If you hold your Roth IRA for at least five years the payee will not owe any
federal income taxes or early withdrawal penalties on amounts paid out from the
contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to qualified first-time homebuyers (not to exceed a lifetime limitation of
$10,000) as specified in the Code.

The Code treats payments you receive from Roth IRAs that do not qualify for
the above tax free treatment first as a tax-free return of the contributions you
made. However, any amount of such non-qualifying payments or distributions that
exceed the amount of your contributions is taxable to you as ordinary income and
possibly subject to the 10% penalty tax.

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 $2,000 Roth IRA contribution limit does not apply to converted amounts.

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.

SIMPLE IRA plans

In general, 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. As an eligible employee of the business, you may make
pre-tax contibutions to the SIMPLE IRA plan. You may specify the percentage of
compensation that you want to contribute under a qualified salary reduction
arrangement, provided the amount does not exceed certain contribution limits
(currently $6,000 a year). Your employer must elect to make a matching
contribution of up to 3% of your compensation or a non-elective contribution
equal to 2% of your compensation.

Simplified Employee Pension plans (SEPs)

SEPs are employer sponsored plans that may accept an expanded rate of
contributions from one or more employers. Employer contributions are flexible,
subject to certain limits under the Code, and are made entirely by the business
owner directly to a SEP-IRA owned by the employee. Contributions are tax-
deductible by the business owner and are not includable in income by employees
until withdrawn. The maximum amount that may be contributed to an SEP is the
lesser of 15% of compensation or the IRS compensation limit for the year
($170,000 for the year 2001).

Section 403(b) plans

Under these tax-sheltered annuity arrangements, public school systems and
certain tax-exempt organizations can make premium payments into contracts owned
by their employees that are not taxable currently to the employee.

The amount of such non-taxable contributions each year

. is limited by a maximum (called the "exclusion allowance") that is computed
in accordance with a formula prescribed under the Code;

. may not, together with all other deferrals the employee elects under other
tax-qualified plans, exceed $10,500 (subject to cost of living increases);
and

. is subject to certain other limits (described in Section 415 of the Code).

When we make payments from a 403(b) contract on surrender of the contract,
partial withdrawal, death of the annuitant, or commencement of an annuity
option, the payee ordinarily must treat the entire payment as ordinary taxable
income.

Moreover, the Code prohibits distributions from a 403(b) contract before the
employee reaches age 59 1/2, except:

. on the employee's separation from service, death, or disability,

. with respect to distributions of assets held under a 403(b) contract as of
December 31, 1988, and

. transfers and exchanges to other products that qualify under Section 403(b).

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."

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 premium payments made by the employee.

The non-taxable portion of each annuity payment is determined, under the
Code, according to one formula if the payments are variable and a somewhat
different formula if the payments are fixed. In each case, speaking generally,
the formula seeks to allocate an appropriate amount of the investment in the
contract to each payment. Favorable procedures may also be available to
taxpayers who had attained age 50 prior to January 1, 1986.

IRS required minimum distributions to the employee 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.

"Top-heavy" plans

Certain plans may fall within the definition of "top-heavy plans" under
Section 416 of the Code. This can happen if the plan holds a significant amount
of its assets for the benefit of "key employees" (as defined in the Code). You
should consider whether your plan meets the definition. If so, you should take
care to consider the special limitations applicable to top-heavy plans and the
potentially adverse tax consequences to key employees.

Government deferred compensation plans

You can exclude a portion of your compensation from gross income if you
participate in a deferred compensation plan maintained by:

. a state,

. a political subdivision of a state,

. an agency or intrumentality or a state or political subdivision of a state,
or

. a tax-exempt organization.

As a "participant" in such a deferred compensation plan, any amounts you
exclude (and any income on such amounts) will be includible in gross income only
for the taxable year in which such amounts are paid or otherwise made available
to the annuitant or other payee.

In general, the maximum amount of compensation you can defer under such
tax-favored plans equals the lesser of:

. $7,500 or

. 33 1/3% of your "includible income" (as defined in the Code).

The deferred compensation plan must satisfy several conditions, including the
following:

. the plan 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 shall remain solely the employer's
property and may be subject to the claims of its creditors.

If we make a payment under your contract in the form of an annuity, or in a
single sum such as on surrender or withdrawal, the payment is taxed as ordinary
income.

Withholding on rollover distributions

The tax law requires us to withhold 20% from certain distributions from tax
qualified plans. We do not have to make the withholding, however, if you
rollover your entire distribution to another plan and you request us to pay it
directly to the successor plan. Otherwise, the 20% mandatory withholding will
reduce the amount you can rollover to the new plan, unless you add funds to the
rollover from other sources. Consult a qualified tax adviser before making such
a distribution.

Puerto Rico annuity contracts purchased to fund a tax-qualified plan

The provisions of the tax laws of Puerto Rico vary significantly from those
under the Internal Revenue Code of the United States with respect to the various
"tax qualified" plans described above. Although we may offer variable annuity
contracts in Puerto Rico in connection with "tax qualified" plans, the text of
the prospectus under the subsection "Contracts purchased for a tax qualified
plan" is inapplicable in Puerto Rico and should be disregarded.

See your own tax adviser

The above description of Federal (and Puerto Rico) income tax consequences
to owners of and payees under contracts, and of the different kinds of tax
qualified plans which may be funded by the contracts, is only a brief summary
and is not intended as tax advice. The rules under the Code governing tax
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 consult a qualified tax
adviser.

Further Information About JHVLICO

except New York. JHVLICO is wholly-owned by John Hancock Life Insurance Company
(formerly known as John Hancock Mutual Life Insurance Company, hereinafter
referred to as "JHLICO" or "John Hancock"), a life insurance company organized
under the laws of Massachusetts in 1862. Pursuant to a Plan of Reorganization
approved by the policyholders of John Hancock and the Commonwealth of
Massachusetts Division of Insurance, effective February 1, 2000, John Hancock
converted from a mutual life insurance company to a stock life insurance company
(i.e. demutualized) and became a wholly owned subsidiary of John Hancock
Financial Services, Inc. which is a holding company. In connection with the
reorganization, John Hancock changed its name to John Hancock Life Insurance
Company. In addition, on February 1, 2000, John Hancock Financial Services, Inc.
completed its initial public offering in which 102 million shares of common
stock were issued at an initial public offering price of $17 per share. At
December 31, 2000, JHVLICO had $74.8 billion of gross life insurance in force.

JHVLICO markets its policies through

. John Hancock's sales organization, which includes a career agency
system composed of company-supported independent general agencies and,

. various unaffiliated broker-dealers and certain financial institutions
with which John Hancock and JHVLICO have sales agreements.

In 1993, JHVLICO acquired Colonial Penn Annuity and Life Insurance Company
and renamed it John Hancock Life Insurance Company of America. On March 5, 1998,
the name of the company was changed from John Hancock Life Insurance Company of
America to Investors Partner Life Insurance Company ("IPL").

Selected financial data

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

The following table sets forth certain selected financial data. The
table first presents selected financial data of our consolidated results
of operations for the year ended December 31, 2000 and statement of
financial position data as of December 31, 2000 on a basis of generally
accepted accounting principles ("GAAP"). This data has been derived from
our audited GAAP basis financial statements included elsewhere in this
prospectus. After that, the table presents selected statement of
operations data for each of the two years ended December 31, 2000 and
1999 and statement of financial position data as of December 31, 2000
and 1999 on a basis prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance ("statutory" or "Stat" basis). This
data has been derived from our audited statutory basis financial
statements included elsewhere in this prospectus. After that, the table
presents selected statement of operations data for the years ended
December 31, 1998, 1997 and 1996 and statement of financial position
data as of December 31, 1998, 1997 and 1996 that have been derived from
our audited statutory basis financial statements not included herein.

You should read the following selected historical financial data along
with other information including "Management's Discussion and Analysis"
immediately following this section and our financial statements and the
notes to the financial statements beginning on page 35.

Past results do not necessarily indicate future results.

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

Selected financial data - continued

Year Year Year Year Year
ended ended ended ended ended
December December December December December
31, 2000 31, 2000 31, 1999 31, 1998 31, 1997
(in millions-GAAP) (in millions-Stat) (in millions-Stat) (in millions-Stat) (in millions-Stat)
------------------ ------------------ ------------------ ------------------ ------------------

STATEMENT OF OPERATIONS DATA:
Premiums............................ $ 28.6 $ 945.5 $ 950.8 $1,272.3 $ 872.7
Net investment income............... 213.4 176.7 136.0 122.8 89.7
Net realized capital gains
(losses).......................... (10.6) -- -- -- --
Other income, net.................. 337.3 475.6 605.4 618.1 449.1
--------- --------- --------- -------- --------
TOTAL REVENUES....................... $ 568.7 $ 1,597.8 $ 1,692.2 2,013.2 1,411.5
Total benefits and expenses........ $ 425.5 $ 1,574.4 $ 1,573.6 1,963.9 1,342.5
Federal income tax expense
(credit).......................... 43.8 (18.0) 42.9 33.1 38.5
Net realized capital gains
(losses).......................... -- (18.2) (1.7) (0.6) (3.0)
Net gain/net income................. $ 99.4 $ 23.2 $ 74.0 $ 15.6 $ 27.5
BALANCE SHEET DATA:
Total assets....................... $12,194.7 $10,720.2 $10,613.0 $8,599.0 $6,521.5
Total obligations.................. 11,389.1 10,271.4 10,216.0 8,268.2 6,199.8
Total stockholder's equity/
policyholders' contingency reserve.. $ 805.6 $ 448.8 $ 397.0 $ 330.8 $ 321.7

Year
ended
December
31, 2000
(in millions-GAAP)
------------------

STATEMENT OF OPERATIONS DATA:
Premiums............................ $ 820.6
Net investment income............... 76.1
Net realized capital gains
(losses).......................... --
Other income, net.................. 427.7
---------
TOTAL REVENUES....................... 1,324.4
Total benefits and expenses........ 1,249.0
Federal income tax expense
(credit).......................... 38.6
Net realized capital gains
(losses).......................... (1.5)
Net gain/net income................. $ 35.3
BALANCE SHEET DATA:
Total assets....................... $ 4,567.8
Total obligations.................. 4,284.7
Total stockholder's equity/
policyholders' contingency reserve.. $ 283.1

Management's discussion and analysis

The following narrative reviews our consolidated financial condition and
results of operations as of, and for the year ended, December 31, 2000,
respectively, and, where appropriate, factors that may affect future financial
performance. Also contained herein is a review of our statutory-basis financial
position and results of operations as of, and for the years ended, December 31,
2000, 1999 and 1998, respectively. These discussions should be read in
conjunction with the audited consolidated GAAP-basis and statutory-basis
financial statements and related notes, included elsewhere in this prospectus.

Forward-Looking Information

The statements, analyses, and other information contained herein relating
to trends in JHVLICO's operations and financial results, the markets for
JHVLICO's products, the future development of JHVLICO's business, and the
contingencies and uncertainties to which JHVLICO may be subject, as well as
other statements including words such as "anticipate," "believe," "plan,"
"estimate," "expect," "intend," "will," "should," "may," and other similar
expressions, are "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. Such statements are made based upon management's
current expectations and beliefs concerning future events and their effects on
JHVLICO and may not be those anticipated by management. JHVLICO's actual results
may differ materially from the results anticipated in these forward-looking
statements.

fund companies, banks and investment management firms as well as from other
insurance companies, (4) a decline or increased volatility in the securities
markets, and other economic factors, may adversely affect our business,
particularly our variable life insurance and variable annuity business, (5) our
life insurance sales are highly dependent on a third party distribution
relationship, (6) customers may not be responsive to new or existing products or
distribution channels, (7) interest rate volatility may adversely affect our
profitability, (8) our net income and revenues will suffer if customers
surrender annuities and variable and universal life insurance policies, (9) we
will face losses if the claims on our insurance products, or reductions in rates
of mortality on our annuity products, are greater than we projected, (10) we
face risks relating to our investment portfolio, (11) we may experience
volatility in net income due to changes in standards for accounting for
derivatives and other changes, (12) we are subject to risk-based capital
requirements and possible guaranty fund assessments, (13) the National
Association of Insurance Commissioners' codification of statutory accounting
practices will adversely affect our statutory surplus, (14) we may be unable to
retain personnel who are key to our business, (15) we face risks from ceded
reinsurance business in respect to life insurance,and (16) litigation and
regulatory proceedings may result in financial losses, harm our reputation and
divert management resources.

You are also directed to other risks and uncertainties discussed, as well
as to further discussion of the risks described above, in other documents filed
by us with the United States Securities and Exchange Commission. We specifically
disclaim any obligation to update or revise any forward-looking information,
whether as a result of new information, future developments, or otherwise.

Overview

We are a leading life insurance company providing a broad range of products
and services in one major business, the retail business, which offers insurance
protection and asset gathering products and services primarily to retail
consumers.

Our GAAP revenues are derived principally from:

. premiums on individual life insurance and annuities with life contingencies;

. product charges from variable and universal life insurance products and
annuities;

. net investment income and realized investment gains on general account
assets.

Our GAAP expenses consist principally of insurance benefits provided to
policyholders, interest credited on policyholders' general account balances,
dividends to policyholders, other operating costs and expenses, which include
commissions and general business expenses, net of expenses deferred,
amortization of deferred policy acquisition costs, and premium and income taxes.

Our profitability depends in large part upon: (1) the adequacy of our
product pricing, which is primarily a function of competitive conditions, our
ability to assess and manage trends in mortality and morbidity experience, our
ability to generate investment earnings and our ability to maintain expenses in
accordance with pricing assumptions and (2) the maintenance of our target
spreads between the rate of earnings on our investments and rates credited on
policyholders' general account balances.

Our sales and financial results of our retail business over the last
several years have been affected by general economic and industry trends.
Variable products, including variable life insurance and variable annuities,
have accounted for the majority of recent increases in total premiums and
deposits for the insurance industry as a result of the strong equity market
growth in recent years and the "baby boom" generation reaching its high-earnings
years and seeking tax-advantaged investments to prepare for retirement.

Premiums and deposits of our individual annuity products were $94.3 million
in 2000 as compared to $231.3 million in 1999. Our variable life insurance
product deposits were $853.1 million in 2000 as compared to $719.7 million in
1999.

Reconciliation of GAAP and Statutory Financial Results for the Year Ended
December 31, 2000

GAAP basis net income was $99.4 million and statutory gain from operations
was $41.4 million for the year ended December 31, 2000. Statutory gain from
operations of $41.4 million does not include $3.3 million of statutory gain from
operations from JHVLICO's wholly-owned subsidiary, Investors Partner Life
Insurance Company (IPL) which is accounted for on the statutory equity method of
accounting. In determining statutory gain from operations of $41.4 million,
certain items are either added to, or subtracted from, GAAP basis net income, as
these items receive differing treatment on a GAAP and statutory basis. A
discussion of these reconciling items follows.

a different calculation between statutory and GAAP accounting. These decreases
to GAAP basis net income were offset mainly by increases of $61.8 million for
taxes and $22.8 million for policyholder benefit reserves. Statutory basis
accounting calculates taxes on a tax return basis, with no recognition given to
timing differences. GAAP basis accounting does recognize these timing
differences. Also offsetting decreases to GAAP basis net income were $10.6
million of realized capital losses as realized capital losses are not part of
statutory gain from operations.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
(Statutory Discussion)

Gain from operations before income taxes and net realized capital losses of
$23.4 million for the year ended December 31, 2000 decreased by $95.2 million,
or 80.2%, as compared to gain from operations before income taxes and net
realized capital losses of $118.6 million for the year ended December 31, 1999.
The decrease was primarily attributable to decreases in gain from operations
before income taxes and net realized capital losses of $52.7 million in
annuities, and $38.2 million in traditional life insurance. The annuity decrease
can be partially attributable to a 1999 $22.7 million pre-tax expense
reimbursement adjustment under a modified coinsurance agreement that did not
recur during 2000. Reserve increases in 2000 resulting from the effect of recent
changes in statutory reserve requirements, especially for guaranteed minimum
death in combination with poor separate account performance further contributed
to the annuity decrease. The traditional life decrease was primarily due to a
change in expense allocation that resulted in a $33.3 million pre-tax expense
re-allocation in the fourth quarter of 2000. This adjustment was to properly
reflect expense amounts allocated between JHVLICO and John Hancock.

Premium revenue, net of premium ceded to reinsurers, was $945.5 million for
2000, a decrease of $5.3 million, or .6%, from $950.8 million in 1999. The
decrease was attributable to a decrease of $137.0 million in annuities, which
was largely offset by a combined increase of $131.7 million in variable life,
universal life, and traditional life insurance. The annuity decrease was driven
largely by lower Independence Preferred Annuity product deposits which was
partially offset by higher deposits of the Revolution Annuity product, which was
first sold during the third quarter of 1999. Variable life insurance had an
increase in net premium of $54.5 million compared to 1999, due to increased
sales of the Variable Estate Protection product. Universal life net premium
revenue increased by $48.7 million compared to 1999, driven largely by the
result of single premium ($52.5 million) bank owned life insurance sales
occurring during 2000 that did not occur during 1999. Traditional life insurance
premium revenue increased by $28.5 million compared to 1999 as a result of an
increase in the number of states JHVLICO is licensed to sell traditional
products compared to 1999.

Net investment income was $176.7 million for 2000, an increase of $40.7
million, or 29.9%, from $136.0 million in 1999. This increase was primarily
attributable to an increase of $22.1 million related to universal life
insurance, and an increase of $15.7 million related to variable life insurance,
both attributable to an increasing average asset base.

Other revenue was $475.6 million in 2000, a decrease of $129.8 million, or
21.4%, from $605.4 million reported in 1999. This was primarily the result of a
decrease of $140.9 million in annuities, largely the result of a $146.0 million
decrease in reserve adjustments on reinsurance ceded compared to 1999. This was
somewhat offset by an increase of $7.4 million in universal life insurance, and
an increase of $4.9 million in variable life insurance.

Payments to policyholders and beneficiaries were $340.8 million for 2000, a
decrease of $9.1 million, or 2.6%, from $349.9 million in 1999. This was due to
a decrease of $19.0 million in annuities, the result of an increase in ceded
surrender benefits. Offsetting this decrease was an increase of $8.0 million in
variable life insurance, and an increase of $4.3 million in traditional life
insurance.

Additions to reserves to provide for future payments to policyholders and
beneficiaries were $844.4 million for 2000, a decrease of $44.4 million, or
5.0%, from $888.8 million in 1999. The decrease was primarily attributable to a
decrease of $196.0 million in annuities, the result of lower net annuity
deposits, and lower transfers to JHVLICO's separate accounts compared to 1999.
This decrease was offset by increases of $76.4 million, $52.3 million, and $22.9
million in universal life insurance, variable life insurance, and traditional
life insurance, respectively, compared to 1999. The universal life insurance
reserve increase was primarily the result of single premium ($52.5 million) bank
owned life insurance sales occurring during 2000 that did not occur during 1999.
Both the variable life insurance and traditional life insurance increases are a
result of continued growth in insurance in-force.

Expenses of providing service to policyholders and obtaining new insurance
were $363.4 million for 2000, an increase of $49.0 million, or 15.6%, from
$314.4 million in 1999. This increase was primarily due to an increase of $40.4
million in traditional life insurance, and an increase of $16.6 million in
variable life insurance. These increases were offset by a decrease of $9.4
million in annuities. The traditional life increase can be attributed to a
change in expense allocation that resulted in a $33.3 million pre-tax expense
re-allocation in the fourth quarter of 2000. The variable life increase consists
of a $16.8 million increase in commission expense resulting from the sale of new
and renewal business. The annuity decrease is

predominately due to lower systems expense (lower year 2000 and demutualization
systems expense in 2000). Income taxes were $(18.0) million in 2000 compared to
$42.9 million for 1999, reflecting a federal tax refund in 2000.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
(Statutory Discussion)

Gain from operations before income taxes and net realized capital losses of
$118.6 million for the year ended December 31, 1999 increased by $69.3 million,
or 140.6%, as compared to $49.3 million for the year ended December 31, 1998.
The increase was primarily attributable to increases of $38.8 million in
annuities, $30.3 million in universal life insurance, and $13.9 million in
variable life insurance. These increases were offset by a decrease of $14.2
million in traditional life insurance. The annuity net increase was principally
due to $22.7 million reinsurance reimbursements under a modified coinsurance
agreement occurring during 1999 that did not occur during 1998. Increased
operating gain for universal life was primarily the result of lower acquisition
expenses and premium taxes due to lower sales in 1999. Higher separate account
fee income contributed to the increase in the variable life gain from
operations.

Premium revenue, net of premium ceded to reinsurers, was $950.8 million for
1999, a decrease of $321.5 million, or 25.3%, from $1,272.3 million in 1998. The
decrease was primarily attributable to a decrease of $326.5 million in universal
life premium, due to large single premium ($340.0 million) bank owned life
insurance sales that occurred during 1998 and did not recur during 1999. A $53.3
million decrease in annuity deposits was offset by an increase in variable life
insurance premium of $53.0 million.

Net investment income was $136.0 million for 1999, an increase of $13.2
million, or 10.7%, from $122.8 million in 1998. This increase was attributable
to an increase of $7.3 million related to variable life insurance and an
increase of $6.5 million related to universal life insurance, both attributable
to an increasing average asset base.

Other revenue was $605.4 million in 1999, a decrease of $12.7 million, or
2.1%, from $618.1 million reported in 1998. This decrease was primarily
attributable to decreases of $19.7 million in annuities and $5.2 million in
universal life insurance, which were offset by an increase of $11.9 million in
variable life insurance. The annuity decrease is primarily due to a decrease in
reserve adjustments on reinsurance ceded of $35.4 million, which was partially
offset by higher separate account fee income of $15.0 million. The decrease in
universal life is also the result of a $5.0 million decrease in reserve
adjustments on reinsurance ceded. The variable life increase is primarily the
result of a $7.5 million increase in separate account fee income.

Payments to policyholders and beneficiaries were $349.9 million for 1999,
an increase of $48.5 million, or 16.1%, from $301.4 million in 1998. The
increase was primarily due to an increase of $76.0 million in variable life
insurance, which was offset by decreases of $20.9 million in annuities and $7.9
million in universal life insurance. The variable life increase was principally
due to increased surrenders. The annuity decrease was primarily the result of
increased ceded surrender benefits under a modified coinsurance agreement with
John Hancock. The universal life insurance decrease can be attributed to
decreased death benefits.

Additions to reserves to provide for future payments to policyholders and
beneficiaries were $888.8 million for 1999, a decrease of $471.4 million, or
34.7%, from $1,360.2 million in 1998. The decrease was attributable to decreases
of $345.3 million in universal life insurance, $91.0 million in annuities, and
$52.1 million in variable life insurance. These decreases were partially offset
by an increase of $17.0 million in traditional life insurance. The universal
life decrease is primarily the result of lower 1999 sales of bank owned life
insurance. The annuity and variable life decreases were the result of lower net
amounts transferred to JHVLICO's separate accounts. The increase in traditional
life was due to continued growth in the business.

Expenses of providing service to policyholders and obtaining new insurance
were $314.4 million for 1999, an increase of $40.2 million, or 14.7%, from
$274.2 million in 1998. The increase was primarily due to an increase of $33.3
million in variable life insurance. Of this increase, $9.7 million was due to an
increase of new and renewal commissions, and the remaining $23.6 million was
primarily due to higher systems expenses. Income taxes were $42.9 million in
1999 compared to $33.1 million for 1998.

General Account Investments

Overall Composition of the General Account

The following discussion is presented on a statutory basis of accounting.

Invested assets, excluding separate accounts, totaled $2.5 billion and $2.2
billion as of December 31, 2000 and December 31, 1999, respectively. The
portfolio composition has not significantly changed at December 31, 2000 as
compared to December 31, 1999. The following table shows the composition of
investments in our general account portfolio.

The following table shows the composition of investments in our general
account portfolio.

As of December 31,
--------------------------------------------
2000 1999
------------------- -------------------
Carrying % of Carrying % of
Value Total Value Total
---------- ------- ---------- -------
(in millions) (in millions)

Bonds (1)......................... $1,400.5 55.3% $1,216.3 54.6%
Preferred stocks.................. 44.0 1.7 35.9 1.6
Common stocks..................... 2.8 0.1 3.2 0.1
Investment in affiliates.......... 84.8 3.4 80.7 3.6
Mortgage loans (2)................ 456.0 18.0 433.1 19.4
Real estate....................... 24.5 1.0 25.0 1.1
Policy loans (3).................. 218.9 8.7 172.1 7.7
Other invested assets............. 24.7 1.0 14.8 0.7
Short-term investments............ 226.6 9.0 222.9 10.0
Temporary cash investments (4).... 45.4 1.8 27.2 0.2
---------- ------- ---------- -------
Total invested assets............ $2,528.2 100.0% $2,231.2 100.0%
========== ======= ========== =======

(1) The total fair value of our bond portfolio was $1,366.9 million and
$1,163.2 million at December 31, 2000 and December 31, 1999, respectively.
(2) The fair value for our mortgage loan portfolio was $467.3 million and
$421.7 million as of December 31, 2000 and December 31, 1999, respectively.
(3) Policy loans are secured by the cash value of the underlying life insurance
policies.
(4) Cash and temporary investments are included in total invested assets in the
table above for the purposes of calculating yields on the income producing
assets for JHVLICO. Cash and temporary investments are not considered part
of Total Investments of JHVLICO of $2,482.8 million and $2,204.0 million at
December 31, 2000 and December 31, 1999, respectively.

Bonds

Our bond portfolio is predominantly comprised of low risk, investment
grade, publicly and privately traded corporate bonds and senior tranches of
asset-backed securities ('ABS') and mortgage-backed securities ('MBS'), with the
balance invested in government bonds. As of December 31, 2000, bonds represented
55.3% of general account investment assets with a statement value of $1.4
billion, roughly comprised of 50% public securities and 50% private securities.
Each year we direct the majority of our net cash inflows into investment grade
bonds. We typically invest between 5% and 15% of funds allocated to bonds in
below-investment-grade securities while maintaining our policy to limit the
overall level of these bonds to no more than 10% of invested assets and two
thirds of that balance in the BB category. Allocations are based on our
assessment of relative value and the likelihood of enhancing risk-adjusted
portfolio returns. While the general account has profited from the below-
investment-grade asset class in the past, care is taken to manage its growth
strategically by limiting its size relative to our total invested assets.

The following table shows the composition of our bond portfolio.

Bond Portfolio -- By Issuer

Corporate securities............... $1,158.9 82.7% $ 964.9 79.3%
MBS/ABS............................ 223.3 16.0 229.4 18.9
U.S. Treasury securities and
obligations of U.S. government
agencies.......................... 5.7 0.4 5.9 0.5
Debt securities issued by foreign
governments....................... 10.8 0.8 13.9 1.1
Obligations of states and
political Subdivisions............ 1.8 0.1 2.2 0.2
-------- ----- -------- -----
Total............................. $1,400.5 100.0% $1,216.3 100.0%
======== ===== ======== =====

Our MBS and ABS holdings, in keeping with our investment philosophy of
tightly managing interest rate risk, are heavily concentrated in commercial MBS
where the underlying loans are largely call protected, which means they are not
pre-payable without penalty prior to maturity at the option of the issuer,
rather than in residential MBS where the underlying loans have no call
protection. By investing in MBS and ABS securities with relatively predictable
repayments, we add high quality, liquid assets to our portfolios without
incurring the risk of excessive cash flow in periods of low interest rates or a
cash flow deficit in periods of high interest rates. We believe the portion of
our MBS/ABS portfolio subject to prepayment risk as

of December 31, 2000 and December 31, 1999 was limited to 3.3% and 3.9% of our
total MBS/ABS portfolio and 0.6% and 0.7% of our bond holdings, respectively.

Mortgage Loans

As of December 31, 2000, we held mortgage loans with an amortized cost of
$0.5 billion.

The following table shows the distribution of our mortgage loan portfolio
by property type as of the dates indicated. Our commercial mortgage loan
portfolio consists primarily of non-recourse fixed-rate mortgages on fully, or
nearly fully, leased commercial properties.

Apartment........................ $ 93.6 20.5% $ 112.1 25.9%
Office Buildings................. 84.7 18.6 86.4 20.0
Retail........................... 35.4 7.8 25.5 5.9
Agricultural..................... 142.5 31.3 99.6 23.0
Industrial....................... 63.5 13.9 66.0 15.2
Hotels........................... 13.0 2.9 11.3 2.6
Multi-Family..................... -- -- -- --
Mixed Use........................ 12.9 2.8 -- --
Other............................ 10.2 2.2 32.2 7.4
------- ----- ------- -----
Total........................... $ 456.0 100.0% $ 433.1 100.0%
======= ===== ======= =====

The following table shows the distribution of our mortgage loan portfolio
by geographical region.

As of December 31,
------------------------------------------------------
2000 1999
------------------- -------------------
Number
of Carrying % of Carrying % of
Loans Value Total Value Total
------ ---------- ------- ---------- -------
(in millions) (in millions)

East North Central........... 17 $ 64.3 14.1% $ 71.3 16.5%
East South Central........... 17 20.9 4.6 7.4 1.7
Middle Atlantic.............. 8 20.9 4.6 28.5 6.6
Mountain..................... 11 27.0 5.9 21.0 4.8
New England.................. 9 23.4 5.1 37.5 8.7
Pacific...................... 46 108.0 23.7 111.1 25.7
South Atlantic............... 37 120.7 26.5 87.6 20.2
West North Central........... 5 16.0 3.5 16.6 3.8
West South Central........... 17 51.5 11.3 48.6 11.2
Canada....................... 1 3.3 0.7 3.5 0.8
----- --------- ------- --------- -------
Total....................... 168 $ 456.0 100.0% $ 433.1 100.0%
===== ========= ======= ========= =======

Investment Results

The following table summarizes JHVLICO's investment results for the periods
indicated. Overall, the yield, net of investment expenses, on our general
account portfolio increased from the year ended December 31, 1999. The improved
yield was primarily generated by favorable interest rates achieved on our 2000
bond acquisitions. In particular, 2000 bond acquisitions benefited from a
combination of higher U.S. Treasury rates and relatively wide spreads in both
the public and private sectors. While interest rates declined substantially
during the fourth quarter of 2000, they were well above 1999 rates on a full
calendar year basis. The average 10-year U. S. Treasury rate in 2000 was 34
basis points higher than the average 10-year U.S. Treasury rate in 1999.

For the Year Ended December 31,
-------------------------------
2000 1999
-------------- --------------
Yield Amount Yield Amount
----- ------ ----- ------
(in million) (in million)

General account
assets-
excluding policy
loans
Gross income..................... 8.0% $ 174.6 7.2% $ 138.6
Ending assets-
excluding policy
Loans........................... 2,309.3 2,059.1
Policy loans
Gross income..................... 6.2% 12.1 6.2% 9.6
Ending assets.................... 218.9 172.1
Total gross income............. 7.8% 186.7 7.2% 148.1
Less: investment
expenses........................ (10.1) (12.1)
-------- --------
Net investment
income........................... 7.4% $ 176.7 6.6% $ 136.0
======== ========

Liquidity and Capital Resources

The following discussion is presented on a statutory basis of accounting.

Liquidity describes the ability of a company to generate sufficient cash flows
to meet the cash requirements of business operations. Historically, our
principal cash flow sources have been premiums, deposits and charges on
policies, investment income, maturing investments and proceeds from sales of
investment assets. In addition to the need for cash flow to meet operating
expenses, our liquidity requirements relate principally to the liabilities
associated with our various life insurance and annuity products and to the
funding of investments in new products, processes and technologies.

Net cash provided by operating activities was $236.7 million, $236.0 million,
and $475.7 million for the years ended December 31, 2000, 1999 and 1998,
respectively. December 31, 2000 remained relatively unchanged as compared to
December 31, 1999. The decrease in 1999 as compared to 1998 of $239.7 million
resulted primarily from decreases in insurance premiums of $316.8 million,
insurance expenses and taxes of $47.9 million, benefits to policyholders and
beneficiaries of $46.1 million, other expenses of $10.7 million and dividends
paid to policyholders of $3.3 million. Offsetting these decreases were increases
of $169.1 million in net transfers to separate accounts and net investment
income of $16.0 million.

Net cash used in investing activities was $214.8 million, $138.8 million and
$660.9 million for the years ended December 31, 2000, 1999, and 1998,
respectively. The increase in net cash used in 2000 as compared to 1999 of $76.0
million resulted primarily from an increase in bond purchases of $210.0 million.
Offsetting this increase in bond purchases were increases in cash provided by
other investing activities of $92.6 million and mortgage loan repayments of
$36.3 million. The decrease in net cash used in 1999 as compared to 1998 of
$522.1 million resulted primarily from a decrease in bond purchases of $378.1
million, a decrease of $366.3 million in cash used in other investing
activities, and a decrease in cash provided by the sale of bonds of $232.4
million.

Net cash provided by financing activities was $0.0 million, $133.0 million and
$61.9 million, for the years ended December 31, 2000, 1999 and 1998,
respectively. The decrease in 2000 as compared to 1999 of $133.0 million
resulted because there were no financing activities in 2000. In 1999, JHVLICO
received a capital contribution of $194.9 million from John Hancock for the
portion of the class action settlement allocated to JHVLICO. In addition,
JHVLICO paid off $61.9 million in outstanding short-term notes payable which
offset the capital contribution in 1999. This $61.9 million was borrowed in 1998
and represents the only financing activity for that year.

Based on current trends, JHVLICO expects to generate sufficient positive
operating cash to meet all short-term and long-term cash requirements. In
addition, JHVLICO has a line of credit with John Hancock Capital Corporation, an
indirect, wholly-owned subsidiary of John Hancock, totaling $250 million. John
Hancock Capital Corporation will commit, when requested, to loan funds at
prevailing interest rates as agreed to from time to time between John Hancock
Capital Corporation and JHVLICO.

Quantitative and Qualitative Disclosures About Market Risk.

The following discussion is presented on a statutory basis of accounting.

Capital Markets Risk Management

JHVLICO maintains a disciplined, comprehensive approach to managing capital
market risks inherent in its business operations. To mitigate these risks, and
effectively support our objectives, investment operations are organized and
staffed to focus investment management expertise on specific classes of
investments, with particular emphasis placed on private placement markets. In
addition, a dedicated unit of asset/liability risk management (ALM)
professionals centralizes the implementation of its interest rate risk
management program. As an integral component of its ALM program, derivative
instruments are used in accordance with risk reduction techniques established
through Company policy. JHVLICO's use of derivative instruments is monitored on
a regular basis by John Hancock's Investment Compliance Department and reviewed
quarterly with the senior management and John Hancock's Committee of Finance.

Our principal capital market exposures are credit and interest rate risk which
includes the impact of inflation, although we have certain exposures to changes
in equity prices and foreign currency exchange rates. Credit risk pertains to
the uncertainty associated with the ability of an obligor or counterparty to
continue to make timely and complete payments of contractual principal and/or
interest. Interest rate risk pertains to the market value fluctuations that
occur within fixed maturity securities or liabilities as market interest rates
move. Equity and foreign currency risk pertain to price fluctuations, associated
with JHVLICO's ownership of equity investments or non-US dollars denominated
investments and liabilities, driven by dynamic market environments.

Credit Risk

JHVLICO manages the credit risk inherent in its fixed maturity securities by
applying strict credit and underwriting standards, with specific limits
regarding the proportion of permissible below investment grade holdings. We also
diversify our fixed maturity securities with respect to investment quality, and
credit concentration. Credit concentrations are monitored with respect to
issuer, industry, geographic location and loan property-type. Where possible,
consideration of external measures of creditworthiness, such as ratings assigned
by nationally recognized rating agencies, supplement our internal credit
analysis. JHVLICO uses simulation models to examine the probability distribution
of credit losses to ensure that it can readily withstand feasible adverse
scenarios. In addition, JHVLICO periodically examines, on various levels of
aggregation, its actual default loss experience on significant asset classes to
determine if the losses are consistent with the (1) levels assumed in product
pricing, (2) ACLI loss experience and (3) rating agencies' quality-specific
cohort default data. These tests have generally found JHVLICO's aggregate
experience to be favorable relative to these external benchmarks and consistent
with priced-for-levels.

As of December 31, 2000, JHVLICO's bond portfolio was comprised of 86.0%
investment grade securities and 14.0% below-investment-grade securities. These
percentages are consistent with recent experience and indicative of our
long-standing investment philosophy of pursuing moderate amounts of credit risk
in anticipation of earning higher expected returns. We believe that credit risk
can be successfully managed given our proprietary credit evaluation models and
experienced personnel.

Interest Rate Risk

JHVLICO maintains a tightly controlled approach to managing its potential
interest rate risk. Interest rate risk arises from many of our primary
activities, as we invest substantial funds in interest-sensitive assets to
support the issuance of our various interest-sensitive liabilities.

We manage interest rate sensitive segments of our business, and their
supporting investments, under one of two broadly defined risk management methods
designed to provide an appropriate matching of assets and liabilities. For
guaranteed rate products, where contractual liability cash flows are highly
predictable (e.g., immediate annuities) we apply sophisticated duration-matching
techniques to manage the segment's exposure to both parallel and non-parallel
yield curve movements. Typically this management technique involves a duration
mismatch tolerance of only +/- .05 years, with other measures used for limiting
exposure to non-parallel risk. Duration measures the sensitivity of the fair
value of assets and liabilities to changes in interest rates. For example,
should interest rates increase by 100 basis points, the fair value of an asset
with a duration of 5 years is expected to decrease in value by approximately
5.0%. For non-guaranteed rate products we apply scenario modeling techniques to
develop investment policies with what we believe to be the optimal risk/return
tradeoff given our risk constraints. Each scenario is based on near term
reasonably possible hypothetical changes in interest rates which illustrate the
potential impact of such events.

deferred annuities, is less formulaic, but very data intensive, due to the less
predictable nature of the liability cash flows. For these products, we manage
interest rate risk based on scenario-based portfolio modeling that seeks to
identify the most appropriate investment strategy given probable policyholder
behavior and liability crediting needs under a wide range of interest rate
environments.

Derivative Instruments

JHVLICO also utilizes various derivative financial instruments to manage its
exposure to fluctuations in interest rates, including interest rate swaps,
interest rate futures, and interest rate caps. Interest rate swaps are used
primarily to more closely align the interest rate characteristics of assets and
liabilities. JHVLICO also uses interest rate futures to periodically rebalance
its duration-managed accounts and to hedge the timing gap between liability
sales and investment purchases. JHVLICO uses interest rate floors to hedge
minimum guaranteed rates on certain product issuance and interest rate caps to
hedge embedded caps on floating-rate assets and to manage the risk associated
with a sudden rise in interest rates.

John Hancock's Investment Compliance Unit monitors all derivative activity for
consistency with internal policies and guidelines. All derivatives trading
activity is reported monthly to senior management and John Hancock's Committee
of Finance for review. The table below reflects JHVLICO's interest rate based
derivative positions as of December 31, 2000. The notional amounts in the table
represent the basis on which pay or receive amounts are calculated and are not
reflective of credit risk. These exposures represent only a point in time and
will be subject to change as a result of ongoing portfolio and risk management
activities.

As of December 31, 2000
--------------------------------------------------------
Fair Value

----------------------------------------------
Weighted-
Average -100 +100
Notional Term Basis Point As of Basis Point
Amount (Years) Change 12/31/00 Change
-------- --------- ----------- -------- ------------
(in millions, except for Weighted-Average Term)
Interest rate
swaps.......... $1,150.0 4.2 (17.2) -- 13.3
Futures
contracts
(1).......... 43 8.0 0.2 0.1 (0.2)
Interest rate
floors........ 361.4 9.5 3.1 1.4 0.8
Interest rate
caps.......... 239.4 6.8 0.8 2.1 4.1
-------- --- ----- --- ----
Totals........... 1,793.8 5.7 (13.1) 3.6 18.0
======== === ===== === ====

(1) Represents the notional value on open contracts as of December 31, 2000.

To limit exposures arising from counterparty nonperformance on interest rate
swaps and interest rate caps and floors, JHVLICO enters into master netting
agreements with its counterparties. In addition, JHVLICO enters into bi-lateral
collateral agreements with certain of its counterparties. JHVLICO believes the
risk of incurring losses due to nonperformance by its counterparties is remote.
Futures contracts trade on organized financial exchanges and therefore have
little to no credit risk.

Equity Risk

Equity risk is the risk that we will incur economic losses due to adverse
price changes in a particular common stock held by JHVLICO. In order to reduce
our exposure to market fluctuations on some equity securities, we may use equity
collar agreements. These equity collar agreements limit the market value
fluctuations on equity securities. As of December 31, 2000, the fair value of
our equity securities was $2.8 million. The fair value of our equity collar
agreements as of December 31, 2000 was $0.4 million. A 15% decline in the value
of our equity securities, hedged with equity collar agreements, would result in
effectively no change in fair value.

Foreign Currency Risk

Foreign currency risk is the possibility that JHVLICO will incur economic
losses due to adverse changes in foreign currency exchange rates. This risk
arises from the purchase of fixed income securities that are denominated in
foreign currencies; however, JHVLICO uses derivatives to hedge the foreign
currency risk of these securities (both interest payments and the final maturity
payment). At December 31, 2000, the notional value of JHVLICO's foreign currency
denominated fixed maturity securities was approximately $22.0 million. JHVLICO
uses currency swap agreements of the same currency to hedge the foreign exchange
risk related to its investments in securities denominated in foreign currencies.
The fair value of JHVLICO's currency swap agreements at December 31, 2000 was
$(0.6) million.

The estimate that as of December 31, 2000, a 10% immediate change in each of
the foreign currency exchange rates to which we are exposed, including the
currency swap agreements, would result in no material change to the net fair
value of our currency-denominated instruments identified above. The selection of
a 10% immediate change in all currency exchange rates should not be construed as
a prediction by us of future market events but rather as an illustration of the
potential impact of such an event.

results noted above due to the correlation assumptions utilized or if events
occur that were not included in the methodology, such as significant liquidity
or market events.

Effects of Inflation

JHVLICO does not believe that inflation has had a material effect on the
results of its operations except insofar as inflation may affect interest rates.

Reinsurance

To reduce its exposure to large losses under its insurance policies, JHVLICO
enters into reinsurance arrangements with its parent, John Hancock, and other
non-affiliated insurance companies. For more information about JHVLICO's
reinsurance arrangements, see Notes 5 and 7 of the Notes to Statutory Financial
Statements.

Separate Accounts

State laws permit insurers to establish separate accounts in which to hold
assets backing certain policies or contracts, including variable life insurance
policies and variable annuity contracts. The insurance company maintains the
investments in each separate account apart from other separate accounts and the
general account. The investment results of the separate account assets are
passed through directly to the account's policyholders or contract owners. The
insurance company derives certain fees from, but bears no investment risk on,
these assets. Other than amounts derived from or otherwise attributable to
JHVLICO's general account, assets of its separate accounts are not available to
fund the liabilities of its general account.

Competition

The life insurance business is highly competitive. There are approximately
1,250 stock and other types of insurers in the life/health insurance business in
the United States. According to the July 24, 2000 issue of the National
Underwriter, JHVLICO ranks 102/nd/ in terms of net premiums written during 1999,
while John Hancock ranks 7/th/.

Best's Press Release, dated January 30, 2001, affirms JHVLICO's financial
stability rating from A.M. Best Company, Inc. of A++, its highest, based on the
strength of John Hancock and the capital guarantee discussed below. Standard &
Poor's Corporation and Fitch, Inc. have assigned insurance claims-paying ability
ratings to JHVLICO of AA+ and AAA, respectively, which place JHVLICO in the
second highest and highest categories, respectively, by these rating agencies.
Moody's Investors Service, Inc. has assigned JHVLICO a financial strength rating
of Aa2, which is its third highest rating.

Employees and Facilities

John Hancock provides JHVLICO with personnel, property, and facilities for the
performance of certain of JHVLICO's corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of
criteria, which are revised annually to reflect continuing changes in the
JHVLICO's operations. The amount of service fee charged to JHVLICO was $164.5
million for the year ended December 31, 2000.

Transactions with John Hancock

As indicated, property, personnel, and facilities are provided, at a service
fee, by John Hancock for purposes of JHVLICO's operations. In addition, John
Hancock has contributed all of JHVLICO's capital, of which $1.8 million of
paid-in capital was returned to John Hancock during 1993. It is expected that
arrangements and transactions such as the foregoing will continue in the future
to an indeterminate extent. See Note 2 to our audited consolidated GAAP
financial statements.

John Hancock receives no additional compensation for its services as
underwriter and distributor of the contracts issued by JHVLICO. See Note 2 to
our audited consolidated GAAP financial statements.

Legal Proceedings.

We are regularly involved in litigation, both as a defendant and as a
plaintiff. The litigation naming us as a defendant ordinarily involves our
activities as a provider of insurance protection products, as well as an
employer and taxpayer. In addition, state regulatory bodies, the Unites States
Securities and Exchange Commission and other regulatory bodies regularly make
inquiries and, from time to time conduct examinations concerning our compliance
with, among other things, insurance laws and securities laws. We do not believe
that the ultimate resolution of the litigation referred to above or any of these
other matters that are currently pending, either individually or in the
aggregate, will have a material adverse effect on our business, financial
condition or results of operations.

Sales Practice Class Action Settlement

Insurance Company and John Hancock Distributors, Inc., Duhaime, et al. v. John
Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and John Hancock Distributors, Inc. With certain limited exceptions, the
class that is bound by the terms of the settlement includes persons and entities
who at any time during the class period (January 1, 1979 through December 31,
1996) had an ownership interest in one or more of our whole life, universal life
or variable life insurance policies (and certain annuities) issued during the
class period.

In conjunction with this settlement, we have established a reserve that stood
at $66.3 million at December 31, 2000. Given the uncertainties associated with
estimating the reserve, it is reasonably possible that the final cost of the
settlement could differ materially from the amounts presently provided for by
us. We will continue to update this estimate of the final cost of the settlement
as the claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at the
time, and the uncertainties associated with the final claim processing and
alternate dispute resolution and arbitration, the range of any additional costs
related to the settlement cannot be estimated with precision. If JHVLICO's share
of the settlement increases, John Hancock will contribute additional capital to
JHVLICO so that JHVLICO's total stockholder's equity would not be impacted.

Regulation

JHVLICO complies with extensive state regulation in the jurisdictions in which
it does business. This extensive state regulation along with proposals to adopt
a federal regulatory framework may in the future adversely affect the JHVLICO's
ability to sustain adequate returns. JHVLICO's business also could be adversely
affected by changes in state law relating to asset and reserve valuation
requirements, limitations on investments and risk-based capital requirements,
and, at the Federal level, laws and regulations that may affect certain aspects
of the insurance industry.

States levy assessments against John Hancock companies as a result of
participation in various types of state guaranty associations, state insurance
pools for the uninsured or other arrangements.

Regulators have discretionary authority to limit or prohibit an insurer from
issuing new business to policyholders if the regulators determine that such
insurer is not maintaining minimum statutory surplus or capital or further
transaction of business would be hazardous to the policyholders.

Based upon their current or anticipated levels of statutory surplus and the
volume of their new sales, JHVLICO and its affiliate do not believe regulations
will limit their issuance of new insurance business.

Although the Federal government does not directly regulate the business of
insurance, Federal initiatives often have an impact on the business in a variety
of ways. Current and proposed measures that may significantly affect the
insurance business generally include limitations on anti-trust immunity, minimum
solvency requirements and health care reform. Such initiatives could impact the
relative desirability of various personal investment vehicles.

On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 was signed into law,
implementing fundamental changes in the regulation of the financial services
industry in the United States. The act permits the transformation of the already
converging banking, insurance and securities industries by permitting mergers
that combine commercial banks, insurers and securities firms under one holding
company. Under the act, national banks retain their existing ability to sell
insurance products in some circumstances. In addition, bank holding companies
that qualify and elect to be treated as "financial holding companies" may engage
in activities, and acquire companies engaged in activities, that are "financial"
in nature or "incidental" or "complementary" to such financial activities,
including acting as principal, agent or broker in selling life, property and
casualty and other forms of insurance, including annuities. A financial holding
company can own any kind of insurance company or insurance broker or agent, but
its bank subsidiary cannot own the insurance company. Under state law, the
financial holding company would need to apply to the insurance commissioner in
the insurer's state of domicile for prior approval of the acquisition of the
insurer, and the act provides that the commissioner, in considering the
application, may not discriminate against the financial holding company because
it is affiliated with a bank. Under the act, no state may prevent or interfere
with affiliations between banks and insurers, insurance agents or brokers, or
the licensing of a bank or affiliate as an insurer or agent or broker.

Until the passage of the Gramm-Leach-Bliley Act, the Glass-Steagall Act of
1933, as amended, had limited the ability of banks to engage in securities-
related businesses, and the Bank Holding Company Act of 1956, as amended, had
restricted banks from being affiliated with insurance companies. With the
passage of the Gramm-Leach-Bliley Act, bank holding companies may acquire
insurers, and insurance holding companies may acquire banks. The ability of
banks to affiliate with insurance companies may materially adversely affect all
of our product lines by substantially increasing the number, size and financial
strength of potential competitors.

Moreover, the United States Supreme Court held in 1995 in Nationsbank of North
Carolina v. Variable Annuity Life

Insurance Company that annuities are not insurance for purposes of the National
Bank Act. Although the effect of these developments on us and our competitors is
uncertain, both the persistency of our existing products and our ability to sell
new products may be materially impacted by these developments in the future.

Directors and Executive Officers

The directors and executive officers of JHVLICO are as follows:

David D'Alessandro, 50 Chairman President and Chief Executive Officer, John
Director Hancock Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Michele G. Van Leer, 43 Vice Chairman & President Senior Vice President, Life Product Management,
Director John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Robert S. Paster, 48 Vice President Second Vice President, Direct Distribution,
Director John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Robert R. Reitano, 50 Vice President & CIO Senior Vice President and Chief Investment
Director Strategist, Investment Policy & Research,
John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara L. Luddy, 49 Vice President & Actuary Senior Vice President, Financial Reporting
Director & Analysis, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce M. Jones 43 Vice President Vice President, Annuity Product Management,
Director John Hancock; Prior to July, 1999, Senior Vice
President & Chief Operation Officer, Phoenix
Home Life Insurance Company; Vice President,
Marketing Department, Phoenix Home Life
Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald J. Bocage, 55 Vice President & Counsel Vice President & Counsel, Insurance and
Director Separate Account Products Division, John
Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Lee, 54 Vice President Vice President, Life Product and Systems
Director Management, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Paul J. Strong 54 Vice President Vice President, Retail Life Product Management,
Director John Hancock; Prior to September, 1999, Senior
Vice President, Product Management, Jefferson
Pilot Financial Insurance Company; Senior Vice
President, Marketing, Chubb Life Insurance
Company of America
- ------------------------------------------------------------------------------------------------------------------------------------
Earl W. Baucom 54 Controller Senior Vice President and Controller,
Controller's Department, John Hancock; Prior
to 1999, Senior Vice President and CFO,
Franklin Life Insurance Company; Prior to
June, 1996, Senior Vice President and CFO of
Providian Direct Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
Julie H. Indge 47 Treasurer Assistant Treasurer, Financial Sector
Management, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Peter H. Scavongelli 43 Secretary State Compliance Officer, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------

Executive Compensation

Executive officers of JHVLICO also serve one or more of the affiliated
companies of John Hancock. Allocations have been made as to each individual's
time devoted to his or her duties as an executive officer of JHVLICO.

There were no other executive officers of JHVLICO whose allocated compensation
exceeded $100,000 during 2000. Directors of JHVLICO receive no compensation in
addition to their compensation as employees of John Hancock.

The following table provides information on the allocated compensation paid
to the chief executive officer for 2000.

Annual Compensation Long-Term Compensation
------------------- ----------------------
Name Title Salary Bonus Other LTIP All Other
---- ----- ------ ----- ----- ---- ---------

David F. D'Alessandro Chairman $45,846 $68,000 $ 313 $36,495 $0

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:

. the mortality and expense risk charges, and

. the annual contract fee.

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 Series Fund level where comparable charges
are not deducted.

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 charge or any charge for
optional benefit riders.

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 Series Funds.

Voting privileges

At meetings of the Series 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 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 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 Account in any form permitted by law, and

. to terminate the 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 guarantee period. 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 premium payment,

. the size of the group or class,

. the total amount of premium payments expected to be received from the group
or class and the manner in which the premium 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 or rates 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.
Any variation in charges 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 Funds, Inc. ("JHFI") and Signator Investors, Inc.("Signator")
act as principal distributors of the contracts sold through this prospectus.
JHFI and Signator are each registered as a broker-dealer under the Securities
Exchange Act of 1934, and each is a member of the National Association of
Securities Dealers, Inc. JHFI's address is 101 Huntington Avenue, Boston,
Massachusetts 02199. Signator's address is 200 Clarendon Street, John Hancock
Place, Boston, Massachusetts 02117. Both JHFI and Signator are subsidiaries of
John Hancock Life Insurance Company.

You can purchase a contract through registered representatives of
broker-dealers and certain financial institutions who have entered into selling
agreements with JHVLICO and JHFI, or with JHVLICO and Signator. We pay
broker-dealers compensation for promoting, marketing and selling our variable
insurance and variable annuity products. In turn, the broker-dealers pay a
portion of the compensation to their registered representatives, under their own
arrangments. Signator will also pay its own registered representatives for sales
of the contracts to their customers. We do not expect the compensation we pay to
such broker-dealers (including Signator) and financial institutions to exceed
8.0% of premium payments (on a present value basis) for sales of the contracts
described in this prospectus. For limited periods of time, we may pay additional
compensation to broker-dealers as part of special sales promotions. We offer
these contracts on a continuous basis, but neither JHVLICO nor JHFI nor Signator
is obligated to sell any particular amount of contracts. We also reimburse JHFI
and Signator for direct and indirect expenses actually incurred in connection
with the marketing of these contracts.

From time to time, JHFI and Signator, at their expense, may provide
significant additional compensation to financial services firms which sell or
arrange for the sale of the contracts. Such compensation may include, for
example, financial asistance 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 financial services firms-
sponsored events or activities.

Experts

Ernst & Young LLP, independent auditors, have audited the financial statements
of John Hancock Variable Life Insurance Company that appear herein and the
financial statements of the Account that appear in the Statement of Additional
Information, which also is a part of the registration statement that contains
this prospectus. Those financial statements are included in the registration
statement in reliance upon Ernst & Young's reports given upon the firm's
authority as experts in accounting and auditing.

Registration statement

JHVLICO complies with the reporting requirements of the Securities Act of
1934. You can get more details from the SEC upon payment of prescribed fees or
through the SEC's internet web site (www.sec.gov).

This prospectus omits certain information contained in the registration
statement that we filed with the SEC. Among other things, the registration
statement contains a "Statement of Additional Information" that we will send you
without charge upon request. The Table of Contents of the Statement of
Additional Information lists the following subjects that it covers:

page of SAI

Distribution................................................. 2

Calculation of Performance Data.............................. 2

Calculation of Annuity Payments.............................. 8

Additional Information About Determining Unit Values......... 10

Purchases and Redemptions of Fund Shares..................... 11

The Account.................................................. 11

Delay of Certain Payments.................................... 11

Liability for Telephone Transfers............................ 12

Voting Privileges............................................ 13

Financial Statements......................................... 14

CONDENSED FINANCIAL INFORMATION

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT JF

The following table provides selected data for Revolution accumulation
shares for each investment option that was available during the period shown.
Revolution commenced operations on August 10, 1999.

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Equity Index
Accumulation share value:
Beginning of period....................................................... $ 22.54 $ 10.00
End of period............................................................. $ 20.22 $ 22.54
Number of Accumulation Shares outstanding at end of period................. 507,320 76,098
Growth & Income
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 8.82 --
Number of Accumulation Shares outstanding at end of period................. 12,749 --
Large Cap Value CORE(SM)
Accumulation share value:
Beginning of period....................................................... $ 10.31 $ 10.00
End of period............................................................. $ 10.71 $ 10.31
Number of Accumulation Shares outstanding at end of period................. 520,128 92,493
Large Cap Aggressive Growth
Accumulation share value:
Beginning of period....................................................... $ 11.97 $ 10.00
End of period............................................................. $ 9.60 $ 11.97
Number of Accumulation Shares outstanding at end of period................. 1,040,129 178,388
Large/Mid Cap Value
Accumulation share value:
Beginning of period....................................................... $ 10.43 $ 10.00
End of period............................................................. $ 11.68 $ 10.43
Number of Accumulation Shares outstanding at end of period................. 347,760 64,904
Fundamental Growth
Accumulation share value:
Beginning of period....................................................... $ 15.39 $ 10.00
End of period............................................................. $ 14.74 $ 15.39
Number of Accumulation Shares outstanding at end of period.................. 525,081 38,912
Mid Cap Growth
Accumulation share value:
Beginning of period (Note 1).............................................. $ 10.00 --
End of period............................................................. $ 7.11 --
Number of Accumulation Shares outstanding at end of period................. 629,910 --
Small/Mid Cap CORE(SM)
Accumulation share value:
Beginning of period....................................................... $ 12.73 $ 11.00
End of period............................................................. $ 13.16 $ 12.73
Number of Accumulation Shares outstanding at end of period................. 114,891 9,532
Small/Mid Cap Growth
Accumulation share value:
Beginning of period....................................................... $ 18.98 $ 18.07
End of period............................................................. $ 20.47 $ 18.98
Number of Accumulation Shares outstanding at end of period................. 136,439 14,779
Small Cap Equity
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 8.30 --
Number of Accumulation Shares outstanding at end of period................. 535 --

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Small Cap Value
Accumulation share value:
Beginning of period....................................................... $ 10.46 --
End of period............................................................. $ 13.87 --
Number of Accumulation Shares outstanding at end of period................. 241,338 --
Small Cap Growth
Accumulation share value:
Beginning of period....................................................... $ 21.19 $ 14.27
End of period............................................................. $ 16.44 $ 21.19
Number of Accumulation Shares outstanding at end of period................. 608,753 59,529
V.A. Relative Value
Accumulation share value:
Beginning of period (Note 1).............................................. $ 10.00 --
End of period............................................................. $ 9.21 --
Number of Accumulation Shares outstanding at end of period................. 172,283 --
AIM V.I. Value
Accumulation share value:
Beginning of period....................................................... $ 11.77 $ 10.00
End of period............................................................. $ 9.92 $ 11.77
Number of Accumulation Shares outstanding at end of period................. 2,548,369 302,772
AIM V.I. Growth
Accumulation share value:
Beginning of period....................................................... $ 12.30 $ 10.00
End of period............................................................. $ 9.66 $ 12.30
Number of Accumulation Shares outstanding at end of period................. 1,551,758 102,211
Fidelity VIP Growth
Accumulation share value:
Beginning of period....................................................... $ 12.04 $ 10.00
End of period............................................................. $ 10.57 $ 12.04
Number of Accumulation Shares outstanding at end of period................. 1,875,307 205,097
Fidelity VIP Contrafund(R)
Accumulation share value:
Beginning of period....................................................... $ 11.61 $ 10.00
End of period............................................................. $ 10.69 $ 11.61
Number of Accumulation Shares outstanding at end of period................. 1,447,471 237,990
MFS Investors Growth Stock
Accumulation share value:
Beginning of period....................................................... $ 12.36 $ 10.00
End of period............................................................. $ 11.45 $ 12.36
Number of Accumulation Shares outstanding at end of period................. 971,077 158,192
MFS Research
Accumulation share value:
Beginning of period....................................................... $ 11.86 $ 10.00
End of period............................................................. $ 11.14 $ 11.86
Number of Accumulation Shares outstanding at end of period................. 672,010 73,452
MFS New Discovery
Accumulation share value:
Beginning of period....................................................... $ 15.26 $ 10.00
End of period............................................................. $ 14.77 $ 15.26
Number of Accumulation Shares outstanding at end of period................. 431,090 36,557
International Equity
Accumulation share value:
Beginning of period....................................................... $ 12.06 $ 10.00
End of period............................................................. $ 10.23 $ 12.06
Number of Accumulation Shares outstanding at end of period................. 181,982 11,123

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Fidelity VIP Overseas
Accumulation share value:
Beginning of period....................................................... $ 12.48 $ 10.00
End of period............................................................. $ 9.97 $ 12.48
Number of Accumulation Shares outstanding at end of period................. 1,107,608 30,517
Janus Aspen Worldwide Growth
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 9.04 --
Number of Accumulation Shares outstanding at end of period................. 128,709 --
Real Estate Equity
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 10.95 --
Number of Accumulation Shares outstanding at end of period................. 1,766 --
V.A. Financial Industries
Accumulation share value:
Beginning of period....................................................... $ 14.25 $ 10.00
End of period............................................................. $ 17.90 $ 14.25
Number of Accumulation Shares outstanding at end of period................. 642,376 113,876
V.A. Technology
Accumulation share value:
Beginning of period (Note 1).............................................. $ 10.00 --
End of period............................................................. $ 7.28 --
Number of Accumulation Shares outstanding at end of period................. 679,427 --
Managed
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 9.73 --
Number of Accumulation Shares outstanding at end of period................. 89 --
Global Balanced
Accumulation share value:
Beginning of period....................................................... $ 12.98 $ 12.24
End of period............................................................. $ 11.65 $ 12.98
Number of Accumulation Shares outstanding at end of period................. 63,735 5,361
Short Term Bond
Accumulation share value:
Beginning of period....................................................... $ 12.48 $ 12.34
End of period............................................................. $ 13.30 $ 12.48
Number of Accumulation Shares outstanding at end of period................. 126,421 15,433
Bond Index
Accumulation share value:
Beginning of period....................................................... $ 9.63 $ 9.65
End of period............................................................. $ 10.63 $ 9.63
Number of Accumulation Shares outstanding at end of period................. 327,502 47,232
V.A. Strategic Income
Accumulation share value:
Beginning of period....................................................... $ 12.62 $ 12.25
End of period............................................................. $ 12.64 $ 12.62
Number of Accumulation Shares outstanding at end of period................. 535,897 58,942
High Yield Bond
Accumulation share value:
Beginning of period....................................................... $ 10.27 $ 10.00
End of period............................................................. $ 9.04 $ 10.27
Number of Accumulation Shares outstanding at end of period................. 333,028 48,898

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Global Bond
Accumulation share value:
Beginning of period (Note 2).............................................. $ 10.00 --
End of period............................................................. $ 10.60 --
Number of Accumulation Shares outstanding at end of period................. -- --

(1) Values shown for 2000 begin on May 1, 2000.

(2) Values shown for 2000 begin on November 1, 2000.

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
John Hancock Variable Life Insurance Company

We have audited the accompanying consolidated balance sheet of John Hancock
Variable Life Insurance Company as of December 31, 2000, and the related
consolidated statements of income, changes in shareholder's equity, and cash
flows for the year ended December 31, 2000. Our audit also included the
financial statement schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audit.

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

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

/S/ ERNST & YOUNG LLP
Boston, Massachusetts
March 16, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET

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

ASSETS
Investments--Notes 3 and 4
Fixed maturities:
Held-to-maturity--at amortized cost (fair value: $686.8)..................................... $ 715.4
Available-for-sale--at fair value (cost: $1,018.8)........................................... 1,011.8
Equity securities:
Available-for-sale--at fair value (cost: $7.1)............................................... 8.1
Mortgage loans on real estate. ............................................................... 54.8
Real estate................................................................................... 23.9
Policy loans ................................................................................. 334.2
Short-term investments ....................................................................... 21.7
Other invested assets......................................................................... 34.8
---------
Total Investments........................................................................... 2,704.7
Cash and cash equivalents..................................................................... 277.3
Accrued investment income..................................................................... 52.1
Premiums and accounts receivable ............................................................. 7.0
Deferred policy acquisition costs............................................................. 994.1
Reinsurance recoverable--Note 7............................................................... 48.4
Other assets.................................................................................. 28.2
Separate accounts assets...................................................................... 8,082.9
---------
Total Assets................................................................................ $12,194.7
=========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET -- (CONTINUED)

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

Liabilities and Shareholder's Equity
Liabilities
Future policy benefits........................................ $ 2,754.2
Policyholders' funds.......................................... 14.2
Unearned revenue.............................................. 212.0
Unpaid claims and claim expense reserves...................... 11.1
Dividends payable to policyholders............................ 0.1
Income taxes--Note 5.......................................... 64.2
Other liabilities ............................................ 250.4
Separate accounts liabilities................................. 8,082.9
-----------
Total Liabilities .......................................... 11,389.1
Shareholder's Equity--Note 9
Common stock, $50 par value; 50,000 shares authorized;
50,000 shares issued and outstanding ........................ 2.5
Additional paid in capital.................................... 572.4
Retained earnings............................................. 232.9
Accumulated other comprehensive loss.......................... (2.2)
-----------
Total Shareholder's Equity.................................. 805.6
-----------
Total Liabilities and Shareholder's Equity.................. $ 12,194.7
===========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME

Year Ended
December 31
2000
----------------
(in millions)

Revenues
Premiums.................................................... $ 28.6
Universal life and investment-type product charges.......... 337.1
Net investment income--Note 3............................... 213.4
Net realized investment losses, net of related
amortization of deferred policy acquisition
costs of $3.8--Notes 1, 3, and 10.......................... (10.6)
Other revenue............................................... 0.2
-------
Total revenues............................................ 568.7
Benefits and expenses
Benefits to policyholders................................... 248.6
Other operating costs and expenses.......................... 116.8
Amortization of deferred policy acquisition costs,
excluding amounts related to net realized
investment losses of $3.8--Notes 1, 3 and 10............... 34.0
Dividends to policyholders.................................. 26.1
-------
Total benefits and expenses............................... 425.5
-------
Income before income taxes.................................. 143.2
Income taxes--Note 5........................................ 43.8
-------
Net income.................................................. $ 99.4
=======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME

Accumulated
Additional Other Total
Paid In Retained Comprehensive Shareholder's
Common Stock Capital Earnings Loss Equity
------------ ---------- -------- ------------- ---------------

Balance at December 31, 1999....................... $2.5 $572.4 $133.5 ($13.4) $695.0
Comprehensive income:
Net income........................................ 99.4 99.4
Other comprehensive income, net of tax:
Net unrealized gains.............................. 11.2 11.2
Comprehensive income............................... 110.6
---- ------ ------ ------ ------
Balance at December 31, 2000....................... $2.5 $572.4 $232.9 ($2.2) $805.6
==== ====== ====== ====== ======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended
December 31
2000
---------------
(in millions)

Cash flows from operating activities:
Net income.......................................................................................... $ 99.4
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of discount--fixed maturities...................................................... (1.9)
Realized investment losses, net................................................................. 10.6
Change in deferred policy acquisition costs..................................................... (141.5)
Depreciation and amortization................................................................... 1.9
Increase in accrued investment income........................................................... (10.2)
Decrease in premiums and accounts receivable.................................................... 0.3
Decrease in other assets and other liabilities, net............................................. 70.7
Decrease in policy liabilities and accruals, net................................................ (401.1)
Increase in income taxes........................................................................ 22.5
--------
Net cash used by operating activities....................................................... (349.3)
Cash flows from investing activities:
Sales of:
Fixed maturities available-for-sale............................................................. 194.6
Equity securities available-for-sale............................................................ 1.0
Real estate..................................................................................... 0.2
Short-term investments and other invested assets................................................ 1.3
Maturities, prepayments and scheduled redemptions of:
Fixed maturities held-to-maturity............................................................... 79.9
Fixed maturities available-for-sale............................................................. 91.5
Short-term investments and other invested assets................................................ 10.1
Mortgage loans on real estate................................................................... 85.6
Purchases of:
Fixed maturities held-to-maturity............................................................... (127.2)
Fixed maturities available-for-sale............................................................. (424.7)
Equity securities available-for-sale............................................................ (0.6)
Real estate..................................................................................... (0.4)
Short-term investments and other invested assets................................................ (38.8)
Mortgage loans on real estate issued............................................................ (100.5)
Other, net...................................................................................... (41.5)
--------
Net cash used in investing activities....................................................... (269.5)
Cash flows from financing activities:
Universal life and investment-type contract deposits.............................................. $1,067.2
Universal life and investment-type contract maturities and withdrawals............................ (430.7)
--------
Net cash provided by financing activities................................................... 636.5
--------
Net increase in cash and cash equivalents................................................... 17.7
Cash and cash equivalents at beginning of year....................................................... 259.6
--------
Cash and cash equivalents at end of year.................................................... $ 277.3
========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

John Hancock Variable Life Insurance Company (the Company) is a wholly-
owned subsidiary of John Hancock Life Insurance Company (John Hancock or the
Parent). The Company, domiciled in the Commonwealth of Massachusetts, issues
variable and universal life insurance policies, individual whole and term life
policies and variable annuity contracts. Those policies primarily are marketed
through John Hancock's sales organization, which includes a career agency system
composed of Company-supported independent general agencies and a direct
brokerage system that markets directly to external independent brokers. Policies
are also sold through various unaffiliated securities broker-dealers and certain
other financial institutions. Currently, the Company writes business in all
states except New York.

Pursuant to a Plan of Reorganization approved by the policyholders and the
Commonwealth of Massachusetts Division of Insurance, effective February 1, 2000,
John Hancock converted from a mutual life insurance company to a stock life
insurance company (i.e., demutualized) and became a wholly owned subsidiary of
John Hancock Financial Services, Inc., which is a holding company. In connection
with the reorganization, John Hancock changed its name to John Hancock Life
Insurance Company. In addition, on February 1, 2000, John Hancock Financial
Services, Inc. completed its initial public offering and 102 million shares of
common stock were issued at an initial public offering price of $17 per share.

Prior to 2000, the Company did not prepare its financial statements in
accordance with accounting principles generally accepted in the United States
and financial information on such basis currently is not readily available for
earlier periods. Comparative financial statements prepared on a statutory-basis
are included elsewhere in this Form 10-K.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, Investors Partner Life Insurance
Company (IPL). All significant intercompany transactions and balances have been
eliminated.

The preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

Investments

In accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", the Company is required to classify its investments into one of
three categories: held-to-maturity, available-for-sale or trading. The Company
determines the appropriate classification of debt securities at the time of
purchase and re-evaluates such designation as of each balance sheet date. Fixed
maturity investments include bonds, mortgage-backed securities, and redeemable
preferred stock and are classified as held-to-maturity or available-for-sale.
Bonds and mortgage-backed securities, which the Company has the positive intent
and ability to hold to maturity, are classified as held-to-maturity and carried
at amortized cost. Fixed maturity investments not classified as held-to-maturity
are classified as available-for-sale and are carried at fair value. Unrealized
gains and losses related to available-for-sale securities are reflected in
shareholder's equity, net of related amortization of deferred policy acquisition
costs and applicable taxes. The amortized cost of debt securities is adjusted
for amortization of premiums and accretion of discounts to maturity. Such
amortization is included in investment income. The amortized cost of fixed
maturity investments is adjusted for impairments in value deemed to be other
than temporary.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

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

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

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

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

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

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

Short-term investments are carried at amortized cost.

Partnership and joint venture interests in which the Company does not have
control or a majority ownership interest are recorded using the equity method of
accounting and included in other invested assets.

Realized investment gains and losses, other than those related to separate
accounts for which the Company does not bear the investment risk, are determined
on the basis of specific identification and are reported net of related
amortization of deferred policy acquisition costs.

Derivative Financial Instruments

The Company uses futures contracts, interest rate swap, cap and floor
agreements, swaptions and currency rate swap agreements for other than trading
purposes to hedge and manage its exposure to changes in interest rate levels and
foreign exchange rate fluctuations and to manage duration mismatch of assets and
liabilities. The Company also uses equity collar agreements to reduce its
exposure to market fluctuations in certain equity securities.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

The Company uses futures contracts principally to hedge risks associated
with interest rate fluctuations on anticipated fixed income asset acquisitions.
Futures contracts represent commitments to either purchase or sell securities at
a specified future date and at a specified price or yield.

The Company uses interest rate swap, cap and floor agreements and swaptions
for the purpose of converting the interest rate characteristics (fixed or
variable) of certain investments to more closely match its liabilities. Interest
rate swap agreements are contracts with a counterparty to exchange interest rate
payments of a differing character (e.g., fixed-rate payments exchanged for
variable-rate payments) based on an underlying principal balance (notional
principal) to hedge against interest rate changes. Interest rate cap and floor
agreements are contracts with a counterparty which require the payment of a
premium for the right to receive payments for the difference between the cap or
floor interest rate and a market interest rate on specified future dates based
on an underlying principal balance (notional principal) to hedge against rising
and falling interest rates. Swaptions entitle the Company to receive settlement
payments from other parties on specified expiration dates, contingent on future
interest rates. The amount of such settlement payments, if any, is determined by
the present value of the difference between the fixed rate on a market rate swap
and the strike rate multiplied by the notional amount.

Currency rate swap agreements are used to manage the Company's exposure to
foreign exchange rate fluctuations. Currency rate swap agreements are contracts
to exchange the currencies of two different countries at the same rate of
exchange at specified future dates.

The Company invests in common stock that is subject to fluctuations from
market value changes in stock prices. The Company sometimes seeks to reduce its
market exposure to such holdings by entering into equity collar agreements. A
collar consists of a call option that limits the Company's potential for gain
from appreciation in the stock price as well as a put option that limits the
Company's potential for loss from a decline in the stock price.

Futures contracts are carried at fair value and require daily cash
settlement. Changes in the fair value of futures contracts that qualify as
hedges are deferred and recognized as an adjustment to the hedged asset or
liability.

The net differential to be paid or received on interest rate swap
agreements and currency rate swap agreements is accrued and recognized as a
component of net investment income. The related amounts due to or from
counterparties are included in accrued investment income receivable or payable.

Premiums paid for interest rate cap and floor agreements and swaptions are
deferred and amortized to net investment income on a straight-line basis over
the term of the agreements. The unamortized premium is included in other assets.
Amounts earned on interest rate cap and floor agreements and swaptions are
recorded as an adjustment to net investment income. Settlements received on
swaptions are deferred and amortized over the life of the hedged assets as an
adjustment to yield.

Interest rate swap, cap and floor agreements, swaptions and currency rate
swap agreements which hedge instruments designated as available-for-sale are
adjusted to fair value with the resulting unrealized gains and losses, net of
related taxes, included in shareholder's equity.

Equity collar agreements are carried at fair value and are included in
other invested assets, with the resulting unrealized gains and losses included
in realized investment gains (losses).

Hedge accounting is applied after the Company determines that the items to
be hedged expose it to interest or price risk, designates these financial
instruments as hedges and assesses whether the instruments reduce the hedged
risks through the measurement of changes in the value of the instruments and the
items being hedged at both inception and throughout the hedge period.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

From time to time, futures contracts, interest rate swaps, cap and floor
agreements, swaptions and currency rate swap agreements are terminated. If the
terminated position was accounted for as a hedge, realized gains or losses are
deferred and amortized over the remaining lives of the hedged assets or
liabilities. Realized and unrealized changes in fair value of derivatives
designated with items that no longer exist or are no longer probable of
occurring are recorded as a component of the gain or loss arising from the
disposition of the designated item or included in income when it is determined
that the item is no longer probable of occurring. Changes in the fair value of
derivatives no longer effective as hedges are recognized in income from the date
the derivative becomes ineffective until their expiration.

Revenue Recognition

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

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

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

Future Policy Benefits and Policyholders' Funds

Future policy benefits for participating traditional life insurance
policies are based on the net level premium method. This net level premium
reserve is calculated using the guaranteed mortality and dividend fund interest
rates, which range from 4.5% to 5.0%. The liability for annual dividends
represents the accrual of annual dividends earned. Settlement dividends are
accrued in proportion to gross margins over the life of the contract.

For non-participating traditional life insurance policies, future policy
benefits are estimated using a net level premium method on the basis of
actuarial assumptions as to mortality, persistency, interest and expenses
established at policy issue. Assumptions established at policy issue as to
mortality and persistency are based on the Company's experience, which, together
with interest and expense assumptions, include a margin for adverse deviation.
Benefit liabilities for annuities during the accumulation period are equal to
accumulated contractholders' fund balances and after annuitization are equal to
the present value of expected future payments. Interest rates used in
establishing such liabilities range from 7.5% to 8.0% for life insurance
liabilities and 3.5% to 10.3% for individual annuity liabilities.

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

Liabilities for unpaid claims and claim expenses include estimates of
payments to be made on reported individual life claims and estimates of incurred
but not reported claims based on historical claims development patterns.

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Participating Insurance

Participating business represents approximately 16.3% of the Company's life
insurance in force and 30.1% of life insurance premiums in 2000.

The amount of policyholders' dividends to be paid is approved annually by
the Company's Board of Directors. The determination of the amount of
policyholder dividends is complex and varies by policy type. In general, the
aggregate amount of policyholders' dividends is related to actual interest,
mortality, morbidity, persistency and expense experience for the year and
judgment as to the appropriate level of statutory surplus to be retained by the
Company.

Deferred Policy Acquisition Costs

Costs that vary with, and are related primarily to, the production of new
business have been deferred to the extent that they are deemed recoverable. Such
costs include commissions, certain costs of policy issue and underwriting, and
certain agency expenses. For participating traditional life insurance policies,
such costs are being amortized over the life of the contracts at a constant rate
based on the present value of the estimated gross margin amounts expected to be
realized over the lives of the contracts. Estimated gross margin amounts include
anticipated premiums and investment results less claims and administrative
expenses, changes in the net level premium reserve and expected annual
policyholder dividends. For universal life insurance contracts and investment-
type products, such costs are being amortized generally in proportion to the
present value of expected gross profits arising principally from surrender
charges and investment results, and mortality and expense margins. The effects
on the amortization of deferred policy acquisition costs of revisions to
estimated gross margins and profits are reflected in earnings in the period such
estimated gross margins and profits are revised. For non-participating term life
insurance products, such costs are being amortized over the premium-paying
period of the related policies using assumptions consistent with those used in
computing policy benefit reserves. Amortization expense was $30.2 million in
2000.

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

Realized investment gains and losses related to certain products have a
direct impact on the amortization of deferred policy acquisition costs as such
gains and losses affect the amount and timing of profit emergence. Accordingly,
to the extent that such amortization results from realized gains and losses,
management believes that presenting realized investment gains and losses net of
related amortization of deferred policy acquisition costs provides information
useful in evaluating the operating performance of the Company. This presentation
may not be comparable to presentations made by other insurers.

Cash and Cash Equivalents

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Separate Accounts

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

Reinsurance

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

Assets and liabilities related to reinsurance ceded contracts are reported
on a gross basis. The accompanying statement of income reflects premiums,
benefits and settlement expenses net of reinsurance ceded. Reinsurance premiums,
commissions, expense reimbursements, benefits and reserves related to reinsured
business are accounted for on bases consistent with those used in accounting for
the original policies issued and the terms of the reinsurance contracts.

Federal Income Taxes

The provision for federal income taxes includes amounts currently payable
or recoverable and deferred income taxes, computed under the liability method,
resulting from temporary differences between the tax basis and book basis of
assets and liabilities. A valuation allowance is established for deferred tax
assets when it is more likely than not that an amount will not be realized.

Foreign Currency Translation

Gains or losses on foreign currency transactions are reflected in earnings.

Accounting Changes and New Accounting Principles Adopted

SOP 98-7, "Deposit Accounting: Accounting for Insurance and Reinsurance
Contracts That Do Not Transfer Insurance Risk," provides guidance on how to
account for insurance and reinsurance contracts that do not transfer insurance
risk under a method referred to as deposit accounting. SOP 98-7 is effective for
fiscal years beginning after June 15, 1999. SOP 98-7 did not have a material
impact on the Company's consolidated financial statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." In June
1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement 133." This
Statement amends SFAS No. 133 to defer its effective date for one year, to
fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities--an amendment of SFAS No. 133." This Statement makes certain changes
in the hedging provisions of SFAS No. 133, and is effective concurrent with SFAS
No. 133. As amended, SFAS No. 133 requires all derivatives to be recognized on
the balance sheet at fair value, and establishes special accounting for the
following three types of hedges: fair value hedges, cash flow hedges, and hedges
of foreign currency exposures of net investments in foreign operations. Special
accounting for qualifying hedges provides for matching the timing of gain or
loss recognition on the hedging instrument with the recognition of the
corresponding changes in value of the hedged item. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in the fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be recognized
immediately in earnings and will be included in net realized and other
investment gains.

The adoption of SFAS No. 133, as amended, will result in an increase in
other comprehensive income of $0.5 million (net of tax of $0.3 million) as of
January 1, 2001 that will be accounted for as the cumulative effect of an
accounting change. In addition, the adoption of SFAS No. 133, as amended, will
result in an increase to earnings of $4.9 million (net of tax of $2.7 million)
as of January 1, 2001, that will be accounted for as the cumulative effect of an
accounting change. The Company believes that its current risk management
philosophy will remain largely unchanged after adoption of the Statement.

SFAS No. 133, as amended, precludes the designation of held-to-maturity
fixed maturity investment securities as hedged items in hedging relationships
where the hedged risk is interest rates. As a result, in connection with the
adoption of the Statement and consistent with the provisions of the Statement,
on January 1, 2001, the Company will reclassify approximately $550.3 million of
its held-to-maturity fixed maturity investment portfolio to the available-for-
sale category. This will result in an additional increase in other comprehensive
income of $4.7 million (net of tax of $2.5 million) as of January 1, 2001.

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Codification

In March 1998, the National Association of Insurance Commissioners (NAIC)
adopted codified statutory accounting principles (Codification) effective
January 1, 2001. Codification changes prescribed statutory accounting practices
and results in changes to the accounting practices that the Company and its
domestic life insurance subsidiary will use to prepare their statutory-basis
financial statements. The states of domicile of the Company and its domestic
life insurance subsidiary have adopted Codification as the prescribed basis of
accounting on which domestic insurers must report their statutory-basis results
effective January 1, 2001. The cumulative effect of changes in accounting
principles adopted to conform to the requirements of Codification will be
reported as an adjustment to surplus as of January 1, 2001. Management believes
that, although the implementation of Codification will have a negative impact on
the Company and its domestic life insurance subsidiary's statutory-basis capital
and surplus, the Company and its domestic life insurance subsidiary will remain
in compliance with all regulatory and contractual obligations.

Note 2. Transactions with Parent

John Hancock provides the Company with personnel, property and facilities
in carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of
criteria, which were revised in 2000 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$170.6 million, which has been included in other operating costs and expenses.
As of December 31, 2000, the Company owed John Hancock $56.9 million related to
these services, which is included in other liabilities. John Hancock has
guaranteed that, if necessary, it will make additional capital contributions to
prevent the Company's shareholder's equity from declining below $1.0 million.

The Company has a modified coinsurance agreement with John Hancock to
reinsure 50% of the Company's 1995 in-force block and 50% of 1996 and all future
issue years of certain retail annuity contracts. In connection with this
agreement, the Company is holding a deposit liability of $102.2 million as of
December 31, 2000. This agreement had no impact on the Company's net gain from
operations.

Effective January 1, 1997, the Company entered into a stop-loss agreement
with John Hancock to reinsure mortality claims in excess of 100% of expected
mortality claims for all policies that are not reinsured under any other
indemnity agreement. In connection with the agreement, John Hancock received
$1.0 million from the Company in 2000. This agreement increased the Company's
net gain from operations in 2000 by $1.1 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments

The following information summarizes the components of net investment
income and realized investment losses, net:

Year Ended
December 31
2000
---------------
(in millions)

Net Investment Income
Fixed maturities............................................................................................. $138.5
Equity securities............................................................................................ 0.2
Mortgage loans on real estate................................................................................ 44.3
Real estate.................................................................................................. 4.1
Policy loans................................................................................................. 17.1
Short-term investments....................................................................................... 19.4
Other........................................................................................................ 1.1
------
Gross investment income...................................................................................... 224.7
Less investment expenses.................................................................................. 11.3
------
Net investment income..................................................................................... $213.4
======
Net Realized Investment Gains (Losses), Net of Related
Amortization of Deferred Policy Acquisition Costs
Fixed maturities.............................................................................................. $(16.0)
Equity securities............................................................................................. 0.8
Mortgage loans on real estate and real estate................................................................. (2.3)
Derivatives and other invested assets......................................................................... 3.1
Amortization adjustment for deferred policy acquisition costs................................................. 3.8
------
Net realized investment losses, net of related amortization of deferred policy acquisition costs.............. $(10.6)
======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Gross gains of $1.5 million in 2000 and gross losses of $6.0 million in
2000 were realized on the sale of available-for-sale securities.

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

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)

December 31, 2000
Held-to-Maturity:
Corporate securities..................................................... $ 684.2 $23.4 $51.0 $ 656.6
Mortgage-backed securities............................................... 29.3 0.2 1.2 28.3
Obligations of states and political subdivisions......................... 1.9 0.0 0.0 1.9
-------- ----- ----- --------
Total................................................................. $ 715.4 $23.6 $52.2 $ 686.8
======== ===== ===== ========
Available-for-sale:
Corporate securities..................................................... $ 751.6 $20.6 $27.8 $ 744.4
Mortgage-backed securities............................................... 239.1 3.6 3.7 239.0
Obligations of states and political subdivisions......................... 0.9 0.0 0.0 0.9
Debt securities issued by foreign governments............................ 11.1 0.3 0.6 10.8
U.S. Treasury securities and obligations of U.S. government
corporations and agencies............................................. 16.1 0.7 0.1 16.7
-------- ----- ----- --------
Total fixed maturities................................................... 1,018.8 25.2 32.2 1,011.8
Equity securities........................................................ 7.1 2.8 1.8 8.1
-------- ----- ----- --------
Total................................................................. $1,025.9 $28.0 $34.0 $1,019.9
======== ===== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

The amortized cost and fair value of fixed maturities at December 31, 2000,
by contractual maturity, are shown below:

Amortized Fair
Cost Value
--------- ----------
(in millions)

Held-to-Maturity:
Due in one year or less................................. $ 71.9 $ 72.1
Due after one year through five years................... 234.8 235.0
Due after five years through ten years.................. 222.5 223.0
Due after ten years..................................... 156.9 128.4
-------- --------
686.1 658.5
Mortgage-backed securities.............................. 29.3 28.3
-------- --------
Total.................................................. $ 715.4 $ 686.8
======== ========
Available-for-Sale:
Due in one year or less................................. $ 24.9 $ 24.8
Due after one year through five years................... 332.3 333.0
Due after five years through ten years.................. 290.0 281.0
Due after ten years..................................... 132.5 134.0
-------- --------
779.7 772.8
Mortgage-backed securities.............................. 239.1 239.0
-------- --------
Total.................................................. $1,018.8 $1,011.8
======== ========

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

The Company participates in a securities lending program for the purpose of
enhancing income on securities held. At December 31, 2000, $1.4 million of the
Company's bonds and stocks, at market value, were on loan to various
brokers/dealers, but were fully collateralized by cash and U.S. government
securities in an account held in trust for the Company. The market value of the
loaned securities is monitored on a daily basis, and the Company obtains
additional collateral when deemed appropriate.

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Changes in the allowance for probable losses on mortgage loans on real
estate were as follows:

Balance at Balance at
Beginning End of
of Year Additions Deductions Year
---------- --------- ---------- ----------
(in millions)

Year ended December 31, 2000
Mortgage loans on real
estate...................... $3.8 $1.2 $0.0 $5.0
==== ==== ==== ====

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

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

Impaired mortgage loans on real estate with provision for
losses....................................................... $4.2
Provision for losses.......................................... 1.2
----
Net impaired mortgage loans on real estate.................... $3.0
====

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

Year Ended
December 31
2000
-------------
(in millions)

Average recorded investment in impaired loans................. $2.1
Interest income recognized on impaired loans.................. 0.3

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

Restructured commercial mortgage loans aggregated $3.4 million as of
December 31, 2000.The expected gross interest income that would have been
recorded had the loans been current in accordance with the original loan
agreements and the actual interest income recorded were as follows:

Year Ended
December 31
2000
-------------
(in millions)

Expected...................................................... 0.34
Actual........................................................ 0.27

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

At December 31, 2000, the mortgage portfolio was diversified by geographic
region and specific collateral property type as displayed below:

Carrying Geographic Carrying
Property Type Amount Concentration Amount
- ------------- ------------- ------------- ---------------
(in millions) (in millions)

Apartments.............. $129.2 East North Central......... $ 68.1
Hotels.................. 15.1 East South Central......... 27.6
Industrial.............. 77.4 Middle Atlantic............ 27.1
Office buildings........ 99.2 Mountain................... 35.7
Retail.................. 45.7 New England................ 44.5
Mixed Use............... 13.5 Pacific.................... 120.7
Agricultural............ 165.6 South Atlantic............. 156.7
Other................... 14.1 West North Central......... 16.9
West South Central......... 59.3
Canada/Other............... 3.2
Allowance for losses.... (5.0) Allowance for losses....... (5.0)
------ ------
Total.................. $554.8 Total..................... $554.8
====== ======

Bonds with amortized cost of $7.0 million were non-income producing for the
year ended December 31, 2000.

Depreciation expense on investment real estate was $0.6 million in 2000.
Accumulated depreciation was $2.5 million at December 31, 2000.

Investments in unconsolidated joint ventures and partnerships accounted for
by using the equity method of accounting totaled $0.4 million at December 31,
2000. Total combined assets of these joint ventures and partnerships were $28.5
million (consisting primarily of investments), and total combined liabilities
were $8.7 million (including $2.9 million of non-recourse notes payable to
banks) at December 31, 2000. Total combined revenues and expenses of such joint
ventures and partnerships were $77.6 million and $76.3 million, respectively,
resulting in $1.3 million of total combined income from operations before income
taxes in 2000. Net investment income on investments accounted for on the equity
method totaled $0.4 million in 2000.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments are as follows:

Number of
Contracts/ Assets (Liabilities)
Notional ----------------------
Amounts 2000
---------- ----------------------
Carrying Fair
2000 Value Value
---------- ----------- ---------
(in millions)

Asset Hedges:
Futures contracts to sell securities..... 6 -- --
Interest rate swap agreements
Notional................................ $600.0 -- (10.8)
Average fixed rate--paid................ 6.38% -- --
Average float rate--received............ 6.69% -- --
Currency rate swap agreements............ $ 22.3 (0.6) (0.6)
Equity collar agreements................. -- 0.4 0.4
Liability Hedges:
Futures contracts to acquire securities.. 43 0.1 0.1
Interest rate swap agreements
Notional................................ $570.0 9.6
Average fixed rate--received............ 6.43% -- --
Average float rate--paid................ 6.69% -- --
Interest rate cap agreements............. $239.4 2.1 2.1
Interest rate floor agreements........... 485.4 4.5 4.5

Financial futures contracts are used principally to hedge risks associated
with interest rate fluctuations on anticipated fixed income asset acquisitions.
The Company is subject to the risks associated with changes in the value of the
underlying securities; however, such changes in value generally are offset by
opposite changes in the value of the hedged items. The contracts or notional
amounts of the contracts represent the extent of the Company's involvement but
not the future cash requirements, as the Company intends to close the open
positions prior to settlement. The futures contracts expire in March 2001.

The interest rate swap agreements expire in 2001 to 2011. The interest rate
cap agreements expire in 2006 to 2007 and interest rate floor agreements expire
in 2010. The currency rate swap agreements expire in 2006 to 2015. The equity
collar agreements expire in 2005.

Fair values for futures contracts are based on quoted market prices. Fair
values for interest rate swap, cap and floor agreements, swaptions, and currency
swap agreements and equity collar agreements are based on current settlement
values. The current settlement values are based on quoted market prices, which
utilize pricing models or formulas using current assumptions.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives (continued)

The Company's exposure to credit risk is the risk of loss from a
counterparty failing to perform to the terms of the contract. The Company
continually monitors its position and the credit ratings of the counterparties
to these derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

Note 5. Income Taxes

The Company is included in the consolidated federal income tax return of
John Hancock Financial Services, Inc. The federal income taxes of the Company
are allocated on a separate return basis with certain adjustments.

The components of income taxes were as follows:

Year Ended
December 31
2000
-------------
(in millions)

Current taxes:
Federal......................................................... $15.2
Foreign......................................................... 0.6
-----
15.8

Deferred taxes:
Federal......................................................... 28.0
Foreign......................................................... --
-----
28.0
-----
Total income taxes............................................. $43.8
=====

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

Year Ended
December 31
2000
-------------
(in millions)

Tax at 35%....................................................... $50.1
Add (deduct):
Equity base tax................................................. (5.6)
Tax credits..................................................... (0.6)
Foreign taxes................................................... 0.6
Tax exempt investment income.................................... (0.7)
-----
Total income taxes............................................. $43.8
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 5. Income Taxes (continued)

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

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

Deferred Tax Assets:
Policy reserve adjustments.................................. $ 74.6
Other postretirement benefits............................... 23.3
Book over tax basis of investments.......................... 7.8
Interest.................................................... 7.5
Unrealized losses........................................... 1.4
------
Total deferred tax assets.................................. 114.6
------
Deferred Tax Liabilities:
Deferred policy acquisition costs........................... 199.1
Depreciation................................................ 1.8
Basis in partnerships....................................... 0.4
Market discount on bonds.................................... 0.6
Other....................................................... 9.5
------
Total deferred tax liabilities............................. 211.4
------
Net deferred tax liabilities............................... $ 96.8
======

The Company made income tax payments of $62.9 million in 2000.

Note 6. Debt and Line of Credit

At December 31, 2000, the Company had a line of credit with John Hancock
Capital Corporation, an indirect, wholly-owned subsidiary of John Hancock,
totaling $250.0 million. John Hancock Capital Corporation will commit, when
requested, to loan funds at prevailing interest rates as agreed to from time to
time between John Hancock Capital Corporation and the Company. At December 31,
2000, the Company had no outstanding borrowings under the agreement.

Note 7. Reinsurance

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

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

Life Insurance:
Direct...................................................... $34.1 $34.1
Ceded....................................................... (5.5) (5.5)
----- -----
Net life insurance premiums................................ $28.6 $28.6
===== =====

For the year ended December 31, 2000, benefits to policyholders under life
ceded reinsurance contracts were $3.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 7. Reinsurance (continued)

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

Note 8. Commitments and Contingencies

The Company has extended commitments to purchase long-term bonds, issue
real estate mortgages and purchase other assets totaling $37.0 million, $6.3
million and $17.4 million, respectively, at December 31, 2000. The Company
monitors the creditworthiness of borrowers under long-term bond commitments and
requires collateral as deemed necessary. If funded, loans related to real estate
mortgages would be fully collateralized by the related properties. The estimated
fair value of the commitments described above was $62.9 million at December 31,
2000. The majority of these commitments expire in 2001.

In the normal course of its business operations, the Company is involved
with litigation from time to time with claimants, beneficiaries and others, and
a number of litigation matters were pending as of December 31, 2000. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

During 1997, John Hancock entered into a court-approved settlement relating
to a class action lawsuit involving certain individual life insurance policies
sold from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. The reserve held in connection with the
settlement to provide for relief to class members and for legal and
administrative costs associated with the settlement amounted to $66.3 million at
December 31, 2000. No costs were incurred in 2000. The estimated reserve is
based on a number of factors, including the estimated cost per claim and the
estimated costs to administer the claims.

During 1996, management determined that it was probable that a settlement
would occur and that a minimum loss amount could be reasonably estimated.
Accordingly, the Company recorded its best estimate based on the information
available at the time. The terms of the settlement agreement were negotiated
throughout 1997 and approved by the court on December 31, 1997. In accordance
with the terms of the settlement agreement, the Company contacted class members
during 1998 to determine the actual type of relief to be sought by class
members. The majority of responses from class members were received by the
fourth quarter of 1998. The type of relief sought by class members differed from
the Company's previous estimates, primarily due to additional outreach
activities by regulatory authorities during 1998 encouraging class members to
consider alternative dispute resolution relief. In 1999, the Company updated its
estimate of the cost of claims subject to alternative dispute resolution relief
and revised its reserve estimate accordingly.

Given the uncertainties associated with estimating the reserve, it is
reasonably possible that the final cost of the settlement could differ
materially from the amounts presently provided for by the Company. John Hancock
and the Company will continue to update their estimate of the final cost of the
settlement as claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at the
time, and the uncertainties associated with the final claim processing and
alternative dispute resolution, the range of any additional costs related to the
settlement cannot be estimated with precision. If the Company's share of the
settlement increases, John Hancock will contribute additional capital to the
Company so that the Company's total shareholder's equity would not be impacted.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity

(a) Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

Accumulated
Other
Comprehensive
Income
-------------

Balance at January 1, 2000...................................... ($13.4)
------
Gross unrealized gains (net of deferred income tax expense of
$9.7 million).................................................. 18.0
Less reclassification adjustment for gains, realized in net
income (net of tax expense of $1.6 million).................... (2.9)
Adjustment to deferred policy acquisition costs (net of
deferred income tax benefit of $2.1 million)................... (3.9)
------
Net unrealized gains............................................ 11.2
------
Balance at December 31, 2000.................................... ($2.2)
======

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

2000
-------------
(in millions)

Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................................... ($7.0)
Equity investments............................................. 1.0
Derivatives and other.......................................... 0.3
------
Total......................................................... (5.7)
Amounts attributable to:
Deferred policy acquisition cost............................... 2.1
Deferred federal income taxes.................................. 1.4
------
Total......................................................... 3.5
------
Net unrealized investment gains............................... ($2.2)
======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity (Continued)

(b) Statutory Results

The Company and its domestic insurance subsidiary prepare their
statutory-basis financial statements in accordance with accounting practices
prescribed or permitted by the state of domicile. Prescribed statutory
accounting practices include state laws, regulations and administrative rules,
as well as guidance published by the NAIC. Permitted accounting practices
encompass all accounting practices that are not prescribed by the sources noted
above. Since 1988, the Commonwealth of Massachusetts Division of Insurance has
provided the Company with approval to recognize a pension plan prepaid expense
in accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Commonwealth of Massachusetts Division of
Insurance with an actuarial certification of the prepaid expense computation on
an annual basis. The pension plan prepaid expense amounted to $55.6 million at
December 31, 2000.

Statutory net income and surplus include the accounts of the Company and
its wholly-owned subsidiary, Investors Partners Life Insurance Company.

2000
-------------
(in millions)

Statutory net income............................................ $ 26.6
Statutory surplus............................................... 527.2

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

Note 10. Segment Information

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

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

Retail-Asset Gathering Segment. Offers individual annuities, consisting of
fixed deferred annuities, fixed immediate annuities, single premium immediate
annuities, and variable annuities. This segment distributes its products through
distribution channels including insurance agents and brokers affiliated with the
Company, securities brokerage firms, financial planners, and banks.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

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

Amounts reported as segment adjustments in the tables below primarily
relate to: (i) certain realized investment gains (losses), net of related
amortization adjustment for deferred policy acquisition costs; (ii) benefits to
policyholders and expenses incurred relating to the settlement of a class action
lawsuit against the Company involving certain individual life insurance policies
sold from 1979 through 1996; (iii) restructuring costs related to our
distribution systems and retail operations; (iv) the surplus tax on mutual life
insurance companies that was allocated by John Hancock to the Company; and (v) a
charge for certain one time costs associated with John Hancock's demutualization
process.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

Retail
Retail Asset
Protection Gathering Consolidated
---------- --------- --------------
2000
Revenues:
Segment revenues....................... $ 530.8 $ 48.5 $ 579.3
Realized investment losses, net........ (10.6) -- (10.6)
-------- -------- ---------
Revenues............................... $ 520.2 $ 48.5 $ 568.7
======== ======== =========
Net investment income.................. $ 215.9 ($2.5) $ 213.4
Net Income:
Segment after-tax operating income..... 96.0 6.3 102.3
Realized investment losses, net........ (6.8) -- (6.8)
Restructuring charges.................. (1.1) -- (1.1)
Surplus tax............................ 5.4 0.2 5.6
Other demutualization related costs.... (0.5) (0.1) (0.6)
-------- -------- ---------
Net income............................. $ 93.0 $ 6.4 $ 99.4
======== ======== =========
SupplementaL Information:
Equity in net income of investees
accounted for by the equity method.... $ 1.3 -- $ 1.3
Amortization of deferred policy
acquisition costs..................... 17.6 16.4 34.0
Income tax expense..................... 40.7 3.1 43.8
Segment assets......................... 9,326.9 2,867.8 12,194.7
Net Realized Investment Gains Data:
Net realized investment losses......... $ (14.4) -- $ (14.4)
Add capitalization/less amortization of
deferred policy acquisition costs
related to net realized investment
gains (losses)........................ 3.8 -- 3.8
-------- -------- ---------
Net realized investment losses, net of
related amortization of deferred
policy acquisition costs--per
consolidated financial statements..... (10.6) -- (10.6)
Less income tax effect................. 3.8 -- 3.8
-------- -------- ---------
Realized investment losses,
net-after-tax adjustment made to
calculate segment operating income.... ($6.8) -- ($6.8)
======== ======== =========

The Company operates only in the United States. The Company has no
reportable major customers and revenues are attributed to countries based on the
location of customers.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value Of Financial Instruments

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

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

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

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

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

The fair value for fixed-rate deferred annuities is the cash surrender
value, which represents the account value less applicable surrender
charges. Fair values for immediate annuities without life contingencies are
estimated based on discounted cash flow calculations using current market
rates.

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

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value Of Financial Instruments (continued)

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

December 31
2000
--------------------------
Carrying Value Fair Value
-------------- ----------
(in millions)

Assets:
Fixed maturities:
Held-to-maturity............................... $ 715.4 $ 686.8
Available-for-sale............................. 1,011.8 1,011.8
Equity securities:
Available-for-sale............................. 8.1 8.1
Mortgage loans on real estate................... 554.8 574.2
Policy loans.................................... 334.2 334.2
Short-term investments.......................... 21.7 21.7
Cash and cash equivalents....................... 277.3 277.3
Liabilities:
Fixed rate deferred and immediate annuities...... 63.8 60.4

Derivatives assets/(liabilities) relating to:
Futures contracts, net......................... 0.1 0.1
Interest rate swap agreements.................. (1.2)
Interest rate cap agreements................... 2.1 2.1
Interest rate floor agreements................. 4.5 4.5
Currency rate swap agreements.................. (0.6) (0.6)
Equity collar agreements....................... 0.4 0.4
Commitments...................................... -- 62.9

REPORT OF INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

We have audited the accompanying statutory-basis statements of financial
position of John Hancock Variable Life Insurance Company as of December 31,
2000, 1999 and 1998, and the related statutory-basis statements of operations
and unassigned deficit and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

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

As described in Note 1 to the financial statements, the Company presents
its financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from accounting principles generally accepted in the United
States. The variances between such practices and accounting principles generally
accepted in the United States and the effects on the accompanying financial
statements also are described in Note 1.

In our opinion, because of the effects of the matter described in the
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with accounting principles generally accepted in the
United States, the financial position of John Hancock Variable Life Insurance
Company at December 31, 2000, 1999, and 1998, or the results of its operations
or its cash flows for each of the three years in the period ended December 31,
2000.

However, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of John Hancock
Variable Life Insurance Company at December 31, 2000, 1999, and 1998, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000 in conformity with accounting practices
prescribed or permitted by the Commonwealth of Massachusetts Division of
Insurance. Also, in our opinion, the related financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

/S/ ERNST & YOUNG LLP
Boston, Massachusetts
March 9, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

December 31
----------------------------------
2000 1999 1998
---------- ----------- -----------
(in millions)

Assets
Bonds--Note 6............................ $ 1,400.5 $ 1,216.3 $1,185.8
Preferred stocks......................... 44.0 35.9 36.5
Common stocks............................ 2.8 3.2 3.1
Investment in affiliates................. 84.8 80.7 81.7
Mortgage loans on real estate--Note 6.... 456.0 433.1 388.1
Real estate.............................. 24.5 25.0 41.0
Policy loans............................. 218.9 172.1 137.7
Cash items:
Cash in banks........................... 45.4 27.2 11.4
Temporary cash investments.............. 226.6 222.9 8.5
--------- --------- --------
272.0 250.1 19.9
Premiums due and deferred................ 73.0 29.9 32.7
Investment income due and accrued........ 43.3 33.2 29.8
Other general account assets............. 17.6 65.3 47.5
Assets held in separate accounts......... 8,082.8 8,268.2 6,595.2
--------- --------- --------
Total Assets............................ $10,720.2 $10,613.0 $8,599.0
========= ========= ========

Obligations And Stockholder's Equity
Obligations
Policy reserves.......................... $ 2,207.9 $ 1,866.6 $1,652.0
Federal income and other taxes
payable--Note 1......................... (7.4) 67.3 44.3
Other general account obligations........ 166.3 219.0 150.9
Transfers from separate accounts, net.... (198.5) (221.6) (190.3)
Asset valuation reserve--Note 1.......... 26.7 23.1 21.9
Obligations related to separate accounts. 8,076.4 8,261.6 6,589.4
--------- --------- --------
Total Obligations...................... 10,271.4 10,216.0 8,268.2
========= ========= ========
Stockholder's Equity
Common Stock, $50 par value; authorized
50,000 shares; issued and outstanding
50,000 shares........................... 2.5 2.5 2.5
Paid-in capital.......................... 572.4 572.4 377.5
Unassigned deficit--Note 10.............. (126.1) (177.9) (49.2)
--------- --------- --------
Total Stockholder's Equity.............. 448.8 397.0 330.8
--------- --------- --------
Total Obligations and Stockholder's
Equity.................................. $10,720.2 $10,613.0 $8,599.0
========= ========= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

Year ended December 31
-------------------------------
2000 1999 1998
-------- -------- --------
(In Millions)

Income
Premiums.................................................................................. $ 945.5 $ 950.8 $1,272.3
Net investment income--Note 3............................................................. 176.7 136.0 122.8
Other, net................................................................................ 475.6 605.4 618.1
-------- -------- --------
1,597.8 1,692.2 2,013.2
Benefits and Expenses
Payments to policyholders and beneficiaries............................................... 340.8 349.9 301.4
Additions to reserves to provide for future payments to policyholders and
beneficiaries........................................................................... 844.4 888.8 1,360.2
Expenses of providing service to policyholders and obtaining new insurance--Note 5........ 363.4 314.4 274.2
State and miscellaneous taxes............................................................. 25.8 20.5 28.1
-------- -------- --------
1,574.4 1,573.6 1,963.9
-------- -------- --------
Gain From Operations Before Federal Income Tax (Credit) Expense and Net
Realized Capital Losses................................................................. 23.4 118.6 49.3
Federal income tax (credit) expense--Note 1................................................ (18.0) 42.9 33.1
-------- -------- --------
Gain From Operations Before Net Realized Capital Losses.................................... 41.4 75.7 16.2
Net realized capital losses--Note 4........................................................ (18.2) (1.7) (0.6)
-------- -------- --------
Net Income................................................................................. 23.2 74.0 15.6
Unassigned deficit at beginning of year.................................................... (177.9) (49.2) (58.3)
Net unrealized capital gains (losses) and other adjustments--Note 4........................ 8.0 (3.8) (6.0)
Adjustment to premiums due and deferred.................................................... 21.4 -- --
Other reserves and adjustments--Note 10.................................................... (0.8) (198.9) (0.5)
-------- -------- --------
Unassigned Deficit at End of Year.......................................................... $ (126.1) $ (177.9) $ (49.2)
======== ======== ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

Year ended December 31
-----------------------------
2000 1999 1998
------- ------- --------
(In millions)

Cash flows from operating activities:
Insurance premiums........................................................... $ 939.9 $ 958.5 $1,275.3
Net investment income........................................................ 166.0 134.2 118.2
Benefits to policyholders and beneficiaries.................................. (315.1) (321.6) (275.5)
Dividends paid to policyholders.............................................. (26.1) (25.6) (22.3)
Insurance expenses and taxes................................................. (362.4) (344.8) (296.9)
Net transfers to separate accounts........................................... (513.0) (705.3) (874.4)
Other, net................................................................... 347.4 540.6 551.3
------- ------- --------
Net Cash Provided From Operations.......................................... 236.7 236.0 475.7
------- ------- --------
Cash flows used in investing activities:
Bond purchases............................................................... (450.7) (240.7) (618.8)
Bond sales................................................................... 148.0 108.3 340.7
Bond maturities and scheduled redemptions.................................... 80.0 78.4 111.8
Bond prepayments............................................................. 29.4 18.7 76.5
Stock purchases.............................................................. (8.8) (3.9) (23.4)
Proceeds from stock sales.................................................... 1.7 3.6 1.9
Real estate purchases........................................................ (0.4) (2.2) (4.2)
Real estate sales............................................................ 0.2 17.8 2.1
Other invested assets purchases.............................................. (13.8) (4.5) --
Mortgage loans issued........................................................ (85.7) (70.7) (145.5)
Mortgage loan repayments..................................................... 61.6 25.3 33.2
Other, net................................................................... 23.7 (68.9) (435.2)
------- ------- --------
Net Cash Used in Investing Activities....................................... (214.8) (138.8) (660.9)
------- ------- --------

Cash flows from financing activities:
Capital contribution......................................................... -- 194.9 --
Net (decrease) increase in short-term note payable........................... -- (61.9) 61.9
------- ------- --------
Net Cash Provided From Financing Activities................................. -- 133.0 61.9
------- ------- --------
Increase (Decrease) in Cash and Temporary Cash Investments.................. 21.9 230.2 (123.3)
Cash and temporary cash investments at beginning of year...................... 250.1 19.9 143.2
------- ------- --------
Cash and Temporary Cash Investments at End of Year......................... $ 272.0 $ 250.1 $ 19.9
======= ======= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Note 1. Nature of Operations and Significant Accounting Practices

John Hancock Variable Life Insurance Company (the Company) is a wholly-owned
subsidiary of John Hancock Life Insurance Company (John Hancock). The Company,
domiciled in the Commonwealth of Massachusetts, writes variable and universal
life insurance policies and variable annuity contracts. Those policies primarily
are marketed through John Hancock's sales organization, which includes a career
agency system composed of Company-supported independent general agencies and a
direct brokerage system that markets directly to external independent brokers.
Policies also are sold through various unaffiliated securities broker-dealers
and certain other financial institutions. Currently, the Company writes business
in all states except New York.

The preparation of financial statements requires management to make estimates
and assumptions that affect amounts reported in the financial statements and
accompanying notes. Such estimates and assumptions could change in the future as
more information becomes known, which could impact the amounts reported and
disclosed herein.

Basis of Presentation: The financial statements have been prepared using
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance and in conformity with the practices of the
National Association of Insurance Commissioners (NAIC), which practices differ
from generally accepted accounting principles (GAAP).

The significant differences from GAAP include:(1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized in relation to
future estimated gross profits; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available-for-
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred. The carrying values of investment
securities and real estate are reduced through the income statement when there
has been a decline in value deemed other than temporary and mortgage loan
valuation allowances, if necessary, are established when the Company determines
it is probable that it will be unable to collect all amounts of principal and
interest due according to the contractual terms of the mortgage loan agreement;
(7) investments in affiliates are carried at their net equity value with changes
in value being recorded directly to unassigned deficit rather than consolidated
in the financial statements; (8) no provision is made for the deferred income
tax effects of temporary differences between book and tax basis reporting; and
(9) certain items, including modifications to required policy reserves resulting
from changes in actuarial assumptions, are recorded directly to unassigned
deficit rather than being reflected in income. GAAP net income for the year
ended December 31, 2000 and GAAP shareholder's equity as of December 31, 2000
and 1999 were $99.4 million, $805.6 million and $695.0 million, respectively.
The effects of variances from GAAP on net income for the year ended December 31,
1999 have not been determined but are presumed to be material.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The significant accounting practices of the Company are as follows:

Permitted Statutory Accounting Practices: In March 1998, the National
Association of Insurance Commissioners (NAIC) adopted codified statutory
accounting principles (Codification) effective January 1, 2001. Codification
changes prescribed statutory accounting practices and results in changes to the
accounting practices that the Company will use to prepare its statutory-basis
financial statements. The Commonwealth of Massachusetts Division of Insurance
has adopted Codification as the prescribed basis of accounting on which domestic
insurers must report their statutory-basis results effective January 1, 2001.
The cumulative effect of changes in accounting principles adopted to conform to
the requirements of Codification will be reported as an adjustment to surplus as
of January 1, 2001. Management believes that, although the implementation of
Codification will have a negative impact on the Company's statutory-basis
capital and surplus, the Company will remain in compliance with all regulatory
and contractual obligations.

Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of new
business, are charged to operations as incurred and policyholder dividends are
provided as paid or accrued.

Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-term,
highly-liquid investments both readily convertible to known amounts of cash and
so near maturity that there is insignificant risk of changes in value because of
changes in interest rates.

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

Bond and stock values are carried as prescribed by the NAIC; bonds generally
at amortized amounts or cost, preferred stocks generally at cost and common
stocks at fair value. The discount or premium on bonds is amortized using the
interest method.

Investments in affiliates are included on the statutory equity method.

Loan-backed bonds and structured securities are valued at amortized cost using
the interest method including anticipated prepayments. Prepayment assumptions
are obtained from broker dealer surveys or internal estimates and are based on
the current interest rate and economic environment. The retrospective
adjustment method is used to value all such securities except for
interest-only securities, which are valued using the prospective method.

The net interest effect of interest rate and currency rate swap transactions
is recorded as an adjustment of interest income as incurred. The initial cost
of interest rate cap and floor agreements is amortized to net investment
income over the life of the related agreement. Gains and losses on financial
futures contracts used as hedges against interest rate fluctuations are
deferred and recognized in income over the period being hedged. Net premiums
related to equity collar positions are amortized into income on a
straight-line basis over the term of the collars. The interest rate cap and
floor agreements and collars are carried at fair value, with changes in fair
value reflected directly in unassigned deficit.

Mortgage loans are carried at outstanding principal balance or amortized cost.

Investment real estate is carried at depreciated cost, less encumbrances.
Depreciation on investment real estate is recorded on a straight-line basis.
Accumulated depreciation amounted to $2.5 million in 2000, $1.9 million in
1999, and $3.0 million in 1998.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Real estate acquired in satisfaction of debt and real estate held for sale are
carried at the lower of cost or fair value.

Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.

Asset Valuation and Interest Maintenance Reserves: The Asset Valuation Reserve
(AVR) is computed in accordance with the prescribed NAIC formula and represents
a provision for possible fluctuations in the value of bonds, equity securities,
mortgage loans, real estate and other invested assets. Changes to the AVR are
charged or credited directly to the unassigned deficit.

The Company also records the NAIC prescribed Interest Maintenance Reserve
(IMR) that represents that portion of the after tax net accumulated unamortized
realized capital gains and losses on sales of fixed income securities,
principally bonds and mortgage loans, attributable to changes in the general
level of interest rates. Such gains and losses are deferred and amortized into
income over the remaining expected lives of the investments sold. At December
31, 2000, the IMR, net of 2000 amortization of $1.6 million, amounted to $4.2
million, which is included in other general account obligations. The
corresponding 1999 amounts were $2.3 million and $7.4 million, respectively, and
the corresponding 1998 amounts were $2.4 and $10.7 million, respectively.

Goodwill: The excess of cost over the statutory book value of the net assets
of life insurance business acquired was $6.3 million, $8.9 million, and $11.4
million at December 31, 2000, 1999 and 1998, respectively, and generally is
amortized over a ten-year period using a straight-line method.

Separate Accounts: Separate account assets and liabilities reported in the
accompanying statements of financial position represent funds that are
separately administered, principally for variable annuity contracts and variable
life insurance policies, and for which the contractholder, rather than the
Company, generally bears the investment risk. Separate account obligations are
intended to be satisfied from separate account assets and not from assets of the
general account. Separate accounts generally are reported at fair value. The
operations of the separate accounts are not included in the statement of
operations; however, income earned on amounts initially invested by the Company
in the formation of new separate accounts is included in other income.

Fair Value Disclosure of Financial Instruments: Statement of Financial
Accounting Standards (SFAS) No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about certain
financial instruments, whether or not recognized in the statement of financial
position, for which it is practicable to estimate the value. In situations where
quoted market prices are not available, fair values are based on estimates using
present value or other valuation techniques. SFAS No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Therefore, the aggregate fair value amounts presented do not
represent the underlying value of the Company. See Note 11.

The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for cash
and temporary cash investments approximate their fair values.

Fair values for public bonds are obtained from an independent pricing service.
Fair values for private placement securities and publicly traded bonds not
provided by the independent pricing service are estimated by the Company by
discounting expected future cash flows using current market rates applicable
to the yield, credit quality and maturity of the investments.

The fair values for common and preferred stocks, other than its subsidiary
investments, which are carried at equity values, are based on quoted market
prices.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Fair values for futures contracts are based on quoted market prices. Fair
values for interest rate swap, cap agreements, and currency swap agreements
are based on current settlement values. The current settlement values are
based on brokerage quotes that utilize pricing models or formulas using
current assumptions.

The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit characteristics
of the underlying loans. Mortgage loans with similar characteristics and
credit risks are aggregated into qualitative categories for purposes of the
fair value calculations.

The carrying amount in the statement of financial position for policy loans
approximates their fair value.

The fair value for outstanding commitments to purchase long-term bonds and
issue real estate mortgages is estimated using a discounted cash flow method
incorporating adjustments for the difference in the level of interest rates
between the dates the commitments were made and December 31, 2000.

Capital Gains and Losses: Realized capital gains and losses are determined
using the specific identification method. Realized capital gains and losses, net
of taxes and amounts transferred to the IMR, are included in net gain or loss.
Unrealized gains and losses, which consist of market value and book value
adjustments, are shown as adjustments to the unassigned deficit.

Policy Reserves: Life reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest rates
and valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum or guaranteed policy cash values or the
amounts required by the Commonwealth of Massachusetts Division of Insurance.
Reserves for variable life insurance policies are maintained principally on the
modified preliminary term method using the 1958 and 1980 Commissioner's Standard
Ordinary (CSO) mortality tables, with an assumed interest rate of 4% for
policies issued prior to May 1, 1983 and 4 1/2% for policies issued on or
thereafter. Reserves for single premium policies are determined by the net
single premium method using the 1958 CSO mortality table, with an assumed
interest rate of 4%. Reserves for universal life policies issued prior to 1985
are equal to the gross account value which at all times exceeds minimum
statutory requirements. Reserves for universal life policies issued from 1985
through 1988 are maintained at the greater of the Commissioner's Reserve
Valuation Method (CRVM) using the 1958 CSO mortality table, with 4 1/2% interest
or the cash surrender value. Reserves for universal life policies issued after
1988 and for flexible variable policies are maintained using the greater of the
cash surrender value or the CRVM method with the 1980 CSO mortality table and 5
1/2% interest for policies issued from 1988 through 1992; 5% interest for
policies issued in 1993 and 1994; and 4 1/2% interest for policies issued in
1995 through 2000.

Federal Income Taxes: Federal income taxes are reported in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company are
consolidated with John Hancock in filing a consolidated federal income tax
return for the affiliated group. The federal income taxes of the Company are
allocated on a separate return basis with certain adjustments. The Company made
federal income tax payments of $65.1 million in 2000, $10.6 million in 1999, and
$38.2 million in 1998.

Income before taxes differs from taxable income principally due to tax-exempt
investment income, the limitation placed on the tax deductibility of
policyholder dividends, accelerated depreciation, differences in policy reserves
for tax return and financial statement purposes, capitalization of policy
acquisition expenses for tax purposes and other adjustments prescribed by the
Internal Revenue Code.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Amounts for disputed tax issues relating to the prior years are charged or
credited directly to policyholders' contingency reserve.

Adjustments to Policy Reserves: From time to time, the Company finds it
appropriate to modify certain required policy reserves because of changes in
actuarial assumptions. Reserve modifications resulting from such determinations
are recorded directly to stockholder's equity. No such refinements were made
during 2000, 1999 or 1998.

Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms of
the reinsurance contracts. Premiums ceded to other companies have been reported
as a reduction of premium income. Amounts applicable to reinsurance ceded for
future policy benefits, unearned premium reserves and claim liabilities have
been reported as reductions of these items.

Note 2. Investment in Affiliate

The Company owns all outstanding shares of Investors Partner Life Insurance
Company (IPL). IPL manages a block of single premium whole life insurance
business and began marketing term life and variable universal life products
through brokers in 1999.

Summarized statutory-basis financial information for IPL for 2000, 1999 and
1998 is as follows:

2000 1999 1998
------ ------ --------
(In millions)

Total assets........................................ $554.7 $571.0 $587.8
Total liabilities................................... 476.3 499.2 517.5
Total revenues...................................... 42.8 35.6 38.8
Net income.......................................... 3.3 3.5 3.8

Note 3. Net Investment Income

Investment income has been reduced by the following amounts:

2000 1999 1998
----- ----- -------
(In millions)
Investment expenses.................................... $ 9.0 $ 9.5 $ 8.3
Interest expense....................................... -- 1.7 2.4
Depreciation expense................................... 0.6 0.6 0.8
Investment taxes....................................... 0.5 0.3 0.7
----- ----- -----
$10.1 $12.1 $12.2
===== ===== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 4. Net Capital Gains (Losses) and Other Adjustments

Net realized capital losses consist of the following items:

2000 1999 1998
------- ------ --------
(In millions)

Net (losses) gains from asset sales................ $(19.5) $(2.8) $ 7.6
Capital gains tax.................................. (0.3) 0.2 (2.9)
Amounts transferred to IMR......................... 1.6 0.9 (5.3)
------ ----- -----
Net realized capital losses....................... $(18.2) $(1.7) $(0.6)
====== ===== =====

Net unrealized capital gains (losses) and other adjustments consist of the
following items:

2000 1999 1998
----- ----- -----
(In millions)

Net gains (losses) from changes in security values and book value adjustments...................... $11.6 $(2.6) $(2.7)
Increase in asset valuation reserve................................................................ (3.6) (1.2) (3.3)
----- ----- -----
Net unrealized capital gains (losses) and other adjustments....................................... $ 8.0 $(3.8) $(6.0)
===== ===== =====

Note 5. Transactions With Parent

John Hancock provides the Company with personnel, property and facilities in
carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of criteria
which were revised in 2000, 1999 and 1998 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$162.2 million, $188.3 million, $157.5 million, in 2000, 1999, and 1998,
respectively, which has been included in insurance and investment expenses. John
Hancock has guaranteed that, if necessary, it will make additional capital
contributions to prevent the Company's stockholder's equity from declining below
$1.0 million.

The service fee charged to the Company by John Hancock includes $0.7 million,
$0.2 million, and $0.7 million in 2000, 1999, and 1998, respectively,
representing the portion of the provision for retiree benefit plans determined
under the accrual method, including a provision for the 1993 transition
liability which is being amortized over twenty years, that was allocated to the
Company. John Hancock allocates a portion of the activity related to its defined
benefit pension plans to the Company. The pension plan prepaid expense allocated
to the Company amounted to $55.0 million and $41.9 million in 2000 and 1999,
respectively. Since 1988, the Massachusetts Division of Insurance has provided
the Company with approval to recognize the pension plan prepaid expense, if any,
in accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Division of Insurance with an actuarial
certification of the prepaid expense computation on an annual basis.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 5. Transactions With Parent (continued)

The Company has a modified coinsurance agreement with John Hancock to reinsure
50% of 1994 through 2000 issues of flexible premium variable life insurance and
scheduled premium variable life insurance policies. In connection with this
agreement, John Hancock transferred $24.2 million, $44.5 million, and $4.9
million of cash for tax, commission, and expense allowances to the Company,
which decreased the Company's net gain from operations by $0.9 million in 2000,
and increased the Company's net gain from operations by$20.6 million, and $22.2
million in 1999, and 1998, respectively.

Effective January 1, 1996, the Company entered into a modified coinsurance
agreement with John Hancock to reinsure 50% of the 1995 inforce block and 50% of
1996 and all future issue years of certain variable annuity contracts
(Independence Preferred, Declaration, Independence 2000, MarketPlace, and
Revolution). In connection with this agreement, the Company received a net cash
payment of $17.4 million, $40.0 million, and $12.7 million in 2000, 1999, and
1998, respectively, for surrender benefits, tax, reserve increase, commission,
expense allowances and premium. This agreement increased the Company's net gain
from operations by $5.6 million, $26.9 million, and $8.4 million in 2000, 1999,
and 1998, respectively.

Effective January 1, 1997, the Company entered into a stop-loss agreement with
John Hancock to reinsure mortality claims in excess of 100% of expected
mortality claims in 2000, 1999 and 1998 for all policies that are not reinsured
under any other indemnity agreement. In connection with the agreement, John
Hancock received $1.0 million, $0.8 million, and $1.0 million in 2000, 1999, and
1998, respectively, for mortality claims to the Company. This agreement
decreased the Company's net gain from operations by $1.1 million in 2000 and
$0.5 million in both 1999 and 1998.

The Company had a $200.0 million line of credit with an affiliate, John
Hancock Capital Corp. At December 31, 2000 and 1999, the Company had no
outstanding borrowings under this agreement.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments

The statement value and fair value of bonds are shown below:

Gross Gross
Statement Unrealized Unrealized Fair
Value Gains Losses Value
--------- ---------- ---------- ----------
(In millions)

December 31, 2000
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.................. $ 5.7 $ -- $ -- $ 5.7
Obligations of states and political subdivisions.............. 1.8 -- -- 1.8
Debt securities issued by foreign governments................. 10.9 0.3 0.6 10.6
Corporate securities.......................................... 1,158.8 36.4 68.5 1,126.7
Mortgage-backed securities.................................... 223.3 3.4 4.6 222.1
-------- ----- ----- --------
Total bonds................................................ $1,400.5 $40.1 $73.7 $1,366.9
======== ===== ===== ========

December 31, 1999
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.................. $ 5.9 -- $ 0.1 $ 5.8
Obligations of states and political subdivisions.............. 2.2 $ 0.1 0.1 2.2
Debt securities issued by foreign governments................. 13.9 0.8 0.1 14.6
Corporate securities.......................................... 964.9 13.0 59.4 918.5
Mortgage-backed securities.................................... 229.4 0.5 7.8 222.1
-------- ----- ----- --------
Total bonds................................................ $1,216.3 $14.4 $67.5 $1,163.2
======== ===== ===== ========

December 31, 1998
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.................. $ 5.1 $ 0.1 -- $ 5.2
Obligations of states and political subdivisions.............. 3.2 0.3 -- 3.5
Corporate securities.......................................... 925.2 50.4 $15.0 960.6
Mortgage-backed securities.................................... 252.3 10.0 0.1 262.2
-------- ----- ----- --------
Total bonds................................................ $1,185.8 $60.8 $15.1 $1,231.5
======== ===== ===== ========

The statement value and fair value of bonds at December 31, 2000, by
contractual maturity, are shown below. Maturities will differ from contractual
maturities because eligible borrowers may exercise their right to call or prepay
obligations with or without call or prepayment penalties.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Statement Fair
Value Value
--------- ----------
(In millions)

Due in one year or less................................. $ 72.4 $ 72.5
Due after one year through five years................... 424.2 427.7
Due after five years through ten years.................. 428.5 419.5
Due after ten years..................................... 252.1 225.1
-------- --------
1,177.2 1,144.8
Mortgage-backed securities.............................. 223.3 222.1
-------- --------
$1,400.5 $1,366.9
======== ========

Gross gains of $0.9 million in 2000, $0.3 million in 1999, and $3.4 million in
1998 and gross losses of $3.0 million in 2000, $4.0 million in 1999 and $0.7
million in 1998 were realized from the sale of bonds.

At December 31, 2000, bonds with an admitted asset value of $9.6 million were
on deposit with state insurance departments to satisfy regulatory requirements.

The cost of common stocks was $3.1 million at December 31, 2000 and 1999 and
$2.1 million at December 31, 1998. At December 31, 2000, gross unrealized
appreciation on common stocks totaled $1.5 million, and gross unrealized
depreciation totaled $1.8 million. The fair value of preferred stock totaled
$41.6 million, $35.9 million, and $36.5 million at December 31, 2000, 1999, and
1998, respectively.

Bonds with amortized cost of $5.1 million were non-income producing for the
twelve months ended December 31, 2000.

At December 31, 2000, the mortgage loan portfolio was diversified by
geographic region and specific collateral property type as displayed below. The
Company controls credit risk through credit approvals, limits and monitoring
procedures.

Statement Geographic Statement
Property Type Value Concentration Value
- ------------- ------------- ------------- ---------------
(In millions) (In millions)

Apartments............. $ 93.7 East North Central..... $ 64.3
Hotels................. 13.0 East South Central..... 20.9
Industrial............. 63.5 Middle Atlantic........ 20.9
Office buildings....... 84.7 Mountain............... 27.0
Retail................. 35.4 New England............ 23.4
Agricultural........... 142.5 Pacific................ 108.0
Other.................. 23.2 South Atlantic......... 120.7
------
West North Central..... 16.0
West South Central..... 51.5
Other.................. 3.3
------
$456.0 $456.0
====== ======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

At December 31, 2000, the fair values of the commercial and agricultural
mortgage loans portfolios were $317.5 million and $149.8 million, respectively.
The corresponding amounts as of December 31, 1999 were approximately $323.5
million and $98.2 million, respectively.

The maximum and minimum lending rates for mortgage loans during 2000 were
12.84% and 8.29% for agricultural loans, and 8.94% and 8.07% for other
properties. Generally, the maximum percentage of any loan to the value of
security at the time of the loan, exclusive of insured, guaranteed or purchase
money mortgages, is 75%. For city mortgages, fire insurance is carried on all
commercial and residential properties at least equal to the excess of the loan
over the maximum loan which would be permitted by law on the land without the
building, except as permitted by regulations of the Federal Housing Commission
on loans fully insured under the provisions of the National Housing Act. For
agricultural mortgage loans, fire insurance is not normally required on land
based loans except in those instances where a building is critical to the
farming operation. Fire insurance is required on all agri-business facilities in
an aggregate amount equal to the loan balance.

Note 7. Reinsurance

The Company cedes business to reinsurers to share risks under variable life,
universal life and flexible variable life insurance policies for the purpose of
reducing exposure to large losses. Premiums, benefits and reserves ceded to
reinsurers in 2000 were $588.1 million, $187.3 million, and $19.9 million,
respectively. The corresponding amounts in 1999 were $594.9 million, $132.8
million, and $13.6 million, respectively, and the corresponding amounts in 1998
were $590.2 million, $63.2 million, and $8.2 million, respectively.

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

Neither the Company, nor any of its related parties, control, either directly
or indirectly, any external reinsurers with which the Company conducts business.
No policies issued by the Company have been reinsured with a foreign company
which is controlled, either directly or indirectly, by a party not primarily
engaged in the business of insurance.

The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 2000 would result in a payment to the reinsurer of amounts
which, in the aggregate and allowing for offset of mutual credits from other
reinsurance agreements with the same reinsurer, exceed the total direct premiums
collected under the reinsured policies.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments were as follows at December 31:

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 2000
---------------- ---------------------
Carrying Fair
2000 Value Value
---------------- ----------- -----------
($ In millions)

Futures contracts to sell securities......... $ -- $ -- $ --
Futures contracts to buy securities.......... 43 0.1 0.1
Interest rate swap agreements................ $1,150.0 --
Interest rate cap agreements................. 239.4 2.1 2.1
Currency rate swap agreements................ 22.3 -- (0.6)
Equity collar agreements..................... -- 0.4 0.4
Interest rate floor agreements............... 361.4 1.4 1.4

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1999
---------------- ---------------------
Carrying Fair
1999 Value Value
---------------- ----------- -----------
($ In millions)

Futures contracts to sell securities......... 362 $ 0.6 $ 0.6
Interest rate swap agreements................ $ 965.0 -- 11.5
Interest rate cap agreements................. 239.4 5.6 5.6
Currency rate swap agreements................ 15.8 -- (1.6)

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1999
---------------- ---------------------
Carrying Fair
1999 Value Value
---------------- ----------- -----------
($ In millions)

Futures contracts to sell securities......... 947 $(0.5) $ (0.5)
Interest rate swap agreements................ $ 365.0 -- (17.7)
Interest rate cap agreements................. 89.4 3.1 3.1
Currency rate swap agreements................ 15.8 -- (3.3)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk (continued)

The Company uses futures contracts, interest rate swap, cap agreements, and
currency rate swap agreements for other than trading purposes to hedge and
manage its exposure to changes in interest rate levels, foreign exchange rate
fluctuations and to manage duration mismatch of assets and liabilities.

The Company invests in common stock that is subject to fluctuations from
market value changes in stock prices. The Company sometimes seeks to reduce its
market exposure to such holdings by entering into equity collar agreements. A
collar consists of a call that limits the Company's potential gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The futures contracts expire in 2001. The interest rate swap agreements expire
in 2000 to 2011. The interest rate cap agreements expire in 2006 to 2008. The
currency rate swap agreements expire in 2006 to 2015. The equity collar
agreements expire in 2005.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

Note 9. Policy Reserves, Policyholders' and Beneficiaries' Funds and Obligations
Related To Separate Accounts

The Company's annuity reserves and deposit fund liabilities that are subject
to discretionary withdrawal, with and without adjustment, are summarized as
follows:

December 31, 2000 Percent
----------------- ---------
(In millions)

Subject to discretionary withdrawal (with adjustment)
With market value adjustment.............................................. $ 30.3 1.1%
At book value less surrender charge....................................... 54.7 2.1
At market value........................................................... 2,250.3 84.8
-------- -----
Total with adjustment.................................................... 2,335.3 88.0
Subject to discretionary withdrawal at book value (without adjustment)..... 312.8 11.8
Not subject to discretionary withdrawal--general account................... 7.1 0.2
-------- -----
Total annuity reserves and deposit liabilities........................... $2,655.2 100.0%
======== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 10. Commitments and Contingencies

The Company has extended commitments to purchase long-term bonds issue real
estate mortgages and purchase other assets totaling $33.5 million, $6.3 million
and $14.7 million, respectively, at December 31, 2000. The Company monitors the
creditworthiness of borrowers under long-term bonds commitments and requires
collateral as deemed necessary. If funded, loans related to real estate
mortgages would be fully collateralized by the related properties. The estimated
fair value of the commitments described above is $56.4 million at December 31,
2000. The majority of these commitments expire in 2001.

In the normal course of its business operations, the Company is involved with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 2000. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

During 1997, John Hancock entered into a court-approved settlement relating to
a class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. During 1999, the Company recorded a $194.9
million reserve, through a direct charge to its unassigned deficit, representing
the Company's share of the settlement and John Hancock contributed $194.9
million of capital to the Company. The reserve held at December 31, 2000
amounted to $39.5 million and is based on a number of factors, including the
estimated cost per claim and the estimated costs to administer the claims.

Given the uncertainties associated with estimating the reserve, it is
reasonably possible that the final cost of the settlement could differ
materially from the amounts presently provided for by the Company. John Hancock
and the Company will continue to update their estimate of the final cost of the
settlement as claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at this
time, and the uncertainties associated with the final claim processing and
alternative dispute resolution, the range of any additional costs related to the
settlement cannot be estimated with precision. If the Company's share of the
settlement increases, John Hancock will contribute additional capital to the
Company so that the Company's total stockholder's equity would not be impacted.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments

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

December 31
---------------------------------------
2000 1999
------------------ ------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- --------- -------- ----------
(In millions)

Assets
Bonds--Note 6.......................................... $1,400.5 $1,366.9 $1,216.3 $1,163.2
Preferred stocks--Note 6............................... 44.0 41.6 35.9 35.9
Common stocks--Note 6.................................. 2.8 2.8 3.2 3.2
Mortgage loans on real estate--Note 6.................. 456.0 467.3 433.1 421.7
Policy loans--Note 1................................... 218.9 218.9 172.1 172.1
Cash items--Note 1..................................... 272.0 272.0 250.1 250.1

Derivatives assets (liabilities) relating to: Note 8
Futures contracts...................................... 0.1 0.1 0.6 0.6
Interest rate swaps.................................... -- (0.4) -- 11.5
Currency rate swaps.................................... -- (0.6) -- (1.6)
Interest rate caps..................................... 2.1 2.1 5.6 5.6
Equity collar agreements............................... -- 0.4 -- --

Liabilities
Commitments--Note 10................................... -- 56.4 -- 19.4

100

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments (continued)

December 31
-------------------
1998
-------------------
Carrying Fair
Amount Value
--------- ---------
(In millions)

Assets
Bonds--Note 6.......................................... $1,185.8 $1,231.5
Preferred stocks--Note 6............................... 36.5 36.5
Common stocks--Note 6.................................. 3.1 3.1
Mortgage loans on real estate--Note 6.................. 388.1 401.3
Policy loans--Note 1................................... 137.7 137.7
Cash items--Note 1..................................... 19.9 19.9

Derivatives assets (liabilities) relating to: Note 8
Futures contracts...................................... (0.5) (0.5)
Interest rate swaps.................................... -- (17.7)
Currency rate swaps.................................... -- (3.3)
Interest rate caps..................................... 3.1 3.1

Liabilities
Commitments--Note 10................................... -- 32.1

The carrying amounts in the tables are included in the statutory-basis
statements of financial position. The method and assumptions utilized by the
Company in estimating its fair value disclosures are described in Note 1.

101

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Type of Investment Cost (2) Value Balance Sheet
------------------ -------- ----- ---------------

Fixed maturity securities, available-for-sale:
Bonds:
United States government and government agencies and authorities.............. 16.1 16.7 16.7
States, municipalities and political subdivisions............................. 6.8 6.7 6.7
Foreign governments........................................................... 11.1 10.8 10.8
Public utilities.............................................................. 49.1 50.1 50.1
Convertibles and bonds with warrants attached................................. 13.7 13.6 13.6
All other corporate bonds..................................................... 877.1 871.5 871.5
Certificates of deposits...................................................... 0.0 0.0 0.0
Redeemable preferred stock.................................................... 44.9 42.4 42.4
------- ------- -------
Total fixed maturity securities, available-for-sale........................... 1,018.8 1,011.8 1,011.8
------- ------- -------

Equity securities, available-for-sale:
Common stocks:
Public utilities.............................................................. 0.0 0.0 0.0
Banks, trust and insurance companies.......................................... 0.0 0.0 0.0
Industrial, miscellaneous and all other....................................... 4.0 4.8 4.8
Non-redeemable preferred stock................................................ 3.1 3.3 3.3
------- ------- -------
Total equity securities, available-for-sale................................... 7.1 8.1 8.1
------- ------- -------

Fixed maturity securities, held-to-maturity:
Bonds:
United States government and government agencies and authorities.............. 0.0 0.0 0.0
States, municipalities and political subdivisions............................. 1.9 1.9 1.9
Foreign governments........................................................... 0.0 0.0 0.0
Public utilities.............................................................. 42.5 43.4 42.5
Convertibles and bonds with warrants attached................................. 13.3 11.1 13.3
All other corporate bonds..................................................... 657.7 630.4 657.7
Certificates of deposits...................................................... 0.0 0.0 0.0
Redeemable preferred stock.................................................... 0.0 0.0 0.0
------- ------- -------
Total fixed maturity securities, held-to-maturity............................. 715.4 686.8 715.4
------- ------- -------

Equity securities, trading:
Common stocks:
Public utilities..............................................................
Banks, trust and insurance companies..........................................
Industrial, miscellaneous and all other.......................................
Non-redeemable preferred stock................................................
Total equity securities, trading.............................................. 0.0 0.0 0.0
------- ------- -------
Mortgage loans on real estate, net (1)........................................ 559.8 XXXX 554.8

102

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES (continued)

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Cost (2) Value Balance Sheet
-------- ----- ----------------

Real estate, net:
Investment properties (1)............... 23.9 XXXX 23.9
Acquired in satisfaction of debt (1).... 0.0 XXXX 0.0
Policy loans............................ 334.2 XXXX 334.2
Other long-term investments (2)......... 34.8 XXXX 34.8
Short-term investments.................. 21.7 XXXX 21.7
------- ------- -------
Total investments...................... 2,715.7 1,706.7 2,704.7
======= ======= =======

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

(2) Difference from Column B is primarily due to operating gains (losses) of
investments in limited partnerships.

See accompanying independent auditors' report.

103

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION

As of December 31, 2000, 1999 and 1998 and for the Year then ended
(in millions of dollars)

Future Policy Other
Deferred Benefits, Policy
Policy Losses, Claims Claims and
Acquisition and Loss Unearned Benefits Premium
Segment Costs Expenses Premiums Payable Revenue
------- ------------ --------------- --------- ---------- -------

GAAP
2000:
Protection.................................. $819.3 $2,698.4 $212.0 $11.1 $ 28.6
Asset Gathering............................. 174.8 70.0 -- -- --
------ -------- ------ ----- --------
Total...................................... $994.1 $2,768.4 $212.0 $11.1 $ 28.6
------ -------- ------ ----- --------
Statutory Basis
2000:
Variable Products.......................... N/A $2,206.0 $ 8.8 $16.4 $ 945.4
------ -------- ------ ----- --------
1999:
Variable Products.......................... N/A $1,864.9 $ 3.9 $15.4 $ 950.8
------ -------- ------ ----- --------
1998:
Variable Products.......................... N/A $1,651.7 $ 2.3 $13.1 $1,272.3
------ -------- ------ ----- --------

104

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION (continued)

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

Amortization Of
Benefits, Deferred Policy
Claims, Losses, Acquisition Costs,
Net And Excluding Amounts Other
Investment Settlement Related To Realized Operating
Segment Income Expenses Investment Gains Expenses
------- ---------- --------------- ------------------- ---------

GAAP
2000:
Protection........................... $215.9 $ 242.2 $17.6 $100.5
Asset Gathering...................... (2.5) 6.4 16.4 16.3
------ -------- ----- ------
Total............................... $213.4 $ 248.6 $34.0 $116.8
------ -------- ----- ------
Statutory Basis
2000:
Variable Products................... $176.7 $1,185.2 N/A $389.2
------ -------- ----- ------
1999:
Variable Products................... $136.0 $1,238.7 N/A $334.9
------ -------- ----- ------
1998:
Variable Products................... $122.8 $1,661.6 N/A $302.3
------ -------- ----- ------

105

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV -- REINSURANCE

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Assumed
Amount Companies Companies Net Amount to Net
------ --------- ---------- ---------- ----------

GAAP
2000
Life insurance in force........... $98,737.2 $39,495.8 $37.1 $59,278.5 0.1%
--------- --------- ----- --------- ---
Premiums:
Life insurance.................... $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
Accident and health insurance..... -- -- -- -- 0.0%
P&C............................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................... $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
========= ========= ===== ========= ===
Statutory Basis
2000
Life insurance in force........... $96,574.3 $38,059.7 $ -- $58,514.6 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance.................... $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
Accident and health insurance..... -- -- -- -- 0.0%
P&C............................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................... $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
========= ========= ===== ========= ===
1999
Life insurance in force........... $74,831.8 $ 8,995.0 $ -- $55,836.8 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance.................... $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
Accident and health insurance..... -- -- -- -- 0.0%
P&C............................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................... $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
========= ========= ===== ========= ===

106

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV--REINSURANCE (continued)

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Net Assumed
Amount Companies Companies Amount to Net
------ --------- ---------- ------ ----------

1998
Life insurance in force.............. $62,628.7 $15,302.1 $-- $47,326.6 0.0%
--------- --------- --- --------- ---
Premiums:
Life insurance....................... $ 1,862.5 $ 590.2 $-- $ 1,272.3 0.0%
Accident and health insurance........ -- -- -- -- 0.0%
P&C.................................. -- -- -- -- 0.0%
--------- --------- --- --------- ---
Total.............................. $ 1,862.5 $ 590.2 $-- $ 1,272.3 0.0%
========= ========= === ========= ===

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

See accompanying independent auditors' report.

107

APPENDIX A - DETAILS ABOUT OUR GUARANTEE PERIODS

Investments that support our guarantee periods

We back our obligations under the guarantee periods 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 guarantee periods). 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
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period

We have no specific formula for establishing the guaranteed rates for the
guarantee periods. The rates may be influenced by interest rates generally
available on the types of investments acquired with amounts allocated to the
guarantee period. In determining guarantee rates, we may also consider, among
other factors, the duration of the guarantee period, 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 guarantee period by a factor expressed by the
following formula:
n
--
12
1 + g
( --------- ) - 1
1 +c+0.005

where,

108

. g is the guaranteed rate in effect for the current guarantee period.

. c is the current guaranteed rate in effect for new guarantee periods with
duration equal to the number of years remaining in the current guarantee
period (rounded to the nearest whole number of years). If we are not
currently offering such a guarantee period, 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 guarantee period. (If less than one complete month
remains, N equals one unless the withdrawal is made on the last day of
the guarantee period, in which case no adjustment applies.)

Sample Calculation 1: Positive Adjustment

- --------------------------------------------------------------------------------
Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------
Guaranteed rate for new 5 year 7%
guarantee (c)
- --------------------------------------------------------------------------------
Remaining guarantee period (n) 60 months
- --------------------------------------------------------------------------------

Market value adjustment:

60
--
12
1 + 0.08
10.000x [ (----------------) -1 ] = 234.73
1 + 0.07 + 0.005

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
+ $234.73 = $10,234.73

109

Sample Calculation 2: Negative Adjustment

- --------------------------------------------------------------------------------
Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------
Guaranteed rate for new 5 year
guarantee (c) 9%
- --------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- --------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - 666.42 = $9,333.58

Sample Calculation 3: Negative Adjustment

- --------------------------------------------------------------------------------
Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------
Guaranteed rate for new 5 year
guarantee (c) 7.75%
- --------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- --------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - 114.94 = $9,885.06

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

*All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we are
actually guaranteeing at any time.

110

Prospectus dated May 1, 2001

-----------------------------------------------------------
REVOLUTION EXTRA VARIABLE ANNUITY
-----------------------------------------------------------

a deferred combination fixed and variable annuity contract
issued by
John Hancock Variable Life Insurance Company ("JHVLICO")

The contract enables you to earn fixed rates of interest that we guarantee
for stated periods of time ("guarantee periods") and investment-based
returns in the following variable investment options:

- ------------------------------------------------------------------------------------------------------------------------------------
Variable Investment Option Managed By
-------------------------- ----------

Equity Index.............................................. SSgA Funds Management, Inc.
Growth & Income........................................... Independence Investment LLC and Putnam Investment Management LLC
Large Cap Value........................................... T. Rowe Price Associates, Inc.
Large Cap Value CORE(SM).................................. Goldman Sachs Asset Management
Large Cap Growth.......................................... Independence Investment LLC
Large Cap Aggressive Growth............................... Alliance Capital Management L.P.
Large/Mid Cap Value....................................... Wellington Management Company, LLP
Fundamental Growth........................................ Putnam Investment Management LLC
Mid Cap Growth............................................ Janus Capital Corporation
Small/Mid Cap CORE(SM).................................... Goldman Sachs Asset Management
Small/Mid Cap Growth...................................... Wellington Management Company, LLP
Small Cap Equity.......................................... Capital Guardian Trust Company
Small Cap Value........................................... T. Rowe Price Associates, Inc.
Small Cap Growth.......................................... John Hancock Advisers, Inc.
V.A. Relative Value....................................... John Hancock Advisers, Inc.
AIM V.I. Value............................................ A I M Advisors, Inc.
AIM V.I. Growth........................................... A I M Advisors, Inc.
Fidelity VIP Growth....................................... Fidelity Management & Research Company
Fidelity VIP Contrafund(R)................................ Fidelity Management & Research Company
MFS Investors Growth Stock................................ MFS Investment Management(R)
MFS Research.............................................. MFS Investment Management(R)
MFS New Discovery......................................... MFS Investment Management(R)
International Opportunities............................... T. Rowe Price International, Inc.
International Equity...................................... Goldman Sachs Asset Management
Fidelity VIP Overseas..................................... Fidelity Management & Research Company
Emerging Markets Equity................................... Morgan Stanley Dean Witter Investment Management, Inc.
Janus Aspen Worldwide Growth.............................. Janus Capital Corporation
Real Estate Equity........................................ Independence Investment LLC and Morgan Stanley Dean Witter Investment
Management, Inc.
Health Sciences........................................... Putnam Investment Management LLC
V.A. Financial Industries................................. John Hancock Advisers, Inc.
V.A. Technology........................................... John Hancock Advisers, Inc.
Managed................................................... Independence Investment LLC and Capital Guardian Trust Company
Global Balanced........................................... Capital Guardian Trust Company
Short-Term Bond........................................... Independence Investment LLC
Bond Index................................................ Mellon Bond Associates, LLP
Active Bond............................................... John Hancock Advisers, Inc.
V.A. Strategic Income..................................... John Hancock Advisers, Inc.
High Yield Bond........................................... Wellington Management Company, LLP
Global Bond............................................... Capital Guardian Trust Company
Money Market.............................................. Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------

The variable investment options shown on page 1 are those available as of the
date of this prospectus. We may add, modify or delete variable investment
options in the future.

Each Series Fund is a so-called "series" type mutual fund registered with the
Securities and Exchange Commission ("SEC"). The investment results of each
variable investment option you select will depend on those of the corresponding
fund of one of the Series Funds. Each of the funds is separately managed and has
its own investment objective and strategies. Attached at the end of this
prospectus is a prospectus for each Series Fund. The Series Fund prospectuses
contain detailed information about each available fund. Be sure to read those
prospectuses before selecting any of the variable investment options shown on
page 1.

For amounts you don't wish to invest in a variable investment option, you can
choose among several guarantee periods, each of which has its own guaranteed
interest rate and expiration date. If you remove money from a guarantee period
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 guarantee period. This is known as a "market
value adjustment."

The Revolution Extra Variable Annuity provides an Extra Credit feature that is
described on page 14. 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 that we add to your contract may be more than offset by the withdrawal
charge that is described on page 18 if you prematurely "surrender" or otherwise
withdraw money in excess of the Free Withdrawal Amounts (see page 18) while this
charge is in effect.

John Hancock Annuity Servicing Office
-------------------------------------

Mail Delivery Phone:
------------- ------
1-800-824-0335

529 Main Street Fax:
----
Charlestown, MA 02129 1-617-886-3070

Contracts are not deposits or obligations of, or insured, endorsed, or
guaranteed by the U.S. Government, any bank, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency, entity or person,
other than JHVLICO. They involve investment risks including the possible loss of
principal.

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

Please note that the SEC has not approved or disapproved these securities, or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged
the prospectus in the following way:

. The first section contains an "Index of Key Words."

. Behind the index is the "Fee Table." This section highlights the
various fees and expenses you will pay directly or indirectly, if you
purchase a contract.

. The next section is called "Basic Information." It contains basic
information about the contract presented in a question and answer
format. You should read the Basic Information before reading any
other section of the prospectus.

. Behind the Basic Information is "Additional Information." This
section gives more details about the contract. It generally does not
repeat information contained in the Basic Information.

The Series Funds' prospectuses are attached at the end of this prospectus. You
should save these prospectuses for future reference.

- --------------------------------------------------------------------------------
IMPORTANT NOTICES

This is the prospectus - it is not the contract. The prospectus simplifies
many contract provisions to better communicate the contract's essential
features. Your rights and obligations under the contract will be determined by
the language of the contract itself. On request, we will provide the form of
contract for you to review. In any event, when you receive your contract, we
suggest you read it promptly.

We've also filed with the SEC a "Statement of Additional Information," dated
May 1, 2001. This Statement contains detailed information not included in the
prospectus. Although a separate document from this prospectus, the Statement
of Additional Information has the same legal effect as if it were a part of
this prospectus. We will provide you with a free copy of the Statement upon
your request. To give you an idea what's in the Statement, we have included a
copy of the Statement's table of contents on page 51.

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

INDEX OF KEY WORDS

We define or explain each of the following key words used in this prospectus
on the pages shown below:

Key word Page

Accumulation units........................................... 28
Annuitant.................................................... 11
Annuity payments............................................. 14
Annuity period............................................... 14
Contract year................................................ 12
Date of issue................................................ 12
Date of maturity............................................. 28
Extra Credit................................................. 14
Free withdrawal amount....................................... 18
Funds........................................................ 2
Guarantee period............................................. 13
Investment options........................................... 15
Market value adjustment...................................... 13
Premium payments............................................. 11
Surrender ................................................... 18
Surrender value.............................................. 20
Total value of your contract................................. 13
Variable investment options.................................. cover
Withdrawal charge............................................ 19
Withdrawal................................................... 19

FEE TABLE

The following fee table shows the various fees and expenses that you will pay,
either directly or indirectly, if you purchase a contract. The table does not
include charges for premium taxes (which may vary by state) or fees for any
optional benefit riders that you select.

Owner Transaction Expenses and Annual Contract Fee

. Maximum Withdrawal Charge (as % of amount withdrawn) 7%

. Annual Contract Fee (applies only to contracts of less than $50,000) 30%

Annual Contract Expenses (as a % of the average total value of the contract)

. Asset-based Charge (for administration and mortality and expense
risk) 1.25%
This charge doesn't apply to amounts held in the guarantee periods.

Annual Fund Expenses (based on % of average net assets)

The funds must pay investment management fees and other operating expenses.
These fees and expenses are different for each fund and reduce the investment
return of each fund. Therefore, they also indirectly reduce the return you will
earn on any variable investment options you select. We may also receive
payments from a fund or its affiliates at an annual rate of up to approximately
0.35% of the average net assets that holders of our variable life insurance
policies and variable annuity contracts have invested in that fund. Any such
payments do not, however, result in any charge to you in addition to what is
disclosed below.

---------------
Total Fund Total Fund
Investment Distribution and Other Operating Operating Operating
Management Service Expenses With Expenses With Expenses Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement
- --------- ---------- ---------------- -------------- ------------- ---------------

John Hancock Variable Series
Trust I (Note 1):
Equity Index........................................ 0.13% N/A 0.06% 0.19% 0.19%
Growth & Income..................................... 0.68% N/A 0.08% 0.76% 0.76%
Large Cap Value..................................... 0.75% N/A 0.05% 0.80% 0.80%
Large Cap Value CORE(SM)............................ 0.75% N/A 0.10% 0.85% 1.09%
Large Cap Growth.................................... 0.36% N/A 0.10% 0.46% 0.46%
Large Cap Aggressive Growth......................... 0.90% N/A 0.10% 1.00% 1.05%
Large/Mid Cap Value................................. 0.95% N/A 0.10% 1.05% 1.36%
Fundamental Growth*................................. 0.90% N/A 0.10% 1.00% 1.04%
Mid Cap Growth...................................... 0.81% N/A 0.04% 0.85% 0.85%
Small/Mid Cap CORE(SM).............................. 0.80% N/A 0.10% 0.90% 1.23%
Small/Mid Cap Growth................................ 0.75% N/A 0.10% 0.85% 0.85%
Small Cap Equity*................................... 0.90% N/A 0.10% 1.00% 1.03%
Small Cap Value*.................................... 0.95% N/A 0.10% 1.05% 1.29%
Small Cap Growth.................................... 0.75% N/A 0.07% 0.82% 0.82%
International Opportunities......................... 0.83% N/A 0.10% 0.93% 1.09%
International Equity................................ 1.00% N/A 0.10% 1.10% 1.76%
Emerging Markets Equity............................. 1.22% N/A 0.10% 1.32% 2.49%
Real Estate Equity.................................. 1.01% N/A 0.09% 1.10% 1.10%
Health Sciences..................................... 1.00% N/A 0.10% 1.10% 1.10%
---------------

-------------
Total Fund Total Fund
Investment Distribution and Other Operating Operating Operating
Management Service Expenses With Expenses With Expenses Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement
- --------- ---------- ---------------- --------------- ------------- ---------------

John Hancock Variable Series
Trust I - continued (Note 1):
Managed..................................... 0.66% N/A 0.09% 0.75% 0.75%
Global Balanced............................. 1.05% N/A 0.10% 1.15% 1.44%
Short-Term Bond............................. 0.30% N/A 0.06% 0.36% 0.36%
Bond Index.................................. 0.15% N/A 0.10% 0.25% 0.27%
Active Bond................................. 0.62% N/A 0.10% 0.72% 0.74%
High Yield Bond............................. 0.65% N/A 0.10% 0.75% 0.87%
Global Bond................................. 0.85% N/A 010% 0.95% 1.05%
Money Market................................ 0.25% N/A 0.04% 0.29% 0.29%

John Hancock Declaration Trust
(Note 2):
V.A. Relative Value......................... 0.60% N/A 0.19% 0.79% 0.79%
V.A. Financial Industries................... 0.80% N/A 0.10% 0.90% 0.90%
V.A. Technology............................. 0.80% N/A 0.25% 1.05% 1.99%
V.A. Strategic Income....................... 0.60% N/A 0.16% 0.76% 0.76%

AIM Variable Insurance Funds:
AIM V.I. Value.............................. 0.61% N/A 0.23% 0.84% 0.84%
AIM V.I. Growth............................. 0.61% N/A 0.22% 0.83% 0.83%

Variable Insurance Products Fund
- Service Class (Note 3):
Fidelity VIP Growth......................... 0.57% 0.10% 0.09% 0.76% 0.76%
Fidelity VIP Overseas....................... 0.72% 0.10% 0.17% 0.99% 0.99%

Variable Insurance Products Fund II
- Service Class (Note 3):
Fidelity VIP Contrafund(R).................. 0.57% 0.10% 0.09% 0.76% 0.76%

MFS Variable Insurance Trust
- Initial Class shares (Note 4):
MfS Investors Growth Stock**................ 0.75% 0.00% 0.16% 0.91% 0.92%
MFS Research................................ 0.75% 0.00% 0.10% 0.85% 0.85%
MFS New Discovery........................... 0.90% 0.00% 0.16% 1.06% 1.09%

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

Notes to Annual Fund Expenses
(1) Under its current investment management agreements with the John Hancock
Variable Series Trust I, John Hancock Life Insurance Company reimburses a
fund when the fund's "other fund expenses" exceed 0.10% of the fund's
average daily net assets (0.00% for Equity Index). Percentages shown for
the Health Sciences Fund are estimates because the fund was not in
operation in 2000. Percentages shown for the Growth & Income, Fundamental
Growth, Small Cap Equity, Real Estate Equity, Managed, Global Balanced,
Active Bond and Global Bond funds are calculated as if the current
management fee schedules, which apply to these funds effective November 1,
2000, were in effect for all of 2000. Percentages shown for the Small Cap
Value and Large Cap Value funds are calculated as if the current
management fee schedules, which apply to these funds effective May 1,
2001, were in effect for all of 2000. "CORE(SM)" is a service mark of
Goldman, Sachs & Co.

* Fundamental Growth was formerly "Fundamental Mid Cap Growth," Small Cap
Equity was formerly "Small Cap Value," and Small Cap Value was formerly
"Small/Mid Cap Value."

** MFS Investors Growth Stock was formerly "MFS Growth Series."

Examples

The examples on the following two pages illustrate the current expenses you
would pay, directly or indirectly, on a $1,000 investment allocated to one of
the variable investment options, assuming a 5% annual return on assets. These
examples do not include any applicable premium taxes or any fees for optional
benefit riders. The examples should not be considered representations of past
or future expenses; actual charges may be greater or less than those shown
above. The examples assume fund expenses at rates set forth above for 2000,
after reimbursements. The annual contract fee has been included as an annual
percentage of assets.

If you "surrender" (turn in) your contract at the end of the applicable
time period, you would pay:

- -------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------

Equity Index $79 $112 $135 $189
- -------------------------------------------------------------------------------
Growth & Income $85 $131 $167 $252
- -------------------------------------------------------------------------------
Large Cap Value $85 $132 $169 $256
- -------------------------------------------------------------------------------
Large Cap Value CORE(SM) $86 $134 $172 $261
- -------------------------------------------------------------------------------
Large Cap Growth $82 $121 $150 $219
- -------------------------------------------------------------------------------
Large Cap Aggressive Growth $88 $139 $180 $277
- -------------------------------------------------------------------------------
Large/Mid Cap Value $88 $140 $183 $282
- -------------------------------------------------------------------------------
Fundamental Growth $88 $139 $180 $277
- -------------------------------------------------------------------------------
Mid Cap Growth $86 $134 $172 $261
- -------------------------------------------------------------------------------
Small/Mid Cap CORE(SM) $87 $135 $175 $266
- -------------------------------------------------------------------------------
Small/Mid Cap Growth $86 $134 $172 $261
- -------------------------------------------------------------------------------
Small Cap Equity $88 $139 $180 $277
- -------------------------------------------------------------------------------
Small Cap Value $88 $140 $183 $282
- -------------------------------------------------------------------------------
Small Cap Growth $86 $133 $171 $258
- -------------------------------------------------------------------------------
V.A. Relative Value $85 $132 $169 $255
- -------------------------------------------------------------------------------
AIM V.I. Value $86 $134 $172 $260
- -------------------------------------------------------------------------------
AIM V.I. Growth $86 $133 $171 $259
- -------------------------------------------------------------------------------
Fidelity VIP Growth $85 $131 $167 $252
- -------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) $85 $131 $167 $252
- -------------------------------------------------------------------------------
MFS Investors Growth Stock $87 $136 $175 $268
- -------------------------------------------------------------------------------
MFS Research $86 $134 $172 $261
- -------------------------------------------------------------------------------
MFS New Discovery $88 $140 $184 $283
- -------------------------------------------------------------------------------
International Opportunities $87 $136 $177 $270
- -------------------------------------------------------------------------------
International Equity $89 $142 $186 $287
- -------------------------------------------------------------------------------
Fidelity VIP Overseas $87 $138 $180 $276
- -------------------------------------------------------------------------------
Emerging Markets Equity $91 $149 $198 $310
- -------------------------------------------------------------------------------
Janus Aspen Worldwide Growth $87 $137 $178 $272
- -------------------------------------------------------------------------------
Real Estate Equity $89 $142 $186 $287
- -------------------------------------------------------------------------------
Health Sciences $89 $142 $186 $287
- -------------------------------------------------------------------------------
V.A. Financial Industries $87 $135 $175 $266
- -------------------------------------------------------------------------------
V.A. Technology $88 $140 $183 $282
- -------------------------------------------------------------------------------
Managed $85 $131 $167 $251
- -------------------------------------------------------------------------------
Global Balanced $89 $143 $189 $292
- -------------------------------------------------------------------------------
Short-Term Bond $81 $118 $145 $208
- -------------------------------------------------------------------------------
Bond Index $80 $114 $139 $196
- -------------------------------------------------------------------------------
Active Bond $85 $130 $165 $247
- -------------------------------------------------------------------------------
V.A. Strategic Income $85 $131 $167 $252
- -------------------------------------------------------------------------------
High Yield Bond $85 $131 $167 $251
- -------------------------------------------------------------------------------
Global Bond $87 $137 $178 $272
- -------------------------------------------------------------------------------
Money Market $80 $116 $141 $200
- -------------------------------------------------------------------------------

If you begin receiving payments under one of our annuity payment options
at the end of the applicable time period, or if you do not surrender your
contact, you would pay:

- -----------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------

Equity Index $16 $50 $ 86 $189
- -----------------------------------------------------------------------------
Growth & Income $22 $68 $117 $252
- -----------------------------------------------------------------------------
Large Cap Value $22 $69 $119 $256
- -----------------------------------------------------------------------------
Large Cap Value CORE(SM) $23 $71 $122 $261
- -----------------------------------------------------------------------------
Large Cap Growth $19 $59 $101 $219
- -----------------------------------------------------------------------------
Large Cap Aggressive Growth $25 $76 $129 $277
- -----------------------------------------------------------------------------
Large/Mid Cap Value $25 $77 $132 $282
- -----------------------------------------------------------------------------
Fundamental Growth $25 $76 $129 $277
- -----------------------------------------------------------------------------
Mid Cap Growth $23 $71 $122 $261
- -----------------------------------------------------------------------------
Small/Mid Cap CORE(SM) $24 $72 $124 $266
- -----------------------------------------------------------------------------
Small/Mid Cap Growth $23 $71 $122 $261
- -----------------------------------------------------------------------------
Small Cap Equity $25 $76 $129 $277
- -----------------------------------------------------------------------------
Small Cap Value $25 $77 $132 $282
- -----------------------------------------------------------------------------
Small Cap Growth $23 $70 $120 $258
- -----------------------------------------------------------------------------
V.A. Relative Value $22 $69 $118 $255
- -----------------------------------------------------------------------------
AIM V.I. Value $23 $71 $121 $260
- -----------------------------------------------------------------------------
AIM V.I. Growth $23 $70 $121 $259
- -----------------------------------------------------------------------------
Fidelity VIP Growth $22 $68 $117 $252
- -----------------------------------------------------------------------------
Fidelity VIP Contrafund(R) $22 $68 $117 $252
- -----------------------------------------------------------------------------
MFS Investors Growth Stock $24 $73 $125 $268
- -----------------------------------------------------------------------------
MFS Research $23 $71 $122 $261
- -----------------------------------------------------------------------------
MFS New Discovery $25 $77 $133 $283
- -----------------------------------------------------------------------------
International Opportunities $24 $73 $126 $270
- -----------------------------------------------------------------------------
International Equity $26 $79 $135 $287
- -----------------------------------------------------------------------------
Fidelity VIP Overseas $24 $75 $129 $276
- -----------------------------------------------------------------------------
Emerging Markets Equity $28 $86 $146 $310
- -----------------------------------------------------------------------------
Janus Aspen Worldwide Growth $24 $74 $127 $272
- -----------------------------------------------------------------------------
Real Estate Equity $26 $79 $135 $287
- -----------------------------------------------------------------------------
Health Sciences $26 $79 $135 $287
- -----------------------------------------------------------------------------
V.A. Financial Industries $24 $72 $124 $266
- -----------------------------------------------------------------------------
V.A. Technology $25 $77 $132 $282
- -----------------------------------------------------------------------------
Managed $22 $68 $116 $251
- -----------------------------------------------------------------------------
Global Balanced $26 $80 $137 $292
- -----------------------------------------------------------------------------
Short-Term Bond $18 $55 $ 96 $208
- -----------------------------------------------------------------------------
Bond Index $17 $52 $ 90 $196
- -----------------------------------------------------------------------------
Active Bond $22 $67 $115 $247
- -----------------------------------------------------------------------------
V.A. Strategic Income $22 $68 $117 $252
- -----------------------------------------------------------------------------
High Yield Bond $22 $68 $116 $251
- -----------------------------------------------------------------------------
Global Bond $24 $74 $127 $272
- -----------------------------------------------------------------------------
Money Market $17 $53 $ 92 $200
- -----------------------------------------------------------------------------

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked
questions about the contract. Here are the page numbers where the questions and
answers appear:

Question Starting on page
-------- ----------------

What is the contract?............................................................ 11

Who owns the contract?........................................................... 11

Is the owner also the annuitant?................................................. 11

How can I invest money in a contract?............................................ 11

How will the value of my investment in the contract change over time?............ 13

What annuity benefits does the contract provide?................................. 14

To what extent can John Hancock vary the terms and conditions of its contracts?.. 14

What are the tax consequences of owning a contract?.............................. 15

How can I change my contract's investment allocations?........................... 15

What fees and charges will be deducted from my contract?......................... 18

How can I withdraw money from my contract?....................................... 20

What happens if the annuitant dies before my contract's date of maturity?........ 22

What other benefits can I purchase under a contract?............................. 23

Can I return my contract?........................................................ 24

What is the contract?

The contract is a deferred payment variable annuity contract. 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 "date of maturity." 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?

Is the owner also the annuitant?

How can I invest money in a contract?

Premium payments

We call the investments you make in your contract premiums or premium
payments. In general, you need at least a $10,000 initial premium payment to
purchase a contract. If you purchase your contract under any of the tax-
qualified plans shown on page 33 or if you purchase your contract through the
automatic investment plan, different minimums may apply. If you choose to
contribute more money into your contract, each subsequent premium payment must
be at least $200 ($100 for the annuity direct deposit program). If your
contract's total value ever falls to zero, we may terminate it. Therefore, you
may need to pay more premiums to keep the contract in force.

Applying for a contract

your signed application.) In those situations, if we do not receive your signed
application within our required time period, we will deem the contract void from
the beginning and return your premium payment.

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.

Limits on premium payments

You can make premium payments of up to $1,000,000 in any one contract year.
The total of all new premium payments and transfers that you allocate to any one
variable 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 premium
payments at any time before the date of maturity. However,

-----------------------------------------------------------------------
you may not make any premium
payments after the annuitant
if your contract is used to fund reaches age
-----------------------------------------------------------------------

a "tax qualified plan"* 70 1/2**
-----------------------------------------------------------------------
a non-tax qualified plan 85
-----------------------------------------------------------------------

* as that term is used in "Tax Information," beginning on page 31.
** except for a Roth IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than age
84. We may waive any of these limits, however.

Ways to make premium payments

Premium 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."

We will not accept credit card checks. Nor will we accept starter or third
party checks that fail to meet our administrative requirements.

Once we have issued your contract and it becomes effective, we credit you
with any additional premiums you pay as of the day we receive them at the John
Hancock Annuity Servicing Office.

Premium payments by wire

. issue a contract;

. accept premium payments; or

. allow other transactions.

How will the value of my investment in the contract change over time?

However, if you prematurely transfer, "surrender" or otherwise withdraw
money from a guarantee period 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 had on the market value of a debt instrument with
terms comparable to that guarantee period. 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")" beginning
on page 27.

At any time before the date of maturity, the total value of your contract
equals

. the total amount you invested,

. plus the amount(s) credited to your contact under the "Extra Credit feature"
described below,

. 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 guarantee period,

. 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
guarantee period.

Extra Credit feature

Each time you make a premium payment, we will credit an extra amount to the
total value of your contract in addition to the amount of the premium payment.
If your premium payment is greater than $10,000 and less than $2.5 million, the
extra amount will be equal to 3.5% of the premium payment. If your premium
payment is $2.5 million or more, the extra amount will be equal to 5.0% of the
premium payment. These extra amounts are referred to as extra credits. Each
extra credit will be credited to your contract at the same time the premium
payment is credited and will be allocated among the variable investment options
and the guarantee periods in the same way that the premium payment is allocated
(see "Allocation of premium payments" on page 15). However, each extra credit
will be treated for all purposes as "earnings" under your contract, not as a
premium payment.

We 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 purchasing the contract.

What annuity benefits does the contract provide?

You should carefully review the discussion under "The annuity period,"
beginning on page 28, for information about all of these choices you can make.

To what extent can jhvlico vary the terms and conditions of its contracts?

Listed below are some of the variation we can make in the terms of our
contracts. Any variation will be made only in accordance with uniform rules that
we apply fairly to all our customers.

State law insurance requirements

Variations in charges or rates

What are the tax consequences of owning a contract?

. partial withdrawal (including systematic withdrawals)

. full withdrawal ("surrender")

. payment of death benefit proceeds as a single sum upon the annuitant's death

. periodic payments under one of our annuity payment options

How much you will be taxed on a 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 tax qualified retirement plan for which the contract is
being used, if any, and

. the circumstances under which the payments are made.

If your contract is issued in connection with a tax-qualified retirement
plan, all or part of your premium payments may be tax-deductible.

Special 10% tax penalties apply in many cases to the taxable portion of any
distributions from a contract before you reach age 59 1/2. Also, most tax-
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 premiums you paid or on any earnings under the contract.

How can I change my contract's investment allocations?

Allocation of premium payments

Transferring your assets

Up to 12 times during each year of your contract, you may transfer, free of
any charge,

. all or part of the assets held in one VARIABLE INVESTMENT OPTION to any other
available variable investment option or guarantee period, or

. all or part of the assets held in one GUARANTEE PERIOD to any other available
guarantee period or variable investment option (these transfers may, however,
incur a market value adjustment--either positive or negative.)

. transfer more than $1,000,000 in a contract year into any one variable
investment option or guarantee period, without our prior approval,

. make any transfer that would cause you to exceed the above-mentioned maximum
of 18 investment options,

. make any transfers, during the annuity period, to or from a guarantee period,
or

. make any transfer during the annuity period that would result in more than
four investment options being used at once.

We reserve the right to prohibit a transfer less than 30 days prior to the
contract's date of maturity.

The contract you are purchasing was not designed for professional market
timing organizations or other persons or entities that use programmed or
frequent transfers. The use of such transfers may be disruptive to a fund. We
reserve the right to reject any premium payment or transfer request from any
person, if in our judgment, a fund would be unable to invest effectively in
accordance with its investment objectives and policies, or would otherwise be
potentially adversely affected.

Procedure for transferring your assets

. 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.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

Telephone transfers

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 dollar-cost averaging program:

. You may elect the program only if the total value of your contract equals
$15,000 or more.

. The amount of each transfer must equal at least $250.

. You may change your dollar-cost averaging 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 guarantee periods are not permitted.

. We reserve the right to suspend or terminate the program at any time.

Strategic rebalancing

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 guarantee periods 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.

What fees and charges will be deducted from my contract?

Asset-based charge

We deduct a daily asset-based charge that compensates us primarily for our
administrative expense and for the mortality and expense risks that we assume
under the contracts. On an annual basis, this charge equals 1.25% of the value
of the assets you have allocated to the variable investment options. (This
charge does not apply to assets you have in our guarantee periods.)

Annual contract fee

Premium taxes

We make deductions for any applicable premium or similar taxes based on the
amount of a premium payment. Currently, certain local jurisdictions assess a tax
of up to 5% of each premium 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
premium 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.

Withdrawal charge

If you withdraw some of your premiums from your contract prior to the date
of maturity ("partial withdrawal") or if you surrender (turn in) your contract,
in its entirety, for cash prior to the date of maturity ("total withdrawal" or
"surrender"), we may assess a withdrawal charge. Some people refer to this
charge as a "contingent deferred sales load." We use this charge to help defray
expenses relating to the Extra Credit feature and to sales of the contracts,
including commissions paid and other distribution costs.

Free withdrawal amounts: If you 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 premiums you have
paid and have not (as discussed below) already withdrawn. 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 premiums you have paid to date.

Here's how we determine 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 on any amount of the excess that we attribute to
premium payments you made within seven years of the date of the withdrawal or
surrender.

The withdrawal charge percentage depends upon the number of years that have
elapsed from the date you paid the premium to the date of its withdrawal, as
follows:

-------------------------------------------------------------------
Years from Date of Premium Payment to
Date of Surrender or Withdrawal Withdrawal Charge*
-------------------------------------------------------------------
7 or more........................... 0%
-------------------------------------------------------------------
6 but less than 7................... 4%
-------------------------------------------------------------------
5 but less than 6................... 5%
-------------------------------------------------------------------
4 but less than 5................... 6%
-------------------------------------------------------------------
3 but less than 4................... 7%
-------------------------------------------------------------------
2 but less than 3................... 7%
-------------------------------------------------------------------
1 but less than 2................... 7%
-------------------------------------------------------------------
less than 1......................... 7%
-------------------------------------------------------------------

* As a percentage of the amount of such premium that we consider to have
been withdrawn (including the withdrawal charge), as explained in the
text immediately below.

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 premium payment, and then from the next earliest premium
----
payment, and so forth until all payments have been exhausted. Once a premium
payment has been considered to have been "withdrawn" under these procedures,
that premium payment will not enter into any future withdrawal charge
calculations.

Here's how we deduct the withdrawal charge: We deduct the withdrawal charge
proportionally from each variable investment option and each guarantee period
- --------------
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 date of maturity or
to pay a death benefit;

. on certain withdrawals if you have elected the rider that waives the
withdrawal charge; 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
guarantee period 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.

Other charges

We offer, subject to state availability, four optional benefit riders. We
charge a separate monthly charge for each rider selected.

At the beginning of each month, we charge an amount equal to 1/12/th/ of
the following annual percentages:

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

Waiver of withdrawal charge 0.10% of that portion of your contract's total value
attributable to premiums you contributed and extra
credits credited within 7 years prior to the date of
deduction
---------------------------------------------------------------------------------------------------------
Enhanced death benefit 0.15% of your contract's total value
---------------------------------------------------------------------------------------------------------
Accumulated value enhancement* 0.35% of your initial premium payment (we reserve the
right to increase this percentage on a uniform basis for all
riders issued in the same state)
---------------------------------------------------------------------------------------------------------
Guaranteed retirement income benefit
0.30% of your contract's total value
---------------------------------------------------------------------------------------------------------

* If you choose the accumulated value enhancement, you must also choose the
waiver of withdrawal charge.

We deduct the charge proportionally from each of your investment options,
based on your value in each.

How can I withdraw money from my contract?

Surrenders and partial withdrawals

Prior to your contract's date of maturity, 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.

The surrender value of a contract is the total value of a contract, after
any market value adjustment, minus the annual contract fee, any applicable
-----
premium tax, any withdrawal charges, and any applicable rider charges. We will
determine the amount surrendered or withdrawn as of the date we receive your
request at the John Hancock Annuity Servicing Office.

Certain surrenders and withdrawals may result in taxable income to you or
other tax consequences as described under "Tax information," beginning on page
31. 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.

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.

Waiver of withdrawal charge rider

trust. If the owner is a trust, the "covered persons" are the annuitant and the
annuitant's spouse. Under this rider, we will waive the withdrawal charge on
any withdrawals if a "covered person" has been diagnosed with one of the
critical illnesses listed in the rider, or if all the following conditions
apply:

. a covered person become 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.

You may not purchase this rider if either of the covered persons (1) is older
than 74 years at application or (2) was confined to a nursing home within the
past two years.

There is a charge for this rider, as set forth under "Other charges" beginning
on page 23, above. This rider (and the related charges) will terminate on the
contract's date of maturity, 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 purchase 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 elder care services available to
seniors, and

. 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.

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 withdrawal charge or market value adjustment that
would apply to an otherwise comparable non-systematic withdrawal. See "How will
the value of my investment in the contract change over time?" beginning on page
13, and "What fees and charges will be deducted from my contract?" beginning on
page 18. The same tax consequences also generally will apply.

The following conditions apply to systematic withdrawal plans:

. You may elect the plan only if the total value of your contract equals
$25,000 or more.

. 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 that $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.

What happens if the annuitant dies before my contract's date of maturity?

If the annuitant dies before your contract's date of maturity, we will pay a
death benefit to the contract's beneficiary. If you have named more than one
annuitant, the death benefit will be payable upon the death of the surviving
annuitant prior to the date of maturity.

If your 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 who is the annuitant 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. (For a description of what happens upon the death of an owner who is
not the annuitant, see "Distribution requirements following death of owner,"
beginning on page 31.)

We will pay a "standard" death benefit, unless you have chosen an "enhanced
death benefit rider," as discussed below.

Standard death benefit

The standard death benefit is the greater of:
-------

. the total value of your contract, adjusted by any then-applicable market
value adjustment, or

. the total amount of premium payments made and extra credits credited,
minus any partial withdrawals and related withdrawal charges.

We calculate the death benefit value as of the day we receive, in proper order
you and your immediate family will also have access toat the John Hancock
Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Enhanced death benefit rider

If you are under age 80 when you apply for your contract, you may elect to
enhance the standard death benefit by purchasing an enhanced death benefit
rider. Under this rider, if the annuitant dies before the contract's date of
maturity, we will pay the beneficiary the greatest of:

. the total value of your contract (adjusted by any market value
adjustment) as of the date we receive due proof of the annuitant's death.

For these purposes, however, we count only those contract anniversaries that
occur (1) before we receive proof of death and (2) before the annuitant attains
------ ------
age 80 1/2.

You may elect this rider only when you apply for the contract and only if this
----
rider is available in your state. As long as the rider is in effect, you will
pay a monthly charge for this benefit. For a description of this charge, refer
to page 19 under "Other charges." 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.

This rider (and related charges) will terminate on the contract's date of
maturity, upon your surrendering the contract, or upon your written request that
we terminate it.

What other benefits can I purchase under a contract?

In addition to the enhanced death benefit and waiver of withdrawal charge
riders discussed above, we currently make available two other optional benefits
if your state permits and if you are under age 75 when you apply for a contract.
These optional benefits are provided under riders that contain many terms and
conditions not set forth below. Therefore, you should refer directly to each
rider for more complete information. We will provide you with a copy on request.

Accumulated value enhancement. Under this rider, we will make a contribution
-----------------------------
to the total value of the contract on a monthly basis if the covered person (who
must be 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 rider 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 rider
(the "benefit limit"). The rider must be in effect for 7 years before any
increase will occur.

You may elect this rider only when you apply for the contract. You cannot
elect this rider unless you have also elected the waiver of withdrawal charge
rider. There is a monthly charge for this rider. The charge is described under
"Other charges" beginning on page 19.

In certain marketing materials, this rider may be referred to as
"CARESolutions Plus."

Guaranteed retirement income benefit. Under this rider, we will guarantee the
------------------------------------
amount of annuity payments you receive, if the following conditions are
satisfied:

. The date of maturity must be within the 30 day period following a
contract anniversary.

. 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 date of maturity
and the date of maturity must be on or before the annuitant's 90th birthday.

If you do decide to add this rider to your contract, and if you do 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 under
"Annuity options" on page 30. 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.

If you exercise your rights under this rider, we guarantee that the amount we
apply to this annuity payment option will be the same amount as if your premium
payments had earned a return prescribed by the rider, rather than the return
they earned in the subaccounts you actually chose. Under this rider, we would
apply that guaranteed amount to the fixed annuity payment option specified in
the rider in the same manner and on the same terms as if you had, in the absence
of this rider, elected to apply total contract value in the same amount to that
same annuity payment option.

There is a monthly charge for this rider, which is described beginning on page
19 under "Other charges." 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 have the right to cancel your contract within 10 days (or
longer in some states) after you receive it. To cancel your contract, simply
deliver or mail it to:

. JHVLICO at the address shown on page 2, or

. the JHVLICO representative who delivered the contract to you.

In most states, you will receive a refund equal to the total value of your
contract on the date of cancellation minus the extra credit deduction (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. 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 receive any gain and we bear any loss on
extra credits if you return your contract within the time period specified
above. In some states, or if your contract was issued as an "IRA", you will
receive a refund of any premiums you've paid. The date of cancellation will be
the date we receive the contract.

ADDITIONAL INFORMATION

This section of the prospectus provides additional information that is not
contained in the Basic Information Section on pages 11 through 24.

Contents of this section Starting on page

Description of JHVLICO......................................... 26

Who should purchase a contract?................................ 26

How we support the variable investment options................. 26

How we support the guarantee periods........................... 27

How the guarantee periods work................................. 27

The accumulation period........................................ 28

The annuity period............................................. 28

Variable investment option valuation procedures................ 30

Distribution requirements following death of owner............. 31

Miscellaneous provisions....................................... 31

Tax information................................................ 31

Further information about JHVLICO.............................. 36

Management's discussion and analysis........................... 37

Performance information........................................ 49

Reports........................................................ 49

Voting privileges.............................................. 49

Certain changes................................................ 49

Distribution of contracts...................................... 50

Experts........................................................ 50

Registration statement......................................... 51

Condensed Financial Information................................ 52

JHVLICO financial statements................................... 57

Appendix A - Details About Our Guarantee Periods............... 110

Appendix B - Example of Withdrawal Charge Calculation.......... 113

Description of JHVLICO

We are JHVLICO, a stock life insurance company organized, in 1979, under the
laws of the Commonwealth of Massachusetts. We have authority to transact
business in all states, except New York. We are a wholly-owned subsidiary of
John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life
insurance company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock became a
subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-
traded corporation. John Hancock's home office is at John Hancock Place, Boston,
Massachusetts 02117. At year end 2000, John Hancock's assets were approximately
$ 88 billion and it had invested approximately $575 million in JHVLICO in
connection with JHVLICO's organization and operation.

Who should purchase a contract?

We designed these contracts for individuals doing their own retirement
planning, including purchases under plans and trusts that do not qualify for
special tax treatment under the Internal Revenue Code of 1986 (the "Code"). We
provide general federal income tax information for contracts not purchased in
connection with a tax qualified retirement plan beginning on page 31. We also
designed the contracts for purchase under:

. traditional individual retirement annuity plans ("Traditional IRAs")
satisfying the requirements of Section 408 of the Code;

. non-deductible IRA plans ("Roth IRAs") satisfying the requirements of
Section 408A of the Code;

. SIMPLE IRA plans adopted under Section 408(p) of the Code;

. Simplified Employee Pension plans ("SEPs") adopted under Section 408(k)
of the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by public
school systems and certain other tax-exempt organizations; and

. pension or profit-sharing plans qualified under section 401(a) of the
Code.

To accommodate "employer-related" pension and profit-sharing plans, we provide
"unisex" purchase rates. That means the annuity purchase rates are the same for
males and females. Any questions you have as to whether you are participating in
an "employer-related" pension or profit-sharing plan should be directed to your
employer. Any question you or your employer have about unisex rates may be
directed to the John Hancock Annuity Servicing Office.

How we support the variable investment options

All of JHVLICO's general assets also support JHVLICO's obligations under the
contracts, as well as all of its other

obligations and liabilities. These general assets consist of all JHVLICO's
assets that are not held in the Account (or in another separate account) under
variable annuity or variable life insurance contracts that give their owners a
preferred claim on those assets.

How we support the guarantee periods

How the guarantee periods work

. withdraw all or a portion of any such amount from the contract,

. allocate all or a portion of such amount to a new guarantee period or
periods of the same or different duration as the expiring guarantee
period, or

. allocate all or a portion of such amount to one or more of the variable
investment options.

Guaranteed interest rates

- -------------------------------------------------------------------------------
We make the final determination of guaranteed rates to be declared. We cannot
predict or assure the level of any future guaranteed rates.
- -------------------------------------------------------------------------------

Calculation of market value adjustment ("MVA")

. 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
guarantee period. If the value in that guarantee period 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.

Here is how the MVA works:

- --------------------------------------------------------------------------------
We compare

. the guaranteed rate of the guarantee period from which the assets are
being taken with

. the guaranteed rate we are currently offering for guarantee periods of
the same duration as remains on the guarantee period 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 guarantee
period 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.

The accumulation period

Your value in our variable investment options

Each premium payment, extra credit 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
- --------------------------------------------------------------------------------

Therefore, at any time prior to the date of maturity, 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 guarantee periods

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments, extra credits or transferred amounts
allocated to the guarantee period, minus

. the amount of any withdrawals or transfers paid out of the guarantee
period, 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 guarantee period,
plus

. interest compounded daily on any amounts in the guarantee period from
time to time at the effective annual rate of interest we have declared for
that guarantee period.

The annuity period

Annuity payments are made to the annuitant, if still living. If more than one
annuitant is living at the date of maturity, the payments are made to the
younger of them.

Date of maturity

Your contract specifies the date of maturity, when payments from one of our
annuity options are scheduled to begin. You initially choose a date of maturity
when you

complete your application for a contract. Unless we otherwise permit, the date
of maturity must be

. at least 6 months after the date the first premium payment is applied to
your contract, and

. no later than the maximum age specified in your contract (normally age
95).

Choosing fixed or variable annuity payments

Once annuity payments commence, you may not make transfers from fixed to
variable or from variable to fixed.

Selecting an annuity option

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

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.

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 amount we first, in accordance
with the procedures described above, calculate the amount to be applied to the
fixed annuity option as of the date of maturity. We then divide the difference
by $1,000 and 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

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.

If the payee is more than 85 years old on the date of maturity, the following
two options are not available without our consent:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the 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.

Distribution requirements following death of owner

- --------------------------------------------------------------------------------
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.

. 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 the 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 with payments commencing within one year of your
death.

. 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 with payments commencing within
one year of your 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.
- ----------------------------------------------------------------------------

Notice of the death of an owner or annuitant should be furnished promptly to
the John Hancock Annuity Servicing Office.

Miscellaneous provisions

Assignment; change of owner or beneficiary

. the rights of any assignees of record and

. certain other conditions referenced in the contract.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser before
taking any such action.

Tax information

Our income taxes

We are taxed as a life insurance company under the Internal Revenue Code (the
"Code"). The Account is taxed as part of our operations and is not taxed
separately.

Contracts not purchased to fund a tax qualified plan

Undistributed gains

We believe the contracts will 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.

Annuity payments

When we make payments under a contract in the form of an annuity, each payment
will result in taxable ordinary income to the payee, to the extent that each
such payment exceeds an allocable portion of your "investment in the contract"
(as defined in the Code). 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.

Surrenders and withdrawals before date of maturity

When you take a partial withdrawal from a contract, including a payment under
a systematic withdrawal plan, 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 the special penalty tax
for premature withdrawals as explained below. When only the investment in the
contract remains, any subsequent withdrawal made before the date of maturity
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
JHVLICO or its affiliates to the owner within the same calendar year will be
treated as if they were a single contract.

Penalty for premature withdrawals

Accumulated value enhancement rider

Puerto Rico annuity contracts not purchased to fund a tax qualified plan

Under the Puerto Rico tax laws, distributions from a contract not purchased to
fund a tax qualified plan ("Non-Qualified Contract") before annuitization are
treated as non-taxable return of principal until the principal is fully
recovered. Thereafter, all distributions are fully taxable. Distributions after
annuitization are treated as part taxable income and part non-taxable return of
principal. The amount excluded from gross income after annuitization 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. Puerto Rico does not currently impose an early
withdrawal penalty tax. Generally, Puerto Rico does not require income tax to be
withheld from distributions of income.

Diversification requirements

Each of the funds of the Series Funds intends to qualify as a regulated
investment company under Subchapter M of the

Code and meet the investment diversification tests of Section 817(h) of the Code
and the underlying regulations. Failure to do so could result in current
taxation to you on gains in your contract for the year in which such failure
occurred and thereafter.

Contracts purchased for a tax-qualified plan

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 tax-qualified plan. Trustees and
administrators of tax qualified plans may, however, generally invest and
reinvest existing plan assets without regard to such Code imposed limitations on
contributions. In addition, certain distributions from tax qualified plans may
be transferred directly to another plan, unless funds are added from other
sources, without regard to such limitations.

Tax-free rollovers

You may make a tax-free rollover from:

. a traditional IRA to another traditional IRA,

. any tax-qualified plan to a traditional IRA,

. any tax-qualified plan to another tax-qualified plan of the same type
(i.e. 403(b) to 403(b), corporate plan to corporate plan, etc.), and

. from a regular IRA to a Roth IRA, subject to special restrictions
discussed below.

Traditional IRAs

A traditional individual retirement annuity (as defined in Section 408 of the
Code) generally permits an eligible purchaser to make annual contributions which
cannot exceed the lesser of:

. 100% of compensation includable in your gross income, or

. $2,000 per year.

You may be entitled to a full deduction, a partial deduction or no deduction
for your traditional IRA contribution on your federal income tax return.

The amount of your deduction is based on the following factors:

. whether you or your spouse is an active participant in an employer
sponsored retirement plan,

. your federal income tax filing status, and

. your "Modified Adjusted Gross Income."

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.

Roth IRAs

If you hold your Roth IRA for at least five years the payee will not owe any
federal income taxes or early withdrawal penalties on amounts paid out from the
contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to qualified first-time homebuyers (not to exceed a lifetime limitation
of $10,000) as specified in the Code.

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 $2,000 Roth IRA contribution limit does not apply to converted amounts.

SIMPLE IRA plans

Simplified Employee Pension plans (SEPs)

Section 403(b) plans

The amount of such non-taxable contributions each year

. is limited by a maximum (called the "exclusion allowance") that is
computed in accordance with a formula prescribed under the Code;

. may not, together with all other deferrals the employee elects under other
tax-qualified plans, exceed $10,500 (subject to cost of living increases);
and

. is subject to certain other limits (described in Section 415 of the
Code).

Moreover, the Code prohibits distributions from a 403(b) contract before the
employee reaches age 59 1/2, except:

. on the employee's separation from service, death, or disability,

. with respect to distributions of assets held under a 403(b) contract as
of December 31, 1988, and

. transfers and exchanges to other products that qualify under Section
403(b).

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."

The non-taxable portion of each annuity payment is determined, under the Code,
according to one formula if the payments are variable and a somewhat different
formula if the payments are fixed. In each case, speaking generally, the formula
seeks to allocate an appropriate amount of the investment in the contract to
each payment. Favorable procedures may also be available to taxpayers who had
attained age 50 prior to January 1, 1986.

IRS required minimum distributions to the employee 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.

"Top-heavy" plans

Government deferred compensation plans

You can exclude a portion of your compensation from gross income if you
participate in a deferred compensation plan maintained by:

. a state,

. a political subdivision of a state,

. an agency or intrumentality or a state or political subdivision of a
state, or

. a tax-exempt organization.

In general, the maximum amount of compensation you can defer under such tax-
favored plans equals the lesser of:

. $7,500 or

. 33 1/3 % of your "includible income" (as defined in the Code).

The deferred compensation plan must satisfy several conditions, including the
following:

. the plan 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 shall remain solely the
employer's property and may be subject to the claims of its creditors.

If we make a payment under your contract in the form of an annuity, or in a
single sum such as on surrender or withdrawal, the payment is taxed as ordinary
income.

Withholding on rollover distributions

Puerto Rico annuity contracts purchased to fund a tax-qualified plan

The provisions of the tax laws of Puerto Rico vary significantly from those
under the Internal Revenue Code of the United States with respect to the various
"tax qualified" plans described above. Although John Hancock may offer variable
annuity contracts in Puerto Rico in connection with "tax qualified" plans, the
text of the prospectus under the subsection "Contracts purchased for a tax
qualifed plan" is inapplicable in Puerto Rico and should be disregarded.

See your own tax adviser

The above description of Federal (and Puerto Rico) income tax consequences to
owners of and payees under contracts, and of the different kinds of tax
qualified plans which may be funded by the contracts, is only a brief summary
and is not intended as tax advice. The rules under the Code governing tax
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 consult a qualified tax
adviser.

Further information about JHVLICO

We are JHVLICO, a stock life insurance company, organized in 1979 under the
laws of the Commonwealth of Massachusetts. JHVLICO commenced operations in 1980.
Currently, JHVLICO writes term, whole, variable and universal life insurance
policies and variable annuity contracts in all states except New York. JHVLICO
is wholly-owned by John Hancock Life Insurance Company (formerly known as John
Hancock Mutual Life Insurance Company, hereinafter referred to as "JHLICO" or
"John Hancock"), a life insurance company organized under the laws of
Massachusetts in 1862. Pursuant to a Plan of Reorganization approved by the
policyholders of John Hancock and the Commonwealth of Massachusetts Division of
Insurance, effective February 1, 2000, John Hancock converted from a mutual life
insurance company to a stock life insurance company (i.e. demutualized) and
became a wholly owned subsidiary of John Hancock Financial Services, Inc. which
is a holding company. In connection with the reorganization, John Hancock
changed its name to John Hancock Life Insurance Company. In addition, on
February 1, 2000, John Hancock Financial Services, Inc. completed its initial
public offering in which 102 million shares of common stock were issued at an
initial public offering price of $17 per share. At December 31, 2000, JHVLICO
had $74.8 billion of gross life insurance in force.

JHVLICO markets its policies through

. John Hancock's sales organization, which includes a career agency
system composed of company-supported independent general agencies
and,

. various unaffiliated broker-dealers and certain financial
institutions with which John Hancock and JHVLICO have sales
agreements.

In 1993, JHVLICO acquired Colonial Penn Annuity and Life Insurance Company and
renamed it John Hancock Life Insurance Company of America. On March 5, 1998, the
name of the company was changed from John Hancock Life Insurance Company of
America to Investors Partner Life Insurance Company ("IPL").

Selected financial data

- --------------------------------------------------------------------------------
The following table sets forth certain selected financial data. The table
first presents selected financial data of our consolidated results of
operations for the year ended December 31, 2000 and statement of financial
position data as of December 31, 2000 on a basis of generally accepted
accounting principles ("GAAP"). This data has been derived from our audited
GAAP basis financial statements included elsewhere in this prospectus. After
that, the table presents selected statement of operations data for each of the
two years ended December 31, 2000 and 1999 and statement of financial position
data as of December 31, 2000 and 1999 on a basis prescribed or permitted by
the Commonwealth of Massachusetts Division of Insurance ("statutory" or "Stat"
basis). This data has been derived from our audited statutory basis financial
statements included elsewhere in this prospectus. After that, the table
presents selected statement of operations data for the years ended December
31, 1998, 1997 and 1996 and statement of financial position data as of
December 31, 1998, 1997 and 1996 that have been derived from our audited
statutory basis financial statements not included herein.

You should read the following selected historical financial data along with
other information including "Management's Discussion and Analysis"
immediately following this section and our financial statements and the
notes to the financial statements beginning on page 37.

Past results do not necessarily indicate future results.
- -------------------------------------------------------------------------------

Selected financial data - continued

Year Year Year Year
ended ended ended ended
December December December December
31, 2000 31, 2000 31, 1999 31, 1998
(in millions-GAAP) (in millions-Stat) (in millions-Stat) (in millions-Stat)
------------------ ------------------ ------------------ ------------------

STATEMENT OF OPERATIONS DATA:
Premiums................... $ 28.6 $ 945.5 $ 950.8 $1,272.3
Net investment
income..................... 213.4 176.7 136.0 122.8
Net realized capital
gains (losses)............. (10.6) -- -- --
Other income, net.......... 337.3 475.6 605.4 618.1
------------------ --------- --------- --------
TOTAL REVENUES $ 568.7 $ 1,597.8 $ 1,692.2 2,013.2
Total benefits and
expenses................... $ 425.5 $ 1,574.4 $ 1,573.6 1,963.9
Federal income tax
expense (credit)........... 43.8 (18.0) 42.9 33.1
Net realized capital
gains (losses)............. -- (18.2) (1.7) (0.6)
Net gain/net income........ $ 99.4 $ 23.2 $ 74.0 $ 15.6
BALANCE SHEET DATA:
Total assets............... $12,194.7 $10,720.2 $10,613.0 $8,599.0
Total obligations.......... 11,389.1 10,271.4 10,216.0 8,268.2
Total stockholder's
equity/
policyholders'
contingency reserve........ $ 805.6 $ 448.8 $ 397.0 $ 330.8

Year Year
ended ended
December December
31, 1997 31, 1996
(in millions-Stat) (in millions-Stat)
------------------ ------------------

STATEMENT OF OPERATIONS DATA:
Premiums................... $ 872.7 $ 820.6
Net investment
income..................... 89.7 76.1
Net realized capital
gains (losses)............. -- --
Other income, net.......... 449.1 427.7
--------- --------
TOTAL REVENUES 1,411.5 1,324.4
Total benefits and
expenses................... 1,342.5 1,249.0
Federal income tax
expense (credit)........... 38.5 38.6
Net realized capital
gains (losses)............. (3.0) (1.5)
Net gain/net income........ $ 27.5 $ 35.3
BALANCE SHEET DATA:
Total assets............... $ 6,251.5 $ 4,567.8
Total obligations.......... 6,199.8 4,284.7
Total stockholder's
equity/
policyholders'
contingency reserve........ $ 321.7 283.1

Management's discussion and analysis

Forward-Looking Information

The statements, analyses, and other information contained herein relating to
trends in JHVLICO's operations and financial results, the markets for JHVLICO's
products, the future development of JHVLICO's business, and the contingencies
and uncertainties to which JHVLICO may be subject, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend," "will," "should," "may," and other similar expressions, are "forward-
looking statements" under the Private Securities Litigation Reform Act of 1995.
Such statements are made based upon management's current expectations and
beliefs concerning future events and their effects on JHVLICO and may not be
those anticipated by management. JHVLICO's actual results may differ materially
from the results anticipated in these forward-looking statements.

increased volatility in the securities markets, and other economic factors, may
adversely affect our business, particularly our variable life insurance and
variable annuity business, (5) our life insurance sales are highly dependent on
a third party distribution relationship, (6) customers may not be responsive to
new or existing products or distribution channels, (7) interest rate volatility
may adversely affect our profitability, (8) our net income and revenues will
suffer if customers surrender annuities and variable and universal life
insurance policies, (9) we will face losses if the claims on our insurance
products, or reductions in rates of mortality on our annuity products, are
greater than we projected, (10) we face risks relating to our investment
portfolio, (11) we may experience volatility in net income due to changes in
standards for accounting for derivatives and other changes, (12) we are subject
to risk-based capital requirements and possible guaranty fund assessments, (13)
the National Association of Insurance Commissioners' codification of statutory
accounting practices will adversely affect our statutory surplus, (14) we may be
unable to retain personnel who are key to our business, (15) we face risks from
ceded reinsurance business in respect to life insurance,and (16) litigation and
regulatory proceedings may result in financial losses, harm our reputation and
divert management resources.

You are also directed to other risks and uncertainties discussed, as well as
to further discussion of the risks described above, in other documents filed by
us with the United States Securities and Exchange Commission. We specifically
disclaim any obligation to update or revise any forward-looking information,
whether as a result of new information, future developments, or otherwise.

Overview

Our GAAP revenues are derived principally from:

. premiums on individual life insurance and annuities with life
contingencies;

. product charges from variable and universal life insurance products and
annuities;

. net investment income and realized investment gains on general account
assets.

Our profitability depends in large part upon: (1) the adequacy of our product
pricing, which is primarily a function of competitive conditions, our ability to
assess and manage trends in mortality and morbidity experience, our ability to
generate investment earnings and our ability to maintain expenses in accordance
with pricing assumptions and (2) the maintenance of our target spreads between
the rate of earnings on our investments and rates credited on policyholders'
general account balances.

Our sales and financial results of our retail business over the last several
years have been affected by general economic and industry trends. Variable
products, including variable life insurance and variable annuities, have
accounted for the majority of recent increases in total premiums and deposits
for the insurance industry as a result of the strong equity market growth in
recent years and the "baby boom" generation reaching its high-earnings years
and seeking tax-advantaged investments to prepare for retirement.

Premiums and deposits of our individual annuity products were $94.3 million in
2000 as compared to $231.3 million in 1999. Our variable life insurance product
deposits were $853.1 million in 2000 as compared to $719.7 million in 1999.

Reconciliation of GAAP and Statutory Financial Results for the Year Ended
December 31, 2000

GAAP basis net income was $99.4 million and statutory gain from operations was
$41.4 million for the year ended December 31, 2000. Statutory gain from
operations of $41.4 million does not include $3.3 million of statutory gain from
operations from JHVLICO's wholly-owned subsidiary, Investors Partner Life
Insurance Company (IPL) which is accounted for on the statutory equity method of
accounting. In determining statutory gain from operations of $41.4 million,
certain items are either added to, or subtracted from, GAAP basis net income, as
these items receive differing treatment on a GAAP and statutory basis. A
discussion of these reconciling items follows.

These decreases to GAAP basis net income were offset mainly by increases of
$61.8 million for taxes and $22.8 million for policyholder benefit reserves.
Statutory basis accounting calculates taxes on a tax return basis, with no
recognition given to timing differences. GAAP basis accounting does recognize
these timing differences. Also offsetting decreases to GAAP basis net income
were $10.6 million of realized capital losses as realized capital losses are not
part of statutory gain from operations.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
(Statutory Discussion)

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
(Statutory Discussion)

Payments to policyholders and beneficiaries were $349.9 million for 1999, an
increase of $48.5 million, or 16.1%, from $301.4 million in 1998. The increase
was primarily due to an increase of $76.0 million in variable life insurance,
which was offset by decreases of $20.9 million in annuities and $7.9 million in
universal life insurance. The variable life increase was principally due to
increased surrenders. The annuity decrease was primarily the result of increased
ceded surrender benefits under a modified coinsurance agreement with John
Hancock. The universal life insurance decrease can be attributed to decreased
death benefits.

General Account Investments

Overall Composition of the General Account

The following discussion is presented on a statutory basis of accounting.

The following table shows the composition of investments in our general
account portfolio.

Bonds (1)................. $1,400.5 55.3% $1,216.3 54.6%
Preferred stocks.......... 44.0 1.7 35.9 1.6
Common stocks............. 2.8 0.1 3.2 0.1
Investment in affiliates.. 84.8 3.4 80.7 3.6
Mortgage loans (2)........ 456.0 18.0 433.1 19.4
Real estate............... 24.5 1.0 25.0 1.1
Policy loans (3).......... 218.9 8.7 172.1 7.7
Other invested assets..... 24.7 1.0 14.8 0.7
Short-term investments.... 226.6 9.0 222.9 10.0
Temporary cash
investments (4).......... 45.4 1.8 27.2 0.2
-------- ----- -------- -----
Total invested assets.... $2,528.2 100.0% $2,231.2 100.0%
======== ===== ======== =====

Bonds

The following table shows the composition of our bond portfolio.

Bond Portfolio -- By Issuer

As of December 31,
--------------------------------------
2000 1999
----------------- -----------------
Carrying % of Carrying % of
Value Total Value Total
-------- ------- -------- -------
(in millions) (in millions)
Corporate securities........ $1,158.9 82.7% $ 964.9 79.3%
MBS/ABS..................... 223.3 16.0 229.4 18.9
U.S. Treasury securities
and obligations of U.S.
government agencies........ 5.7 0.4 5.9 0.5
Debt securities issued by
foreign governments........ 10.8 0.8 13.9 1.1
Obligations of states and
political Subdivisions..... 1.8 0.1 2.2 0.2
-------- ----- -------- -----
Total...................... $1,400.5 100.0% $1,216.3 100.0%
======== ===== ======== =====

of December 31, 2000 and December 31, 1999 was limited to 3.3% and 3.9% of our
total MBS/ABS portfolio and 0.6% and 0.7% of our bond holdings, respectively.

Mortgage Loans

As of December 31, 2000, we held mortgage loans with an amortized cost of
$0.5 billion.

As of December 31,
--------------------------------------
2000 1999
----------------- -----------------
Carrying % of Carrying % of
Value Total Value Total
-------- ------- -------- -------
(in millions) (in millions)
Apartment................. $ 93.6 20.5% $112.1 25.9%
Office Buildings.......... 84.7 18.6 86.4 20.0
Retail.................... 35.4 7.8 25.5 5.9
Agricultural.............. 142.5 31.3 99.6 23.0
Industrial................ 63.5 13.9 66.0 15.2
Hotels.................... 13.0 2.9 11.3 2.6
Multi-Family.............. -- -- -- --
Mixed Use................. 12.9 2.8 -- --
Other..................... 10.2 2.2 32.2 7.4
------ ----- ------ -----
Total.................... $456.0 100.0% $433.1 100.0%
====== ===== ====== =====

The following table shows the distribution of our mortgage loan portfolio
by geographical region.

As of December 31,
------------------------------------------------
2000 1999
----------------- -----------------
Number
of Carrying % of Carrying % of
Loans Value Total Value Total
------ -------- ------- -------- -------
(in millions) (in millions)
East North Central........ 17 $ 64.3 14.1% $ 71.3 16.5%
East South Central........ 17 20.9 4.6 7.4 1.7
Middle Atlantic........... 8 20.9 4.6 28.5 6.6
Mountain.................. 11 27.0 5.9 21.0 4.8
New England............... 9 23.4 5.1 37.5 8.7
Pacific................... 46 108.0 23.7 111.1 25.7
South Atlantic............ 37 120.7 26.5 87.6 20.2
WestNorth Central......... 5 16.0 3.5 16.6 3.8
West South Central........ 17 51.5 11.3 48.6 11.2
Canada.................... 1 3.3 0.7 3.5 0.8
------ -------- ------- -------- ------
Total.................... 168 $ 456.0 100.0% $ 433.1 100.0%
====== ======== ======= ======== ======

Investment Results

The following table summarizes JHVLICO's investment results for the periods
indicated. Overall, the yield, net of investment expenses, on our general
account portfolio increased from the year ended December 31, 1999. The improved
yield was primarily generated by favorable interest rates achieved on our 2000
bond acquisitions. In particular, 2000 bond acquisitions benefited from a
combination of higher U.S. Treasury rates and relatively wide spreads in both
the public and private sectors. While interest rates declined substantially
during the fourth quarter of 2000, they were well above 1999 rates on a full
calendar year basis. The average 10-year U.S. Treasury rate in 2000 was 34
basis points higher than the average 10-year U.S. Treasury rate in 1999.

For The Year Ended December 31,
----------------------------------------
2000 1999
------------------ ----------------
Yield Amount Yield Amount
----- ------ ----- ------
(in millions) (in millions)

General account assets-
excluding policy loans
Gross income....................... 8.0% $ 174.6 7.2% $ 138.6
Ending assets- excluding policy
Loans............................. 2,309.3 2,059.1
Policy loans
Gross income....................... 6.2% 12.1 6.2% 9.6
Ending assets...................... 218.9 172.1
Total gross income............... 7.8% 186.7 7.2% 148.1
Less: investment expenses.......... (10.1) (12.1)
-------- --------
Net investment income.............. 7.4% $ 176.7 6.6% $ 136.0
======== ========

Liquidity and Capital Resources

The following discussion is presented on a statutory basis of accounting.

Net cash provided by operating activities was $236.7 million, $236.0 million,
and $475.7 million for the years ended December 31, 2000, 1999 and 1998,
respectively. December 31, 2000 remained relatively unchanged as compared to
December 31, 1999. The decrease in 1999 as compared to 1998 of $239.7 million
resulted primarily from decreases in insurance premiums of $316.8 million,
insurance expenses and taxes of $47.9 million, benefits to policyholders and
beneficiaries of $46.1 million, other expenses of $10.7 million and dividends
paid to policyholders of $3.3 million. Offsetting these decreases were
increases of $169.1 million in net transfers to separate accounts and net
investment income of $16.0 million.

Net cash used in investing activities was $214.8 million, $138.8 million and
$660.9 million for the years ended December 31, 2000, 1999, and 1998,
respectively. The increase in net cash used in 2000 as compared to 1999 of
$76.0 million resulted primarily from an increase in bond purchases of $210.0
million. Offsetting this increase in bond purchases were increases in cash
provided by other investing activities of $92.6 million and mortgage loan
repayments of $36.3 million. The decrease in net cash used in 1999 as compared
to 1998 of $522.1 million resulted primarily from a decrease in bond purchases
of $378.1 million, a decrease of $366.3 million in cash used in other investing
activities, and a decrease in cash provided by the sale of bonds of $232.4
million.

Quantitative and Qualitative Disclosures About Market Risk.

The following discussion is presented on a statutory basis of accounting.

Capital Markets Risk Management

Our principal capital market exposures are credit and interest rate risk which
includes the impact of inflation, although we have certain exposures to changes
in equity prices and foreign currency exchange rates. Credit risk pertains to
the uncertainty associated with the ability of an obligor or counterparty to
continue to make timely and complete payments of contractual principal and/or
interest. Interest rate risk pertains to the market value fluctuations that
occur within fixed maturity securities or liabilities as market interest rates
move. Equity and foreign currency risk pertain to price fluctuations,
associated with JHVLICO's ownership of equity investments or non-US dollars
denominated investments and liabilities, driven by dynamic market environments.

Credit Risk

JHVLICO manages the credit risk inherent in its fixed maturity securities by
applying strict credit and underwriting standards, with specific limits
regarding the proportion of permissible below investment grade holdings. We
also diversify our fixed maturity securities with respect to investment quality,
and credit concentration. Credit concentrations are monitored with respect to
issuer, industry, geographic location and loan property-type. Where possible,
consideration of external measures of creditworthiness, such as ratings assigned
by nationally recognized rating agencies, supplement our internal credit
analysis. JHVLICO uses simulation models to examine the probability
distribution of credit losses to ensure that it can readily withstand feasible
adverse scenarios. In addition, JHVLICO periodically examines, on various
levels of aggregation, its actual default loss experience on significant asset
classes to determine if the losses are consistent with the (1) levels assumed in
product pricing, (2) ACLI loss experience and (3) rating agencies'
quality-specific cohort default data. These tests have generally found
JHVLICO's aggregate experience to be favorable relative to these external
benchmarks and consistent with priced-for-levels.

Interest Rate Risk

Derivative Instruments

As of December 31, 2000
---------------------------------------------------------
Fair Value
-----------------------------------------------
Weighted-
Average -100 +100
Notional Term Basis Point As of Basis Point
Amount (Years) Change 12/31/00 Change
-------- --------- ----------- -------- -------------
(in millions, except for Weighted-Average Term)

Interest rate swaps............. $1,150.0 4.2 (17.2) -- 13.3
Futures contracts (1)........... 43 8.0 0.2 0.1 (0.2)
Interest rate floors............ 361.4 9.5 3.1 1.4 0.8
Interest rate caps.............. 239.4 6.8 0.8 2.1 4.1
-------- ---- ----- ----- -----
Totals........................ 1,793.8 5.7 (13.1) 3.6 18.0
======== ==== ===== ===== =====

(1) Represents the notional value on open contracts as of December 31, 2000.

Equity Risk

Foreign Currency Risk

Foreign currency risk is the possibility that JHVLICO will incur economic
losses due to adverse changes in foreign currency exchange rates. This risk
arises from the purchase of fixed income securities that are denominated in
foreign currencies; however, JHVLICO uses derivatives to hedge the foreign
currency risk of these securities (both interest payments and the final maturity
payment). At December 31, 2000, the notional value of JHVLICO's foreign
currency denominated fixed maturity securities was approximately $22.0 million.
JHVLICO uses currency swap agreements of the same currency to hedge the foreign
exchange risk related to its investments in securities denominated in foreign
currencies. The fair value of JHVLICO's currency swap agreements at December 31,
2000 was $(0.6) million.

The estimate that as of December 31, 2000, a 10% immediate change in each of
the foreign currency exchange rates to which we are exposed, including the
currency swap agreements, would result in no material change to the net fair
value of our currency-denominated instruments identified above. The selection
of a 10% immediate change in all currency exchange rates should not be construed
as a prediction by us of future market events but rather as an illustration of
the potential impact of such an event.

results noted above due to the correlation assumptions utilized or if events
occur that were not included in the methodology, such as significant liquidity
or market events.

Effects of Inflation

JHVLICO does not believe that inflation has had a material effect on the
results of its operations except insofar as inflation may affect interest rates.

Reinsurance

Separate Accounts

Competition

Employees and Facilities

Transactions with John Hancock

John Hancock receives no additional compensation for its services as
underwriter and distributor of the contracts issued by JHVLICO. See Note 2 to
our audited consolidated GAAP financial statements.

Legal Proceedings.

Sales Practice Class Action Settlement

Insurance Company and John Hancock Distributors, Inc., Duhaime, et al. v. John
Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and John Hancock Distributors, Inc. With certain limited exceptions,
the class that is bound by the terms of the settlement includes persons and
entities who at any time during the class period (January 1, 1979 through
December 31, 1996) had an ownership interest in one or more of our whole life,
universal life or variable life insurance policies (and certain annuities)
issued during the class period.

In conjunction with this settlement, we have established a reserve that stood
at $66.3 million at December 31, 2000. Given the uncertainties associated with
estimating the reserve, it is reasonably possible that the final cost of the
settlement could differ materially from the amounts presently provided for by
us. We will continue to update this estimate of the final cost of the
settlement as the claims are processed and more specific information is
developed, particularly as the actual cost of the claims subject to alternative
dispute resolution becomes available. However, based on information available
at the time, and the uncertainties associated with the final claim processing
and alternate dispute resolution and arbitration, the range of any additional
costs related to the settlement cannot be estimated with precision. If
JHVLICO's share of the settlement increases, John Hancock will contribute
additional capital to JHVLICO so that JHVLICO's total stockholder's equity would
not be impacted.

Regulation

States levy assessments against John Hancock companies as a result of
participation in various types of state guaranty associations, state insurance
pools for the uninsured or other arrangements.

On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 was signed into law,
implementing fundamental changes in the regulation of the financial services
industry in the United States. The act permits the transformation of the
already converging banking, insurance and securities industries by permitting
mergers that combine commercial banks, insurers and securities firms under one
holding company. Under the act, national banks retain their existing ability to
sell insurance products in some circumstances. In addition, bank holding
companies that qualify and elect to be treated as "financial holding companies"
may engage in activities, and acquire companies engaged in activities, that are
"financial" in nature or "incidental" or "complementary" to such financial
activities, including acting as principal, agent or broker in selling life,
property and casualty and other forms of insurance, including annuities. A
financial holding company can own any kind of insurance company or insurance
broker or agent, but its bank subsidiary cannot own the insurance company.
Under state law, the financial holding company would need to apply to the
insurance commissioner in the insurer's state of domicile for prior approval of
the acquisition of the insurer, and the act provides that the commissioner, in
considering the application, may not discriminate against the financial holding
company because it is affiliated with a bank. Under the act, no state may
prevent or interfere with affiliations between banks and insurers, insurance
agents or brokers, or the licensing of a bank or affiliate as an insurer or
agent or broker.

Until the passage of the Gramm-Leach-Bliley Act, the Glass-Steagall Act of
1933, as amended, had limited the ability of banks to engage in
securities-related businesses, and the Bank Holding Company Act of 1956, as
amended, had restricted banks from being affiliated with insurance companies.
With the passage of the Gramm-Leach-Bliley Act, bank holding companies may
acquire insurers, and insurance holding companies may acquire banks. The
ability of banks to affiliate with insurance companies may materially adversely
affect all of our product lines by substantially increasing the number, size and
financial strength of potential competitors.

Moreover, the United States Supreme Court held in 1995 in Nationsbank of North
Carolina v. Variable Annuity Life

Insurance Company that annuities are not insurance for purposes of the National
Bank Act. Although the effect of these developments on us and our competitors
is uncertain, both the persistency of our existing products and our ability to
sell new products may be materially impacted by these developments in the
future.

Directors and Executive Officers

The directors and executive officers of JHVLICO are as follows:

David D'Alessandro, 50 Chairman President and Chief Executive Officer, John Hancock
Director Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Michele G. Van Leer, 43 Vice Chairman & President Senior Vice President, Life Product Management,
Director John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Robert S. Paster, 48 Vice President Second Vice President, Direct Distribution,
Director John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Robert R. Reitano, 50 Vice President & CIO Senior Vice President and Chief Investment
Director Strategist, Investment Policy & Research,
John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara L. Luddy, 49 Vice President & Actuary Senior Vice President, Financial Report & Analysis,
Director John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce M. Jones 43 Vice President Vice President, Annuity Product Management,
Director John Hancock; Prior to July, 1999, Senior Vice
President & Chief Operation Officer, Phoenix Home
Life Insurance Company; Vice President, Marketing
Department Phoenix Home Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald J. Bocage, 55 Vice President & Counsel Vice President & Counsel, Insurance and Separate
Director Account Products Division, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Lee, 45 Vice President Vice President, Life Product and Systems
Director Management, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Paul J. Strong 54 Vice President Vice President, Retail Life Product Management,
Director John Hancock; Prior to September, 1999, Senior
Vice President, Product Management, Jefferson Pilot
Financial Insurance Company; Senior Vice President,
Marketing, Chubb Life Insurance Company of America
- ------------------------------------------------------------------------------------------------------------------------------------
Earl W. Baucom 54 Controller Senior Vice President and Controller, Controller's
Department, John Hancock; Prior to 1999, Senior
Vice President and CFO, Franklin Life Insurance
Company; Prior to June, 1996, Senior Vice President
and CFO of Providian Direct Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
Julie H. Indge 47 Treasurer Assistant Treasurer, Financial Sector Management,
John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Peter H. Scavongelli 43 Secretary State Compliance Officer, John
- ------------------------------------------------------------------------------------------------------------------------------------

Executive Compensation

The following table provides information on the allocated compensation paid
to the chief executive officer for 2000.

Annual Compensation Long-Term Compensation
------------------- ----------------------
Name Title Salary Bonus Other LTIP All Other
---- ----- ------ ----- ----- ---- ---------

David F. D'Alessandro Chairman $45,846 $68,000 $ 313 $36,495 $0

Performance Information

. 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:

. the mortality and expense risk charges,

. the annual contract fee, and

. any withdrawal charge payable if the owner surrenders his contract at the
end of the relevant period.

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 withdrawal
charge and it may be for additional durations.

Current yield and effective yield reflect all the recurring charges at the
Account level, but will not reflect any premium tax, any withdrawal charge, or
any charge for optional benefit riders.

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 Series Funds.

Voting Privileges

At meetings of the Series 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 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 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 Account in any form permitted by law, and

. to terminate the 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

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 premium payment,

. the size of the group or class,

. the total amount of premium payments expected to be received from the
group or class and the manner in which the premium 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 or rates 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.
Any variation in charges 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

You can purchase a contract through registered representatives of
broker-dealers and certain financial institutions who have entered into selling
agreements with JHVLICO and JHFI, or with JHVLICO and Signator. We pay
broker-dealers compensation for promoting, marketing and selling our variable
insurance and variable annuity products. In turn, the broker-dealers pay a
portion of the compensation to their registered representatives, under their own
arrangements. Signator will also pay its own registered representatives for
sales of the contracts to their customers. We do not expect the compensation we
pay to such broker-dealers (including Signator) and financial institutions to
exceed 8.0% of premium payments (on a present value basis) for sales of the
contracts described in this prospectus. For limited periods of time, we may
pay additional compensation to broker-dealers as part of special sales
promotions. We offer these contracts on a continuous basis, but neither JHVLICO
nor JHFI nor Signator is obligated to sell any particular amount of contracts.
We also reimburse JHFI and Signator for direct and indirect expenses actually
incurred in connection with the marketing of these contracts.

From time to time, JHFI and Signator, at their expense, may provide significant
additional compensation to financial services firms which sell or arrange for
the sale of the contracts. Such compensation may include, for example,
financial asistance 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 financial services
firms-sponsored events or activities.

Experts

Ernst & Young LLP, independent auditors, have audited the financial statements
of John Hancock Variable Life Insurance Company and the Account that appear in
the Statement of Additional Information, which also is a part of the
registration statement that contains this prospectus. Those financial statements
are included in the registration statement in reliance upon Ernst & Young's
reports given upon the firm's authority as experts in accounting and auditing.

Registration statement

This prospectus omits certain information contained in the registration
statement that we filed with the SEC. You can get more details from the SEC
upon payment of prescribed fees or through the SEC's internet web site
(www.sec.gov).

Among other things, the registration statement contains a "Statement of
Additional Information" that we will send you without charge upon request. The
Table of Contents of the Statement of Additional Information lists the following
subjects that it covers:

page of SAI

Distribution...................................................... 2

Calculation of Performance Data................................... 2

Calculation of Annuity Payments................................... 7

Additional Information About Determining Unit Values.............. 9

Purchases and Redemptions of Fund Shares.......................... 10

The Account....................................................... 11

Delay of Certain Payments......................................... 11

Liability for Telephone Transfers................................. 11

Voting Privileges................................................. 12

Financial Statements.............................................. 13

CONDENSED FINANCIAL INFORMATION

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT JF

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Equity Index
Accumulation share value:
Beginning of period................................................. $ 22.54 $ 10.00
End of period....................................................... $ 20.22 $ 22.54
Number of Accumulation Shares outstanding at end of period........... 507,320 76,098
Growth & Income
Accumulation share value:
Beginning of period (Note 2)........................................ $ 10.00 --
End of period....................................................... $ 8.82 --
Number of Accumulation Shares outstanding at end of period........... 12,749 --
Large Cap Value CORE(SM)
Accumulation share value:
Beginning of period................................................. $ 10.31 $ 10.00
End of period....................................................... $ 10.71 $ 10.31
Number of Accumulation Shares outstanding at end of period........... 520,128 92,493
Large Cap Aggressive Growth
Accumulation share value:
Beginning of period................................................. $ 11.97 $ 10.00
End of period....................................................... $ 9.60 $ 11.97
Number of Accumulation Shares outstanding at end of period........... 1,040,129 178,388
Large/Mid Cap Value
Accumulation share value:
Beginning of period................................................. $ 10.43 $ 10.00
End of period....................................................... $ 11.68 $ 10.43
Number of Accumulation Shares outstanding at end of period........... 347,760 64,904
Fundamental Growth
Accumulation share value:
Beginning of period................................................. $ 15.39 $ 10.00
End of period....................................................... $ 14.74 $ 15.39
Number of Accumulation Shares outstanding at end of period............ 525,081 38,912
Mid Cap Growth
Accumulation share value:
Beginning of period (Note 1)........................................ $ 10.00 --
End of period....................................................... $ 7.11 --
Number of Accumulation Shares outstanding at end of period........... 629,910 --
Small/Mid Cap CORE(SM)
Accumulation share value:
Beginning of period................................................. $ 12.73 $ 11.00
End of period....................................................... $ 13.16 $ 12.73
Number of Accumulation Shares outstanding at end of period........... 114,891 9,532
Small/MID Cap Growth
Accumulation share value:
Beginning of period................................................. $ 18.98 $ 18.07
End of period....................................................... $ 20.47 $ 18.98
Number of Accumulation Shares outstanding at end of period........... 136,439 14,779
Small Cap Equity
Accumulation share value:
Beginning of period (Note 2)........................................ $ 10.00 --
End of period....................................................... $ 8.30 --
Number of Accumulation Shares outstanding at end of period........... 535 --

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Small Cap Value
Accumulation share value:
Beginning of period................................................. $ 10.46 --
End of period....................................................... $ 13.87 --
Number of Accumulation Shares outstanding at end of period........... 241,338 --
Small Cap Growth
Accumulation share value:
Beginning of period................................................. $ 21.19 $ 14.27
End of period....................................................... $ 16.44 $ 21.19
Number of Accumulation Shares outstanding at end of period........... 608,753 59,529
V.A. Relative Value
Accumulation share value:
Beginning of period (Note 1)........................................ $ 10.00 --
End of period....................................................... $ 9.21 --
Number of Accumulation Shares outstanding at end of period........... 172,283 --
AIM V.I. Value
Accumulation share value:
Beginning of period................................................. $ 11.77 $ 10.00
End of period....................................................... $ 9.92 $ 11.77
Number of Accumulation Shares outstanding at end of period........... 2,548,369 302,772
Aim V.I. Growth
Accumulation share value:
Beginning of period................................................. $ 12.30 $ 10.00
End of period....................................................... $ 9.66 $ 12.30
Number of Accumulation Shares outstanding at end of period........... 1,551,758 102,211
Fidelity VIP Growth
Accumulation share value:
Beginning of period................................................. $ 12.04 $ 10.00
End of period....................................................... $ 10.57 $ 12.04
Number of Accumulation Shares outstanding at end of period........... 1,875,307 205,097
Fidelity VIP Contrafund(R)
Accumulation share value:
Beginning of period................................................. $ 11.61 $ 10.00
End of period....................................................... $ 10.69 $ 11.61
Number of Accumulation Shares outstanding at end of period........... 1,447,471 237,990
MFS Investors Growth Stock
Accumulation share value:
Beginning of period................................................. $ 12.36 $ 10.00
End of period....................................................... $ 11.45 $ 12.36
Number of Accumulation Shares outstanding at end of period........... 971,077 158,192
MFS Research
Accumulation share value:
Beginning of period................................................. $ 11.86 $ 10.00
End of period....................................................... $ 11.14 $ 11.86
Number of Accumulation Shares outstanding at end of period........... 672,010 73,452
MFS New Discovery
Accumulation share value:
Beginning of period................................................. $ 15.26 $ 10.00
End of period....................................................... $ 14.77 $ 15.26
Number of Accumulation Shares outstanding at end of period........... 431,090 36,557
International Equity
Accumulation share value:
Beginning of period................................................. $ 12.06 $ 10.00
End of period....................................................... $ 10.23 $ 12.06
Number of Accumulation Shares outstanding at end of period........... 181,982 11,123

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Fidelity VIP Overseas
Accumulation share value:
Beginning of period...................................................... $ 12.48 $ 10.00
End of period............................................................ $ 9.97 $ 12.48
Number of Accumulation Shares outstanding at end of period................ 1,107,608 30,517
Janus Aspen Worldwide Growth
Accumulation share value:
Beginning of period (Note 2)............................................. $ 10.00 --
End of period............................................................ $ 9.04 --
Number of Accumulation Shares outstanding at end of period................ 128,709 --
Real Estate Equity
Accumulation share value:
Beginning of period (Note 2)............................................. $ 10.00 --
End of period............................................................ $ 10.95 --
Number of Accumulation Shares outstanding at end of period................ 1,766 --
V.A. Financial Industries
Accumulation share value:
Beginning of period...................................................... $ 14.25 $ 10.00
End of period............................................................ $ 17.90 $ 14.25
Number of Accumulation Shares outstanding at end of period................ 642,376 113,876
V.A. Technology
Accumulation share value:
Beginning of period (Note 1)............................................. $ 10.00 --
End of period............................................................ $ 7.28 --
Number of Accumulation Shares outstanding at end of period................ 679,427 --
Managed
Accumulation share value:
Beginning of period (Note 2)............................................. $ 10.00 --
End of period............................................................ $ 9.73 --
Number of Accumulation Shares outstanding at end of period................ 89 --
Global Balanced
Accumulation share value:
Beginning of period...................................................... $ 12.98 $ 12.24
End of period............................................................ $ 11.65 $ 12.98
Number of Accumulation Shares outstanding at end of period................ 63,735 5,361
Short Term Bond
Accumulation share value:
Beginning of period...................................................... $ 12.48 $ 12.34
End of period............................................................ $ 13.30 $ 12.48
Number of Accumulation Shares outstanding at end of period................ 126,421 15,433
Bond Index
Accumulation share value:
Beginning of period...................................................... $ 9.63 $ 9.65
End of period............................................................ $ 10.63 $ 9.63
Number of Accumulation Shares outstanding at end of period................ 327,502 47,232
V.A. Strategic Income
Accumulation share value:
Beginning of period...................................................... $ 12.62 $ 12.25
End of period............................................................ $ 12.64 $ 12.62
Number of Accumulation Shares outstanding at end of period................ 535,897 58,942
High Yield Bond
Accumulation share value:
Beginning of period...................................................... $ 10.27 $ 10.00
End of period............................................................ $ 9.04 $ 10.27
Number of Accumulation Shares outstanding at end of period................ 333,028 48,898

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ----------------

Global Bond
Accumulation share value:
Beginning of period (Note 2)............................................. $ 10.00 --
End of period............................................................ $ 10.60 --
Number of Accumulation Shares outstanding at end of period................ -- --

(1) Values shown for 2000 begin on May 1, 2000.

(2) Values shown for 2000 begin on November 1, 2000.

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
John Hancock Variable Life Insurance Company

/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 16, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET

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

Assets
Investments--Notes 3 and 4
Fixed maturities:
Held-to-maturity--at amortized cost (fair value: $686.8)....... $ 715.4
Available-for-sale--at fair value (cost: $1,018.8)............. 1,011.8
Equity securities:
Available-for-sale--at fair value (cost: $7.1)................. 8.1
Mortgage loans on real estate.................................... 554.8
Real estate...................................................... 23.9
Policy loans..................................................... 334.2
Short-term investments........................................... 21.7
Other invested assets............................................ 34.8
---------
Total Investments.............................................. 2,704.7
Cash and cash equivalents........................................ 277.3
Accrued investment income........................................ 52.1
Premiums and accounts receivable................................. 7.0
Deferred policy acquisition costs................................ 994.1
Reinsurance recoverable--Note 7.................................. 48.4
Other assets..................................................... 28.2
Separate accounts assets......................................... 8,082.9
---------
Total Assets................................................... $12,194.7
=========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET -- (CONTINUED)

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

Liabilities and Shareholder's Equity
Liabilities
Future policy benefits........................................ $ 2,754.2
Policyholders' funds.......................................... 14.2
Unearned revenue.............................................. 212.0
Unpaid claims and claim expense reserves...................... 11.1
Dividends payable to policyholders............................ 0.1
Income taxes--Note 5.......................................... 64.2
Other liabilities............................................. 250.4
Separate accounts liabilities................................. 8,082.9
----------
Total Liabilities........................................... 11,389.1
Shareholder's Equity--note 9
Common stock, $50 par value; 50,000 shares authorized;
50,000 shares issued and outstanding......................... 2.5
Additional paid in capital.................................... 572.4
Retained earnings............................................. 232.9
Accumulated other comprehensive loss.......................... (2.2)
----------
Total Shareholder's Equity.................................. 805.6
----------
Total Liabilities and Shareholder's Equity.................. $ 12,194.7
==========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME

Year Ended
December 31
2000
-------------
(in millions)

Revenues
Premiums.......................................................... $ 28.6
Universal life and investment-type product charges................ 337.1
Net investment income--Note 3..................................... 213.4
Net realized investment losses, net of related
amortization of deferred policy acquisition
costs of $3.8--Notes 1, 3, and 10................................ (10.6)
Other revenue..................................................... 0.2
-------
Total revenues.................................................. 568.7
Benefits and Expenses
Benefits to policyholders......................................... 248.6
Other operating costs and expenses................................ 116.8
Amortization of deferred policy acquisition costs,
excluding amounts related to net realized
investment losses of $3.8--Notes 1, 3 and 10..................... 34.0
Dividends to policyholders........................................ 26.1
-------
Total benefits and expenses..................................... 425.5
-------
Income before income taxes........................................ 143.2
Income taxes--Note 5.............................................. 43.8
-------
Net income........................................................ $ 99.4
=======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME

Accumulated
Additional Other Total
Paid In Retained Comprehensive Shareholder's
Common Stock Capital Earnings Loss Equity
------------ ---------- -------- ------------- -------------

Balance at December 31, 1999.................. $2.5 $572.4 $133.5 ($13.4) $695.0
Comprehensive income:
Net income.................................... 99.4 99.4
Other comprehensive income, net of tax:
Net unrealized gains.......................... 11.2 11.2
Comprehensive income........................... 110.6
---- ------ ------ ------ ------
Balance at December 31, 2000................... $2.5 $572.4 $232.9 ($2.2) $805.6
==== ====== ====== ====== ======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended
December 31
2000
-----------
(in millions)

Cash flows from operating activities:
Net income..................................................... $ 99.4
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of discount--fixed maturities................... (1.9)
Realized investment losses, net.............................. 10.6
Change in deferred policy acquisition costs.................. (141.5)
Depreciation and amortization................................ 1.9
Increase in accrued investment income........................ (10.2)
Decrease in premiums and accounts receivable................. 0.3
Decrease in other assets and other liabilities, net.......... 70.7
Decrease in policy liabilities and accruals, net............. (401.1)
Increase in income taxes..................................... 22.5
--------
Net cash used by operating activities....................... (349.3)
Cash flows from investing activities:
Sales of:
Fixed maturities available-for-sale........................... 194.6
Equity securities available-for-sale.......................... 1.0
Real estate................................................... 0.2
Short-term investments and other invested assets.............. 1.3
Maturities, prepayments and scheduled redemptions of:
Fixed maturities held-to-maturity............................. 79.9
Fixed maturities available-for-sale........................... 91.5
Short-term investments and other invested assets.............. 10.1
Mortgage loans on real estate................................. 85.6
Purchases of:
Fixed maturities held-to-maturity............................. (127.2)
Fixed maturities available-for-sale........................... (424.7)
Equity securities available-for-sale.......................... (0.6)
Real estate................................................... (0.4)
Short-term investments and other invested assets.............. (38.8)
Mortgage loans on real estate issued.......................... (100.5)
Other, net.................................................... (41.5)
--------
Net cash used in investing activities....................... (269.5)
Cash flows from financing activities:
Universal life and investment-type contract deposits........... $1,067.2
Universal life and investment-type contract maturities and
withdrawals................................................... (430.7)
--------
Net cash provided by financing activities................... 636.5
--------
Net increase in cash and cash equivalents................... 17.7
Cash and cash equivalents at beginning of year.................. 259.6
--------
Cash and cash equivalents at end of year.................... $ 277.3
========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation

Investments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

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

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

Short-term investments are carried at amortized cost.

Derivative Financial Instruments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Equity collar agreements are carried at fair value and are included in
other invested assets, with the resulting unrealized gains and losses included
in realized investment gains (losses).

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Revenue Recognition

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

Future Policy Benefits and Policyholders' Funds

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Participating Insurance

Participating business represents approximately 16.3% of the Company's life
insurance in force and 30.1% of life insurance premiums in 2000.

Deferred Policy Acquisition Costs

Cash and Cash Equivalents

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Separate Accounts

Reinsurance

Federal Income Taxes

Foreign Currency Translation

Gains or losses on foreign currency transactions are reflected in earnings.

Accounting Changes and New Accounting Principles Adopted

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Codification

Note 2. Transactions with Parent

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments

The following information summarizes the components of net investment
income and realized investment losses, net:

Year Ended
December 31
2000
---------------
(in millions)

Net Investment Income
Fixed maturities............................................... $138.5
Equity securities.............................................. 0.2
Mortgage loans on real estate.................................. 44.3
Real estate.................................................... 4.1
Policy loans................................................... 17.1
Short-term investments......................................... 19.4
Other.......................................................... 1.1
------
Gross investment income........................................ 224.7
Less investment expenses...................................... 11.3
------
Net investment income......................................... $213.4
======
Net Realized Investment Gains (Losses), Net of Related
Amortization of Deferred Policy Acquisition Costs
Fixed maturities............................................... $(16.0)
Equity securities.............................................. 0.8
Mortgage loans on real estate and real estate.................. (2.3)
Derivatives and other invested assets.......................... 3.1
Amortization adjustment for deferred policy acquisition costs.. 3.8
------
Net realized investment losses, net of related amortization
of deferred policy acquisition costs.......................... $(10.6)
======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Gross gains of $1.5 million in 2000 and gross losses of $6.0 million in
2000 were realized on the sale of available-for-sale securities.

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

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)

December 31, 2000
Held-to-Maturity:
Corporate securities......................................................... $ 684.2 $23.4 $51.0 $ 656.6
Mortgage-backed securities................................................... 29.3 0.2 1.2 28.3
Obligations of states and political subdivisions............................. 1.9 0.0 0.0 1.9
-------- ----- ----- --------
Total....................................................................... $ 715.4 $23.6 $52.2 $ 686.8
======== ===== ===== ========
Available-for-Sale:
Corporate securities......................................................... $ 751.6 $20.6 $27.8 $ 744.4
Mortgage-backed securities................................................... 239.1 3.6 3.7 239.0
Obligations of states and political subdivisions............................. 0.9 0.0 0.0 0.9
Debt securities issued by foreign governments................................ 11.1 0.3 0.6 10.8
U.S. Treasury securities and obligations of U.S. government corporations
and agencies................................................................ 16.1 0.7 0.1 16.7
-------- ----- ----- --------
Total fixed maturities....................................................... 1,018.8 25.2 32.2 1,011.8
Equity securities............................................................ 7.1 2.8 1.8 8.1
-------- ----- ----- --------
Total....................................................................... $1,025.9 $28.0 $34.0 $1,019.9
======== ===== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

The amortized cost and fair value of fixed maturities at December 31, 2000,
by contractual maturity, are shown below:

Amortized Fair
Cost Value
--------- ----------
(in millions)
Held-to-Maturity:
Due in one year or less................................. $ 71.9 $ 72.1
Due after one year through five years................... 234.8 235.0
Due after five years through ten years.................. 222.5 223.0
Due after ten years..................................... 156.9 128.4
-------- --------
686.1 658.5
Mortgage-backed securities.............................. 29.3 28.3
-------- --------
Total.................................................. $ 715.4 $ 686.8
======== ========
Available-for-Sale:
Due in one year or less................................. $ 24.9 $ 24.8
Due after one year through five years................... 332.3 333.0
Due after five years through ten years.................. 290.0 281.0
Due after ten years..................................... 132.5 134.0
-------- --------
779.7 772.8
Mortgage-backed securities.............................. 239.1 239.0
-------- --------
Total.................................................. $1,018.8 $1,011.8
======== ========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Changes in the allowance for probable losses on mortgage loans on real
estate were as follows:

Balance at Balance at
Beginning End of
of Year Additions Deductions Year
----------- --------- ---------- -------------
(in millions)

Year ended December 31, 2000
Mortgage loans on real estate ................... $3.8 $1.2 $0.0 $5.0
==== ==== ==== ====

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

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

Impaired mortgage loans on real estate with provision for losses ........ $4.2
Provision for losses..................................................... 1.2
----
Net impaired mortgage loans on real estate............................... $3.0
====

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

Year Ended
December 31
2000
---------------
(in millions)

Average recorded investment in impaired loans................ $2.1
Interest income recognized on impaired loans................. 0.3

Restructured commercial mortgage loans aggregated $3.4 million as of December
31, 2000. The expected gross interest income that would have been recorded had
the loans been current in accordance with the original loan agreements and the
actual interest income recorded were as follows:

Year Ended
December 31
2000
---------------
(in millions)

Expected..................................................... 0.34
Actual....................................................... 0.27

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

At December 31, 2000, the mortgage portfolio was diversified by geographic
region and specific collateral property type as displayed below:

Carrying Geographic Carrying
Property Type Amount Concentration Amount
- ------------- ------------- ------------- ---------------
(in millions) (in millions)

Apartments............ $129.2 East North Central..... $ 68.1
Hotels................ 15.1 East South Central..... 27.6
Industrial............ 77.4 Middle Atlantic........ 27.1
Office buildings...... 99.2 Mountain............... 35.7
Retail................ 45.7 New England............ 44.5
Mixed Use............. 13.5 Pacific................ 120.7
Agricultural.......... 165.6 South Atlantic......... 156.7
Other................. 14.1 West North Central..... 16.9
West South Central..... 59.3
Canada/Other........... 3.2
Allowance for losses.. (5.0) Allowance for losses... (5.0)
------ ------
Total................ $554.8 Total................. $554.8
====== ======

Bonds with amortized cost of $7.0 million were non-income producing for the
year ended December 31, 2000.

Depreciation expense on investment real estate was $0.6 million in 2000.
Accumulated depreciation was $2.5 million at December 31, 2000.

Investments in unconsolidated joint ventures and partnerships accounted for by
using the equity method of accounting totaled $0.4 million at December 31, 2000.
Total combined assets of these joint ventures and partnerships were $28.5
million (consisting primarily of investments), and total combined liabilities
were $8.7 million (including $2.9 million of non-recourse notes payable to
banks) at December 31, 2000. Total combined revenues and expenses of such joint
ventures and partnerships were $77.6 million and $76.3 million, respectively,
resulting in $1.3 million of total combined income from operations before income
taxes in 2000. Net investment income on investments accounted for on the equity
method totaled $0.4 million in 2000.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 4. Derivatives

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments are as follows:

Number of
Contracts/ Assets (Liabilities)
Notional ---------------------
Amounts 2000
---------- ---------------------
Carrying Fair
2000 Value Value
---------- ----------- -----------
(in millions)

Asset Hedges:
Futures contracts to sell securities..... 6 -- --
Interest rate swap agreements............
Notional................................ $600.0 -- (10.8)
Average fixed rate--paid................ 6.38% -- --
Average float rate--received............ 6.69% -- --
Currency rate swap agreements............ $ 22.3 (0.6) (0.6)
Equity collar agreements................. -- 0.4 0.4
Liability Hedges:
Futures contracts to acquire securities.. 43 0.1 0.1
Interest rate swap agreements............
Notional................................ $570.0 9.6
Average fixed rate--received............ 6.43% -- --
Average float rate--paid................ 6.69% -- --
Interest rate cap agreements............. $239.4 2.1 2.1
Interest rate floor agreements........... 485.4 4.5 4.5

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives (continued)

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

Note 5. Income Taxes

The Company is included in the consolidated federal income tax return of John
Hancock Financial Services, Inc. The federal income taxes of the Company are
allocated on a separate return basis with certain adjustments.

The components of income taxes were as follows:

Year Ended
December 31
2000
---------------
(in millions)

Current taxes:
Federal..................................................... $15.2
Foreign..................................................... 0.6
-----
15.8
Deferred taxes:
Federal..................................................... 28.0
Foreign..................................................... --
-----
28.0
-----
Total income taxes......................................... $43.8
=====

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

Year Ended
December 31
2000
---------------
(in millions)

Tax at 35%................................................... $50.1
Add (deduct):
Equity base tax............................................. (5.6)
Tax credits................................................. (0.6)
Foreign taxes............................................... 0.6
Tax exempt investment income................................ (0.7)
-----
Total income taxes......................................... $43.8
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 5. Income Taxes (continued)

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

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

Deferred tax assets:
Policy reserve adjustments.................................. $ 74.6
Other postretirement benefits............................... 23.3
Book over tax basis of investments.......................... 7.8
Interest.................................................... 7.5
Unrealized losses........................................... 1.4
------
Total deferred tax assets.................................. 114.6
------
Deferred tax liabilities:
Deferred policy acquisition costs........................... 199.1
Depreciation................................................ 1.8
Basis in partnerships....................................... 0.4
Market discount on bonds.................................... 0.6
Other....................................................... 9.5
------
Total deferred tax liabilities............................. 211.4
------
Net deferred tax liabilities............................... $ 96.8
======

The Company made income tax payments of $62.9 million in 2000.

Note 6. Debt and Line of Credit

Note 7. Reinsurance

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

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

Life Insurance:
Direct..................................................... $34.1 $34.1
Ceded...................................................... (5.5) (5.5)
----- -----
Net life insurance premiums............................... $28.6 $28.6
===== =====

For the year ended December 31, 2000, benefits to policyholders under life
ceded reinsurance contracts were $3.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 7. Reinsurance (continued)

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

Note 8. Commitments and Contingencies

The Company has extended commitments to purchase long-term bonds, issue real
estate mortgages and purchase other assets totaling $37.0 million, $6.3 million
and $17.4 million, respectively, at December 31, 2000. The Company monitors the
creditworthiness of borrowers under long-term bond commitments and requires
collateral as deemed necessary. If funded, loans related to real estate
mortgages would be fully collateralized by the related properties. The estimated
fair value of the commitments described above was $62.9 million at December 31,
2000. The majority of these commitments expire in 2001.

In the normal course of its business operations, the Company is involved with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 2000. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

During 1997, John Hancock entered into a court-approved settlement relating to
a class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. The reserve held in connection with the
settlement to provide for relief to class members and for legal and
administrative costs associated with the settlement amounted to $66.3 million at
December 31, 2000. No costs were incurred in 2000. The estimated reserve is
based on a number of factors, including the estimated cost per claim and the
estimated costs to administer the claims.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity

(a) Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

Accumulated
Other
Comprehensive
Income
---------------

Balance at January 1, 2000................................... ($13.4)
------
Gross unrealized gains (net of deferred income tax expense of
$9.7 million)............................................... 18.0
Less reclassification adjustment for gains, realized in net
income (net of tax expense of $1.6 million)................. (2.9)
Adjustment to deferred policy acquisition costs (net of
deferred income tax benefit of $2.1 million)................ (3.9)
------
Net unrealized gains......................................... 11.2
------
Balance at December 31, 2000................................. ($2.2)
======

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

2000
---------------
(in millions)

Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................................ ($7.0)
Equity investments.......................................... 1.0
Derivatives and other....................................... 0.3
-----
Total...................................................... (5.7)
Amounts attributable to:
Deferred policy acquisition cost............................ 2.1
Deferred federal income taxes............................... 1.4
-----
Total...................................................... 3.5
-----
Net unrealized investment gains............................ ($2.2)
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity (continued)

(b) Statutory Results

Statutory net income and surplus include the accounts of the Company and its
wholly-owned subsidiary, Investors Partners Life Insurance Company.

2000
---------------
(in millions)

Statutory net income......................................... $ 26.6
Statutory surplus............................................ 527.2

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

Note 10. Segment Information

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

Amounts reported as segment adjustments in the tables below primarily relate
to: (i) certain realized investment gains (losses), net of related amortization
adjustment for deferred policy acquisition costs; (ii) benefits to policyholders
and expenses incurred relating to the settlement of a class action lawsuit
against the Company involving certain individual life insurance policies sold
from 1979 through 1996; (iii) restructuring costs related to our distribution
systems and retail operations; (iv) the surplus tax on mutual life insurance
companies that was allocated by John Hancock to the Company; and (v) a charge
for certain one time costs associated with John Hancock's demutualization
process.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

Retail
Protection Gathering Consolidated
---------- --------- --------------

2000
Revenues:
Segment revenues...................... $ 530.8 $ 48.5 $ 579.3
Realized investment losses, net....... (10.6) -- (10.6)
-------- -------- ---------
Revenues.............................. $ 520.2 $ 48.5 $ 568.7
======== ======== =========
Net investment income................. $ 215.9 ($2.5) $ 213.4
Net Income:
Segment after-tax operating income.... 96.0 6.3 102.3
Realized investment losses, net....... (6.8) -- (6.8)
Restructuring charges................. (1.1) -- (1.1)
Surplus tax........................... 5.4 0.2 5.6
Other demutualization related cost...s (0.5) (0.1) (0.6)
-------- -------- ---------
Net income............................ $ 93.0 $ 6.4 $ 99.4
======== ======== =========
Supplemental Information:
Equity in net income of investees
accounted for by the equity method... $ 1.3 -- $ 1.3
Amortization of deferred policy
acquisition costs.................... 17.6 16.4 34.0
Income tax expense.................... 40.7 3.1 43.8
Segment assets........................ 9,326.9 2,867.8 12,194.7
Net Realized Investment Gains Data:
Net realized investment losses........ $ (14.4) -- $ (14.4)
Add capitalization/less amortization of
deferred policy acquisition costs
related to net realized investment
gains (losses)....................... 3.8 -- 3.8
-------- -------- ---------
Net realized investment losses, net of
related amortization of deferred
policy acquisition costs--per
consolidated financial statements.... (10.6) -- (10.6)
Less income tax effect................ 3.8 -- 3.8
-------- -------- ---------
Realized investment losses,
net-after-tax adjustment made to
calculate segment operating income... ($6.8) -- ($6.8)
======== ======== =========

The Company operates only in the United States. The Company has no reportable
major customers and revenues are attributed to countries based on the location
of customers.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments

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

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

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

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

The fair value for fixed-rate deferred annuities is the cash surrender value,
which represents the account value less applicable surrender charges. Fair
values for immediate annuities without life contingencies are estimated based
on discounted cash flow calculations using current market rates.

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

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments (continued)

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

December 31
2000
--------------------------
Carrying Value Fair Value
-------------- ------------
(in millions)

Derivatives assets/(liabilities) relating to:
Futures contracts, net........................ 0.1 0.1
Interest rate swap agreements................. (1.2)
Interest rate cap agreements.................. 2.1 2.1
Interest rate floor agreements................ 4.5 4.5
Currency rate swap agreements................. (0.6) (0.6)
Equity collar agreements...................... 0.4 0.4
Commitments..................................... -- 62.9

REPORT OF INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from accounting principles generally accepted in the United
States. The variances between such practices and accounting principles generally
accepted in the United States and the effects on the accompanying financial
statements also are described in Note 1.

/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 9, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

December 31
---------------------------------
2000 1999 1998
---------- ---------- ---------
(in millions)

Assets
Bonds--Note 6........................... $ 1,400.5 $ 1,216.3 $1,185.8
Preferred stocks........................ 44.0 35.9 36.5
Common stocks........................... 2.8 3.2 3.1
Investment in affiliates................ 84.8 80.7 81.7
Mortgage loans on real estate--Note 6... 456.0 433.1 388.1
Real estate............................. 24.5 25.0 41.0
Policy loans............................ 218.9 172.1 137.7
Cash items:
Cash in banks.......................... 45.4 27.2 11.4
Temporary cash investments............. 226.6 222.9 8.5
--------- --------- --------
272.0 250.1 19.9
Premiums due and deferred............... 73.0 29.9 32.7
Investment income due and accrued....... 43.3 33.2 29.8
Other general account assets............ 17.6 65.3 47.5
Assets held in separate accounts........ 8,082.8 8,268.2 6,595.2
--------- --------- --------
Total Assets........................... $10,720.2 $10,613.0 $8,599.0
========= ========= ========

Obligations and Stockholder's Equity
Obligations
Policy reserves......................... $ 2,207.9 $ 1,866.6 $1,652.0
Federal income and other taxes
payable--Note 1........................ (7.4) 67.3 44.3
Other general account obligations....... 166.3 219.0 150.9
Transfers from separate accounts, net... (198.5) (221.6) (190.3)
Asset valuation reserve--Note 1......... 26.7 23.1 21.9
Obligations related to separate accounts 8,076.4 8,261.6 6,589.4
--------- --------- --------
Total Obligations..................... 10,271.4 10,216.0 8,268.2
========= ========= ========
Stockholder's Equity
Common Stock, $50 par value; authorized
50,000 shares; issued and outstanding
50,000 shares.......................... 2.5 2.5 2.5
Paid-in capital......................... 572.4 572.4 377.5
Unassigned deficit--Note 10............. (126.1) (177.9) (49.2)
--------- --------- --------
Total Stockholder's Equity............. 448.8 397.0 330.8
--------- --------- --------
Total Obligations and Stockholder's
Equity................................. $10,720.2 $10,613.0 $8,599.0
========= ========= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

Year Ended December 31
-------------------------------
2000 1999 1998
--------- --------- ---------
(In Millions)

Income
Premiums.............................................................. $ 945.5 $ 950.8 $1,272.3
Net investment income--Note 3......................................... 176.7 136.0 122.8
Other, net............................................................ 475.6 605.4 618.1
-------- -------- --------
1,597.8 1,692.2 2,013.2
Benefits and Expenses
Payments to policyholders and beneficiaries........................... 340.8 349.9 301.4
Additions to reserves to provide for future payments to policyholders
and beneficiaries.................................................... 844.4 888.8 1,360.2
Expenses of providing service to policyholders and obtaining new
insurance--Note 5.................................................... 363.4 314.4 274.2
State and miscellaneous taxes......................................... 25.8 20.5 28.1
-------- -------- --------
1,574.4 1,573.6 1,963.9
-------- -------- --------
Gain From Operations Before Federal Income Tax (Credit) Expense
and Net Realized Capital Losses...................................... 23.4 118.6 49.3
Federal income tax (credit) expense--Note 1............................ (18.0) 42.9 33.1
-------- -------- --------
Gain From Operations Before Net Realized Capital Losses................ 41.4 75.7 16.2
Net realized capital losses--Note 4.................................... (18.2) (1.7) (0.6)
-------- -------- --------
Net Income............................................................. 23.2 74.0 15.6
Unassigned deficit at beginning of year................................ (177.9) (49.2) (58.3)
Net unrealized capital gains (losses) and other adjustments--Note 4.... 8.0 (3.8) (6.0)
Adjustment to premiums due and deferred................................ 21.4 -- --
Other reserves and adjustments--Note 10................................ (0.8) (198.9) (0.5)
-------- -------- --------
Unassigned Deficit at End of Year...................................... $ (126.1) $ (177.9) $ (49.2)
======== ======== ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

Year Ended December 31
-----------------------------
2000 1999 1998
-------- -------- ---------
(In Millions)

Cash flows from operating activities:
Insurance premiums.......................................................... $ 939.9 $ 958.5 $1,275.3
Net investment income....................................................... 166.0 134.2 118.2
Benefits to policyholders and beneficiaries................................. (315.1) (321.6) (275.5)
Dividends paid to policyholders............................................. (26.1) (25.6) (22.3)
Insurance expenses and taxes................................................ (362.4) (344.8) (296.9)
Net transfers to separate accounts.......................................... (513.0) (705.3) (874.4)
Other, net.................................................................. 347.4 540.6 551.3
------- ------- --------
Net Cash Provided From Operations......................................... 236.7 236.0 475.7
------- ------- --------
Cash flows used in investing activities:
Bond purchases.............................................................. (450.7) (240.7) (618.8)
Bond sales.................................................................. 148.0 108.3 340.7
Bond maturities and scheduled redemptions................................... 80.0 78.4 111.8
Bond prepayments............................................................ 29.4 18.7 76.5
Stock purchases............................................................. (8.8) (3.9) (23.4)
Proceeds from stock sales................................................... 1.7 3.6 1.9
Real estate purchases....................................................... (0.4) (2.2) (4.2)
Real estate sales........................................................... 0.2 17.8 2.1
Other invested assets purchases............................................. (13.8) (4.5) --
Mortgage loans issued....................................................... (85.7) (70.7) (145.5)
Mortgage loan repayments.................................................... 61.6 25.3 33.2
Other, net.................................................................. 23.7 (68.9) (435.2)
------- ------- --------
Net Cash Used in Investing Activities...................................... (214.8) (138.8) (660.9)
------- ------- --------
Cash flows from financing activities:
Capital contribution........................................................ -- 194.9 --
Net (decrease) increase in short-term note payable.......................... -- (61.9) 61.9
------- ------- --------
Net Cash Provided From Financing Activities................................ -- 133.0 61.9
------- ------- --------
Increase (Decrease) In Cash and Temporary Cash Investments................. 21.9 230.2 (123.3)
Cash and temporary cash investments at beginning of year..................... 250.1 19.9 143.2
------- ------- --------
Cash and Temporary Cash Investments at End of Year........................ $ 272.0 $ 250.1 $ 19.9
======= ======= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Note 1. Nature of Operations and Significant Accounting Practices

The significant differences from GAAP include:(1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized in relation to
future estimated gross profits; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as
available-for-sale are recorded at amortized cost or market value as determined
by the NAIC rather than at fair value; (6) an Asset Valuation Reserve and
Interest Maintenance Reserve as prescribed by the NAIC are not calculated under
GAAP. Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred. The carrying values of investment
securities and real estate are reduced through the income statement when there
has been a decline in value deemed other than temporary and mortgage loan
valuation allowances, if necessary, are established when the Company determines
it is probable that it will be unable to collect all amounts of principal and
interest due according to the contractual terms of the mortgage loan agreement;
(7) investments in affiliates are carried at their net equity value with changes
in value being recorded directly to unassigned deficit rather than consolidated
in the financial statements; (8) no provision is made for the deferred income
tax effects of temporary differences between book and tax basis reporting; and
(9) certain items, including modifications to required policy reserves resulting
from changes in actuarial assumptions, are recorded directly to unassigned
deficit rather than being reflected in income. GAAP net income for the year
ended December 31, 2000 and GAAP shareholder's equity as of December 31, 2000
and 1999 were $99.4 million, $805.6 million and $695.0 million, respectively.
The effects of variances from GAAP on net income for the year ended December 31,
1999 have not been determined but are presumed to be material.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The significant accounting practices of the Company are as follows:

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

Investments in affiliates are included on the statutory equity method.

Mortgage loans are carried at outstanding principal balance or amortized cost.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Real estate acquired in satisfaction of debt and real estate held for sale are
carried at the lower of cost or fair value.

Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.

The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for cash
and temporary cash investments approximate their fair values.

The fair values for common and preferred stocks, other than its subsidiary
investments, which are carried at equity values, are based on quoted market
prices.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The carrying amount in the statement of financial position for policy loans
approximates their fair value.

Policy Reserves: Life reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest rates
and valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum or guaranteed policy cash values or the
amounts required by the Commonwealth of Massachusetts Division of Insurance.
Reserves for variable life insurance policies are maintained principally on the
modified preliminary term method using the 1958 and 1980 Commissioner's Standard
Ordinary (CSO) mortality tables, with an assumed interest rate of 4% for
policies issued prior to May 1, 1983 and 4 1/2% for policies issued on or
thereafter. Reserves for single premium policies are determined by the net
single premium method using the 1958 CSO mortality table, with an assumed
interest rate of 4%. Reserves for universal life policies issued prior to 1985
are equal to the gross account value which at all times exceeds minimum
statutory requirements. Reserves for universal life policies issued from 1985
through 1988 are maintained at the greater of the Commissioner's Reserve
Valuation Method (CRVM) using the 1958 CSO mortality table, with 4 1/2% interest
or the cash surrender value. Reserves for universal life policies issued after
1988 and for flexible variable policies are maintained using the greater of the
cash surrender value or the CRVM method with the 1980 CSO mortality table and
5 1/2% interest for policies issued from 1988 through 1992; 5% interest for
policies issued in 1993 and 1994; and 4 1/2% interest for policies issued in
1995 through 2000.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Amounts for disputed tax issues relating to the prior years are charged or
credited directly to policyholders' contingency reserve.

Note 2. Investment in Affiliate

Summarized statutory-basis financial information for IPL for 2000, 1999 and
1998 is as follows:

2000 1999 1998
------ ------ --------
(In Millions)

Note 3. Net Investment Income

Investment income has been reduced by the following amounts:

2000 1999 1998
----- ----- -------
(In Millions)

Investment expenses.................................... $ 9.0 $ 9.5 $ 8.3
Interest expense....................................... -- 1.7 2.4
Depreciation expense................................... 0.6 0.6 0.8
Investment taxes....................................... 0.5 0.3 0.7
----- ----- -----
$10.1 $12.1 $12.2
===== ===== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 4. Net Capital Gains (Losses) and Other Adjustments

Net realized capital losses consist of the following items:

2000 1999 1998
------ ------ ------
(In millions)

Net (losses) gains from asset sales .................................................. $(19.5) $(2.8) $ 7.6
Capital gains tax .................................................................... (0.3) 0.2 (2.9)
Amounts transferred to IMR............................................................ 1.6 0.9 (5.3)
------ ----- -----
Net realized capital losses.......................................................... $(18.2) $(1.7) $(0.6)
====== ===== =====

Net unrealized capital gains (losses) and other adjustments consist of the
following items:

2000 1999 1998
------ ------ ------
(In millions)

Net gains (losses) from changes in security values and book value adjustments......... $ 11.6 $(2.6) $(2.7)
Increase in asset valuation reserve................................................... (3.6) (1.2) (3.3)
------ ----- -----
Net unrealized capital gains (losses) and other adjustments.......................... $ 8.0 $(3.8) $(6.0)
====== ===== =====

Note 5. Transactions With Parent

John Hancock provides the Company with personnel, property and facilities
in carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of criteria
which were revised in 2000, 1999 and 1998 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$162.2 million, $188.3 million, $157.5 million, in 2000, 1999, and 1998,
respectively, which has been included in insurance and investment expenses. John
Hancock has guaranteed that, if necessary, it will make additional capital
contributions to prevent the Company's stockholder's equity from declining below
$1.0 million.

The service fee charged to the Company by John Hancock includes $0.7
million, $0.2 million, and $0.7 million in 2000, 1999, and 1998, respectively,
representing the portion of the provision for retiree benefit plans determined
under the accrual method, including a provision for the 1993 transition
liability which is being amortized over twenty years, that was allocated to the
Company. John Hancock allocates a portion of the activity related to its defined
benefit pension plans to the Company. The pension plan prepaid expense allocated
to the Company amounted to $55.0 million and $41.9 million in 2000 and 1999,
respectively. Since 1988, the Massachusetts Division of Insurance has provided
the Company with approval to recognize the pension plan prepaid expense, if any,
in accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Division of Insurance with an actuarial
certification of the prepaid expense computation on an annual basis.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 5. Transactions With Parent (continued)

The Company has a modified coinsurance agreement with John Hancock to
reinsure 50% of 1994 through 2000 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, John Hancock transferred $24.2 million, $44.5 million, and
$4.9 million of cash for tax, commission, and expense allowances to the Company,
which decreased the Company's net gain from operations by $0.9 million in 2000,
and increased the Company's net gain from operations by$20.6 million, and $22.2
million in 1999, and 1998, respectively.

Effective January 1, 1997, the Company entered into a stop-loss agreement
with John Hancock to reinsure mortality claims in excess of 100% of expected
mortality claims in 2000, 1999 and 1998 for all policies that are not reinsured
under any other indemnity agreement. In connection with the agreement, John
Hancock received $1.0 million, $0.8 million, and $1.0 million in 2000, 1999, and
1998, respectively, for mortality claims to the Company. This agreement
decreased the Company's net gain from operations by $1.1 million in 2000 and
$0.5 million in both 1999 and 1998.

The Company had a $200.0 million line of credit with an affiliate, John
Hancock Capital Corp. At December 31, 2000 and 1999, the Company had no
outstanding borrowings under this agreement.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments

The statement value and fair value of bonds are shown below:

Gross Gross
Statement Unrealized Unrealized Fair
Value Gains Losses Value
--------- ---------- ---------- ----------
(In millions)

December 31, 2000
U.S. Treasury securities an obligations of
U.S. government corporations and agencies.......... $ 5.7 $ -- $ -- $ 5.7
Obligations of states an political subdivisions...... 1.8 -- -- 1.8
Debt securities issued by foreign governments........ 10.9 0.3 0.6 10.6
Corporate securities................................. 1,158.8 36.4 68.5 1,126.7
Mortgage-backed securities........................... 223.3 3.4 4.6 222.1
-------- ------ ------ ---------
Total bonds..................................... $1,400.5 $ 40.1 $ 73.7 $ 1,366.9
======== ====== ====== =========

December 31, 1999
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.......... $ 5.9 -- $ 0.1 $ 5.8
Obligations of states and political subdivisions..... 2.2 $ 0.1 0.1 2.2
Debt securities issued by foreign governments........ 13.9 0.8 0.1 14.6
Corporate securities................................. 964.9 13.0 59.4 918.5
Mortgage-backed securities........................... 229.4 0.5 7.8 222.1
-------- ------ ------ ---------
Total bonds..................................... $1,216.3 $ 14.4 $ 67.5 $ 1,163.2
======== ====== ====== =========

December 31, 1998
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.......... $ 5.1 $ 0.1 -- $ 5.2
Obligations of states and political subdivisions..... 3.2 0.3 -- 3.5
Corporate securities................................. 925.2 50.4 $ 15.0 960.6
Mortgage-backed securities........................... 252.3 10.0 0.1 262.2
-------- ------ ------ ---------
Total bonds..................................... $1,185.8 $ 60.8 $ 15.1 $ 1,231.5
======== ====== ====== =========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Statement Fair
Value Value
--------- ----------
(In millions)

Due in one year or less.............................................. $ 72.4 $ 72.5
Due after one year through five years................................ 424.2 427.7
Due after five years through ten years............................... 428.5 419.5
Due after ten years.................................................. 252.1 225.1
-------- --------
1,177.2 1,144.8
Mortgage-backed securities........................................... 223.3 222.1
-------- --------
$1,400.5 $1,366.9
======== ========

Gross gains of $0.9 million in 2000, $0.3 million in 1999, and $3.4 million
in 1998 and gross losses of $3.0 million in 2000, $4.0 million in 1999 and $0.7
million in 1998 were realized from the sale of bonds.

At December 31, 2000, bonds with an admitted asset value of $9.6 million
were on deposit with state insurance departments to satisfy regulatory
requirements.

The cost of common stocks was $3.1 million at December 31, 2000 and 1999
and $2.1 million at December 31, 1998. At December 31, 2000, gross unrealized
appreciation on common stocks totaled $1.5 million, and gross unrealized
depreciation totaled $1.8 million. The fair value of preferred stock totaled
$41.6 million, $35.9 million, and $36.5 million at December 31, 2000, 1999, and
1998, respectively.

Bonds with amortized cost of $5.1 million were non-income producing for the
twelve months ended December 31, 2000.

Statement Geographic Statement
Property Type Value Concentration Value
- ------------- ------------- ------------- ---------------
(In millions) (In millions)

Apartments....................... $ 93.7 East North Central.......... $ 64.3
Hotels........................... 13.0 East South Central.......... 20.9
Industrial....................... 63.5 Middle Atlantic............. 20.9
Office buildings................. 84.7 Mountain.................... 27.0
Retail........................... 35.4 New England................. 23.4
Agricultural..................... 142.5 Pacific..................... 108.0
Other............................ 23.2 South Atlantic.............. 120.7
-------
West North Central.......... 16.0
West South Central.......... 51.5
Other....................... 3.3
-------
$ 456.0 $ 456.0
======= =======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Note 7. Reinsurance

The Company cedes business to reinsurers to share risks under variable
life, universal life and flexible variable life insurance policies for the
purpose of reducing exposure to large losses. Premiums, benefits and reserves
ceded to reinsurers in 2000 were $588.1 million, $187.3 million, and $19.9
million, respectively. The corresponding amounts in 1999 were $594.9 million,
$132.8 million, and $13.6 million, respectively, and the corresponding amounts
in 1998 were $590.2 million, $63.2 million, and $8.2 million, respectively.

Neither the Company, nor any of its related parties, control, either
directly or indirectly, any external reinsurers with which the Company conducts
business. No policies issued by the Company have been reinsured with a foreign
company which is controlled, either directly or indirectly, by a party not
primarily engaged in the business of insurance.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments were as follows at December 31:

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 2000
---------------- ------------------------
Carrying Fair
2000 Value Value
---------------- ----------- -----------
($ In millions)

Futures contracts to sell securities................................ $ -- $ -- $ --
Futures contracts to buy securities................................. 43 0.1 0.1
Interest rate swap agreements....................................... $ 1,150.0 --
Interest rate cap agreements........................................ 239.4 2.1 2.1
Currency rate swap agreements....................................... 22.3 -- (0.6)
Equity collar agreements............................................ -- 0.4 0.4
Interest rate floor agreements...................................... 361.4 1.4 1.4

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1999
---------------- ------------------------
Carrying Fair
1999 Value Value
---------------- ----------- -----------
($ In millions)

Futures contracts to sell securities................................ 362 $ 0.6 $ 0.6
Interest rate swap agreements....................................... $ 965.0 -- 11.5
Interest rate cap agreements........................................ 239.4 5.6 5.6
Currency rate swap agreements....................................... 15.8 -- (1.6)

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1998
---------------- ------------------------
Carrying Fair
1998 Value Value
---------------- ---------- -----------
($ In millions)

Futures contracts to sell securities................................ 947 $ (0.5) $ (0.5)
Interest rate swap agreements....................................... $ 365.0 -- (17.7)
Interest rate cap agreements........................................ 89.4 3.1 3.1
Currency rate swap agreements....................................... 15.8 -- (3.3)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk (continued)

The Company invests in common stock that is subject to fluctuations from
market value changes in stock prices. The Company sometimes seeks to reduce its
market exposure to such holdings by entering into equity collar agreements. A
collar consists of a call that limits the Company's potential gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

Note 9. Policy Reserves, Policyholders' and Beneficiaries' Funds and Obligations
Related To Separate Accounts

The Company's annuity reserves and deposit fund liabilities that are subject
to discretionary withdrawal, with and without adjustment, are summarized as
follows:

December 31, 2000 Percent
----------------- ---------
(In millions)

Subject to discretionary withdrawal (with adjustment)
With market value adjustment............................................... $ 30.3 1.1%
At book value less surrender charge........................................ 54.7 2.1
At market value............................................................ 2,250.3 84.8
-------- -----
Total with adjustment..................................................... 2,335.3 88.0
Subject to discretionary withdrawal at book value (without adjustment)...... 312.8 11.8
Not subject to discretionary withdrawal--general account.................... 7.1 0.2
-------- -----
Total annuity reserves and deposit liabilities............................ $2,655.2 100.0%
======== =====

100

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 10. Commitments and Contingencies

In the normal course of its business operations, the Company is involved with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 2000. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

During 1997, John Hancock entered into a court-approved settlement relating to
a class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. During 1999, the Company recorded a $194.9
million reserve, through a direct charge to its unassigned deficit, representing
the Company's share of the settlement and John Hancock contributed $194.9
million of capital to the Company. The reserve held at December 31, 2000
amounted to $39.5 million and is based on a number of factors, including the
estimated cost per claim and the estimated costs to administer the claims.

Given the uncertainties associated with estimating the reserve, it is
reasonably possible that the final cost of the settlement could differ
materially from the amounts presently provided for by the Company. John Hancock
and the Company will continue to update their estimate of the final cost of the
settlement as claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at this
time, and the uncertainties associated with the final claim processing and
alternative dispute resolution, the range of any additional costs related to the
settlement cannot be estimated with precision. If the Company's share of the
settlement increases, John Hancock will contribute additional capital to the
Company so that the Company's total stockholder's equity would not be impacted.

101

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments

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

Assets
Bonds--Note 6.................................. $1,400.5 $1,366.9 $1,216.3 $1,163.2
Preferred stocks--Note 6....................... 44.0 41.6 35.9 35.9
Common stocks--Note 6.......................... 2.8 2.8 3.2 3.2
Mortgage loans on real estate--Note 6.......... 456.0 467.3 433.1 421.7
Policy loans--Note 1........................... 218.9 218.9 172.1 172.1
Cash items--Note 1............................. 272.0 272.0 250.1 250.1

Derivatives assets (liabilities)
relating to: Note 8
Futures contracts.............................. 0.1 0.1 0.6 0.6
Interest rate swaps............................ -- (0.4) -- 11.5
Currency rate swaps............................ -- (0.6) -- (1.6)
Interest rate caps............................. 2.1 2.1 5.6 5.6
Equity collar agreements....................... -- 0.4 -- --

Liabilities
Commitments--Note 10........................... -- 56.4 -- 19.4

102

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments (continued)

December 31
-------------------
1998
-------------------
Carrying Fair
Amount Value
--------- -----------
(In millions)

Assets
Bonds--Note 6............................................ $1,185.8 $1,231.5
Preferred stocks--Note 6................................. 36.5 36.5
Common stocks--Note 6.................................... 3.1 3.1
Mortgage loans on real estate--Note 6.................... 388.1 401.3
Policy loans--Note 1..................................... 137.7 137.7
Cash items--Note 1....................................... 19.9 19.9

Derivatives assets (liabilities) relating to: Note 8
Futures contracts........................................ (0.5) (0.5)
Interest rate swaps...................................... -- (17.7)
Currency rate swaps...................................... -- (3.3)
Interest rate caps....................................... 3.1 3.1

Liabilities
Commitments--Note 10..................................... -- 32.1

103

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES

As of December 31, 2000

(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Type of Investment Cost (2) Value Balance Sheet
------------------ -------- ----- ---------------

104

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES (continued)

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Cost (2) Value Balance Sheet
-------- ----- ---------------

Real estate, net:
Investment properties (1).................................... 23.9 XXXX 23.9
Acquired in satisfaction of debt (1)......................... 0.0 XXXX 0.0
Policy loans................................................. 334.2 XXXX 334.2
Other long-term investments (2).............................. 34.8 XXXX 34.8
Short-term investments....................................... 21.7 XXXX 21.7
------- ------- -------
Total investments........................................... 2,715.7 1,706.7 2,704.7
======= ======= =======

See accompanying independent auditors' report.

105

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

GAAP
2000:
Protection................................................ $819.3 $2,698.4 $212.0 $11.1 $ 28.6
Asset Gathering........................................... 174.8 70.0 -- -- --
------ -------- ------ ----- --------
Total.................................................... $994.1 $2,768.4 $212.0 $11.1 $ 28.6
------ -------- ------ ----- --------
Statutory Basis
2000:
Variable Products........................................ N/A $2,206.0 $ 8.8 $16.4 $ 945.4
------ -------- ------ ----- --------
1999:
Variable Products........................................ N/A $1,864.9 $ 3.9 $15.4 $ 950.8
------ -------- ------ ----- --------
1998:
Variable Products........................................ N/A $1,651.7 $ 2.3 $13.1 $1,272.3
------ -------- ------ ----- --------

106

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION (continued)

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

Amortization of
Benefits, Deferred Policy
Claims, Losses, Acquisition Costs,
Net and Excluding Amounts Other
Investment Settlement Related to Realized Operating
Segment Income Expenses Investment Gains Expenses
------- ---------- --------------- ------------------- ---------

GAAP
2000:
Protection...................................... $215.9 $ 242.2 $17.6 $100.5
Asset Gathering................................. (2.5) 6.4 16.4 16.3
------ -------- ----- ------
Total.......................................... $213.4 $ 248.6 $34.0 $116.8
------ -------- ----- ------
Statutory Basis
2000:
Variable Products.............................. $176.7 $1,185.2 N/A $389.2
------ -------- ----- ------
1999:
Variable Products.............................. $136.0 $1,238.7 N/A $334.9
------ -------- ----- ------
1998:
Variable Products.............................. $122.8 $1,661.6 N/A $302.3
------ -------- ----- ------

107

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV -- REINSURANCE

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Assumed
Amount Companies Companies Net Amount to Net
------ --------- --------- ---------- ----------

GAAP
2000
Life insurance in force................................ $98,737.2 $39,495.8 $37.1 $59,278.5 0.1%
--------- --------- ----- --------- ---
Premiums:
Life insurance......................................... $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
Accident and health insurance.......................... -- -- -- -- 0.0%
P&C.................................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total................................................ $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
========= ========= ===== ========= ===
Statutory Basis
2000
Life insurance in force................................ $96,574.3 $38,059.7 $ -- $58,514.6 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance......................................... $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
Accident and health insurance.......................... -- -- -- -- 0.0%
P&C.................................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total................................................ $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
========= ========= ===== ========= ===
1999
Life insurance in force................................ $74,831.8 $ 8,995.0 $ -- $55,836.8 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance......................................... $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
Accident and health insurance.......................... -- -- -- -- 0.0%
P&C.................................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total................................................ $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
========= ========= ===== ========= ===

108

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV--REINSURANCE (continued)

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Net assumed
Amount Companies Companies Amount to Net
------ --------- ---------- ------ ----------

1998
Life insurance in force............... $62,628.7 $15,302.1 $ -- $47,326.6 0.0%
--------- --------- ---------- --------- ---
Premiums:
Life insurance........................ $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
Accident and health insurance......... -- -- -- -- 0.0%
P&C................................... -- -- -- -- 0.0%
--------- --------- ---------- --------- ---
Total............................... $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
========= ========= ========== ========= ===

See accompanying independent auditors' report.

109

APPENDIX A - DETAILS ABOUT OUR GUARANTEE PERIODS

Investments that support our guarantee periods

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
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period

110

Computation of market value adjustment

We determine the amount of the market value adjustment by multiplying the
amount being taken from the guarantee period (before any applicable withdrawal
charge) by a factor expressed by the following formula:

where,

. g is the guaranteed rate in effect for the current guarantee period.

Sample Calculation 1: Positive Adjustment

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

Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------------------------
Guaranteed rate for new 5 year guarantee (c) 7%
- --------------------------------------------------------------------------------------------------
Remaining guarantee period (n) 60 months
- --------------------------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
+ $234.73 = $10,234.73

111

Sample Calculation 2: Negative Adjustment

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

Amount withdrawn or transferred $10,000
- ------------------------------------------------------------------------------------------------
Guarantee period 7 years
- ------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- ------------------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- ------------------------------------------------------------------------------------------------
Guaranteed rate for new 5 year guarantee (c) 9%
- ------------------------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- ------------------------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - 666.42 = $9,333.58

Sample Calculation 3: Negative Adjustment

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

Amount withdrawn or transferred $10,000
- ---------------------------------------------------------------------------------------------------
Guarantee period 7 years
- ---------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- ---------------------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- ---------------------------------------------------------------------------------------------------
Guaranteed rate for new 5 year guarantee (c) 7.75%
- ---------------------------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- ---------------------------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - 114.94 = $9,885.06

___________________________________________________________________________

*All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we
are actually guaranteeing at any time.

112

APPENDIX B - EXAMPLE OF WITHDRAWAL CHARGE CALCULATION

Assume The Following Facts:

On January 1, 2001, you make a $5,000 initial premium payment and we issue you
a contract.

On January 1, 2002, you make a $1,000 premium payment

On January 1, 2003, you make a $1,000 premium 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 $289.36. We withdraw a total of $7,289.36 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 premiums you have paid)
under the free withdrawal provision.

(2) Next we repay to you the $5,000 premium you paid in 2001 Under the
free withdrawal provision, $200 of that premium is charge free ($7,000
total premiums 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 premium.
Because you made that premium 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 premium payment.
We pay the remainder of $4,464 to you as a part of your withdrawal
request.

$ 5,000
- 200 -- free withdrawal amount (payable to you)
--------
$ 4,800
x .07
--------
$ 336 -- withdrawal charge on 2001 premium payment (payable to us)

$ 4,800
- 336
--------
$ 4,464 -- part of withdrawal request payable to you

(3) We next deem the entire amount of your 2002 PREMIUM PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1,000 amount.
Because you made this premium payment 2 years ago, the withdrawal
charge percentage is 7%. We deduct the resulting $50 from your
contract to cover the withdrawal charge on your 2002 premium payment.
We pay the remainder of $950 to you as a part of your withdrawal
request.

$ 1,000
x .07
--------
$ 50 -- withdrawal charge on 2002 premium payment (payable to us)

113

$ 1,000
- 70
--------
$ 930 -- part of withdrawal request payable to you

(4) 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 premium payment under paragraph 2, and $950 from your 2003
premium payment under paragraph 3. Therefore, $742 is needed to reach
$7,000.

$ 7,000 -- total withdrawal amount requested
- 500 -- profit
- 200 -- free withdrawal amount
-4,464 -- payment deemed from initial premium payment
- 930 -- payment deemed from 2002 premium payment
--------
$ 906 -- additional payment to you needed to reach $7,000

We know that the withdrawal charge percentage for this remaining amount is 6%,
because you are already deemed to have withdrawn all premiums 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 = .94x
$ 906/.93 = x
$ 974.19 = x

$ 974.19 -- deemed withdrawn from 2003 premium payment
-$ 906.00 -- part of withdrawal request payable to you
-----------
$ 68.19 -- withdrawal charge on 2003 premium deemed withdrawn (payable
to us)

114

Prospectus dated May 1, 2001

- --------------------------------------------------------------------------------
REVOLUTION VALUE VARIABLE ANNUITY
- --------------------------------------------------------------------------------

a deferred combination fixed and variable annuity contract
issued by
John Hancock Variable Life Insurance Company ("JHVLICO")

The contract enables you to earn fixed rates of interest that we guarantee
for stated periods of time ("guarantee periods") and investment-based
returns in the following variable investment options:

Equity Index............................. SSgA Funds Management, Inc.
Growth & Income.......................... Independence Investment LLC and Putnam Investment Management LLC
Large Cap Value.......................... T. Rowe Price Associates, Inc.
Large Cap Value CORE(SM)................. Goldman Sachs Asset Management
Large Cap Growth......................... Independence Investment LLC
Large Cap Aggressive Growth.............. Alliance Capital Management L.P.
Large/Mid Cap Value...................... Wellington Management Company, LLP
Fundamental Growth....................... Putnam Investment Management LLC
Mid Cap Growth........................... Janus Capital Corporation
Small/Mid Cap CORE(SM)................... Goldman Sachs Asset Management
Small/Mid Cap Growth..................... Wellington Management Company, LLP
Small Cap Equity......................... Capital Guardian Trust Company
Small Cap Value.......................... T. Rowe Price Associates, Inc.
Small Cap Growth......................... John Hancock Advisers, Inc.
V.A. Relative Value...................... John Hancock Advisers, Inc.
AIM V.I. Value........................... A I M Advisors, Inc.
AIM V.I. Growth.......................... A I M Advisors, Inc.
Fidelity VIP Growth...................... Fidelity Management & Research Company
Fidelity VIP Contrafund(R)............... Fidelity Management & Research Company
MFS Investors Growth Stock............... MFS Investment Management(R)
MFS Research............................. MFS Investment Management(R)
MFS New Discovery........................ MFS Investment Management(R)
International Opportunities.............. T. Rowe Price International, Inc.
International Equity..................... Goldman Sachs Asset Management
Fidelity VIP Overseas.................... Fidelity Management & Research Company
Emerging Markets Equity.................. Morgan Stanley Dean Witter Investment Management, Inc.
Janus Aspen Worldwide Growth............. Janus Capital Corporation
Real Estate Equity....................... Independence Investment LLC and Morgan Stanley Dean Witter Investment Management, Inc.
Health Sciences.......................... Putnam Investment Management LLC
V.A. Financial Industries................ John Hancock Advisers, Inc.
V.A. Technology.......................... John Hancock Advisers, Inc.
Managed.................................. Independence Investment LLC and Capital Guardian Trust Company
Global Balanced.......................... Capital Guardian Trust Company
Short-Term Bond.......................... Independence Investment LLC
Bond Index............................... Mellon Bond Associates, LLP
Active Bond.............................. John Hancock Advisers, Inc.
V.A. Strategic Income.................... John Hancock Advisers, Inc.
High Yield Bond.......................... Wellington Management Company, LLP
Global Bond.............................. Capital Guardian Trust Company
Money Market............................. Wellington Management Company, LLP
- ------------------------------------------------------------------------------------------------------------------------------------

The variable investment options shown on page 1 are those available as of
the date of this prospectus. We may add, modify or delete variable investment
options in the future.

John Hancock Annuity Servicing Office
-------------------------------------

Mail Delivery Phone:
------------- -----
1-800-824-0335

529 Main Street Fax:
---
Charlestown, MA 02129 1-617-886-3070

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

Please note that the SEC has not approved or disapproved these securities,
or determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged
the prospectus in the following way:

. The first section contains an "Index of Key Words."

. Behind the index is the "Fee Table." This section highlights the
various fees and expenses you will pay directly or indirectly, if you
purchase a contract.

. The next section is called "Basic Information." It contains basic
information about the contract presented in a question and answer
format. You should read the Basic Information before reading any
other section of the prospectus.

. Behind the Basic Information is "Additional Information." This
section gives more details about the contract. It generally does not
repeat information contained in the Basic Information.

The Series Funds' prospectuses are attached at the end of this prospectus. You
should save these prospectuses for future reference.

- --------------------------------------------------------------------------------
IMPORTANT NOTICES

This is the prospectus - it is not the contract. The prospectus simplifies
many contract provisions to better communicate the contract's essential
features. Your rights and obligations under the contract will be determined
by the language of the contract itself. On request, we will provide the form
of contract for you to review. In any event, when you receive your contract,
we suggest you read it promptly.

We've also filed with the SEC a "Statement of Additional Information," dated
May 1, 2001. This Statement contains detailed information not included in the
prospectus. Although a separate document from this prospectus, the Statement
of Additional Information has the same legal effect as if it were a part of
this prospectus. We will provide you with a free copy of the Statement upon
your request. To give you an idea what's in the Statement, we have included a
copy of the Statement's table of contents on page 52.

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

INDEX OF KEY WORDS

We define or explain each of the following key words used in this prospectus
on the pages shown below:

Key Word Page

Accumulation units................................... 29
Annuitant............................................ 11
Annuity payments..................................... 14
Annuity period....................................... 14
Contract year........................................ 12
Date of issue........................................ 12
Date of maturity..................................... 29
Free withdrawal amount............................... 19
Funds................................................ 2
Guarantee periods.................................... 13
Investment options................................... 15
Market value adjustment.............................. 13
Premium payments..................................... 11
Surrender............................................ 18
Surrender value...................................... 20
Total value of your contract......................... 13
Variable investment options.......................... cover
Withdrawal charge.................................... 19
Withdrawal........................................... 19

FEE TABLE

Owner Transaction Expenses and Annual Contract Fee

. Maximum Withdrawal Charge (as % of amount withdrawn) 7%

. Annual Contract Fee (applies only to contracts of less than $50,000) $30

Annual Contract Expenses (as a % of the average total value of the contract)

. Asset-based Charge (for administration and mortality and expense risk) 1.25%
This charge doesn't apply to amounts held in the guarantee periods.

Annual Fund Expenses (based on % of average net assets)

The following figures for the funds are based on historical fund expenses,
as a percentage (rounded to two decimal places) of each fund's average daily net
assets for 2000, except as indicated in the Notes appearing at the end of this
table. Expenses of the funds are not fixed or specified under the terms of the
policy, and those expenses may vary from year to year.

John Hancock Variable Series Trust I (Note 1):
Equity Index.......................................... 0.13% N/A 0.06% 0.19% 0.19%
Growth & Income....................................... 0.68% N/A 0.08% 0.76% 0.76%
Large Cap Value....................................... 0.75% N/A 0.05% 0.80% 0.80%
Large Cap Value CORE (SM)............................. 0.75% N/A 0.10% 0.85% 1.09%
Large Cap Growth...................................... 0.36% N/A 0.10% 0.46% 0.46%
Large Cap Aggressive Growth........................... 0.90% N/A 0.10% 1.00% 1.05%
Large/Mid Cap Value................................... 0.95% N/A 0.10% 1.05% 1.36%
Fundamental Growth*................................... 0.90% N/A 0.10% 1.00% 1.04%
Mid Cap Growth........................................ 0.81% N/A 0.04% 0.85% 0.85%
Small/Mid Cap CORE (SM)............................... 0.80% N/A 0.10% 0.90% 1.23%
Small/Mid Cap Growth.................................. 0.75% N/A 0.10% 0.85% 0.85%
Small Cap Equity*..................................... 0.90% N/A 0.10% 1.00% 1.03%
Small Cap Value*...................................... 0.95% N/A 0.10% 1.05% 1.29%
Small Cap Growth...................................... 0.75% N/A 0.07% 0.82% 0.82%
International Opportunities........................... 0.83% N/A 0.10% 0.93% 1.09%
International Equity.................................. 1.00% N/A 0.10% 1.10% 1.76%
Emerging Markets Equity............................... 1.22% N/A 0.10% 1.32% 2.49%
Real Estate Equity.................................... 1.01% N/A 0.09% 1.10% 1.10%
Health Sciences....................................... 1.00% N/A 0.10% 1.10% 1.10%
-------------

John Hancock Variable Series Trust I - Continued
(Note 1):
Managed............................................... 0.66% N/A 0.09% 0.75% 0.75%
Global Balanced....................................... 1.05% N/A 0.10% 1.15% 1.44%
Short-Term Bond....................................... 0.30% N/A 0.06% 0.36% 0.36%
Bond Index............................................ 0.15% N/A 0.10% 0.25% 0.27%
Active Bond........................................... 0.62% N/A 0.10% 0.72% 0.74%
High Yield Bond....................................... 0.65% N/A 0.10% 0.75% 0.87%
Global Bond........................................... 0.85% N/A 0.10% 0.95% 1.05%
Money Market.......................................... 0.25% N/A 0.04% 0.29% 0.29%

John Hancock Declaration Trust (Note 2):
V.A. Relative Value................................... 0.60% N/A 0.19% 0.79% 0.79%
V.A. Financial Industries............................. 0.80% N/A 0.10% 0.90% 0.90%
V.A. Technology....................................... 0.80% N/A 0.25% 1.05% 1.99%
V.A. Strategic Income................................. 0.60% N/A 0.16% 0.76% 0.76%

AIM Variable Insurance Funds:
AIM V.I. Value........................................ 0.61% N/A 0.23% 0.84% 0.84%
AIM V.I. Growth....................................... 0.61% N/A 0.22% 0.83% 0.83%

Variable Insurance Products Fund - Service Class
(Note 3):
Fidelity VIP Growth................................... 0.57% 0.10% 0.09% 0.76% 0.76%
Fidelity VIP Overseas................................. 0.72% 0.10% 0.17% 0.99% 0.99%

Variable Insurance Products Fund II - Service Class
(Note 3):
Fidelity VIP Contrafund(R)............................ 0.57% 0.10% 0.09% 0.76% 0.76%

MFS Variable Insurance Trust - Initial Class Shares
(Note 4):
MFS Investors Growth Stock**.......................... 0.75% 0.00% 0.16% 0.91% 0.92%
MFS Research.......................................... 0.75% 0.00% 0.10% 0.85% 0.85%
MFS New Discovery..................................... 0.90% 0.00% 0.16% 1.06% 1.09%

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

Notes to Annual Fund Expenses

(1) Under its current investment management agreements with the John Hancock
Variable Series Trust I, John Hancock Life Insurance Company reimburses a
fund when the fund's "other fund expenses" exceed 0.10% of the fund's
average daily net assets (0.00% for Equity Index). Percentages shown for
the Health Sciences Fund are estimates because the fund was not in
operation in 2000. Percentages shown for the Growth & Income, Fundamental
Growth, Small Cap Equity, Real Estate Equity, Managed, Global Balanced,
Active Bond and Global Bond funds are calculated as if the current
management fee schedules, which apply to these funds effective November 1,
2000, were in effect for all of 2000. Percentages shown for the Small Cap
Value and Large Cap Value funds are calculated as if the current
management fee schedules, which apply to these funds effective May 1,
2001, were in effect for all of 2000. "CORE(SM)" is a service mark of
Goldman, Sachs & Co.

* Fundamental Growth was formerly "Fundamental Mid Cap Growth," Small Cap
Equity was formerly "Small Cap Value," and Small Cap Value was formerly
"Small/Mid Cap Value."

** MFS Investors Growth Stock was formerly "MFS Growth Series."

Examples

If you "surrender" (turn in) your contract at the end of the applicable
time period, you would pay:

- -----------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------
Equity Index................ $79 $ 93 $109 $182
- -----------------------------------------------------------------------
Growth & Income............. $84 $111 $139 $243
- -----------------------------------------------------------------------
Large Cap Value............. $85 $112 $141 $247
- -----------------------------------------------------------------------
Large Cap Value CORE(SM).... $85 $114 $144 $252
- -----------------------------------------------------------------------
Large Cap Growth............ $81 $102 $123 $212
- -----------------------------------------------------------------------
Large Cap Aggressive Growth. $87 $118 $152 $268
- -----------------------------------------------------------------------
Large/Mid Cap Value......... $87 $120 $154 $273
- -----------------------------------------------------------------------
Fundamental Growth.......... $87 $118 $152 $268
- -----------------------------------------------------------------------
Mid Cap Growth.............. $85 $114 $144 $252
- -----------------------------------------------------------------------
Small/Mid Cap CORE(SM)...... $86 $115 $147 $257
- -----------------------------------------------------------------------
Small/Mid Cap Growth........ $85 $114 $144 $252
- -----------------------------------------------------------------------
Small Cap Equity............ $87 $118 $152 $268
- -----------------------------------------------------------------------
Small Cap Value............. $87 $120 $154 $273
- -----------------------------------------------------------------------
Small Cap Growth............ $85 $113 $142 $249
- -----------------------------------------------------------------------
V.A. Relative Value......... $85 $112 $141 $246
- -----------------------------------------------------------------------
AIM V.I. Value.............. $85 $113 $143 $251
- -----------------------------------------------------------------------
AIM V.I. Growth............. $85 $113 $143 $250
- -----------------------------------------------------------------------
Fidelity VIP Growth......... $84 $111 $139 $243
- -----------------------------------------------------------------------
Fidelity VIP Contrafund(R).. $84 $111 $139 $243
- -----------------------------------------------------------------------
MFS Investors Growth Stock.. $86 $115 $147 $258
- -----------------------------------------------------------------------
MFS Research................ $85 $114 $144 $252
- -----------------------------------------------------------------------
MFS New Discovery........... $87 $120 $155 $274
- -----------------------------------------------------------------------
International Opportunities. $86 $116 $148 $261
- -----------------------------------------------------------------------
International Equity........ $88 $121 $157 $278
- -----------------------------------------------------------------------
Fidelity VIP Overseas....... $87 $118 $151 $267
- -----------------------------------------------------------------------
Emerging Markets Equity..... $90 $128 $168 $299
- -----------------------------------------------------------------------
Janus Aspen Worldwide Growth $86 $117 $149 $263
- -----------------------------------------------------------------------
Real Estate Equity.......... $88 $121 $157 $278
- -----------------------------------------------------------------------
Health Sciences............. $88 $121 $157 $278
- -----------------------------------------------------------------------
V.A. Financial Industries... $86 $115 $147 $257
- -----------------------------------------------------------------------
V.A. Technology............. $87 $120 $154 $273
- -----------------------------------------------------------------------
Managed..................... $84 $110 $139 $242
- -----------------------------------------------------------------------
Global Balanced............. $88 $123 $159 $283
- -----------------------------------------------------------------------
Short-Term Bond............. $80 $ 99 $118 $201
- -----------------------------------------------------------------------
Bond Index.................. $79 $ 95 $112 $189
- -----------------------------------------------------------------------
Active Bond................. $84 $110 $137 $239
- -----------------------------------------------------------------------
V.A. Strategic Income....... $84 $111 $139 $243
- -----------------------------------------------------------------------
High Yield Bond............. $84 $110 $139 $242
- -----------------------------------------------------------------------
Global Bond................. $86 $117 $149 $263
- -----------------------------------------------------------------------
Money Market................ $80 $ 96 $114 $193
- -----------------------------------------------------------------------

If you begin receiving payments under one of our annuity payment options at
the end of the applicable time period, or if you do not surrender your contact,
you would pay:

- -----------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------
Equity Index................ $16 $48 $ 83 $182
- -----------------------------------------------------------------------
Growth & Income............. $21 $66 $113 $243
- -----------------------------------------------------------------------
Large Cap Value............. $22 $67 $115 $247
- -----------------------------------------------------------------------
Large Cap Value CORE(SM).... $22 $69 $117 $252
- -----------------------------------------------------------------------
Large Cap Growth............ $18 $57 $ 97 $212
- -----------------------------------------------------------------------
Large Cap Aggressive Growth. $24 $73 $125 $268
- -----------------------------------------------------------------------
Large/Mid Cap Value......... $24 $75 $128 $273
- -----------------------------------------------------------------------
Fundamental Growth.......... $24 $73 $125 $268
- -----------------------------------------------------------------------
Mid Cap Growth.............. $22 $69 $117 $252
- -----------------------------------------------------------------------
Small/Mid Cap CORE(SM)...... $23 $70 $120 $257
- -----------------------------------------------------------------------
Small/Mid Cap Growth........ $22 $69 $117 $252
- -----------------------------------------------------------------------
Small Cap Equity............ $24 $73 $125 $268
- -----------------------------------------------------------------------
Small Cap Value............. $24 $75 $128 $273
- -----------------------------------------------------------------------
Small Cap Growth............ $22 $68 $116 $249
- -----------------------------------------------------------------------
V.A. Relative Value......... $22 $67 $114 $246
- -----------------------------------------------------------------------
AIM V.I. Value.............. $22 $68 $117 $251
- -----------------------------------------------------------------------
AIM V.I. Growth............. $22 $68 $116 $250
- -----------------------------------------------------------------------
Fidelity VIP Growth......... $21 $66 $113 $243
- -----------------------------------------------------------------------
Fidelity VIP Contrafund(R).. $21 $66 $113 $243
- -----------------------------------------------------------------------
MFS Investors Growth Stock.. $23 $70 $120 $258
- -----------------------------------------------------------------------
MFS Research................ $22 $69 $117 $252
- -----------------------------------------------------------------------
MFS New Discovery........... $24 $75 $128 $274
- -----------------------------------------------------------------------
International Opportunities. $23 $71 $122 $261
- -----------------------------------------------------------------------
International Equity........ $25 $76 $130 $278
- -----------------------------------------------------------------------
Fidelity VIP Overseas....... $24 $73 $125 $267
- -----------------------------------------------------------------------
Emerging Markets Equity..... $27 $83 $141 $299
- -----------------------------------------------------------------------
Janus Aspen Worldwide Growth $23 $72 $123 $263
- -----------------------------------------------------------------------
Real Estate Equity.......... $25 $76 $130 $278
- -----------------------------------------------------------------------
Health Sciences............. $25 $76 $130 $278
- -----------------------------------------------------------------------
V.A. Financial Industries... $23 $70 $120 $257
- -----------------------------------------------------------------------
V.A. Technology............. $24 $75 $128 $273
- -----------------------------------------------------------------------
Managed..................... $21 $65 $112 $242
- -----------------------------------------------------------------------
Global Balanced............. $25 $78 $133 $283
- -----------------------------------------------------------------------
Short-Term Bond............. $17 $54 $ 92 $201
- -----------------------------------------------------------------------
Bond Index.................. $16 $50 $ 87 $189
- -----------------------------------------------------------------------
Active Bond................. $21 $65 $111 $239
- -----------------------------------------------------------------------
V.A. Strategic Income....... $21 $66 $113 $243
- -----------------------------------------------------------------------
High Yield Bond............. $21 $65 $112 $242
- -----------------------------------------------------------------------
Global Bond................. $23 $72 $123 $263
- -----------------------------------------------------------------------
Money Market................ $17 $51 $ 89 $193
- -----------------------------------------------------------------------

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked
questions about the contract. Here are the page numbers where the questions and
answers appear:

Question Starting on page
-------- ----------------

What is the contract?...................................................... 11

Who owns the contract?..................................................... 11

Is the owner also the annuitant?........................................... 11

How can I invest money in a contract?...................................... 11

How will the value of my investment in the contract change over time?...... 13

What annuity benefits does the contract provide?........................... 14

To what extent can JHVLICO vary the terms and conditions of its contracts?. 14

What are the tax consequences of owning a contract?........................ 14

How can I change my contract's investment allocations?..................... 15

What fees and charges will be deducted from my contract?................... 18

How can I withdraw money from my contract?................................. 20

What happens if the annuitant dies before my contract's date of maturity?.. 22

What other benefits can I purchase under a contract?....................... 23

Can I return my contract?.................................................. 25

What is the contract?

Who owns the contract?

Is the owner also the annuitant?

How can I invest money in a contract?

Premium payments

We call the investments you make in your contract premiums or premium
payments. In general, you need at least a $5,000 initial premium payment to
purchase a contract. If you purchase your contract under any of the tax-
qualified plans shown on page 34 or if you purchase your contract through the
automatic investment plan, different minimums may apply. If you choose to
contribute more money into your contract, each subsequent premium payment must
be at least $200 ($100 for the annuity direct deposit program). If your
contract's total value ever falls to zero, we may terminate it. Therefore, you
may need to pay more premiums to keep the contract in force.

Applying for a contract

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.

Limits on premium payments

You can make premium payments of up to $1,000,000 in any one contract year.
The total of all new premium payments and transfers that you allocate to any one
variable 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 premium
payments at any time before the date of maturity. However,

---------------------------------------------------------------------
you may not make any premium
payments after the annuitant
if your contract is used to fund reaches age
---------------------------------------------------------------------
a "tax qualified plan"* 70 1/2**
---------------------------------------------------------------------
a non-tax qualified plan 85
---------------------------------------------------------------------

* as that term is used in "Tax Information," beginning on page 32.
** except for a Roth IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than age
84. We may waive any of these limits, however.

Ways to make premium payments

Premium 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."

We will not accept credit card checks. Nor will we accept starter or third
party checks that fail to meet our administrative requirements.

Once we have issued your contract and it becomes effective, we credit you
with any additional premiums you pay as of the day we receive them at the John
Hancock Annuity Servicing Office.

Premium payments by wire

. issue a contract;

. accept premium payments; or

. allow other transactions.

How will the value of my investment in the contract change over time?

At any time before the date of maturity, the total value of your contract
equals

. the total amount you invested,

. 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 guarantee period,

. 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
guarantee period or in the guarantee rate account (see "Dollar-cost averaging
value program" on page 16).

What annuity benefits does the contract provide?

You should carefully review the discussion under "The annuity period,"
beginning on page 29, for information about all of these choices you can make.

To what extent can jhvlico vary the terms and conditions of its contracts?

Listed below are some of the variation we can make in the terms of our
contracts. Any variation will be made only in accordance with uniform rules that
we apply fairly to all our customers.

State law insurance requirements

Variations in charges or rates

What are the tax consequences of owning a contract?

. partial withdrawal (including systematic withdrawals)

. full withdrawal ("surrender")

. payment of death benefit proceeds as a single sum upon the annuitant's
death

. periodic payments under one of our annuity payment options

How much you will be taxed on a 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 tax qualified retirement plan for which the contract is
being used, if any, and

. the circumstances under which the payments are made.

If your contract is issued in connection with a tax-qualified retirement
plan, all or part of your premium payments may be tax-deductible.

How can I change my contract's investment allocations?

Allocation of premium payments

Transferring your assets

Up to 12 times during each year of your contract, you may transfer, free of
any charge,

. all or part of the assets held in one VARIABLE INVESTMENT OPTION to any other
available variable investment option or guarantee period, or

. transfer more than $1,000,000 in a contract year into any one variable
investment option or guarantee period, without our prior approval,

. make any transfer that would cause you to exceed the above-mentioned maximum
of 18 investment options,

. make any transfers, during the annuity period, to or from a guarantee period,
or

. make any transfer during the annuity period that would result in more than
four investment options being used at once.

We reserve the right to prohibit a transfer less than 30 days prior to the
contract's date of maturity.

Procedure for transferring your assets

. 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.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

Telephone transfers

Dollar-cost averaging value program

You may elect to deposit any new premium payment of $5,000 or more in the
guarantee rate account. Each deposit will be depleted over the 6 or 12 month
period you select. The assets in this account will be automatically transferred
to one or more variable investment options over the period selected, beginning
on the date your new premium is deposited in the selected guarantee rate
account.

At the time of deposit, you will designate:

. the variable investment options to which assets will be transferred;

. the percentage amount to be transferred to each such variable investment
option; and

. the period over which the transfers will occur.

Under our current administrative rules, you may have multiple deposits
under this program at the same time, but the time period for each such deposit
must be the same (i.e., all must be for 6 month periods or all must be for 12
month periods). Transfers to the guarantee periods are not permitted under this
program, and transfers of your account value from a variable investment option
are not permitted to initiate the program. Assets in the account will earn a
fixed rate of return at the effective annual rate in effect at the time the
deposit is made into the account. Such rate will apply to any portion of the
deposit remaining in the account until the full amount of such deposit has been
transferred to the selected variable investment options. We will declare the
rate for the account from time to time.

The guarantee rate account is part of our general account. You have no
interest in or preferential claim on any of the assets held in our general
account. The investments we purchase with amounts you allocate to the guarantee
rate account belong to us; any favorable investment performance on the assets
allocated to the account belongs to us. Instead, you earn interest at the
applicable fixed rate of return.

The dollar-cost averaging value program and the standard dollar-cost
averaging program (described below) cannot be used at the same time.

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:

. You may elect the program only if the total value of your contract equals
$15,000 or more.

. The amount of each transfer must equal at least $250.

. You may change your dollar-cost averaging instructions at any time in writing
or, if you have authorized telephone transfers, by telephone.

. You may not use the standard dollar-cost averaging program and the dollar-
cost averaging value program at the same time.

. 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 guarantee periods are not permitted.

. We reserve the right to suspend or terminate the program at any time.

Strategic rebalancing

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 guarantee periods 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.

What fees and charges will be deducted from my contract?

Asset-based charge

We deduct a daily asset-based charge that compensates us primarily for our
administrative expenses and the mortality and expense risks that we assume under
the contracts. On an annual basis, this charge equals 1.25% of the value of the
assets you have allocated to the variable investment options. (This charge does
not apply to assets you have in our guarantee periods.)

Annual contract fee

Prior to the date of maturity of your contract, we will deduct $30 each
year from your contract if it has a total value on the contract anniversary of
less than $50,000. We deduct this annual contract fee at the beginning of each
contract year after the first contract year. We also deduct it if you surrender
your contract unless your total value is $50,000 or more at the time of
surrender. We take the deduction proportionally from each variable investment
option and each guarantee period you are then using. We reserve the right to
increase the annual contract fee to up to $50.

Premium taxes

We make deductions for any applicable premium or similar taxes based on the
amount of a premium payment. Currently, certain local jurisdictions assess a tax
of up to 5% of each premium payment.

Withdrawal charge

If you withdraw some of your premiums from your contract prior to the date
of maturity ("partial withdrawal") or if you surrender (turn in) your contract,
in its entirety, for cash prior to the date of maturity ("total withdrawal" or
"surrender"), we may assess a withdrawal charge. Some people refer to this
charge as a "contingent deferred sales load." We use this charge to help defray
expenses relating to the sales of the contracts, including commissions paid and
other distribution costs.

The withdrawal charge percentage depends upon the number of years that have
elapsed from the date you paid the premium to the date of its withdrawal, as
follows:

------------------------------------------------------------
Years from Date of Premium Payment to
Date of Surrender or Withdrawal Withdrawal Charge*
------------------------------------------------------------
7 or more........................... 0%
------------------------------------------------------------
6 but less than 7................... 1%
------------------------------------------------------------
5 but less than 6................... 2%
------------------------------------------------------------
4 but less than 5................... 3%
------------------------------------------------------------
3 but less than 4................... 4%
------------------------------------------------------------
2 but less than 3................... 5%
------------------------------------------------------------
1 but less than 2................... 6%
------------------------------------------------------------
less than 1......................... 7%
------------------------------------------------------------

* As a percentage of the amount of such premium that we consider to have
been withdrawn (including the withdrawal charge), as explained in the
text immediately below.

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 date of maturity or
to pay a death benefit;

. on certain withdrawals if you have elected the rider that waives the
withdrawal charge; and

Other charges

---------------------------------------------------------------------------
Waiver of withdrawal charge 0.10% of that portion of your
contract's total value attributable
to premiums that are still subject to
surrender charges
---------------------------------------------------------------------------
Enhanced death benefit 0.15% of your contract's total value
---------------------------------------------------------------------------
Accumulated value enhancement* 0.35% of your initial premium payment
(we reserve the right to increase
this percentage on a uniform basis
for al riders issued in the same
state)
---------------------------------------------------------------------------
Guaranteed retirement income benefit 0.30% of your contract's total value
---------------------------------------------------------------------------

* If you choose the accumulated value enhancement, you must also choose
the waiver of withdrawal charge.

We deduct the charge proportionally from each of your investment options,
based on your value in each.

How can I withdraw money from my contract?

Surrenders and partial withdrawals

Prior to your contract's date of maturity, 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 "Tax information," beginning on page
32. 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.

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.

Waiver of withdrawal charge rider

If your state permits, you may purchase an optional waiver of withdrawal
charge rider at the time of application. 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 charge on any withdrawals, if a
"covered person" has been diagnosed with one of the critical illnesses listed in
the rider, or if all the following conditions apply:

. 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.

You may not purchase this rider if either of the covered persons (1) is older
than 74 years at application or (2) was confined to a nursing home within the
past two years.

There is a charge for this rider, as set forth under "Other charges" on
page 20, above. This rider (and the related charges) will terminate on the
contract's date of maturity, 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 purchase 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 elder care services available to seniors, and

. 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.

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 withdrawal charge or market value adjustment that
would apply to an otherwise comparable non-systematic withdrawal. See "How will
the value of my investment in the contract

change over time?" beginning on page 13, and "What fees and charges will be
deducted from my contract?" beginning on page 18. The same tax consequences
also generally will apply.

The following conditions apply to systematic withdrawal plans:

. You may elect the plan only if the total value of your contract equals
$25,000 or more.

. 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 that $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.

What happens if the annuitant dies before my contract's date of maturity?

We will pay a "standard" death benefit, unless you have chosen the
"enhanced death benefit rider," as discussed below.

Standard death benefit

The standard death benefit is the greater of:
-------

. the total value of your contract, adjusted by any then-applicable market
value adjustment, or

. the total amount of premium payments made, minus any partial withdrawals and
related withdrawal charges.

We calculate the death benefit value as of the day we receive, in proper
order at the John Hancock Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Enhanced death benefit rider

. the amount of each premium you have paid, accumulated at 5% effective annual
interest (less any partial withdrawals you have taken and not including any
interest on such amounts after they are withdrawn);

. the total value of your contract (adjusted by any market value adjustment) as
of the date we receive due proof of the annuitant's death.

For these purposes, however, we count only those contract anniversaries that
occur (1) before we receive proof of death and (2) before the annuitant attains
------ ------
age 80 1/2.

You may elect this rider only when you apply for the contract and only if
this rider is available in your state. As long as the rider is in effect, you
will pay a monthly charge for this benefit. For a description of this charge,
refer to page 20 under "Other charges." 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.

This rider (and related charges) will terminate on the contract's date of
maturity, upon your surrendering the contract, or upon your written request that
we terminate it.

What other benefits can i purchase under a contract?

Accumulated value enhancement

Under this rider, we will make a contribution to the total value of the
contract on a monthly basis if the covered person (who must be 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.

In certain marketing materials, this rider may be referred to as
"CARESolutions Plus."

Guaranteed retirement income benefit

Under this rider, we will guarantee the amount of annuity payments you
receive, if the following conditions are satisfied:

. The date of maturity 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 date of maturity
and the date of maturity 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 date of maturity
and the date of maturity must be on or before the annuitant's 90th birthday.

There is a monthly charge for this rider, which is described at page 20
under "Other charges." 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 have the right to cancel your contract within 10 days
(or longer in some states ) after you receive it. To cancel your contract,
simply deliver or mail it to:

. JHVLICO at the address shown on page 2, or

. the JHVLICO representative who delivered the contract to you.

In most states, you will receive a refund equal to the total value of your
contract on the date of cancellation, 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
will receive a refund of any premiums you've paid. The date of cancellation will
be the date we receive the contract.

ADDITIONAL INFORMATION

This section of the prospectus provides additional information that is not
contained in the Basic Information section on pages 11 through 25.

Contents of this section Starting on page

Description of JHVLICO..................................... 27

Who should purchase a contract?............................ 27

How we support the variable investment options............. 27

How we support the guarantee periods....................... 28

How the guarantee periods work............................. 28

The accumulation period.................................... 29

The annuity period......................................... 29

Variable investment option valuation procedures............ 31

Distribution requirements following death of owner......... 32

Miscellaneous provisions................................... 32

Tax information............................................ 32

Further information about JHVLICO.......................... 37

Management's discussion and analysis....................... 38

Performance information.................................... 50

Reports.................................................... 50

Voting privileges.......................................... 50

Certain changes............................................ 50

Distribution of contracts.................................. 51

Experts.................................................... 51

Registration statement..................................... 52

JHVLICO financial statements............................... 58

Appendix A - Details About Our Guarantee Periods........... 111

Appendix B - Example of Withdrawal Charge Calculation...... 114

Description of JHVLICO

We are JHVLICO, a stock life insurance company organized, in 1979, under
the laws of the Commonwealth of Massachusetts. We have authority to transact
business in all states, except New York. We are a wholly-owned subsidiary of
John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life
insurance company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock became a
subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-
traded corporation. John Hancock's home office is at John Hancock Place, Boston,
Massachusetts 02117. At year end 2000, John Hancock's assets were approximately
$88 billion and it had invested approximately $575 million in JHVLICO in
connection with JHVLICO's organization and operation.

Who should purchase a contract?

We designed these contracts for individuals doing their own retirement
planning, including purchases under plans and trusts that do not qualify for
special tax treatment under the Internal Revenue Code of 1986 (the "Code"). We
provide general federal income tax information for contracts not purchased in
connection with a tax qualified retirement plan beginning on page 32. We also
designed the contracts for purchase under:

. traditional individual retirement annuity plans ("Traditional IRAs")
satisfying the requirements of Section 408 of the Code;

. non-deductible IRA plans ("Roth IRAs") satisfying the requirements of
Section 408A of the Code;

. SIMPLE IRA plans adopted under Section 408(p) of the Code;

. Simplified Employee Pension plans ("SEPs") adopted under Section 408(k) of
the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by public
school systems and certain other tax-exempt organizations; and

. pension or profit-sharing plans qualified under section 401(a) of the Code.

We may include certain requirements from the above sources in endorsements
or riders to the affected contracts. In other cases, we do not. In no event,
however, do we undertake to assure a contract's compliance with all plan, tax
law, and ERISA requirements applicable to a tax-qualified or non tax-qualified
retirement plan. Therefore, if you use or plan to use a contract in connection
with such a plan, you must consult with competent legal and tax advisers to
ensure that you know of (and comply with) all such requirements that apply in
your circumstances.

How we support the variable investment options

We hold the fund shares that support our variable investment options in
John Hancock Variable Annuity Account JF (the "Account"), a separate account
established by JHVLICO under Massachusetts law. The Account is registered as a
unit investment trust under the Investment Company Act of 1940 ("1940 Act").

The Account's assets, including the Series Funds' shares, belong to
JHVLICO. Each contract provides that amounts we hold in the Account pursuant to
the contracts cannot be reached by any other persons who may have claims
against us.

All of JHVLICO's general assets also support JHVLICO's obligations under
the contracts, as well as all of its other

How we support the guarantee periods

How the guarantee periods work

. withdraw all or a portion of any such amount from the contract,

. allocate all or a portion of such amount to a new guarantee period or periods
of the same or different duration as the expiring guarantee period, or

. allocate all or a portion of such amount to one or more of the variable
investment options.

We currently make available guarantee periods with durations up to ten
years. If you select a guarantee period that extends beyond your contract's date
of maturity, 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 guarantee periods for new allocations to or from those that are available
at any time.

Guaranteed interest rates

Each guarantee period has its own guaranteed rate. We may, at our
discretion, change the guaranteed rate for future guarantee periods. These
changes will not affect the guaranteed rates being paid on guarantee periods
that have already commenced. Each time you allocate or transfer money to a
guarantee period, a new guarantee period, 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
will not make available any guarantee period offering a guaranteed rate below
3%.

You may obtain information concerning the guaranteed rates applicable to
the various guarantee periods, and the durations of the guarantee periods
offered at any time, by calling the John Hancock Annuity Servicing Office at the
telephone number shown on page 2.

Calculation of market value adjustment ("MVA")

. 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.

Here is how the MVA works:

- ---------------------------------------------------------------------
We compare

. the guaranteed rate of the guarantee period from which
the assets are being taken with

. the guaranteed rate we are currently offering for
guarantee periods of the same duration as remains on the
guarantee period 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 guarantee
period 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.

The accumulation period

Your value in our variable investment options

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

Therefore, at any time prior to the date of maturity, 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 guarantee periods

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments or transferred amounts allocated to the
guarantee period, minus

. the amount of any withdrawals or transfers paid out of the guarantee
period, 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 guarantee period,
plus

. interest compounded daily on any amounts in the guarantee period from time to
time at the effective annual rate of interest we have declared for that
guarantee period.

The annuity period

Annuity payments are made to the annuitant, if still living. If more than
one annuitant is living at the date of maturity, the payments are made to the
younger of them.

Date of maturity

Unless we otherwise permit, the date of maturity must be

. at least 6 months after the date the first premium 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 date
of maturity. The John Hancock Annuity Servicing Office must receive your new
selection at least 31 days prior to the new date of maturity, however. Also, if
you are selecting or changing your date of maturity for a contract issued under
a tax qualified plan, special limits apply. (See "Contracts purchased for a tax
qualified plan," beginning on page 34.)

Choosing fixed or variable annuity payments

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 guarantee periods. 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 guarantee periods as
of the date of maturity 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 date
of maturity, we will divide your contract's value among the four investment
options with the largest values (considering all guarantee periods as a single
option), pro-rata based on the amount of the total value of your contract that
you have in each.

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 date of maturity pursuant to Option A: "life annuity with 10
years guaranteed" (discussed under "Annuity options" on page 31).

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

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:

. 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.

Fixed monthly annuity payments

. 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

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 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.

If the payee is more than 85 years old on the date of maturity, the following
two options are not available without our consent:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the 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

Distribution requirements following death of owner

- --------------------------------------------------------------------------------
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.

. 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 the 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 with payments commencing within one year of your death.

. 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 with payments commencing within one year of
your death.

If you die on or after annuity payments have begun:

Notice of the death of an owner or annuitant should be furnished promptly to
the John Hancock Annuity Servicing Office.

Miscellaneous provisions

Assignment; change of owner or beneficiary

. the rights of any assignees of record and

. certain other conditions referenced in the contract.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser before
taking any such action.

Tax information

Our income taxes

We are taxed as a life insurance company under the Internal Revenue Code (the
"Code"). The Account is taxed as part of our operations and is not taxed
separately.

Contracts not purchased to fund a tax qualified plan

Undistributed gains

We believe the contracts will 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.

Annuity payments

When we make payments under a contract in the form of an annuity, each payment
will result in taxable ordinary income to the payee, to the extent that each
such payment exceeds an allocable portion of your "investment in the contract"
(as defined in the Code). 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.

Surrenders and withdrawals before date of maturity

Penalty for premature withdrawals

Accumulated value enhancement rider

Puerto Rico annuity contracts not purchased to fund a tax qualified plan

Under the Puerto Rico tax laws, distributions from a contract not purchased to
fund a tax qualified plan ("Non-Qualified Contract") before annuitization are
treated as non-taxable return of principal until the principal is fully
recovered. Thereafter, all distributions are fully taxable. Distributions after
annuitization are treated as part taxable income and part non-taxable return of
principal. The amount excluded from gross income after annuitization 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. Puerto Rico does not currently impose an early
withdrawal penalty tax. Generally, Puerto Rico does not require income tax to be
withheld from distributions of income.

Diversification requirements

Each of the funds of the Series Funds intends to qualify as a regulated
investment company under Subchapter M of the

Contracts purchased for a tax qualified plan

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 tax-qualified plan. Trustees and
administrators of tax qualified plans may, however, generally invest and
reinvest existing plan assets without regard to such Code imposed limitations on
contributions. In addition, certain distributions from tax qualified plans may
be transferred directly to another plan, unless funds are added from other
sources, without regard to such limitations.

Tax-free rollovers

You may make a tax-free rollover from:

. a traditional IRA to another traditional IRA,

. any tax-qualified plan to a traditional IRA,

. any tax-qualified plan to another tax-qualified plan of the same type (i.e.
403(b) to 403(b), corporate plan to corporate plan, etc.), and

. from a regular IRA to a Roth IRA, subject to special restrictions discussed
below.

Traditional IRAs

A traditional individual retirement annuity (as defined in Section 408 of the
Code) generally permits an eligible purchaser to make annual contributions which
cannot exceed the lesser of:

. 100% of compensation includable in your gross income, or

. $2,000 per year.

You may be entitled to a full deduction, a partial deduction or no deduction
for your traditional IRA contribution on your federal income tax return.

The amount of your deduction is based on the following factors:

. whether you or your spouse is an active participant in an employer sponsored
retirement plan,

. your federal income tax filing status, and

. your "Modified Adjusted Gross Income."

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 any
annuity payment, may be excluded from your taxable income when you receive the
proceeds. In general, all other amounts paid out from a traditional IRA
contract (in the form of an annuity, a single sum, or partial withdrawal), are
taxable to the payee as ordinary income. As in the case of a contract not
purchased under a tax-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 similar to those described above for such
non-qualified contracts).

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.

Roth IRAs

If you hold your Roth IRA for at least five years the payee will not owe any
federal income taxes or early withdrawal penalties on amounts paid out from the
contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to qualified first-time homebuyers (not to exceed a lifetime limitation of
$10,000) as specified in the Code.

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 $2,000 Roth IRA contribution limit does not apply to converted amounts.

SIMPLE IRA plans

In general, 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. As an eligible employee of the business, you may
make pre-tax contibutions to the SIMPLE IRA plan. You may specify the
percentage of compensation that you want to contribute under a qualified salary
reduction arrangement, provided the amount does not exceed certain contribution
limits (currently $6,000 a year). Your employer must elect to make a matching
contribution of up to 3% of your compensation or a non-elective contribution
equal to 2% of your compensation.

Simplified Employee Pension plans (SEPs)

Section 403(b) plans

The amount of such non-taxable contributions each year

. is limited by a maximum (called the "exclusion allowance") that is computed in
accordance with a formula prescribed under the Code;

. may not, together with all other deferrals the employee elects under other
tax-qualified plans, exceed $10,500 (subject to cost of living increases); and

. is subject to certain other limits (described in Section 415 of the Code).

Moreover, the Code prohibits distributions from a 403(b) contract before the
employee reaches age 59 1/2, except:

. on the employee's separation from service, death, or disability,

. with respect to distributions of assets held under a 403(b) contract as of
December 31, 1988, and

. transfers and exchanges to other products that qualify under Section 403(b).

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."

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 premium payments made by the employee.

The non-taxable portion of each annuity payment is determined, under the Code,
according to one formula if the payments are variable and a somewhat different
formula if the payments are fixed. In each case, speaking generally, the
formula seeks to allocate an appropriate amount of the investment in the
contract to each payment. Favorable procedures may also be available to
taxpayers who had attained age 50 prior to January 1, 1986.

IRS required minimum distributions to the employee 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.

"Top-heavy" plans

Government deferred compensation plans

You can exclude a portion of your compensation from gross income if you
participate in a deferred compensation plan maintained by:

. a state,

. a political subdivision of a state,

. an agency or intrumentality or a state or political subdivision of a state, or

. a tax-exempt organization.

In general, the maximum amount of compensation you can defer under such
tax-favored plans equals the lesser of:

. $7,500 or

. 33 1/3% of your "includible income" (as defined in the Code).

The deferred compensation plan must satisfy several conditions, including the
following:

. the plan 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 shall remain solely the employer's
property and may be subject to the claims of its creditors.

If we make a payment under your contract in the form of an annuity, or in a
single sum such as on surrender or withdrawal, the payment is taxed as ordinary
income.

Withholding on rollover distributions

Puerto Rico annuity contracts purchased to fund a tax-qualified plan

The provisions of the tax laws of Puerto Rico vary significantly from those
under the Internal Revenue Code of the United States with respect to the various
"tax qualified" plans described above. Although we may offer variable annuity
contracts in Puerto Rico in connection with "tax qualified" plans, the text of
the prospectus under the subsection "Contracts purchased for a tax qualifed
plan" is inapplicable in Puerto Rico and should be disregarded.

See your own tax adviser

The above description of Federal income tax consequences to owners of and
payees under contracts, and of the different kinds of tax qualified plans which
may be funded by the contracts, is only a brief summary and is not intended as
tax advice. The rules under the Code governing tax 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 consult a qualified tax adviser.

Further information about JHVLICO

JHVLICO markets its policies through

. John Hancock's sales organization, which includes a career agency system
composed of company-supported independent general agencies and,

. various unaffiliated broker-dealers and certain financial institutions
with which John Hancock and JHVLICO have sales agreements.

In 1993, JHVLICO acquired Colonial Penn Annuity and Life Insurance Company and
renamed it John Hancock Life Insurance Company of America. On March 5, 1998,
the name of the company was changed from John Hancock Life Insurance Company of
America to Investors Partner Life Insurance Company ("IPL").

Selected financial data

--------------------------------------------------------------------------
The following table sets forth certain selected financial data. The table
first presents selected financial data of our consolidated results of
operations for the year ended December 31, 2000 and statement of financial
position data as of December 31, 2000 on a basis of generally accepted
accounting principles ("GAAP"). This data has been derived from our audited
GAAP basis financial statements included elsewhere in this prospectus.
After that, the table presents selected statement of operations data for
each of the two years ended December 31, 2000 and 1999 and statement of
financial position data as of December 31, 2000 and 1999 on a basis
prescribed or permitted by the Commonwealth of Massachusetts Division of
Insurance ("statutory" or "Stat" basis). This data has been derived from
our audited statutory basis financial statements included elsewhere in this
prospectus. After that, the table presents selected statement of operations
data for the years ended December 31, 1998, 1997 and 1996 and statement of
financial position data as of December 31, 1998, 1997 and 1996 that have
been derived from our audited statutory basis financial statements not
included herein.

You should read the following selected historical financial data
along with other information including "Management's Discussion
and Analysis" immediately following this section and our
financial statements and the notes to the financial statements
beginning on page 38.

Past results do not necessarily indicate future results.
--------------------------------------------------------------------------

Selected financial data - continued

STATEMENT OF OPERATIONS DATA:
Premiums................................... $ 28.6 $ 945.5 $ 950.8 $ 1,272.3
Net investment income...................... 213.4 176.7 136.0 122.8
Net realized capital gains (losses)........ (10.6) -- -- --
Other income, net.......................... 337.3 475.6 605.4 618.1
--------- --------- --------- ---------
TOTAL REVENUES................................ $ 568.7 $ 1,597.8 $ 1,692.2 2,013.2
Total benefits and expenses................ $ 425.5 $ 1,574.4 $ 1,573.6 1,963.9
Federal income tax expense (credit)........ 43.8 (18.0) 42.9 33.1
Net realized capital gains (losses)........ -- (18.2) (1.7) (0.6)
Net gain/net income........................ $ 99.4 $ 23.2 $ 74.0 $ 15.6
BALANCE SHEET DATA:
Total assets............................... $12,194.7 $10,720.2 $10,613.0 $ 8,599.0
Total obligations.......................... 11,389.1 10,271.4 10,216.0 8,268.2
Total stockholder's equity/
policyholders' contingency reserve......... $ 805.6 $ 448.8 $ 397.0 $ 330.8

Year Year
ended ended
December December
31, 1997 31, 1996
(in millions-Stat) (in millions-Stat)
------------------ ------------------

STATEMENT OF OPERATIONS DATA:
Premiums................................... $ 872.7 $ 820.6
Net investment income...................... 89.7 76.1
Net realized capital gains (losses)........ -- --
Other income, net.......................... 449.1 427.7
-------- --------
TOTAL REVENUES................................ 1,411.5 1,324.4
Total benefits and expenses................ 1,342.5 1,249.0
Federal income tax expense (credit)........ 38.5 38.6
Net realized capital gains (losses)........ (3.0) (1.5)
Net gain/net income........................ $ 27.5 $ 35.3
BALANCE SHEET DATA:
Total assets............................... $6,521.5 $4,567.8
Total obligations.......................... 6,199.8 4,285.7
Total stockholder's equity/
policyholders' contingency reserve......... $ 321.7 $ 283.1

Management's discussion and analysis

Forward-Looking Information

The statements, analyses, and other information contained herein relating to
trends in JHVLICO's operations and financial results, the markets for JHVLICO's
products, the future development of JHVLICO's business, and the contingencies
and uncertainties to which JHVLICO may be subject, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend," "will," "should," "may," and other similar expressions, are "forward-
looking statements" under the Private Securities Litigation Reform Act of 1995.
Such statements are made based upon management's current expectations and
beliefs concerning future events and their effects on JHVLICO and may not be
those anticipated by management. JHVLICO's actual results may differ materially
from the results anticipated in these forward-looking statements.

You are also directed to other risks and uncertainties discussed, as well as
to further discussion of the risks described above, in other documents filed by
us with the United States Securities and Exchange Commission. We specifically
disclaim any obligation to update or revise any forward-looking information,
whether as a result of new information, future developments, or otherwise.

Overview

Our GAAP revenues are derived principally from:

. premiums on individual life insurance and annuities with life contingencies;

. product charges from variable and universal life insurance products and
annuities;

. net investment income and realized investment gains on general account assets.

Our profitability depends in large part upon: (1) the adequacy of our product
pricing, which is primarily a function of competitive conditions, our ability to
assess and manage trends in mortality and morbidity experience, our ability to
generate investment earnings and our ability to maintain expenses in accordance
with pricing assumptions and (2) the maintenance of our target spreads between
the rate of earnings on our investments and rates credited on policyholders'
general account balances.

Our sales and financial results of our retail business over the last several
years have been affected by general economic and industry trends. Variable
products, including variable life insurance and variable annuities, have
accounted for the majority of recent increases in total premiums and deposits
for the insurance industry as a result of the strong equity market growth in
recent years and the ''baby boom'' generation reaching its high-earnings years
and seeking tax-advantaged investments to prepare for retirement.

Premiums and deposits of our individual annuity products were $94.3 million in
2000 as compared to $231.3 million in 1999. Our variable life insurance product
deposits were $853.1 million in 2000 as compared to $719.7 million in 1999.

Reconciliation of GAAP and Statutory Financial Results for the Year Ended
December 31, 2000

GAAP basis net income was $99.4 million and statutory gain from operations was
$41.4 million for the year ended December 31, 2000. Statutory gain from
operations of $41.4 million does not include $3.3 million of statutory gain from
operations from JHVLICO's wholly-owned subsidiary, Investors Partner Life
Insurance Company (IPL) which is accounted for on the statutory equity method of
accounting. In determining statutory gain from operations of $41.4 million,
certain items are either added to, or subtracted from, GAAP basis net income, as
these items receive differing treatment on a GAAP and statutory basis. A
discussion of these reconciling items follows.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
(Statutory Discussion)

Gain from operations before income taxes and net realized capital losses of
$23.4 million for the year ended December 31, 2000 decreased by $95.2 million,
or 80.2%, as compared to gain from operations before income taxes and net
realized capital losses of $118.6 million for the year ended December 31, 1999.
The decrease was primarily attributable to decreases in gain from operations
before income taxes and net realized capital losses of $52.7 million in
annuities, and $38.2 million in traditional life insurance. The annuity
decrease can be partially attributable to a 1999 $22.7 million pre-tax expense
reimbursement adjustment under a modified coinsurance agreement that did not
recur during 2000. Reserve increases in 2000 resulting from the effect of recent
changes in statutory reserve requirements, especially for guaranteed minimum
death in combination with poor separate account performance further contributed
to the annuity decrease. The traditional life decrease was primarily due to a
change in expense allocation that resulted in a $33.3 million pre-tax expense
re-allocation in the fourth quarter of 2000. This adjustment was to properly
reflect expense amounts allocated between JHVLICO and John Hancock.

Premium revenue, net of premium ceded to reinsurers, was $945.5 million for
2000, a decrease of $5.3 million, or .6%, from $950.8 million in 1999. The
decrease was attributable to a decrease of $137.0 million in annuities, which
was largely offset by a combined increase of $131.7 million in variable life,
universal life, and traditional life insurance. The annuity decrease was driven
largely by lower Independence Preferred Annuity product deposits which was
partially offset by higher deposits of the Revolution Annuity product, which
was first sold during the third quarter of 1999. Variable life insurance had an
increase in net premium of $54.5 million compared to 1999, due to increased
sales of the Variable Estate Protection product. Universal life net premium
revenue increased by $48.7 million compared to 1999, driven largely by the
result of single premium ($52.5 million) bank owned life insurance sales
occurring during 2000 that did not occur during 1999. Traditional life
insurance premium revenue increased by $28.5 million compared to 1999 as a
result of an increase in the number of states JHVLICO is licensed to sell
traditional products compared to 1999.

Additions to reserves to provide for future payments to policyholders and
beneficiaries were $844.4 million for 2000, a decrease of $44.4 million, or
5.0%, from $888.8 million in 1999. The decrease was primarily attributable to a
decrease of $196.0 million in annuities, the result of lower net annuity
deposits, and lower transfers to JHVLICO's separate accounts compared to 1999.
This decrease was offset by increases of $76.4 million, $52.3 million, and
$22.9 million in universal life insurance, variable life insurance, and
traditional life insurance, respectively, compared to 1999. The universal life
insurance reserve increase was primarily the result of single premium ($52.5
million) bank owned life insurance sales occurring during 2000 that did not
occur during 1999. Both the variable life insurance and traditional life
insurance increases are a result of continued growth in insurance in-force.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
(Statutory Discussion)

Premium revenue, net of premium ceded to reinsurers, was $950.8 million for
1999, a decrease of $321.5 million, or 25.3%, from $1,272.3 million in 1998. The
decrease was primarily attributable to a decrease of $326.5 million in universal
life premium, due to large single premium ($340.0 million) bank owned life
insurance sales that occurred during 1998 and did not recur during 1999. A
$53.3 million decrease in annuity deposits was offset by an increase in variable
life insurance premium of $53.0 million.

Payments to policyholders and beneficiaries were $349.9 million for 1999, an
increase of $48.5 million, or 16.1%, from $301.4 million in 1998. The increase
was primarily due to an increase of $76.0 million in variable life insurance,
which was offset by decreases of $20.9 million in annuities and $7.9 million in
universal life insurance. The variable life increase was principally due to
increased surrenders. The annuity decrease was primarily the result of increased
ceded surrender benefits under a modified coinsurance agreement with John
Hancock. The universal life insurance decrease can be attributed to decreased
death benefits.

Expenses of providing service to policyholders and obtaining new insurance
were $314.4 million for 1999, an increase of $40.2 million, or 14.7%, from
$274.2 million in 1998. The increase was primarily due to an increase of $33.3
million in variable life insurance. Of this increase, $9.7 million was due to an
increase of new and renewal commissions, and the remaining $23.6 million was
primarily due to higher systems expenses. . Income taxes were $42.9 million in
1999 compared to $33.1 million for 1998.

General Account Investments

Overall Composition of the General Account

The following discussion is presented on a statutory basis of accounting.

The following table shows the composition of investments in our general
account portfolio.

As of December 31,
-------------------------------------
2000 1999
------------------- ---------------
Carrying % of Carrying % of
Value Total Value Total
---------- -------- -------- --------
(in millions) (in millions)

Bonds (1)....................... $1,400.5 55.3% $1,216.3 54.6%
Preferred stocks................ 44.0 1.7 35.9 1.6
Common stocks................... 2.8 0.1 3.2 0.1
Investment in affiliates........ 84.8 3.4 80.7 3.6
Mortgage loans (2).............. 456.0 18.0 433.1 19.4
Real estate..................... 24.5 1.0 25.0 1.1
Policy loans (3)................ 218.9 8.7 172.1 7.7
Other invested assets........... 24.7 1.0 14.8 0.7
Short-term investments.......... 226.6 9.0 222.9 10.0
Temporary cash investments (4).. 45.4 1.8 27.2 0.2
-------- ----- -------- -----
Total invested assets.......... $2,528.2 100.0% $2,231.2 100.0%
======== ===== ======== =====

(1) The total fair value of our bond portfolio was $1,366.9 million and $1,163.2
million at December 31, 2000 and December 31, 1999, respectively.
(2) The fair value for our mortgage loan portfolio was $467.3 million and $421.7
million as of December 31, 2000 and December 31, 1999, respectively.
(3) Policy loans are secured by the cash value of the underlying life insurance
policies.
(4) Cash and temporary investments are included in total invested assets in the
table above for the purposes of calculating yields on the income producing
assets for JHVLICO. Cash and temporary investments are not considered part
of Total Investments of JHVLICO of $2,482.8 million and $2,204.0 million at
December 31, 2000 and December 31, 1999, respectively.

Bonds

Our bond portfolio is predominantly comprised of low risk, investment grade,
publicly and privately traded corporate bonds and senior tranches of asset-
backed securities ('ABS') and mortgage-backed securities ('MBS'), with the
balance invested in government bonds. As of December 31, 2000, bonds represented
55.3% of general account investment assets with a statement value of $1.4
billion, roughly comprised of 50% public securities and 50% private securities.
Each year we direct the majority of our net cash inflows into investment grade
bonds. We typically invest between 5% and 15% of funds allocated to bonds in
below-investment-grade securities while maintaining our policy to limit the
overall level of these bonds to no more than 10% of invested assets and two
thirds of that balance in the BB category. Allocations are based on our
assessment of relative value and the likelihood of enhancing risk-adjusted
portfolio returns. While the general account has profited from the below-
investment-grade asset class in the past, care is taken to manage its growth
strategically by limiting its size relative to our total invested assets.

The following table shows the composition of our bond portfolio.

Bond Portfolio -- By Issuer

As of December 31,
----------------------------------------------
2000 1999
--------------------- ---------------------
Carrying % of Carrying % of
Value Total Value Total
---------- -------- -------- --------
(in millions) (in millions)

Corporate securities................................................ $1,158.9 82.7% $ 964.9 79.3%
MBS/ABS............................................................. 223.3 16.0 229.4 18.9
U.S. Treasury securities and obligations of
U.S. government agencies........................................... 5.7 0.4 5.9 0.5
Debt securities issued by foreign governments....................... 10.8 0.8 13.9 1.1
Obligations of states and political Subdivisions.................... 1.8 0.1 2.2 0.2
-------- ----- -------- -----
Total.............................................................. $1,400.5 100.0% $1,216.3 100.0%
======== ===== ======== =====

of December 31, 2000 and December 31, 1999 was limited to 3.3% and 3.9% of our
total MBS/ABS portfolio and 0.6% and 0.7% of our bond holdings, respectively.

Mortgage Loans

As of December 31, 2000, we held mortgage loans with an amortized cost of $0.5
billion.

The following table shows the distribution of our mortgage loan portfolio by
property type as of the dates indicated. Our commercial mortgage loan portfolio
consists primarily of non-recourse fixed-rate mortgages on fully, or nearly
fully, leased commercial properties.

As of December 31,
--------------------------------------------
2000 1999
-------------------- ----------------------
Carrying % of Carrying % of
Value Total Value Total
--------- --------- ---------- --------
(in millions) (in millions)
Apartment..................... $ 93.6 20.5% $112.1 25.9%
Office Buildings.............. 84.7 18.6 86.4 20.0
Retail........................ 35.4 7.8 25.5 5.9
Agricultural.................. 142.5 31.3 99.6 23.0
Industrial.................... 63.5 13.9 66.0 15.2
Hotels........................ 13.0 2.9 11.3 2.6
Multi-Family.................. -- -- -- --
Mixed Use..................... 12.9 2.8 -- --
Other......................... 10.2 2.2 32.2 7.4
------ ----- ------ -----
Total........................ $456.0 100.0% $433.1 100.0%
====== ===== ====== =====

The following table shows the distribution of our mortgage loan portfolio by
geographical region.

As of December 31,
--------------------------------------------------
2000 1999
----------------- ----------------
Number
of Carrying % of Carrying % of
Loans Value Total Value Total
------ -------- ----- -------- -----
(in millions) (in millions)

East North Central....... 17 $ 64.3 14.1% $ 71.3 16.5%
East South Central....... 17 20.9 4.6 7.4 1.7
Middle Atlantic.......... 8 20.9 4.6 28.5 6.6
Mountain................. 11 27.0 5.9 21.0 4.8
New England.............. 9 23.4 5.1 37.5 8.7
Pacific.................. 46 108.0 23.7 111.1 25.7
South Atlantic........... 37 120.7 26.5 87.6 20.2
West North Central....... 5 16.0 3.5 16.6 3.8
West South Central....... 17 51.5 11.3 48.6 11.2
Canada................... 1 3.3 0.7 3.5 0.8
---- ------ ------ ------ ------
Total................... 168 $456.0 100.0% $433.1 100.0%
==== ====== ====== ====== ======

Investment Results

For the Year Ended December 31,
------------------------------------------
2000 1999
------------------- ----------------
Yield Amount Yield Amount
----- ------ ----- ------
(in millions) (in millions)

General account assets-excluding policy loans
Gross income..................................................... 8.0% $ 174.6 7.2% $ 138.6
Ending assets-excluding policy Loans............................. 2,309.3 2,059.1
POLICY LOANS
Gross income..................................................... 6.2% 12.1 6.2% 9.6
Ending assets.................................................... 218.9 172.1
Total gross income............................................. 7.8% 186.7 7.2% 148.1
Less: investment expenses........................................ (10.1) (12.1)
-------- --------
Net investment income............................................ 7.4% $ 176.7 6.6% $ 136.0
======== ========

Liquidity and Capital Resources

The following discussion is presented on a statutory basis of accounting.

Quantitative and Qualitative Disclosures About Market Risk.

The following discussion is presented on a statutory basis of accounting.

Capital Markets Risk Management

Our principal capital market exposures are credit and interest rate risk which
includes the impact of inflation, although we have certain exposures to changes
in equity prices and foreign currency exchange rates. Credit risk pertains to
the uncertainty associated with the ability of an obligor or counterparty to
continue to make timely and complete payments of contractual principal and/or
interest. Interest rate risk pertains to the market value fluctuations that
occur within fixed maturity securities or liabilities as market interest rates
move. Equity and foreign currency risk pertain to price fluctuations,
associated with JHVLICO's ownership of equity investments or non-US dollars
denominated investments and liabilities, driven by dynamic market environments.

Credit Risk

As of December 31, 2000, JHVLICO's bond portfolio was comprised of 86.0%
investment grade securities and 14.0% below-investment-grade securities. These
percentages are consistent with recent experience and indicative of our long-
standing investment philosophy of pursuing moderate amounts of credit risk in
anticipation of earning higher expected returns. We believe that credit risk can
be successfully managed given our proprietary credit evaluation models and
experienced personnel.

Interest Rate Risk

Derivative Instruments

As of December 31, 2000
-----------------------------------------------------
Fair Value
--------------------------------------------
Weighted-
Average -100 +100
Notional Term Basis Point As of Basis Point
Amount (Years) Change 12/31/00 Change
-------- --------- ----------- -------- -----------
(in millions, except for Weighted-Average Term)

Interest rate swaps...... $1,150.0 4.2 (17.2) -- 13.3
Futures contracts(1)..... 43 8.0 0.2 0.1 (0.2)
Interest rate floors..... 361.4 9.5 3.1 1.4 0.8
Interest rate caps....... 239.4 6.8 0.8 2.1 4.1
-------- --- ----- --- ----
Totals.................. 1,793.8 5.7 (13.1) 3.6 18.0
======== === ===== === ====

(1) Represents the notional value on open contracts as of December 31, 2000.

Equity Risk

Foreign Currency Risk

The modeling technique JHVLICO uses to calculate its exposure does not take
into account correlation among foreign currency exchange rates or correlation
among various financial

markets. JHVLICO's actual experience may differ from the results noted above due
to the correlation assumptions utilized or if events occur that were not
included in the methodology, such as significant liquidity or market events.

Effects of Inflation

JHVLICO does not believe that inflation has had a material effect on the
results of its operations except insofar as inflation may affect interest rates.

Reinsurance

Separate Accounts

Competition

Employees and Facilities

Transactions with John Hancock

John Hancock receives no additional compensation for its services as
underwriter and distributor of the contracts issued by JHVLICO. See Note 2 to
our audited consolidated GAAP financial statements.

Legal Proceedings

Sales Practice Class Action Settlement

Regulation

States levy assessments against John Hancock companies as a result of
participation in various types of state guaranty associations, state insurance
pools for the uninsured or other arrangements.

On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 was signed into law,
implementing fundamental changes in the regulation of the financial services
industry in the United States. The act permits the transformation of the
already converging banking, insurance and securities industries by permitting
mergers that combine commercial banks, insurers and securities firms under one
holding company. Under the act, national banks retain their existing ability to
sell insurance products in some circumstances. In addition, bank holding
companies that qualify and elect to be treated as "financial holding companies"
may engage in activities, and acquire companies engaged in activities, that are
"financial" in nature or "incidental" or "complementary" to such financial
activities, including acting as principal, agent or broker in selling life,
property and casualty and other forms of insurance, including annuities. A
financial holding company can own any kind of insurance company or insurance
broker or agent, but its bank subsidiary cannot own the insurance company.
Under state law, the financial holding company would need to apply to the
insurance commissioner in the insurer's state of domicile for prior approval of
the acquisition of the insurer, and the act provides that the commissioner, in
considering the application, may not discriminate against the financial holding
company because it is affiliated with a bank. Under the act, no state may
prevent or interfere with affiliations between banks and insurers, insurance
agents or brokers, or the licensing of a bank or affiliate as an insurer or
agent or broker.

Until the passage of the Gramm-Leach-Bliley Act, the Glass-Steagall Act of
1933, as amended, had limited the ability of banks to engage in
securities-related businesses, and the Bank Holding Company Act of 1956, as
amended, had restricted banks from being affiliated with insurance companies.
With the passage of the Gramm-Leach-Bliley Act, bank holding companies may
acquire insurers, and insurance holding companies may acquire banks. The
ability of banks to affiliate with insurance companies may materially adversely
affect all of our product lines by substantially increasing the number, size and
financial strength of potential competitors.

Moreover, the United States Supreme Court held in 1995 in Nationsbank of North
Carolina v. Variable Annuity Life

Directors and Executive Officers

The directors and executive officers of JHVLICO are as follows:

- -----------------------------------------------------------------------------------------------------------------------------------
Name Age Position with JHVLICO Other business within past 5 years
---- --- --------------------- ----------------------------------

David D'Alessandro, 50 Chairman President and Chief Executive Officer, John Hancock Life
Director Insurance Company
- -----------------------------------------------------------------------------------------------------------------------------------
Michele G. Van Leer, 43 Vice Chairman & President Senior Vice President, Life Product Management, John Hancock
Director
- -----------------------------------------------------------------------------------------------------------------------------------
Robert S. Paster, 48 Vice President Second Vice President, Direct Distribution, John Hancock
Director
- -----------------------------------------------------------------------------------------------------------------------------------
Robert R. Reitano, 50 Vice President & CIO Senior Vice President and Chief Investment Strategist,
Director Investment Policy & Research, John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------
Barbara L. Luddy, 49 Vice President & Actuary Senior Vice President, Financial Reporting & Analysis,
Director John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------
Bruce M. Jones 43 Vice President Vice President, Annuity Product Management, John Hancock;
Director Prior to July, 1999, Senior Chief Operation Officer, Phoenix
Home Company; Vice President, Marketing Department, Phoenix
Home Life Insurance Company
- -----------------------------------------------------------------------------------------------------------------------------------
Ronald J. Bocage, 55 Vice President & Counsel Vice President & Counsel, Insurance and Separate Account
Director Products Division, John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas J. Lee, 46 Vice President Vice President, Life Product and Systems Management,
Director John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------
Paul J. Strong 54 Vice President Vice President, Retail Life Product Management, John Hancock;
Director Prior to September, 1999, September, 1999, Senior Vice
President, Product Management, Jefferson Pilot Financial
Insurance Company; Senior Vice President, Marketing, Chubb Life
Insurance Company of America
- -----------------------------------------------------------------------------------------------------------------------------------
Earl W. Baucom 58 Controller Senior Vice President and Controller, Controller's Department,
John Hancock; Prior to 1999, Senior Vice President and CFO,
Franklin Life Insurance Company; Prior to June, 1996, Senior
Vice President and CFO of Providian Direct Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
Julie H. Indge 47 Treasurer Assistant Treasurer, Financial Sector Management, John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------
Peter H. Scavongelli 43 Secretary State Compliance Officer, John Hancock
- -----------------------------------------------------------------------------------------------------------------------------------

Executive Compensation

The following table provides information on the allocated compensation paid to
the chief executive officer for 2000.

Annual Compensation Long-Term Compensation
------------------- ----------------------
Name Title Salary Bonus Other LTIP All Other
---- ----- ------ ----- ----- ---- ---------

David F. D'Alessandro Chairman $45,846 $68,000 $ 313 $36,495 $0

Performance Information

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:

. the mortality and expense risk charges, and

. the annual contract fee.

Current yield and effective yield reflect all the recurring charges at the
Account level, but will not reflect any premium tax charge or any charge for
optional benefit riders.

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 Series Funds.

Voting privileges

Certain changes

Changes to the Account

We reserve the right, subject to applicable law, including any required
shareholder approval,

. to add or delete variable investment options,

. to change the underlying investment vehicles,

. to operate the Account in any form permitted by law, and

. to terminate the 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

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 premium payment,

. the size of the group or class,

. the total amount of premium payments expected to be received from the group or
class and the manner in which the premium 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.

Distribution of contracts

John Hancock Funds, Inc. ("JHFI") and Signator Investors, Inc.("Signator") act
as principal distributors of the contracts sold through this prospectus. JHFI
and Signator are each registered as a broker-dealer under the Securities
Exchange Act of 1934, and each is a member of the National Association of
Securities Dealers, Inc. JHFI's address is 101 Huntington Avenue, Boston,
Massachusetts 02199. Signator's address is 200 Clarendon Street, John Hancock
Place, Boston, Massachusetts 02117. Both JHFI and Signator are subsidiaries of
John Hancock Life Insurance Company.

You can purchase a contract through registered representatives of broker-
dealers and certain financial institutions who have entered into selling
agreements with JHVLICO and JHFI, or with JHVLICO and Signator. We pay broker-
dealers compensation for promoting, marketing and selling our variable insurance
and variable annuity products. In turn, the broker-dealers pay a portion of the
compensation to their registered representatives, under their own arrangments.
Signator will also pay its own registered representatives for sales of the
contracts to their customers. We do not expect the compensation we pay to such
broker-dealers (including Signator) and financial institutions to exceed 8.0% of
premium payments (on a present value basis) for sales of the contracts described
in this prospectus. For limited periods of time, we may pay additional
compensation to broker-dealers as part of special sales promotions. We offer
these contracts on a continuous basis, but neither JHVLICO nor JHFI nor Signator
is obligated to sell any particular amount of contracts. We also reimburse JHFI
and Signator for direct and indirect expenses actually incurred in connection
with the marketing of these contracts.

Experts

Registration statement

page of SAI

Distribution....................................................... 2

Calculation of Performance Data.................................... 2

Calculation of Annuity Payments.................................... 8

Additional Information About Determining Unit Values............... 10

Purchases and Redemptions of Fund Shares........................... 11

The Account........................................................ 11

Delay of Certain Payments.......................................... 11

Liability for Telephone Transfers.................................. 12

Voting Privileges.................................................. 13

Financial Statements............................................... 14

CONDENSED FINANCIAL INFORMATION

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT JF

The following table provides selected data for Revolution accumulation shares
for each investment option that was available during the period shown.
Revolution commenced operations on August 10, 1999.

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
------------ ---------------

Equity Index
Accumulation share value:
Beginning of period......................................................... $ 22.54 $ 10.00
End of period............................................................... $ 20.22 $ 22.54
Number of Accumulation Shares outstanding at end of period................... 507,320 76,098
Growth & Income
Accumulation share value:
Beginning of period (Note 2)................................................ $ 10.00 --
End of period............................................................... $ 8.82 --
Number of Accumulation Shares outstanding at end of period................... 12,749 --
Large Cap Value CORE(SM)
Accumulation share value:
Beginning of period......................................................... $ 10.31 $ 10.00
End of period............................................................... $ 10.71 $ 10.31
Number of Accumulation Shares outstanding at end of period................... 520,128 92,493
Large Cap Aggressive Growth
Accumulation share value:
Beginning of period......................................................... $ 11.97 $ 10.00
End of period............................................................... $ 9.60 $ 11.97
Number of Accumulation Shares outstanding at end of period................... 1,040,129 178,388
Large/Mid Cap Value
Accumulation share value:
Beginning of period......................................................... $ 10.43 $ 10.00
End of period............................................................... $ 11.68 $ 10.43
Number of Accumulation Shares outstanding at end of period................... 347,760 64,904
Fundamental Growth
Accumulation share value:
Beginning of period......................................................... $ 15.39 $ 10.00
End of period............................................................... $ 14.74 $ 15.39
Number of Accumulation Shares outstanding at end of period.................... 525,081 38,912
Mid Cap Growth
Accumulation share value:
Beginning of period (Note 1)................................................ $ 10.00 --
End of period............................................................... $ 7.11 --
Number of Accumulation Shares outstanding at end of period................... 629,910 --
Small/Mid Cap CORE(SM)
Accumulation share value:
Beginning of period......................................................... $ 12.73 $ 11.00
End of period............................................................... $ 13.16 $ 12.73
Number of Accumulation Shares outstanding at end of period................... 114,891 9,532
Small/Mid Cap Growth
Accumulation share value:
Beginning of period......................................................... $ 18.98 $ 18.07
End of period............................................................... $ 20.47 $ 18.98
Number of Accumulation Shares outstanding at end of period................... 136,439 14,779
Small Cap Equity
Accumulation share value:
Beginning of period (Note 2)................................................ $ 10.00 --
End of period............................................................... $ 8.30 --
Number of Accumulation Shares outstanding at end of period................... 535 --

Small Cap Value

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
-------------- ------------------

Accumulation share value:
Beginning of period.................................................. $ 10.46 --
End of period....................................................... $ 13.87 --
Number of Accumulation Shares outstanding at end of
period............................................................... 241,338 --
Small Cap Growth
Accumulation share value:
Beginning of period.................................................. $ 21.19 $ 14.27
End of period....................................................... $ 16.44 $ 21.19
Number of Accumulation Shares outstanding at end of
period............................................................... 608,753 59,529
V.A. Relative Value
Accumulation share value:
Beginning of period (Note 1)......................................... $ 10.00 --
End of period....................................................... $ 9.21 --
Number of Accumulation Shares outstanding at end of
period............................................................... 172,283 --
AIM V.I. Value
Accumulation share value:
Beginning of period.................................................. $ 11.77 $ 10.00
End of period....................................................... $ 9.92 $ 11.77
Number of Accumulation Shares outstanding at end of
period............................................................... 2,548,369 302,772
AIM V.I. Growth
Accumulation share value:
Beginning of period.................................................. $ 12.30 $ 10.00
End of period....................................................... $ 9.66 $ 12.30
Number of Accumulation Shares outstanding at end of
period............................................................... 1,551,758 102,211
Fidelity Vip Growth
Accumulation share value:
Beginning of period.................................................. $ 12.04 $ 10.00
End of period....................................................... $ 10.57 $ 12.04
Number of Accumulation Shares outstanding at end of
period............................................................... 1,875,307 205,097
Fidelity Vip Contrafund(R)
Accumulation share value:
Beginning of period.................................................. $ 11.61 $ 10.00
End of period....................................................... $ 10.69 $ 11.61
Number of Accumulation Shares outstanding at end of
period............................................................... 1,447,471 237,990
MFS Investors Growth Stock
Accumulation share value:
Beginning of period.................................................. $ 12.36 $ 10.00
End of period....................................................... $ 11.45 $ 12.36
Number of Accumulation Shares outstanding at end of
period............................................................... 971,077 158,192
MFS Research
Accumulation share value:
Beginning of period.................................................. $ 11.86 $ 10.00
End of period....................................................... $ 11.14 $ 11.86
Number of Accumulation Shares outstanding at end of
period............................................................... 672,010 73,452
MFS New Discovery
Accumulation share value:
Beginning of period.................................................. $ 15.26 $ 10.00
End of period....................................................... $ 14.77 $ 15.26
Number of Accumulation Shares outstanding at end of
period............................................................... 431,090 36,557
International Equity
Accumulation share value:
Beginning of period.................................................. $ 12.06 $ 10.00
End of period....................................................... $ 10.23 $ 12.06
Number of Accumulation Shares outstanding at end of
period............................................................... 181,982 11,123

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
-------------- -----------------

Fidelity VIP Overseas
Accumulation share value:
Beginning of period........................................... $ 12.48 $ 10.00
End of period................................................ $ 9.97 $ 12.48
Number of Accumulation Shares outstanding at end of
period........................................................ 1,107,608 30,517
Janus Aspen Worldwide Growth
Accumulation share value:
Beginning of period (Note 2).................................. $ 10.00 --
End of period................................................ $ 9.04 --
Number of Accumulation Shares outstanding at end of
period........................................................ 128,709 --
Real Estate Equity
Accumulation share value:
Beginning of period (Note 2).................................. $ 10.00 --
End of period................................................ $ 10.95 --
Number of Accumulation Shares outstanding at end of
period........................................................ 1,766 --
V.A. Financial Industries
Accumulation share value:
Beginning of period........................................... $ 14.25 $ 10.00
End of period................................................ $ 17.90 $ 14.25
Number of Accumulation Shares outstanding at end of
period........................................................ 642,376 113,876
V.A. Technology
Accumulation share value:
Beginning of period (Note 1).................................. $ 10.00 --
End of period................................................ $ 7.28 --
Number of Accumulation Shares outstanding at end of
period........................................................ 679,427 --
Managed
Accumulation share value:
Beginning of period (Note 2).................................. $ 10.00 --
End of period................................................ $ 9.73 --
Number of Accumulation Shares outstanding at end of
period........................................................ 89 --
Global Balanced
Accumulation share value:
Beginning of period........................................... $ 12.98 $ 12.24
End of period................................................ $ 11.65 $ 12.98
Number of Accumulation Shares outstanding at end of
period........................................................ 63,735 5,361
Short Term Bond
Accumulation share value:
Beginning of period........................................... $ 12.48 $ 12.34
End of period................................................ $ 13.30 $ 12.48
Number of Accumulation Shares outstanding at end of
period........................................................ 126,421 15,433
Bond Index
Accumulation share value:
Beginning of period........................................... $ 9.63 $ 9.65
End of period................................................ $ 10.63 $ 9.63
Number of Accumulation Shares outstanding at end of
period........................................................ 327,502 47,232
V.A. Strategic Income
Accumulation share value:
Beginning of period........................................... $ 12.62 $ 12.25
End of period................................................ $ 12.64 $ 12.62
Number of Accumulation Shares outstanding at end of
period........................................................ 535,897 58,942
High Yield Bond
Accumulation share value:
Beginning of period........................................... $ 10.27 $ 10.00
End of period................................................ $ 9.04 $ 10.27
Number of Accumulation Shares outstanding at end of
period........................................................ 333,028 48,898

Period from
Year Ended August 10, 1999
December 31, to December 31,
2000 1999
-------------- -----------------

Global Bond
Accumulation share value:
Beginning of period (Note 2).................................. $ 10.00 --
End of period................................................ $ 10.60 --
Number of Accumulation Shares outstanding at end of
period........................................................ -- --

(1) Values shown for 2000 begin on May 1, 2000

(2) Values shown for 2000 begin on November 1, 2000

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
John Hancock Variable Life Insurance Company

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

/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 16, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET

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

Assets
Investments--Notes 3 and 4
Fixed maturities:
Held-to-maturity--at amortized cost (fair value: $686.8)....... $ 715.4
Available-for-sale--at fair value (cost: $1,018.8)............. 1,011.8
Equity securities:
Available-for-sale--at fair value (cost: $7.1)................. 8.1
Mortgage loans on real estate................................... 554.8
Real estate..................................................... 23.9
Policy loans.................................................... 334.2
Short-term investments.......................................... 21.7
Other invested assets........................................... 34.8
---------
Total Investments............................................. 2,704.7
Cash and cash equivalents....................................... 277.3
Accrued investment income....................................... 52.1
Premiums and accounts receivable................................ 7.0
Deferred policy acquisition costs............................... 994.1
Reinsurance recoverable--Note 7................................. 48.4
Other assets.................................................... 28.2
Separate accounts assets........................................ 8,082.9
---------
Total Assets.................................................. $12,194.7
=========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET -- (continued)

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

Liabilities and Shareholder's Equity
Liabilities
Future policy benefits..................................... $ 2,754.2
Policyholders' funds....................................... 14.2
Unearned revenue........................................... 212.0
Unpaid claims and claim expense reserves................... 11.1
Dividends payable to policyholders......................... 0.1
Income taxes--Note 5....................................... 64.2
Other liabilities.......................................... 250.4
Separate accounts liabilities.............................. 8,082.9
----------
Total Liabilities........................................ 11,389.1
Shareholder's Equity--Note 9
Common stock, $50 par value; 50,000 shares authorized;
50,000 shares issued and outstanding...................... 2.5
Additional paid in capital................................. 572.4
Retained earnings.......................................... 232.9
Accumulated other comprehensive loss....................... (2.2)
----------
Total Shareholder's Equity............................... 805.6
----------
Total Liabilities and Shareholder's Equity............... $ 12,194.7
==========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME

Year Ended
December 31
2000
---------------
(in millions)

Revenues
Premiums.................................................................. $ 28.6
Universal life and investment-type product charges........................ 337.1
Net investment income--Note 3............................................. 213.4
Net realized investment losses, net of related amortization
of deferred policy acquisition costs of $3.8--Notes 1, 3, and 10......... (10.6)
Other revenue............................................................. 0.2
----------
Total revenues.......................................................... 568.7
Benefits and Expenses
Benefits to policyholders................................................. 248.6
Other operating costs and expenses........................................ 116.8
Amortization of deferred policy acquisition costs, excluding amounts
related to net realized investment losses of $3.8--Notes 1, 3 and 10..... 34.0
Dividends to policyholders................................................ 26.1
----------
Total benefits and expenses............................................. 425.5
----------
Income before income taxes................................................ 143.2
Income taxes--Note 5...................................................... 43.8
----------
Net income................................................................ $ 99.4
==========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME

Accumulated
Additional Other Total
Paid in Retained Comprehensive Shareholder's
Common Stock Capital Earnings Loss Equity
------------ ---------- -------- ------------- ---------------

Balance at December 31, 1999............. $2.5 $572.4 $133.5 ($13.4) $695.0
Comprehensive income:
Net income.............................. 99.4 99.4
Other comprehensive income, net of tax:
Net unrealized gains.................... 11.2 11.2
Comprehensive income..................... 110.6
---- ------ ------ ------ ------
Balance at December 31, 2000............. $2.5 $572.4 $232.9 ($2.2) $805.6
==== ====== ====== ====== ======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended
December 31
2000
-------------
(in millions)
Cash flows from operating activities:
Net income.................................................... $ 99.4
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of discount--fixed maturities.................. (1.9)
Realized investment losses, net............................. 10.6
Change in deferred policy acquisition costs................. (141.5)
Depreciation and amortization............................... 1.9
Increase in accrued investment income....................... (10.2)
Decrease in premiums and accounts receivable................ 0.3
Decrease in other assets and other liabilities, net......... 70.7
Decrease in policy liabilities and accruals, net............ (401.1)
Increase in income taxes.................................... 22.5
--------
Net cash used by operating activities...................... (349.3)
Cash flows from investing activities:
Sales of:
Fixed maturities available-for-sale.......................... 194.6
Equity securities available-for-sale......................... 1.0
Real estate.................................................. 0.2
Short-term investments and other invested assets............. 1.3
Maturities, prepayments and scheduled redemptions of:
Fixed maturities held-to-maturity............................ 79.9
Fixed maturities available-for-sale.......................... 91.5
Short-term investments and other invested assets............. 10.1
Mortgage loans on real estate................................ 85.6
Purchases of:
Fixed maturities held-to-maturity............................ (127.2)
Fixed maturities available-for-sale.......................... (424.7)
Equity securities available-for-sale......................... (0.6)
Real estate.................................................. (0.4)
Short-term investments and other invested assets............. (38.8)
Mortgage loans on real estate issued......................... (100.5)
Other, net................................................... (41.5)
--------
Net cash used in investing activities...................... (269.5)
Cash flows from financing activities:
Universal life and investment-type contract deposits.......... $1,067.2
Universal life and investment-type contract maturities and
withdrawals.................................................. (430.7)
--------
Net cash provided by financing activities.................. 636.5
--------
Net increase in cash and cash equivalents.................. 17.7
Cash and cash equivalents at beginning of year................. 259.6
--------
Cash and cash equivalents at end of year................... $ 277.3
========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

John Hancock Variable Life Insurance Company (the Company) is a wholly-owned
subsidiary of John Hancock Life Insurance Company (John Hancock or the Parent).
The Company, domiciled in the Commonwealth of Massachusetts, issues variable and
universal life insurance policies, individual whole and term life policies and
variable annuity contracts. Those policies primarily are marketed through John
Hancock's sales organization, which includes a career agency system composed of
Company-supported independent general agencies and a direct brokerage system
that markets directly to external independent brokers. Policies are also sold
through various unaffiliated securities broker-dealers and certain other
financial institutions. Currently, the Company writes business in all states
except New York.

Principles of Consolidation

The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.

Investments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

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

Short-term investments are carried at amortized cost.

Derivative Financial Instruments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

The Company uses futures contracts principally to hedge risks associated with
interest rate fluctuations on anticipated fixed income asset acquisitions.
Futures contracts represent commitments to either purchase or sell securities at
a specified future date and at a specified price or yield.

The net differential to be paid or received on interest rate swap agreements
and currency rate swap agreements is accrued and recognized as a component of
net investment income. The related amounts due to or from counterparties are
included in accrued investment income receivable or payable.

Equity collar agreements are carried at fair value and are included in other
invested assets, with the resulting unrealized gains and losses included in
realized investment gains (losses).

Hedge accounting is applied after the Company determines that the items to be
hedged expose it to interest or price risk, designates these financial
instruments as hedges and assesses whether the instruments reduce the hedged
risks through the measurement of changes in the value of the instruments and the
items being hedged at both inception and throughout the hedge period.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Revenue Recognition

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

Future Policy Benefits and Policyholders' Funds

Future policy benefits for participating traditional life insurance policies
are based on the net level premium method. This net level premium reserve is
calculated using the guaranteed mortality and dividend fund interest rates,
which range from 4.5% to 5.0%. The liability for annual dividends represents the
accrual of annual dividends earned. Settlement dividends are accrued in
proportion to gross margins over the life of the contract.

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Participating Insurance

Participating business represents approximately 16.3% of the Company's life
insurance in force and 30.1% of life insurance premiums in 2000.

The amount of policyholders' dividends to be paid is approved annually by the
Company's Board of Directors. The determination of the amount of policyholder
dividends is complex and varies by policy type. In general, the aggregate amount
of policyholders' dividends is related to actual interest, mortality, morbidity,
persistency and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by the Company.

Deferred Policy Acquisition Costs

Costs that vary with, and are related primarily to, the production of new
business have been deferred to the extent that they are deemed recoverable. Such
costs include commissions, certain costs of policy issue and underwriting, and
certain agency expenses. For participating traditional life insurance policies,
such costs are being amortized over the life of the contracts at a constant rate
based on the present value of the estimated gross margin amounts expected to be
realized over the lives of the contracts. Estimated gross margin amounts include
anticipated premiums and investment results less claims and administrative
expenses, changes in the net level premium reserve and expected annual
policyholder dividends. For universal life insurance contracts and
investment-type products, such costs are being amortized generally in proportion
to the present value of expected gross profits arising principally from
surrender charges and investment results, and mortality and expense margins. The
effects on the amortization of deferred policy acquisition costs of revisions to
estimated gross margins and profits are reflected in earnings in the period such
estimated gross margins and profits are revised. For non-participating term life
insurance products, such costs are being amortized over the premium-paying
period of the related policies using assumptions consistent with those used in
computing policy benefit reserves. Amortization expense was $30.2 million in
2000.

Cash and Cash Equivalents

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Separate Accounts

Reinsurance

Assets and liabilities related to reinsurance ceded contracts are reported on
a gross basis. The accompanying statement of income reflects premiums, benefits
and settlement expenses net of reinsurance ceded. Reinsurance premiums,
commissions, expense reimbursements, benefits and reserves related to reinsured
business are accounted for on bases consistent with those used in accounting for
the original policies issued and the terms of the reinsurance contracts.

Federal Income Taxes

The provision for federal income taxes includes amounts currently payable or
recoverable and deferred income taxes, computed under the liability method,
resulting from temporary differences between the tax basis and book basis of
assets and liabilities. A valuation allowance is established for deferred tax
assets when it is more likely than not that an amount will not be realized.

Foreign Currency Translation

Gains or losses on foreign currency transactions are reflected in earnings.

Accounting Changes and New Accounting Principles Adopted

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." In June
1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement 133." This
Statement amends SFAS No. 133 to defer its effective date for one year, to
fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities--an amendment of SFAS No. 133." This Statement makes certain changes
in the hedging provisions of SFAS No. 133, and is effective concurrent with SFAS
No. 133. As amended, SFAS No. 133 requires all derivatives to be recognized on
the balance sheet at fair value, and establishes special accounting for the
following three types of hedges: fair value hedges, cash flow hedges, and hedges
of foreign currency exposures of net investments in foreign operations. Special
accounting for qualifying hedges provides for matching the timing of gain or
loss recognition on the hedging instrument with the recognition of the
corresponding changes in value of the hedged item. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in the fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be recognized
immediately in earnings and will be included in net realized and other
investment gains.

The adoption of SFAS No. 133, as amended, will result in an increase in other
comprehensive income of $0.5 million (net of tax of $0.3 million) as of January
1, 2001 that will be accounted for as the cumulative effect of an accounting
change. In addition, the adoption of SFAS No. 133, as amended, will result in an
increase to earnings of $4.9 million (net of tax of $2.7 million) as of January
1, 2001, that will be accounted for as the cumulative effect of an accounting
change. The Company believes that its current risk management philosophy will
remain largely unchanged after adoption of the Statement.

SFAS No. 133, as amended, precludes the designation of held-to-maturity fixed
maturity investment securities as hedged items in hedging relationships where
the hedged risk is interest rates. As a result, in connection with the adoption
of the Statement and consistent with the provisions of the Statement, on January
1, 2001, the Company will reclassify approximately $550.3 million of its
held-to-maturity fixed maturity investment portfolio to the available-for-sale
category. This will result in an additional increase in other comprehensive
income of $4.7 million (net of tax of $2.5 million) as of January 1, 2001.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Codification

Note 2. Transactions with Parent

John Hancock provides the Company with personnel, property and facilities in
carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of
criteria, which were revised in 2000 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$170.6 million, which has been included in other operating costs and expenses.
As of December 31, 2000, the Company owed John Hancock $56.9 million related to
these services, which is included in other liabilities. John Hancock has
guaranteed that, if necessary, it will make additional capital contributions to
prevent the Company's shareholder's equity from declining below $1.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments

The following information summarizes the components of net investment
income and realized investment losses, net:

Year Ended
December 31
2000
---------------
(in millions)

Net Investment Income
Fixed maturities............................................. $138.5
Equity securities............................................ 0.2
Mortgage loans on real estate................................ 44.3
Real estate.................................................. 4.1
Policy loans................................................. 17.1
Short-term investments....................................... 19.4
Other........................................................ 1.1
------
Gross investment income...................................... 224.7
Less investment expenses.................................... 11.3
------
Net investment income....................................... $213.4
======
Net Realized Investment Gains (Losses), Net of Related
Amortization of Deferred Policy Acquisition Costs
Fixed maturities.............................................. $(16.0)
Equity securities............................................. 0.8
Mortgage loans on real estate and real estate................. (2.3)
Derivatives and other invested assets......................... 3.1
Amortization adjustment for deferred policy acquisition costs. 3.8
------
Net realized investment losses, net of related amortization
of deferred policy acquisition costs......................... $(10.6)
======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Gross gains of $1.5 million in 2000 and gross losses of $6.0 million in
2000 were realized on the sale of available-for-sale securities.

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

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)

December 31, 2000
Held-to-Maturity:
Corporate securities............ $ 684.2 $23.4 $51.0 $ 656.6
Mortgage-backed securities...... 29.3 0.2 1.2 28.3
Obligations of states and
political subdivisions......... 1.9 0.0 0.0 1.9
-------- ----- ----- --------
Total.......................... $ 715.4 $23.6 $52.2 $ 686.8
======== ===== ===== ========
Available-for-Sale:
Corporate securities............ $ 751.6 $20.6 $27.8 $ 744.4
Mortgage-backed securities...... 239.1 3.6 3.7 239.0
Obligations of states and
political subdivisions......... 0.9 0.0 0.0 0.9
Debt securities issued by
foreign governments............ 11.1 0.3 0.6 10.8
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies...... 16.1 0.7 0.1 16.7
-------- ----- ----- --------
Total fixed maturities.......... 1,018.8 25.2 32.2 1,011.8
Equity securities............... 7.1 2.8 1.8 8.1
-------- ----- ----- --------
Total.......................... $1,025.9 $28.0 $34.0 $1,019.9
======== ===== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

The amortized cost and fair value of fixed maturities at December 31, 2000,
by contractual maturity, are shown below:

Amortized Fair
Cost Value
--------- ----------
(in millions)

Held-to-Maturity:
Due in one year or less................................ $ 71.9 $ 72.1
Due after one year through five years.................. 234.8 235.0
Due after five years through ten years................. 222.5 223.0
Due after ten years.................................... 156.9 128.4
-------- --------
686.1 658.5
Mortgage-backed securities............................. 29.3 28.3
-------- --------
Total................................................. $ 715.4 $ 686.8
======== ========
Available-for-Sale:
Due in one year or less................................ $ 24.9 $ 24.8
Due after one year through five years.................. 332.3 333.0
Due after five years through ten years................. 290.0 281.0
Due after ten years.................................... 132.5 134.0
-------- --------
779.7 772.8
Mortgage-backed securities............................. 239.1 239.0
-------- --------
Total................................................. $1,018.8 $1,011.8
======== ========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Changes in the allowance for probable losses on mortgage loans on real
estate were as follows:

Balance at Balance at
Beginning End of
of Year Additions Deductions Year
---------- --------- ---------- ----------
(in millions)

Year ended December 31, 2000
Mortgage loans on real
estate...................... $3.8 $1.2 $0.0 $5.0
==== ==== ==== ====

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

Impaired mortgage loans on real estate with provision for losses.. $4.2
Provision for losses.............................................. 1.2
----
Net impaired mortgage loans on real estate........................ $3.0
====

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

Year Ended
December 31
2000
-------------
(in millions)

Average recorded investment in impaired loans..................... $2.1
Interest income recognized on impaired loans...................... 0.3

Year Ended
December 31
2000
-------------
(in millions)

Expected.......................................................... 0.34
Actual............................................................ 0.27

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

At December 31, 2000, the mortgage portfolio was diversified by geographic
region and specific collateral property type as displayed below:

Carrying Geographic Carrying
Property Type Amount Concentration Amount
- ------------- ------------- ------------- ---------------
(in millions) (in millions)

Apartments............. $129.2 East North Central...... $ 68.1
Hotels................. 15.1 East South Central...... 27.6
Industrial............. 77.4 Middle Atlantic......... 27.1
Office buildings....... 99.2 Mountain................ 35.7
Retail................. 45.7 New England............. 44.5
Mixed Use.............. 13.5 Pacific................. 120.7
Agricultural........... 165.6 South Atlantic.......... 156.7
Other.................. 14.1 West North Central...... 16.9
West South Central...... 59.3
Canada/Other............ 3.2
Allowance for losses... (5.0) Allowance for losses.... (5.0)
------ ------
Total................. $554.8 Total.................. $554.8
====== ======

Bonds with amortized cost of $7.0 million were non-income producing for the
year ended December 31, 2000.

Depreciation expense on investment real estate was $0.6 million in 2000.
Accumulated depreciation was $2.5 million at December 31, 2000.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments are as follows:

Number of
Contracts/ Assets (Liabilities)
Notional ----------------------
Amounts 2000
---------- ----------------------
Carrying Fair
2000 Value Value
---------- ----------- ---------
(in millions)

Asset Hedges:
Futures contracts to sell securities...... 6 -- --
Interest rate swap agreements
Notional................................. $600.0 -- (10.8)
Average fixed rate--paid................. 6.38% -- --
Average float rate--received............. 6.69% -- --
Currency rate swap agreements............. $ 22.3 (0.6) (0.6)
Equity collar agreements.................. -- 0.4 0.4
Liability Hedges:
Futures contracts to acquire securities... 43 0.1 0.1
Interest rate swap agreements
Notional................................. $570.0 9.6
Average fixed rate--received............. 6.43% -- --
Average float rate--paid................. 6.69% -- --
Interest rate cap agreements.............. $239.4 2.1 2.1
Interest rate floor agreements............ 485.4 4.5 4.5

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives (continued)

Note 5. Income Taxes

The components of income taxes were as follows:

Year Ended
December 31
2000
-------------
(in millions)

Current taxes:
Federal.......................................................... $15.2
Foreign.......................................................... 0.6
-----
15.8
Deferred taxes:
Federal.......................................................... 28.0
Foreign.......................................................... --
-----
28.0
-----
Total income taxes.............................................. $43.8
=====

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

Year Ended
December 31
2000
-------------
(in millions)

Tax at 35%........................................................ $50.1
Add (deduct):
Equity base tax.................................................. (5.6)
Tax credits...................................................... (0.6)
Foreign taxes.................................................... 0.6
Tax exempt investment income..................................... (0.7)
-----
Total income taxes.............................................. $43.8
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 5. Income Taxes (continued)

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

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

The Company made income tax payments of $62.9 million in 2000.

Note 6. Debt and Line of Credit

Note 7. Reinsurance

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

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

For the year ended December 31, 2000, benefits to policyholders under life
ceded reinsurance contracts were $3.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 7. Reinsurance (continued)

Note 8. Commitments and Contingencies

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity

(a) Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

Accumulated
Other
Comprehensive
Income
-------------

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

2000
-------------
(in millions)
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................................... ($7.0)
Equity investments............................................. 1.0
Derivatives and other.......................................... 0.3
-----
Total......................................................... (5.7)
Amounts attributable to:
Deferred policy acquisition cost............................... 2.1
Deferred federal income taxes.................................. 1.4
-----
Total......................................................... 3.5
-----
Net unrealized investment gains............................... ($2.2)
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity (continued)

(b) Statutory Results

The Company and its domestic insurance subsidiary prepare their statutory-
basis financial statements in accordance with accounting practices prescribed or
permitted by the state of domicile. Prescribed statutory accounting practices
include state laws, regulations and administrative rules, as well as guidance
published by the NAIC. Permitted accounting practices encompass all accounting
practices that are not prescribed by the sources noted above. Since 1988, the
Commonwealth of Massachusetts Division of Insurance has provided the Company
with approval to recognize a pension plan prepaid expense in accordance with the
requirements of SFAS No. 87, "Employers' Accounting for Pensions." The Company
furnishes the Commonwealth of Massachusetts Division of Insurance with an
actuarial certification of the prepaid expense computation on an annual basis.
The pension plan prepaid expense amounted to $55.6 million at December 31, 2000.

Statutory net income and surplus include the accounts of the Company and its
wholly-owned subsidiary, Investors Partners Life Insurance Company.

2000
---------------
(in millions)

Statutory net income.......................................... $ 26.6
Statutory surplus............................................. 527.2

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

Note 10. Segment Information

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

Amounts reported as segment adjustments in the tables below primarily relate
to: (i) certain realized investment gains (losses), net of related amortization
adjustment for deferred policy acquisition costs; (ii) benefits to policyholders
and expenses incurred relating to the settlement of a class action lawsuit
against the Company involving certain individual life insurance policies sold
from 1979 through 1996; (iii) restructuring costs related to our distribution
systems and retail operations; (iv) the surplus tax on mutual life insurance
companies that was allocated by John Hancock to the Company; and (v) a charge
for certain one time costs associated with John Hancock's demutualization
process.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

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

Retail
Retail Asset
Protection Gathering Consolidated
---------- --------- --------------

2000
Revenues:
Segment revenues....................... $ 530.8 $ 48.5 $ 579.3
Realized investment losses, net........ (10.6) -- (10.6)
-------- -------- ---------
Revenues............................... $ 520.2 $ 48.5 $ 568.7
======== ======== =========
Net investment income.................. $ 215.9 ($2.5) $ 213.4

Net Income:
Segment after-tax operating income..... 96.0 6.3 102.3
Realized investment losses, net........ (6.8) -- (6.8)
Restructuring charges.................. (1.1) -- (1.1)
Surplus tax............................ 5.4 0.2 5.6
Other demutualization related cost..... (0.5) (0.1) (0.6)
-------- -------- ---------
Net income............................. $ 93.0 $ 6.4 $ 99.4
======== ======== =========

Supplemental Information:
Equity in net income of investees
accounted for by the equity method.... $ 1.3 -- $ 1.3
Amortization of deferred policy
acquisition costs..................... 17.6 16.4 34.0
Income tax expense..................... 40.7 3.1 43.8
Segment assets......................... 9,326.9 2,867.8 12,194.7

Net Realized Investment Gains Data:
Net realized investment losses......... $ (14.4) -- $ (14.4)
Add capitalization/less amortization of
deferred policy acquisition costs
related to net realized investment
gains (losses)........................ 3.8 -- 3.8
-------- -------- ---------

Net realized investment losses, net of
related amortization of deferred
policy acquisition costs--per
consolidated financial statements..... (10.6) -- (10.6)
Less income tax effect................. 3.8 -- 3.8
-------- -------- ---------
Realized investment losses,
net-after-tax adjustment made to
calculate segment operating income.... ($6.8) -- ($6.8)
======== ======== =========

The Company operates only in the United States. The Company has no reportable
major customers and revenues are attributed to countries based on the location
of customers.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments

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

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

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

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

The fair value for fixed-rate deferred annuities is the cash surrender value,
which represents the account value less applicable surrender charges. Fair
values for immediate annuities without life contingencies are estimated based
on discounted cash flow calculations using current market rates.

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

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments (continued)

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

December 31
2000
--------------------------
Carrying Value Fair Value
-------------- ------------
(in millions)

Assets:
Fixed maturities:
Held-to-maturity................................. $ 715.4 $ 686.8
Available-for-sale............................... 1,011.8 1,011.8
Equity securities:
Available-for-sale............................... 8.1 8.1
Mortgage loans on real estate..................... 554.8 574.2
Policy loans...................................... 334.2 334.2
Short-term investments............................ 21.7 21.7
Cash and cash equivalents......................... 277.3 277.3

Liabilities:
Fixed rate deferred and immediate annuities........ 63.8 60.4
Derivatives assets/(liabilities) relating to:
Futures contracts, net........................... 0.1 0.1
Interest rate swap agreements.................... (1.2)
Interest rate cap agreements..................... 2.1 2.1
Interest rate floor agreements................... 4.5 4.5
Currency rate swap agreements.................... (0.6) (0.6)
Equity collar agreements......................... 0.4 0.4
Commitments........................................ -- 62.9

REPORT OF INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from accounting principles generally accepted in the United
States. The variances between such practices and accounting principles generally
accepted in the United States and the effects on the accompanying financial
statements also are described in Note 1.

/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 9, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

December 31
---------------------------------
2000 1999 1998
---------- ---------- ---------
(in millions)

Assets
Bonds--Note 6............................. $ 1,400.5 $ 1,216.3 $1,185.8
Preferred stocks.......................... 44.0 35.9 36.5
Common stocks............................. 2.8 3.2 3.1
Investment in affiliates.................. 84.8 80.7 81.7
Mortgage loans on real estate--Note 6..... 456.0 433.1 388.1
Real estate............................... 24.5 25.0 41.0
Policy loans.............................. 218.9 172.1 137.7
Cash items:
Cash in banks............................ 45.4 27.2 11.4
Temporary cash investments............... 226.6 222.9 8.5
--------- --------- --------
272.0 250.1 19.9
Premiums due and deferred................. 73.0 29.9 32.7
Investment income due and accrued......... 43.3 33.2 29.8
Other general account assets.............. 17.6 65.3 47.5
Assets held in separate accounts.......... 8,082.8 8,268.2 6,595.2
--------- --------- --------
Total Assets............................. $10,720.2 $10,613.0 $8,599.0
========= ========= ========

Obligations and Stockholder's Equity
Obligations
Policy reserves........................... $ 2,207.9 $ 1,866.6 $1,652.0
Federal income and other taxes
payable--Note 1.......................... (7.4) 67.3 44.3
Other general account obligations......... 166.3 219.0 150.9
Transfers from separate accounts, net..... (198.5) (221.6) (190.3)
Asset valuation reserve--Note 1........... 26.7 23.1 21.9
Obligations related to separate accounts.. 8,076.4 8,261.6 6,589.4
--------- --------- --------
Total Obligations....................... 10,271.4 10,216.0 8,268.2
========= ========= ========
Stockholder's Equity
Common Stock, $50 par value; authorized
50,000 shares; issued and outstanding
50,000 shares............................ 2.5 2.5 2.5
Paid-in capital........................... 572.4 572.4 377.5
Unassigned deficit--Note 10............... (126.1) (177.9) (49.2)
--------- --------- --------
Total Stockholder's Equity............... 448.8 397.0 330.8
--------- --------- --------
Total Obligations and Stockholder's
Equity................................... $10,720.2 $10,613.0 $8,599.0
========= ========= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

Year ended December 31
-------------------------------
2000 1999 1998
--------- --------- ---------
(in millions)

Income
Premiums.................................... $ 945.5 $ 950.8 $1,272.3
Net investment income--Note 3............... 176.7 136.0 122.8
Other, net.................................. 475.6 605.4 618.1
-------- -------- --------
1,597.8 1,692.2 2,013.2
Benefits And Expenses
Payments to policyholders and beneficiaries 340.8 349.9 301.4
Additions to reserves to provide for future
payments to policyholders and
beneficiaries.............................. 844.4 888.8 1,360.2
Expenses of providing service to
policyholders and obtaining new
insurance--Note 5.......................... 363.4 314.4 274.2
State and miscellaneous taxes............... 25.8 20.5 28.1
-------- -------- --------
1,574.4 1,573.6 1,963.9
-------- -------- --------
Gain From Operations Before Federal Income
Tax (Credit) Expense and Net Realized
Capital Losses.............................. 23.4 118.6 49.3
Federal income tax (credit) expense--Note 1.. (18.0) 42.9 33.1
-------- -------- --------
Gain From Operations Before Net Realized
Capital Losses.............................. 41.4 75.7 16.2
Net realized capital losses--Note 4.......... (18.2) (1.7) (0.6)
-------- -------- --------
Net Income................................... 23.2 74.0 15.6
Unassigned deficit at beginning of year...... (177.9) (49.2) (58.3)
Net unrealized capital gains (losses) and
other adjustments--Note 4................... 8.0 (3.8) (6.0)
Adjustment to premiums due and deferred...... 21.4 -- --
Other reserves and adjustments--Note 10...... (0.8) (198.9) (0.5)
-------- -------- --------
Unassigned Deficit at End of Year............ $ (126.1) $ (177.9) $ (49.2)
======== ======== ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

Year ended December 31
-----------------------------
2000 1999 1998
-------- -------- ---------
(in millions)

Cash flows from operating activities:
Insurance premiums............................ $ 939.9 $ 958.5 $1,275.3
Net investment income......................... 166.0 134.2 118.2
Benefits to policyholders and beneficiaries... (315.1) (321.6) (275.5)
Dividends paid to policyholders............... (26.1) (25.6) (22.3)
Insurance expenses and taxes.................. (362.4) (344.8) (296.9)
Net transfers to separate accounts............ (513.0) (705.3) (874.4)
Other, net.................................... 347.4 540.6 551.3
------- ------- --------
Net Cash Provided From Operations........... 236.7 236.0 475.7
------- ------- --------
Cash flows used in investing activities:
Bond purchases................................ (450.7) (240.7) (618.8)
Bond sales.................................... 148.0 108.3 340.7
Bond maturities and scheduled redemptions..... 80.0 78.4 111.8
Bond prepayments.............................. 29.4 18.7 76.5
Stock purchases............................... (8.8) (3.9) (23.4)
Proceeds from stock sales..................... 1.7 3.6 1.9
Real estate purchases......................... (0.4) (2.2) (4.2)
Real estate sales............................. 0.2 17.8 2.1
Other invested assets purchases............... (13.8) (4.5) --
Mortgage loans issued......................... (85.7) (70.7) (145.5)
Mortgage loan repayments...................... 61.6 25.3 33.2
Other, net.................................... 23.7 (68.9) (435.2)
------- ------- --------
Net Cash Used in Investing Activities........ (214.8) (138.8) (660.9)
------- ------- --------
Cash flows from financing activities:
Capital contribution.......................... -- 194.9 --
Net (decrease) increase in short-term note
payable...................................... -- (61.9) 61.9
------- ------- --------
Net Cash Provided From Financing Activities.. -- 133.0 61.9
------- ------- --------
Increase (Decrease) In Cash and Temporary
Cash Investments............................ 21.9 230.2 (123.3)
Cash and temporary cash investments at
beginning of year............................. 250.1 19.9 143.2
------- ------- --------
Cash and Temporary Cash Investments at End
of Year.................................... $ 272.0 $ 250.1 $ 19.9
======= ======= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Note 1. Nature of Operations and Significant Accounting Practices

The significant differences from GAAP include:(1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized in relation to
future estimated gross profits; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as
available-for-sale are recorded at amortized cost or market value as determined
by the NAIC rather than at fair value; (6) an Asset Valuation Reserve and
Interest Maintenance Reserve as prescribed by the NAIC are not calculated under
GAAP. Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred. The carrying values of investment
securities and real estate are reduced through the income statement when there
has been a decline in value deemed other than temporary and mortgage loan
valuation allowances, if necessary, are established when the Company determines
it is probable that it will be unable to collect all amounts of principal and
interest due according to the contractual terms of the mortgage loan agreement;
(7) investments in affiliates are carried at their net equity value with changes
in value being recorded directly to unassigned deficit rather than consolidated
in the financial statements; (8) no provision is made for the deferred income
tax effects of temporary differences between book and tax basis reporting; and
(9) certain items, including modifications to required policy reserves resulting
from changes in actuarial assumptions, are recorded directly to unassigned
deficit rather than being reflected in income. GAAP net income for the year
ended December 31, 2000 and GAAP shareholder's equity as of December 31, 2000
and 1999 were $99.4 million, $805.6 million and $695.0 million, respectively.
The effects of variances from GAAP on net income for the year ended December 31,
1999 have not been determined but are presumed to be material.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The significant accounting practices of the Company are as follows:

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

Investments in affiliates are included on the statutory equity method.

Mortgage loans are carried at outstanding principal balance or amortized cost.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Real estate acquired in satisfaction of debt and real estate held for sale are
carried at the lower of cost or fair value.

Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.

The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for cash
and temporary cash investments approximate their fair values.

The fair values for common and preferred stocks, other than its subsidiary
investments, which are carried at equity values, are based on quoted market
prices.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The carrying amount in the statement of financial position for policy loans
approximates their fair value.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Amounts for disputed tax issues relating to the prior years are charged or
credited directly to policyholders' contingency reserve.

Note 2. Investment in Affiliate

Summarized statutory-basis financial information for IPL for 2000, 1999 and
1998 is as follows:

2000 1999 1998
------ ------ --------
(in millions)
Total assets.......................................... $554.7 $571.0 $587.8
Total liabilities..................................... 476.3 499.2 517.5
Total revenues........................................ 42.8 35.6 38.8
Net income............................................ 3.3 3.5 3.8

Note 3. Net Investment Income

Investment income has been reduced by the following.amounts:

2000 1999 1998
----- ----- -------
(in millions)
Investment expenses................................... $ 9.0 $ 9.5 $ 8.3
Interest expense...................................... -- 1.7 2.4
Depreciation expense.................................. 0.6 0.6 0.8
Investment taxes...................................... 0.5 0.3 0.7
----- ----- -----
$10.1 $12.1 $12.2
===== ===== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 4. Net Capital Gains (Losses) and Other Adjustments

Net realized capital losses consist of the following items:

2000 1999 1998
------- ------ --------
(in millions)
Net (losses) gains from asset sales................. $(19.5) $(2.8) $ 7.6
Capital gains tax................................... (0.3) 0.2 (2.9)
Amounts transferred to IMR.......................... 1.6 0.9 (5.3)
------ ----- -----
Net realized capital losses........................ $(18.2) $(1.7) $(0.6)
====== ===== =====

Net unrealized capital gains (losses) and other adjustments consist of the
following items:

2000 1999 1998
------ ------ --------
(in millions)
Net gains (losses) from changes in security values
and book value adjustments......................... $11.6 $(2.6) $(2.7)
Increase in asset valuation reserve................. (3.6) (1.2) (3.3)
----- ----- -----
Net unrealized capital gains (losses) and other
adjustments....................................... $ 8.0 $(3.8) $(6.0)
===== ===== =====

Note 5. Transactions With Parent

John Hancock provides the Company with personnel, property and facilities in
carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of criteria
which were revised in 2000, 1999 and 1998 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$162.2 million, $188.3 million, $157.5 million, in 2000, 1999, and 1998,
respectively, which has been included in insurance and investment expenses. John
Hancock has guaranteed that, if necessary, it will make additional capital
contributions to prevent the Company's stockholder's equity from declining below
$1.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 5. Transactions With Parent (continued)

The Company had a $200.0 million line of credit with an affiliate, John
Hancock Capital Corp. At December 31, 2000 and 1999, the Company had no
outstanding borrowings under this agreement.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments

The statement value and fair value of bonds are shown below:

Gross Gross
Statement Unrealized Unrealized Fair
Value Gains Losses Value
--------- ---------- ---------- ----------
(in millions)
December 31, 2000
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies....... $ 5.7 $ -- $ -- $ 5.7
Obligations of states and
political subdivisions.......... 1.8 -- -- 1.8
Debt securities issued by
foreign governments............. 10.9 0.3 0.6 10.6
Corporate securities............. 1,158.8 36.4 68.5 1,126.7
Mortgage-backed securities....... 223.3 3.4 4.6 222.1
-------- ----- ----- --------
Total bonds.................... $1,400.5 $40.1 $73.7 $1,366.9
======== ===== ===== ========

December 31, 1999
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies....... $ 5.9 -- $ 0.1 $ 5.8
Obligations of states and
political subdivisions.......... 2.2 $ 0.1 0.1 2.2
Debt securities issued by
foreign governments............. 13.9 0.8 0.1 14.6
Corporate securities............. 964.9 13.0 59.4 918.5
Mortgage-backed securities....... 229.4 0.5 7.8 222.1
-------- ----- ----- --------
Total bonds.................... $1,216.3 $14.4 $67.5 $1,163.2
======== ===== ===== ========

December 31, 1998
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies....... $ 5.1 $ 0.1 -- $ 5.2
Obligations of states and
political subdivisions.......... 3.2 0.3 -- 3.5
Corporate securities............. 925.2 50.4 $15.0 960.6
Mortgage-backed securities....... 252.3 10.0 0.1 262.2
-------- ----- ----- --------
Total bonds.................... $1,185.8 $60.8 $15.1 $1,231.5
======== ===== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Statement Fair
Value Value
--------- ----------
(in millions)
Due in one year or less................................. $ 72.4 $ 72.5
Due after one year through five years................... 424.2 427.7
Due after five years through ten years.................. 428.5 419.5
Due after ten years..................................... 252.1 225.1
-------- --------
1,177.2 1,144.8
Mortgage-backed securities.............................. 223.3 222.1
-------- --------
$1,400.5 $1,366.9
======== ========

At December 31, 2000, bonds with an admitted asset value of $9.6 million were
on deposit with state insurance departments to satisfy regulatory requirements.

Bonds with amortized cost of $5.1 million were non-income producing for the
twelve months ended December 31, 2000.

Statement Geographic Statement
Property Type Value Concentration Value
- ------------- ------------- ------------- ---------------
(In Millions) (In Millions)

Apartments................ $ 93.7 East North Central........ $ 64.3
Hotels.................... 13.0 East South Central........ 20.9
Industrial................ 63.5 Middle Atlantic........... 20.9
Office buildings.......... 84.7 Mountain.................. 27.0
Retail.................... 35.4 New England............... 23.4
Agricultural.............. 142.5 Pacific................... 108.0
Other..................... 23.2 South Atlantic............ 120.7
------
West North Central........ 16.0
West South Central........ 51.5
Other..................... 3.3
------
$456.0 $456.0
====== ======

John Hancock Variable Life Insurance Company

Notes To Statutory-basis Financial Statements (continued)

Note 6. Investments (continued)

Note 7. Reinsurance

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

John Hancock Variable Life Insurance Company

Notes To Statutory-basis Financial Statements (continued)

NOTE 8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments were as follows at December 31:

Contracts/ Assets (Liabilities)
Notional Amounts 2000
---------------- ---------------------
Carrying Fair
2000 Value Value
---------------- ----------- --------
($ in millions)
Futures contracts to sell
securities............................ $ -- $ -- $ --
Futures contracts to buy securities.... 43 0.1 0.1
Interest rate swap agreements.......... $1,150.0 --
Interest rate cap agreements........... 239.4 2.1 2.1
Currency rate swap agreements.......... 22.3 -- (0.6)
Equity collar agreements............... -- 0.4 0.4
Interest rate floor agreements......... 361.4 1.4 1.4

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1999
---------------- ---------------------
Carrying Fair
1999 Value Value
---------------- ----------- --------
($ in millions)

Futures contracts to sell
securities............................ 362 $0.6 $ 0.6
Interest rate swap agreements......... $965.0 -- 11.5
Interest rate cap agreements.......... 239.4 5.6 5.6
Currency rate swap agreements......... 15.8 -- (1.6)

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1998
---------------- --------------------
Carrying Fair
1998 Value Value
---------------- ---------- --------
($ in millions)

Futures contracts to sell securities... 947 $(0.5) $ (0.5)
Interest rate swap agreements.......... $365.0 -- (17.7)
Interest rate cap agreements........... 89.4 3.1 3.1
Currency rate swap agreements.......... 15.8 -- (3.3)

100

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk (continued)

The Company invests in common stock that is subject to fluctuations from
market value changes in stock prices. The Company sometimes seeks to reduce its
market exposure to such holdings by entering into equity collar agreements. A
collar consists of a call that limits the Company's potential gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The futures contracts expire in 2001. The interest rate swap agreements
expire in 2000 to 2011. The interest rate cap agreements expire in 2006 to 2008.
The currency rate swap agreements expire in 2006 to 2015. The equity collar
agreements expire in 2005.

Note 9. Policy Reserves, Policyholders' and Beneficiaries' Funds and Obligations
Related to Separate Accounts

The Company's annuity reserves and deposit fund liabilities that are
subject to discretionary withdrawal, with and without adjustment, are summarized
as follows:

December 31, 2000 Percent
----------------- ---------
(in millions)

Subject to discretionary withdrawal (with
adjustment)......................................
With market value adjustment...................... $ 30.3 1.1%
At book value less surrender charge............... 54.7 2.1
At market value................................... 2,250.3 84.8
-------- -----
Total with adjustment............................ 2,335.3 88.0
Subject to discretionary withdrawal at book value
(without adjustment).............................. 312.8 11.8
Not subject to discretionary withdrawal--general
account........................................... 7.1 0.2
-------- -----
Total annuity reserves and deposit liabilities... $2,655.2 100.0%
======== =====

101

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 10. Commitments and Contingencies

During 1997, John Hancock entered into a court-approved settlement relating
to a class action lawsuit involving certain individual life insurance policies
sold from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. During 1999, the Company recorded a $194.9
million reserve, through a direct charge to its unassigned deficit, representing
the Company's share of the settlement and John Hancock contributed $194.9
million of capital to the Company. The reserve held at December 31, 2000
amounted to $39.5 million and is based on a number of factors, including the
estimated cost per claim and the estimated costs to administer the claims.

Given the uncertainties associated with estimating the reserve, it is
reasonably possible that the final cost of the settlement could differ
materially from the amounts presently provided for by the Company. John Hancock
and the Company will continue to update their estimate of the final cost of the
settlement as claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at this
time, and the uncertainties associated with the final claim processing and
alternative dispute resolution, the range of any additional costs related to the
settlement cannot be estimated with precision. If the Company's share of the
settlement increases, John Hancock will contribute additional capital to the
Company so that the Company's total stockholder's equity would not be impacted.

102

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments

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

Assets
Bonds--Note 6....................... $1,400.5 $1,366.9 $1,216.3 $1,163.2
Preferred stocks--Note 6............ 44.0 41.6 35.9 35.9
Common stocks--Note 6............... 2.8 2.8 3.2 3.2
Mortgage loans on real estate--Note
6.................................. 456.0 467.3 433.1 421.7
Policy loans--Note 1................ 218.9 218.9 172.1 172.1
Cash items--Note 1.................. 272.0 272.0 250.1 250.1

Derivatives assets (liabilities)
relating to: Note 8
Futures contracts................... 0.1 0.1 0.6 0.6
Interest rate swaps................. -- (0.4) -- 11.5
Currency rate swaps................. -- (0.6) -- (1.6)
Interest rate caps.................. 2.1 2.1 5.6 5.6
Equity collar agreements............ -- 0.4 -- --

Liabilities
Commitments--Note 10................ -- 56.4 -- 19.4

103

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments (continued)

December 31
--------------------
1998
--------------------
Carrying Fair
Amount Value
--------- ---------
(in millions)

Liabilities
Commitments--Note 10................................... -- 32.1

104

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I--SUMMARY OF INVESTMENTS--
OTHER THAN INVESTMENTS IN RELATED PARTIES

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Type of Investment Cost (2) Value Balance Sheet
------------------ -------- ----- ---------------

Fixed maturity securities, available-for-sale:
Bonds:
United States government and government agencies and authorities.... 16.1 16.7 16.7
States, municipalities and political subdivisions................... 6.8 6.7 6.7
Foreign governments................................................. 11.1 10.8 10.8
Public utilities.................................................... 49.1 50.1 50.1
Convertibles and bonds with warrants attached....................... 13.7 13.6 13.6
All other corporate bonds........................................... 877.1 871.5 871.5
Certificates of deposits............................................ 0.0 0.0 0.0
Redeemable preferred stock.......................................... 44.9 42.4 42.4
------- ------- -------
Total fixed maturity securities, available-for-sale................. 1,018.8 1,011.8 1,011.8
------- ------- -------

Equity securities, available-for-sale:
Common stocks:
Public utilities.................................................... 0.0 0.0 0.0
Banks, trust and insurance companies................................ 0.0 0.0 0.0
Industrial, miscellaneous and all other............................. 4.0 4.8 4.8
Non-redeemable preferred stock...................................... 3.1 3.3 3.3
------- ------- -------
Total equity securities, available-for-sale......................... 7.1 8.1 8.1
------- ------- -------

Fixed maturity securities, held-to-maturity:
Bonds:
United States government and government agencies and authorities.... 0.0 0.0 0.0
States, municipalities and political subdivisions................... 1.9 1.9 1.9
Foreign governments................................................. 0.0 0.0 0.0
Public utilities.................................................... 42.5 43.4 42.5
Convertibles and bonds with warrants attached....................... 13.3 11.1 13.3
All other corporate bonds........................................... 657.7 630.4 657.7
Certificates of deposits............................................ 0.0 0.0 0.0
Redeemable preferred stock.......................................... 0.0 0.0 0.0
------- ------- -------
Total fixed maturity securities, held-to-maturity................... 715.4 686.8 715.4
------- ------- -------

Equity securities, trading:
Common stocks:
Public utilities....................................................
Banks, trust and insurance companies................................
Industrial, miscellaneous and all other.............................
Non-redeemable preferred stock......................................
Total equity securities, trading.................................... 0.0 0.0 0.0
------- ------- -------
Mortgage loans on real estate, net (1).............................. 559.8 XXXX 554.8

105

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES (continued)

As of December 31, 2000
(In millions of dollars)

Amount at Which
Shown in the
Consolidated
Cost (2) Value Balance Sheet
-------- ----- ---------------

Real estate, net:
Investment properties (1)........................................... 23.9 XXXX 23.9
Acquired in satisfaction of debt (1)................................ 0.0 XXXX 0.0
Policy loans........................................................ 334.2 XXXX 334.2
Other long-term investments (2)..................................... 34.8 XXXX 34.8
Short-term investments.............................................. 21.7 XXXX 21.7
------- ------- -------
Total investments.................................................. 2,715.7 1,706.7 2,704.7
======= ======= =======

See accompanying independent auditors' report.

106

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III--SUPPLEMENTARY INSURANCE INFORMATION

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

GAAP
2000:
Protection............. $819.3 $2,698.4 $212.0 $11.1 $ 28.6
Asset Gathering........ 174.8 70.0 -- -- --
------ -------- ------ ----- --------
Total................. $994.1 $2,768.4 $212.0 $11.1 $ 28.6
------ -------- ------ ----- --------
Statutory Basis
2000:
Variable Products..... N/A $2,206.0 $ 8.8 $16.4 $ 945.4
------ -------- ------ ----- --------
1999:
Variable Products..... N/A $1,864.9 $ 3.9 $15.4 $ 950.8
------ -------- ------ ----- --------
1998:
Variable Products..... N/A $1,651.7 $ 2.3 $13.1 $1,272.3
------ -------- ------ ----- --------

107

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III--SUPPLEMENTARY INSURANCE INFORMATION (continued)

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

Amortization of
Benefits, Deferred Policy
Claims, Losses, Acquisition Costs,
Net and Excluding Amounts Other
Investment Settlement Related To Realized Operating
Segment Income Expenses Investment Gains Expenses
------- ---------- --------------- ------------------- ---------

GAAP
2000:
Protection............ $215.9 $ 242.2 $17.6 $100.5
Asset Gathering....... (2.5) 6.4 16.4 16.3
------ -------- ----- ------
Total................ $213.4 $ 248.6 $34.0 $116.8
------ -------- ----- ------
Statutory Basis
2000:
Variable Products.... $176.7 $1,185.2 N/A $389.2
------ -------- ----- ------
1999:
Variable Products.... $136.0 $1,238.7 N/A $334.9
------ -------- ----- ------
1998:
Variable Products.... $122.8 $1,661.6 N/A $302.3
------ -------- ----- ------

108

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV -- REINSURANCE

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Assumed
Amount Companies Companies Net Amount to Net
------ --------- --------- ---------- ----------

GAAP
2000
Life insurance in force...................... $98,737.2 $39,495.8 $37.1 $59,278.5 0.1%
--------- --------- ----- --------- ---
Premiums:
Life insurance............................... $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
Accident and health insurance......... ...... -- -- -- -- 0.0%
P&C.......................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total...................................... $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
========= ========= ===== ========= ===
Statutory Basis
2000
Life insurance in force...................... $96,574.3 $38,059.7 $ -- $58,514.6 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance............................... $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
Accident and health insurance................ -- -- -- -- 0.0%
P&C.......................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total...................................... $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
========= ========= ===== ========= ===
1999
Life insurance in force...................... $74,831.8 $ 8,995.0 $ -- $55,836.8 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance............................... $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
Accident and health insurance................ -- -- -- -- 0.0%
P&C.......................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total...................................... $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
========= ========= ===== ========= ===

109

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV--REINSURANCE (continued)

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded To Assumed Of Amount
Gross Other From Other Net Assumed
Amount Companies Companies Amount To Net
------ --------- --------- ------ ----------

1998
Life insurance in force.............. $62,628.7 $15,302.1 $ -- $47,326.6 0.0%
--------- --------- ---- --------- ---
Premiums:
Life insurance....................... $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
Accident and health insurance........ -- -- -- -- 0.0%
P&C.................................. -- -- -- -- 0.0%
--------- --------- ---- --------- ---
Total.............................. $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
========= ========= ==== ========= ===

See accompanying independent auditors' report.

110

APPENDIX A - DETAILS ABOUT OUR GUARANTEE PERIODS

Investments that support our guarantee periods

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
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period

111

Computation of market value adjustment

where,

. g is the guaranteed rate in effect for the current guarantee period.

. c is the current guaranteed rate in effect for new guarantee periods
with duration equal to the number of years remaining in the current
guarantee period (rounded to the nearest whole number of years). If we
are not currently offering such a guarantee period, 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 guarantee period. (If less than one complete month
remains, n equals one unless the withdrawal is made on the last day of
the guarantee period, in which case no adjustment applies.)

Sample Calculation 1: Positive Adjustment

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment):
$10,000 + $234.73 = $10,234.73

112

Sample Calculation 2: Negative Adjustment

- --------------------------------------------------------------------------------
Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------
Guaranteed rate for new 5 year 9%
guarantee (c)
- --------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- --------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment):
$10,000- 666.42 = $9,333.58

Sample Calculation 3: Negative Adjustment

- --------------------------------------------------------------------------------
Amount withdrawn or transferred $10,000
- --------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- --------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- --------------------------------------------------------------------------------
Guaranteed rate for new 5 year 7.75%
guarantee (c)
- --------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- --------------------------------------------------------------------------------

Market value adjustment:

Amount withdrawn or transferred (adjusted for market value adjustment):
$10,000- 114.94 = $9,885.06

__________________________________________________________________________

*All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we
are actually guaranteeing at any time.

113

APPENDIX B - EXAMPLE OF WITHDRAWAL CHARGE CALCULATION

Assume the following facts:

On January 1, 2001, you make a $5,000 initial premium payment and we issue
you a contract.
On January 1, 2002, you make a $1,000 premium payment
On January 1, 2003, you make a $1,000 premium payment.
On January 1, 2004, the total value of your contract is $7,500 because of
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 $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 premiums you have paid)
under the free withdrawal provision.

2. Next we repay to you the $5,000 premium you paid in 2001 Under the free
withdrawal provision, $200 of that premium is charge free ($7,000 total
premiums 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 premium. Because you made
that premium 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 premium 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 premium payment (payable to us)

$4,800
- 192
------
$4,608 -- part of withdrawal request payable to you

3. We next deem the entire amount of your 2002 PREMIUM PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1,000 amount.
Because you made this premium 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 premium 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 premium payment (payable to us)

$1,000
- 50
------
$ 950 -- part of withdrawal request payable to you

4. 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

114

paragraph 2, $4,608 from your 2001 premium payment under paragraph 2, and
$950 from your 2003 premium 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 premium payment
- 950 -- payment deemed from 2002 premium payment
------
$ 742 -- additional payment to you needed to reach $7,000

We know that the withdrawal charge percentage for this remaining amount is
6%, because you are already deemed to have withdrawn all premiums 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]

$742 = x - [.06x]
$742 = .94x
$742/.94 = x
$789.36 = x

$789.36 -- deemed withdrawn from 2003 premium payment
- $742.00 -- part of withdrawal request payable to you
---------
$ 47.36 -- withdrawal charge on 2003 premium deemed withdrawn (payable to
us)

115

Prospectus dated May 1, 2001

- --------------------------------------------------------------------------------
PATRIOT VARIABLE ANNUITY
- --------------------------------------------------------------------------------

a deferred combination fixed and variable annuity contract
issued by
John Hancock Variable Life Insurance Company ("JHVLICO")

The contract enables you to earn fixed rates of interest that we guarantee
for stated periods of time ("guaranteed periods") and investment-based
returns in the following variable investment options:

- -------------------------------------------------------------------------------------------------------------
Variable Investment Option Managed By
- -------------------------- ----------

Equity Index....................................... SSgA Funds Management, Inc.
V.A. Core Equity................................... Independence Investment LLC
Large Cap Value.................................... T. Rowe Price Associates, Inc.
Large Cap Growth................................... Independence Investment LLC
Large/Mid Cap Value II............................. Wellington Management Company, LLP
Mid Cap Growth..................................... Janus Capital Corporation
Small/Mid Cap CORE(SM)............................. Goldman Sachs Asset Management
Small Cap Equity................................... Capital Guardian Trust Company
V.A. Bond.......................................... John Hancock Advisers, Inc.
V.A. Sovereign Investors........................... John Hancock Advisers, Inc.
V.A. Relative Value................................ John Hancock Advisers, Inc.
International Equity Index......................... Independence Investment LLC
International Opportunities........................ T. Rowe Price International, Inc.
Emerging Markets Equity............................ Morgan Stanley Dean Witter Investment Management, Inc.
Real Estate Equity................................. Independence Investment LLC and Morgan Stanley Dean
Witter Investment Management, Inc.
V.A. Financial Industries.......................... John Hancock Advisers, Inc.
Managed............................................ Independence Investment LLC and Capital Guardian Trust
Company
Global Balanced.................................... Capital Guardian Trust Company
Short-Term Bond.................................... Independence Investment LLC
Bond Index......................................... Mellon Bond Associates, LLP
V.A. Strategic Income.............................. John Hancock Advisers, Inc.
High Yield Bond.................................... Wellington Management Company, LLP
Global Bond........................................ Capital Guardian Trust Company
V.A. Money Market.................................. John Hancock Advisers, Inc.
V.A. Small Cap Growth.............................. John Hancock Advisers, Inc.
V.A. Mid Cap Growth................................ John Hancock Advisers, Inc.
V.A. Large Cap Growth.............................. John Hancock Advisers, Inc.
V.A. High Yield Bond............................... John Hancock Advisers, Inc.
- -------------------------------------------------------------------------------------------------------------

The variable investment options shown on page 1 are those available as of
the date of this prospectus. We may add, modify or delete variable investment
options in the future.

When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of one or more of the
following: the John Hancock Declaration Trust and the John Hancock Variable
Series Trust I (together, the " Series Funds"). In this prospectus, the
investment options of the Series Funds are referred to as funds. In the
prospectuses for the Series Funds, the investment options may also be referred
to as "funds," "portfolios" or "series."

John Hancock Annuity Servicing Office
-------------------------------------

Mail Delivery Phone:
------------- ------
1-800-824-0335
529 Main Street (X-4)
Charlestown, MA 02129 Fax:
----
1-617-886-3070

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

Please note that the SEC has not approved or disapproved these securities,
or determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged the
prospectus in the following way:

. The first section contains an "Index of Key Words."

. Behind the index is the "Fee Table." This section highlights the
various fees and expenses you will pay directly or indirectly, if you
purchase a contract.

. The next section is called "Basic Information." It contains basic
information about the contract presented in a question and answer
format. You should read the Basic Information before reading any
other section of the prospectus.

. Behind the Basic Information is "Additional Information." This
section gives more details about the contract. It generally does not
repeat information contained in the Basic Information.

. "Condensed Financial Information" follows the "Additional
Information." This gives some basic information about the size and
past performance of the variable investment options.

The Series Funds' prospectuses are attached at the end of this prospectus. You
should save these prospectuses for future reference.

- --------------------------------------------------------------------------------
IMPORTANT NOTICES

This is the prospectus - it is not the contract. The prospectus simplifies
many contract provisions to better communicate the contract's essential
features. Your rights and obligations under the contract will be determined by
the language of the contract itself. On request, we will provide the form of
contract for you to review. In any event, when you receive your contract, we
suggest you read it promptly.

We've also filed with the SEC a "Statement of Additional Information,"
dated May 1, 2001. This Statement contains detailed information not included in
the prospectus. Although a separate document from this prospectus, the Statement
of Additional Information has the same legal effect as if it were a part of this
prospectus. We will provide you with a free copy of the Statement upon your
request. To give you an idea what's in the Statement, we have included a copy of
the Statement's table of contents on page 46.

The contracts are not available in all states. 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.
- --------------------------------------------------------------------------------

INDEX OF KEY WORDS

We define or explain each of the following key words used in this
prospectus on the pages shown below:

Key Word Page

Accumulation units................................................. 24
Annuitant.......................................................... 10
Annuity payments................................................... 27
Annuity period..................................................... 12
Contract year...................................................... 10
Date of issue...................................................... 10
Date of maturity................................................... 24
Free withdrawal amount............................................. 16
Funds.............................................................. 2
Guarantee periods.................................................. 2
Investment options................................................. 14
Market value adjustment............................................ 12
Premium payments................................................... 10
Surrender.......................................................... 16
Surrender value.................................................... 17
Variable investment options........................................ cover
Withdrawal......................................................... 17
Withdrawal charge.................................................. 17

FEE TABLE

Owner Transaction Expenses and Annual Contract Fee

. Maximum Withdrawal Charge (as % of amount withdrawn) 6%

. Annual Contract Fee (applies only to contracts of less than $10,000) $30

Annual Contract Expenses (as a % of the average total value of the contract)

Initial Premium Payment less than $250,000
------------------------------------------

. Mortality and Expense Risk Charge 0.90%
. Administrative Services Charge 0.35%
-----
. Total Annual Contract Charge 1.25%

Initial Premium Payment $250,000 or more
----------------------------------------

. Mortality and Expense Risk Charge 0.90%
. Administrative Services Charge 0.10%
-----
. Total Annual Contract Charge 1.00%

These annual contract expenses don't apply to amounts held in the guarantee
periods.

Annual Fund Expenses (based on % of average net assets)

The following figures for the funds are based on historical fund expenses,
as a percentage (rounded to two decimal places) of each fund's average daily net
assets for 2000, except as indicated in the Notes appearing at the end of this
table. Expenses of the funds are not fixed or specified under the terms of the
policy, and those expenses may vary from year to year.

Total Fund
Total Fund Operating
Investment Distribution and Other Operating Operating Expenses
Management Service Expenses With Expenses With Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement
- --------- ---------- ---------------- --------------- -------------- -------------

John Hancock Variable Series Trust I (Note 1):
Equity Index ....................................... 0.13% N/A 0.06% 0.19% 0.19%
Large Cap Value..................................... 0.75% N/A 0.05% 0.80% 0.80%
Large Cap Growth ................................... 0.36% N/A 0.10% 0.46% 0.46%
Large Cap Aggressive Growth......................... 0.90% N/A 0.10% 1.00% 1.05%
Large/Mid Cap Value II*............................. 0.81% N/A 0.07% 0.88% 0.88%
Mid Cap Growth...................................... 0.81% N/A 0.04% 0.85% 0.85%
Small/Mid Cap CORE(SM).............................. 0.80% N/A 0.10% 0.90% 1.23%
Small Cap Equity*................................... 0.90% N/A 0.10% 1.00% 1.03%
----------------

John Hancock Variable Series Trust I (Note 1) -
Continued:
International Equity Index.......................... 0.18% N/A 0.10% 0.28% 0.37%
International Opportunities......................... 0.83% N/A 0.10% 0.93% 1.09%
Emerging Markets Equity............................. 1.22% N/A 0.10% 1.32% 2.49%
Real Estate Equity.................................. 1.01% N/A 0.09% 1.10% 1.10%
Managed............................................. 0.66% N/A 0.09% 0.75% 0.75%
Global Balanced..................................... 1.05% N/A 0.10% 1.15% 1.44%
Short-Term Bond..................................... 0.30% N/A 0.06% 0.36% 0.36%
Bond Index.......................................... 0.15% N/A 0.10% 0.25% 0.27%
High Yield Bond..................................... 0.65% N/A 0.10% 0.75% 0.87%
Global Bond......................................... 0.85% N/A 010% 0.95% 1.05%

John Hancock Declaration Trust (Note 2):
V.A. Core Equity.................................... 0.70% N/A 0.15% 0.85% 0.85%
V.A. Bond........................................... 0.50% N/A 0.25% 0.75% 0.92%
V.A. Sovereign Investors............................ 0.60% N/A 0.12% 0.72% 0.72%
V.A. Relative Value................................. 0.60% N/A 0.19% 0.79% 0.79%
V.A. Financial Industries........................... 0.80% N/A 0.10% 0.90% 0.90%
V.A. Strategic Income............................... 0.60% N/A 0.16% 0.76% 0.76%
V.A. Money Market................................... 0.50% N/A 0.10% 0.60% 0.60%
V.A. Small Cap Growth............................... 0.75% N/A 0.25% 1.00% 1.10%
V.A. Mid Cap Growth................................. 0.75% N/A 0.25% 1.00% 1.10%
V.A. Large Cap Growth............................... 0.75% N/A 0.21% 0.96% 0.96%
V.A. High Yield Bond................................ 0.60% N/A 0.25% 0.85% 1.24%
--------------

Notes To Annual Fund Expenses
(1) Under its current investment management agreements with the John
Hancock Variable Series Trust I, John Hancock Life Insurance Company
reimburses a fund when the fund's "other fund expenses" exceed 0.10%
of the fund's average daily net assets (0.00% for Equity Index).
Percentages shown for the Small Cap Equity, Real Estate Equity,
Managed, Global Balanced and Global Bond funds are calculated as if
the current management fee schedules, which apply to these funds
effective November 1, 2000, were in effect for all of 2000.
Percentages shown for the Large Cap Value and Large/Mid Cap Value II
funds are calculated as if the current management fee schedules, which
apply to these funds effective May 1, 2001, were in effect for all of
2000. "CORE(SM)" is a service mark of Goldman, Sachs & Co.

* Small Cap Equity was formerly "Small Cap Value" and Large/Mid Cap
Value II was formerly "Mid Cap Value."

Examples

should not be considered representations of past or future expenses; actual
charges may be greater or less than those shown above. The examples assume fund
expenses at rates set forth above for 2000, after reimbursements. The annual
contract fee has been included as an annual percentage of assets.

If you "surrender" (turn in) your contract at the end of the applicable
time period, you would pay:

1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------

Equity Index $69 $ 91 $115 $174
- --------------------------------------------------------------------
V.A. Core Equity $75 $111 $149 $244
- --------------------------------------------------------------------
Large Cap Value $75 $109 $147 $239
- --------------------------------------------------------------------
Large Cap Growth $72 $ 99 $129 $203
- --------------------------------------------------------------------
Large/Mid Cap Value II $76 $112 $151 $248
- --------------------------------------------------------------------
Mid Cap Growth $75 $111 $149 $244
- --------------------------------------------------------------------
Small/Mid Cap CORE(SM) $76 $112 $152 $250
- --------------------------------------------------------------------
Small Cap Equity $77 $115 $157 $260
- --------------------------------------------------------------------
V.A. Bond $74 $108 $144 $234
- --------------------------------------------------------------------
V.A. Sovereign Investors $74 $107 $142 $231
- --------------------------------------------------------------------
V.A. Relative Value $75 $109 $146 $238
- --------------------------------------------------------------------
International Equity Index $70 $ 93 $120 $184
- --------------------------------------------------------------------
International Opportunities $76 $113 $153 $253
- --------------------------------------------------------------------
Emerging Markets Equity $80 $125 $173 $292
- --------------------------------------------------------------------
Real Estate Equity $78 $118 $162 $270
- --------------------------------------------------------------------
V.A. Financial Industries $76 $112 $152 $250
- --------------------------------------------------------------------
Managed $74 $108 $144 $234
- --------------------------------------------------------------------
Global Balanced $78 $120 $164 $275
- --------------------------------------------------------------------
Short-Term Bond $71 $ 96 $124 $193
- --------------------------------------------------------------------
Bond Index $69 $ 92 $118 $181
- --------------------------------------------------------------------
V.A. Strategic Income $75 $108 $144 $235
- --------------------------------------------------------------------
High Yield Bond $74 $108 $144 $234
- --------------------------------------------------------------------
Global Bond $76 $114 $154 $255
- --------------------------------------------------------------------
V.A. Money Market $73 $103 $136 $218
- --------------------------------------------------------------------
V.A. Small Cap Growth $77 $115 $157 $260
- --------------------------------------------------------------------
V.A. Mid Cap Growth $77 $115 $157 $260
- --------------------------------------------------------------------
V.A. Large Cap Growth $77 $114 $155 $256
- --------------------------------------------------------------------
V.A. High Yield Bond $75 $111 $149 $244
- --------------------------------------------------------------------

If you begin receiving payments under one of our annuity payment options at
the end of the applicable time period, or if you do not surrender your contact,
you would pay: :

1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------

Equity Index $15 $46 $ 79 $174
- --------------------------------------------------------------------
V.A. Core Equity $21 $66 $114 $244
- --------------------------------------------------------------------
Large Cap Value $21 $65 $111 $239
- --------------------------------------------------------------------
Large Cap Growth $18 $54 $ 94 $203
- --------------------------------------------------------------------
Large/Mid Cap Value II $22 $67 $115 $248
- --------------------------------------------------------------------
Mid Cap Growth $21 $66 $114 $244
- --------------------------------------------------------------------
Small/Mid Cap CORE(SM) $22 $68 $116 $250
- --------------------------------------------------------------------
Small Cap Equity $23 $71 $121 $260
- --------------------------------------------------------------------
V.A. Bond $20 $63 $108 $234
- --------------------------------------------------------------------
V.A. Sovereign Investors $20 $62 $107 $231
- --------------------------------------------------------------------
V.A. Relative Value $21 $64 $110 $238
- --------------------------------------------------------------------
International Equity Index $16 $49 $ 84 $184
- --------------------------------------------------------------------
International Opportunities $22 $69 $118 $253
- --------------------------------------------------------------------
Emerging Markets Equity $26 $80 $137 $292
- --------------------------------------------------------------------
Real Estate Equity $24 $74 $126 $270
- --------------------------------------------------------------------
V.A. Financial Industries $22 $68 $116 $250
- --------------------------------------------------------------------
Managed $20 $63 $108 $234
- --------------------------------------------------------------------
Global Balanced $24 $75 $129 $275
- --------------------------------------------------------------------
Short-Term Bond $17 $51 $ 88 $193
- --------------------------------------------------------------------
Bond Index $15 $48 $ 83 $181
- --------------------------------------------------------------------
V.A. Strategic Income $21 $63 $109 $235
- --------------------------------------------------------------------
High Yield Bond $20 $63 $108 $234
- --------------------------------------------------------------------
Global Bond $22 $69 $119 $255
- --------------------------------------------------------------------
V.A. Money Market $19 $59 $101 $218
- --------------------------------------------------------------------
V.A. Small Cap Growth $23 $71 $121 $260
- --------------------------------------------------------------------
V.A. Mid Cap Growth $23 $71 $121 $260
- --------------------------------------------------------------------
V.A. Large Cap Growth $23 $70 $119 $256
- --------------------------------------------------------------------
V.A. High Yield Bond $21 $66 $114 $244
- --------------------------------------------------------------------

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked
questions about the contract. Here are the page numbers where the questions and
answers appear:

Question Starting on page
-------- ----------------

What is the contract?........................................................ 10

Who owns the contract?....................................................... 10

Is the owner also the annuitant?............................................. 10

How can I invest money in a contract?........................................ 10

How will the value of my investment in the contract change over time?........ 12

What annuity benefits does the contract provide?............................. 12

To what extent can JHVLICO vary the terms and conditions of the contracts?... 13

What are the tax consequences of owning a contract?.......................... 13

How can I change my contract's investment allocations?....................... 14

What fees and charges will be deducted from my contract?..................... 15

How can I withdraw money from my contract?................................... 17

What happens if the annuitant dies before my contract's date of maturity?.... 19

What is the Contract?

The contract is a deferred payment variable annuity contract. 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 "date of
maturity." 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?

Is the owner also the annuitant?

How can I invest money in a contract?

Premium payments

We call the investments you make in your contract premiums or premium
payments. In general, you need at least a $1,000 initial premium payment to
purchase a contract. If you choose to contribute more money into your contract,
each subsequent premium payment must also be at least $500. If you deposit
money directly from your bank account, your subsequent premium payments can be
as small as $100.

Applying for a contract

In certain situations, we will issue a contract upon receiving the order
from your broker-dealer or financial institution but delay the effectiveness of
the contract until we receive your signed application. In those situations, if
we do not receive your signed application within our required time period, we
will deem the contract void from the beginning and return your premium payment.

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.

Limits on premium payments

You can make premium payments of up to $1,000,000 in any one contract year.
The total of all new premium payments and transfers that you allocate to any one
variable 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 premium
payments at any time until the annuitant reaches age 84 1/2. However,

----------------------------------------------------------------------------
you may not make any premium
payments after the annuitant
if your contract is used to fund reaches age
----------------------------------------------------------------------------

a "tax qualified plan"* 70 1/2**
----------------------------------------------------------------------------
a non-tax qualified plan 84 1/2
----------------------------------------------------------------------------

* as that term is used in "Tax Information," beginning on page 27.
** except for a Roth IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than age
84. We may waive any of these limits, however.

Ways to make premium payments

Premium 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."

We will not accept credit card checks. Nor will we accept starter or third
party checks that fail to meet our administrative requireements. Premium
payments after the initial premium payment should be sent to the John Hancock
Annuity Servicing Office at the address shown on page 2 of this prospectus. We
will also accept premium payments by wire. We will accept your initial premium
payment by exchange from another insurance company. You can find information
about wire payments under "Premium payments by wire," below. You can find
information about other methods of premium payment by contacting your broker-
dealer or by contacting the John Hancock Annuity Servicing Office.

Once we have issued your contract and it becomes effective, we credit you
with any additional premiums you pay as of the day we receive them at the John
Hancock Annuity Servicing Office.

Premium payments by wire

. issue a contract;

. accept premium payments; or

. allow other transactions.

How will the value of my investment in the contract change over time?

Like a regular mutual fund, each fund deducts investment management fees
and other operating expenses. These expenses are shown in the fee table on page
5. 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 under "What fees and
charges will be deducted from my contract?" beginning on page 15.

At any time before the date of maturity, the total value of your contract
equals

. the total amount you invested,

. 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 guarantee
period,

. plus or minus each variable investment option's positive or negative
investment return that we credit daily to any of your contract's value
daily while it is in that option, and

. plus the interest we credit to any of your contract's value while it is in
a guarantee period.

What annuity benefits does a contract provide?

You should carefully review the discussion under "The annuity period,"
beginning on page 24, for information about all of these choices you can make.

To what extent can JHVLICO vary the terms and conditions of its contracts?

State law insurance requirements

Variations in charges or rates

What are the tax consequences of owning a contract?

. partial withdrawal (including systematic withdrawals)

. full withdrawal ("surrender")

. payment of death benefit proceeds as a single sum upon the annuitant's
death

. 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 tax qualified retirement plan for which the contract is
being used

. the circumstances under which the payments are made

If your contract is issued in connection with a tax-qualified retirement
plan, all or part of your premium payments may be tax-deductible.

How can I change my contract's investment allocations?

Allocation of premium payments

Currently, you may use a maximum of 18 investment options over the life of
your contract. For purposes of this limit, each contribution or transfer of
assets into a variable investment option or guarantee period that you are not
then using counts as one "use" of an investment option, even if you had used
that option at an earlier time. Renewing a guarantee period upon its expiration
does not count as a new use, however, if the new guarantee period has the same
number of years as the expiring one.

Transferring your assets

Up to 12 times during each year of your contract, you may transfer

. all or part of the assets held in one variable investment option to any
other available variable investment option or guarantee period, or

Transfers under our dollar cost averaging program do not count toward the
12 you are allowed each year. However, you may not:

. transfer assets within 30 days prior to the contract's date of maturity,

. transfer more than $1,000,000 in a contract year from any one variable
investment option or guarantee period, without our prior approval,

. make any transfer that would cause you to exceed the above-mentioned
maximum of 18 investment options,

. make any transfers, during the annuity period, to or from a fixed
investment option, or

. make any transfer during the annuity period that would result in more than
four investment options being used at once.

The contract you are purchasing was not designed for professional market
timing organizations or other persons or entities that use programmed or
frequent transfers. The use of such transfers may be disruptive to a Fund. We
reserve the right to reject any premium payment or transfer request from any
person, if in our judgment, a Fund would be unable to invest effectively in
accordance with its investment objectives and policies, or would otherwise be
potentially adversely affected.

Procedure for transferring your assets

. your name,

. daytime telephone number,

. contract number,

. the names of the investment options being transferred to and from each, and

. the amount of each transfer.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

Telephone transfers

What fees and charges will be deducted from my contract?

Mortality and expense risk charge

We deduct a daily charge that compensates us primarily for mortality and
expense risks that we assume under the contracts. On an annual basis, this
charge equals 0.90% of the value of the assets you have allocated to the
variable investment options. (This charge does not apply to assets you have in
our guarantee periods.)

In return for mortality risk charge, we assume the risk that annuitants as
a class will live longer than expected, requiring us to a pay 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.

Administrative services charge

We deduct a daily charge for administrative and clerical services that the
contracts require us to provide.

On an annual basis, this charge equals 0.35% of the value of the assets you
have allocated to the variable investment options. (This charge does not apply
to assets you have in our guarantee periods.) However, if your initial premium
payment was more than $250,000, we reduce the charge to 0.10%.

Annual contract fee

Prior to the date of maturity of your contract, we will deduct $30 each
year from your contract if it has a total value of less than $10,000. We deduct
this annual contract fee at the beginning of each contract year after the first
contract year. We also deduct it if you surrender your contract. We take the
deduction proportionally from each variable investment option and each guarantee
period you are then using. We reserve the right to increase the annual contract
fee to $50.

Premium taxes

We make deductions for any applicable premium or similar taxes based on the
amount of a premium payment. Currently, certain local jurisdictions assess a tax
of up to 5% of each premium payment.

Withdrawal charge

If you withdraw some money from your contract prior to the date of maturity
(a partial withdrawal) or if you surrender (turn in) your contract, in its
entirety, for cash prior to the date of maturity (a total withdrawal or
surrender), we may assess a withdrawal charge. Some people refer to this charge
as a "contingent deferred withdrawal load." We use this charge to help defray
expenses relating to the sales of the contracts, including commissions paid and
other distribution costs.

Here's how we determine the charge: In any contract year, you may withdraw
up to 10% of the total value of your contract (computed as of the beginning of
the contract year) without the assessment of any withdrawal charge. We refer to
this amount as the free withdrawal amount. However, if the amount you withdraw
or surrender totals more than the free withdrawal amount during the contract
year, we will assess a withdrawal charge on any amount of the excess that we
attribute to premium payments you made within seven years of the date of the
withdrawal or surrender.

The withdrawal charge percentage depends upon the number of years that have
elapsed from the date you paid the premium to the date of its withdrawal, as
follows:

7 or more.......................... 0%
------------------------------------------------------------
6 but less than 7.................. 2%
------------------------------------------------------------
5 but less than 6.................. 3%
------------------------------------------------------------
4 but less than 5.................. 4%
------------------------------------------------------------
3 but less than 4.................. 5%
------------------------------------------------------------
2 but less than 3.................. 5%
------------------------------------------------------------
less than 2........................ 6%
------------------------------------------------------------

* As a percentage of the amount of such premium that we consider to have
been withdrawn (including the withdrawal charge), as explained in the
text immediately below.

Solely for purposes of determining the amount of the withdrawal charge, we
assume that each withdrawal (together with any associated withdrawal charge) is
a withdrawal first from the earliest premium payment, and then from the next
----- ----
earliest premium payment, and so forth until all payments have been exhausted.
Once a premium payment has been considered to have been "withdrawn" under these
procedures, that premium payment will not enter into any future withdrawal
charge calculations. For this purpose, we also consider any amounts that we
deduct for the annual contract charge to have been withdrawals of premium
payments (which means that no withdrawal charge will ever be paid on those
amounts).

The amount of any withdrawal that exceeds any remaining premium payments
that have not already been considered as withdrawn will not be subject to any
withdrawal charge. This means that no withdrawal charge will apply to any
favorable investment experience that you have earned.

Here's how we deduct the withdrawal charge: We deduct the withdrawal charge
proportionally from each variable investment option and each guarantee period
- --------------
being reduced by the surrender or withdrawal. For example, if 60% of the
withdrawal amount comes from a Growth option and 40% from the V.A. Money Market
option, then we will deduct 60% of the withdrawal charge from the Growth option
and 40% from the V.A. 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 date of
maturity or to pay a death benefit;

. on certain withdrawals if you have elected the nursing home rider that
waives the withdrawal charge; 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
guarantee period 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 less. Similarly, if the MVA results in a downward
adjustment, we will compute any withdrawal charge as if you had withdrawn that
much more.

Other charges

We offer, subject to state availability, three optional benefit riders. We
charge a separate monthly charge for each rider selected. At the beginning of
each month, we charge an amount equal to 1/12/th/ of the following annual
percentages:

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

Stepped up death benefit* 0.15% of total value of your contract
---------------------------------------------------------------------------------------------------------------------
Accidental death benefit 0.10% of total value of your contract
---------------------------------------------------------------------------------------------------------------------
Nursing home waiver 0.05% of that portion of your contract's total value
attributable to premiums that are still subject to
surrender charges
---------------------------------------------------------------------------------------------------------------------

*Some people refer to this benefit as the "enhanced stepped-up
death benefit"

We deduct the charge proportionally from each of your investment options,
based on your value in each.

How can I withdraw money from my contract?

Surrenders and partial withdrawals

Prior to your contract's date of maturity, 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.

The surrender value of a contract is the total value of a contract, after
any market value adjustment, minus the annual contract fee and any applicable
-----
premium tax and withdrawal charges. We will determine the amount surrendered or
withdrawn as of the date we receive your request at the John Hancock Annuity
Servicing Office.

Certain surrenders and withdrawals may result in taxable income to you or
other tax consequences as described under "Tax information," beginning on page
27. 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.

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.

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. 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.

Nursing home waiver of withdrawal charge

If your state permits, you may purchase an optional nursing home waiver of
withdrawal charge rider when you apply for a contract. Under this rider, we
will waive withdrawal charge 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.

You may not purchase this rider if (1) you are older than 75 years at
application or (2) if you were confined to a nursing home within the past two
years.

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 withdrawal charge or market value adjustment that
would apply to an otherwise comparable non-systematic withdrawal. See "How will
the value of my investment in the contract change over time?" beginning on page
12, and "What fees and charges will be deducted from my contract?" beginning on
page 15. The same tax consequences also generally will apply.

The following conditions apply to systematic withdrawal plans:

. you may elect the plan only if the total value of your contract equals
$15,000 or more,

. 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.

Dollar cost averaging program

. you may elect the program only if the total value of your contract equals
$15,000 or more,

. the amount of each transfer must equal at least $250,

. you may change your dollar cost averaging 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 guarantee periods are not permitted.

We reserve the right to suspend or terminate the program at any time.

What happens if the annuitant dies before my contract's date of maturity?

Standard death benefit

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. The standard death benefit is the greater of:

. the total value of your contract, adjusted by any then-applicable market
value adjustment, or

. the total amount of premium payments made, minus any partial withdrawals
and related withdrawal charges.

We calculate the death benefit value as of the day we receive, in proper order
at the John Hancock Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Unless you have elected an optional method of settlement, we will pay the
death benefit in a single sum to the beneficiary you chose prior to the
annuitant's death. If you have not elected an optional method of settlement,
the beneficiary may do so. However, if the death benefit is less than $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,"
beginning on page 26.

Enhanced death benefit riders

"Stepped-up" death benefit rider

If you are under age 80 when you apply for your contract, you may elect to
enhance the standard death benefit by purchasing a stepped-up death benefit
rider. Under this rider, if the annuitant dies before the contract's date of
maturity, 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 premium
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 80 1/2.

You may elect this rider only when you apply for the contract and only if
this rider is available in your state. As long as the rider is in effect, you
will pay a monthly charge for this benefit. For a description of this charge,
refer to page 15 under "What fees and charges will be deducted from my
contract?" 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.

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 rider. In addition to any other death
benefit, this rider provides a benefit upon the accidental death of the
annuitant prior to the earlier of:

. the contract's date of maturity, and

. the annuitant's 80/th/ birthday.

Under this rider, 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 John Hancock Annuity
Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

You may elect this rider ONLY when you apply for the contract. As long as
the rider is in effect, you will pay a monthly charge for this benefit. For a
description of this charge, refer to page 17 under "What fees and charges will
be deducted from my contract?" 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.

ADDITIONAL INFORMATION

Contents of this Section Starting on Page

Description of JHVLICO.................................... 22

Who should purchase a contract............................ 22

How we support the variable investment options............ 22

How we support the guarantee periods...................... 23

How the guarantee periods work............................ 23

The accumulation period................................... 24

The annuity period........................................ 24

Variable investment option valuation procedures........... 26

Distribution requirements following death of owner........ 26

Miscellaneous provisions.................................. 27

Tax information........................................... 27

Further information about JHVLICO......................... 31

Management's discussion and analysis...................... 33

Performance information................................... 44

Reports................................................... 44

Voting privileges......................................... 44

Certain changes........................................... 45

Distribution of contracts................................. 45

Experts................................................... 46

Registration statement.................................... 46

Condensed financial information........................... 47

JHVLICO financial statements.............................. 54

Appendix A - Details About Our Guarantee Periods.......... 107

Appendix B - Examples of Withdrawal Charge Calculation.... 110

Description of JHVLICO

We are JHVLICO, a stock life insurance company organized, in 1979, under
the laws of the Commonwealth of Massachusetts. We have authority to transact
business in all states, except New York. We are a wholly-owned subsidiary of
John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life
insurance company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock became a
subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-
traded corporation. John Hancock's home office is at John Hancock Place, Boston,
Massachusetts 02117. At year end 2000, John Hancock's assets were approximately
$88 billion and it had invested approximately $575 million in JHVLICO in
connection with JHVLICO's organization and operation.

Who should purchase a contract?

We designed these contracts for individuals doing their own retirement
planning, including purchases under plans and trusts that do not qualify for
special tax treatment under the Internal Revenue Code of 1986 (the "Code"). We
provide general federal income tax information for contracts not purchased in
connection with a tax qualified retirement plan beginning on page 27. We also
designed the contracts for purchase under:

. traditional individual retirement annuity plans ("traditional IRAs")
satisfying the requirements of Section 408 of the Code;

. non-deductible IRA plans ("Roth IRAs") satisfying the requirements of
Section 408A of the Code;

. SIMPLE IRA plans adopted under Section 408(p) of the Code;

. Simplified Employee Pension plans ("SEPs") adopted under Section 408(k) of
the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by public
school systems and certain other tax-exempt organizations; and

. pension or profit-sharing plans qualified under section 401(a) of the Code.

We may include certain requirements from the above sources in endorsements
or riders to the affected contracts. In other cases, we do not. In no event,
however, do we undertake to assure a contract's compliance with all plan, tax
law, and ERISA requirements applicable to a tax-qualified or non tax-qualified
retirement plan. Therefore, if you use or plan to use a contract in connection
with such a plan, you must consult with competent legal and tax advisers to
ensure that you know of (and comply with) all such requirements that apply in
your circumstances.

How we support the variable investment options

We hold the fund shares that support our variable investment options in
John Hancock Variable Annuity Account JF (the "Account"), a separate account
established by JHVLICO under Massachusetts law. The Account is registered as a
unit investment trust under the Investment Company Act of 1940 ("1940 Act").

The Account's assets, including the Series Funds' shares, belong to
JHVLICO. Each contract provides that amounts we hold in the Account pursuant to
the policies cannot be reached by any other persons who may have claims against
us.

All of JHVLICO's general assets also support JHVLICO's obligations under
the contracts, as well as all of its other obligations and liabilities. These
general assets consist of all JHVLICO's assets that are not held in the Account
(or in another separate account) under variable annuity or variable life
insurance contracts that give their owners a preferred claim on those assets.

How we support the guarantee periods

How the guarantee periods work

Amounts you allocate to the guarantee periods earn interest at a guaranteed
rate commencing with the date of allocation. At the expiration of the guarantee
period, we will automatically transfer its accumulated value to the Money Market
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 guarantee period or periods
of the same or different duration as the expiring guarantee period, 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
John Hancock Annuity Servicing Office at least 30 days prior to the end of the
expiring guarantee period. We will notify you of the end of the guarantee
period at least 30 days prior to its expiration. The first day of the new
guarantee period or other reallocation will begin the day after the end of the
expiring guarantee period.

We currently make available guarantee periods with durations up to ten
years. You may not select a guarantee period if it extends beyond your
contract's date of maturity. We reserve the right to add or delete guarantee
periods from those that are available at any time for new allocations.

Guaranteed interest rates

Each guarantee period has its own guaranteed rate. We may, at our
discretion, change the guaranteed rate for future guarantee periods. These
changes will not affect the guaranteed rates being paid on guarantee periods
that have already commenced. Each time you allocate or transfer money to a
guarantee period, a new guarantee period, 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
will not make available any guarantee period offering a guaranteed rate below
3%.

You may obtain information concerning the guaranteed rates applicable to
the various guarantee periods, and the durations of the guarantee periods
offered at any time by calling the John Hancock Annuity Servicing Office at the
telephone number on page 2.

Calculation of market value adjustment ("MVA")

. 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.

Here is how the MVA works:

- -------------------------------------------------------------------------------
We compare

. the guaranteed rate of the guarantee period from which the assets are being
taken with

. the guaranteed rate we are currently offering for guarantee periods of the
same duration as remains on the guarantee period 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 guarantee
period 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.

The accumulation period

Your value in our variable investment options

Each premium 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
---------------------------------------------------

Therefore, at any time prior to the date of maturity, 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 guarantee periods

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments or transferred amounts allocated to the
guarantee period, minus

. the amount of any withdrawals or transfers paid out of the guarantee period,
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 guarantee period, plus

. interest compounded daily on any amounts in the guarantee period from time
to time at the effective annual rate of interest we have declared for that
guarantee period.

The annuity period

Date of maturity

. at least 6 months after the date the first premium 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 select an
earlier date of maturity. The John Hancock Annuity Servicing Office must receive
your new selection at least 31 days prior to the new date of maturity, however.
Also, if you are selecting or changing your date of maturity for a contract
issued under a tax qualified plan, special limits apply. (See "Contracts
purchased for a tax-qualified plan," beginning on page 28.)

Choosing fixed or variable annuity payments

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 guarantee periods. 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.

four investment options with the largest values (directing all guarantee periods
as a single option), pro-rata based on the amount of the total value of your
contract that you have in each.

Once annuity payments begin, 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 date of maturity pursuant to Option A: "life annuity with 10
years guaranteed" (discussed under "Annuity options" on page 26).

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

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:

. 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.

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 amount we first, in accordance
with the procedures described above, calculate the amount to be applied to the
fixed annuity option as of the date of maturity. We then subtract any applicable
premium tax charge 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 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 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.

If the payee is more than 85 years old on the date of maturity, the
following two options are not available:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the 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.

Distribution requirements following death of owner

- --------------------------------------------------------------------------------
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.

. 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 the 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 with payments commencing within one year of your death.

If you are the last surviving annuitant, as well as the owner, the entire
interest in the contract on the date of your death equals the death benefit
that then becomes payable. If you are the owner 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 with payments commencing within one year of
your death.

If you die on or after annuity payments have begun:

Notice of the death of an owner or annuitant should be furnished promptly to
the John Hancock Annuity Servicing Office.

Miscellaneous provisions

Assignment; change of owner or beneficiary

. the rights of any assignees of record and

. certain other conditions referenced in the contract.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser before
taking any such action.

Tax information

Our income taxes

We are taxed as a life insurance company under the Internal Revenue Code
(the "Code"). The Account is taxed as part of our operations and is not taxed
separately.

Contracts not purchased to fund a tax qualified plan

Undistributed gains

Annuity payments

The Code prescribes the allocable portion of each such annuity payment to
be excluded from income according to one

formula if the payments are variable and a somewhat different formula if the
payments are fixed. In each case, speaking generally, the formula seeks to
allocate an appropriate amount of the investment in the contract to each
payment. After the entire "investment in the contract" has been distributed,
any remaining payment is fully taxable.

Surrenders and withdrawals before date of maturity

When we make a single sum payment from a 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 or if no annuity payment option is selected for a
death benefit payment.

When you take a partial withdrawal from a contract, including a payment
under a systematic withdrawal plan, 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 the
special penalty tax for premature withdrawals as explained below. When only the
investment in the contract remains, any subsequent withdrawal made before the
date of maturity 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.

Penalty for premature withdrawals

The taxable portion of any withdrawal or single sum payment may also
trigger an additional 10% penalty tax. The penalty tax does not apply to
payments made to you after age 59 1/2, or on account of your death or
disability. Nor will it apply to withdrawals in substantially equal periodic
payments over the life of the payee (or over the joint lives of the payee and
the payee's beneficiary).

Puerto Rico annuity contracts not purchased to fund a tax qualified plan

Diversification requirements

Contracts purchased for a tax qualified plan

Tax-free rollovers

You may make a tax-free rollover from:

. a traditional IRA to another traditional IRA,

. any tax-qualified plan to a traditional IRA,

. any tax-qualified plan to another tax-qualified plan of the same type (i.e.
403(b) to 403(b), corporate plan to corporate plan, etc.), and

. from a regular IRA to a Roth IRA, subject to special restrictions
discussed below.

Traditional IRAs

A traditional individual retirement annuity (as defined in Section 408 of
the Code) generally permits an eligible purchaser to make annual contributions
which cannot exceed the lesser of:

. 100% of compensation includable in your gross income, or

. $2,000 per year.

You may be entitled to a full deduction, a partial deduction or no
deduction for your traditional IRA contribution on your federal income tax
return.

The amount of your deduction is based on the following factors:

. whether you or your spouse is an active participant in an employer sponsored
retirement plan,

. your federal income tax filing status, and

. your "Modified Adjusted Gross Income."

Your traditional IRA deduction is subject to phase out limits, based on
your Modified Adjusted Gross Income, which are applicable according to your
filing status and whether you or your spouse are active participants in an
employer sponsored retirement plan. You can still contribute to a traditional
IRA even if your contributions are not deductible.

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 any
annuity payment, may be excluded from your taxable income when you receive the
proceeds. In general, all other amounts paid out from a traditional IRA contract
(in the form of an annuity, a single sum, or partial withdrawal), are taxable to
the payee as ordinary income. As in the case of a contract not purchased under a
tax-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 similar to those described above for such non-qualified
contracts).

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.

Roth IRAs

If you hold your Roth IRA for at least five years the payee will not owe
any federal income taxes or early withdrawal penalties on amounts paid out from
the contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to qualified first-time homebuyers (not to exceed a lifetime limitation
of $10,000) as specified in the Code.

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 $2,000 Roth IRA contribution limit does not apply to converted amounts.

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.

SIMPLE IRA plans

In general, 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. As an eligible employee of the business, you may
make pre-tax contributions to the SIMPLE IRA plan. You may specify the
percentage of compensation that you want to contribute under a qualified salary
reduction arrangement, provided the amount does not exceed certain contribution
limits (currently $6,000 a year). Your employer must elect to make a matching
contribution of up to 3% of your compensation or a non-elective contribution
equal to 2% of your compensation.

Simplified Employee Pension plans (SEPs)

SEPs are employer sponsored plans that may accept an expanded rate of
contributions from one or more employers. Employer contributions are flexible,
subject to certain limits under the Code, and are made entirely by the business
owner directly to a SEP-IRA owned by the employee. Contributions are
tax-deductible by the business owner and are not includable in income by
employees until withdrawn. The maximum amount that may be contributed to an SEP
is the lesser of 15% of compensation or the IRS compensation limit for the year
($170,000 for the year 2001).

Section 403(b) plans

The amount of such non-taxable contributions each year

. is limited by a maximum (called the "exclusion allowance") that is computed
in accordance with a formula prescribed under the Code;

. may not, together with all other deferrals the employee elects under other
tax-qualified plans, exceed $10,500 (subject to cost of living increases);
and

. is subject to certain other limits (described in Section 415 of the Code).

Moreover, the Code prohibits distributions from a 403(b) contract before
the employee reaches age 59 1/2, except:

. on the employee's separation from service, death, or disability,

. with respect to distributions of assets held under a 403(b) contract as of
December 31, 1988, and

. transfers and exchanges to other products that qualify under Section 403(b).

Pension and profit sharing plans qualified under Section 401(a)

IRS required minimum distributions to the employee 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.

"Top-heavy" plans

Puerto Rico annuity contracts purchased to fund a tax-qualified plan

The provisions of the tax laws of Puerto Rico vary significantly from those
under the Internal Revenue Code of the United States with respect to the various
"tax qualified" plans described above. Although JHVLICO may offer variable
annuity contracts in Puerto Rico in connection with "tax qualified" plans, the
text of the prospectus under the subsection "Contracts purchased for a tax
qualifed plan" is inapplicable in Puerto Rico and should be disregarded.

See your own tax adviser

The above description of Federal (and Puerto Rico) income tax consequences to
owners of and payees under contracts, and of the different kinds of tax
qualified plans which may be funded by the contracts, is only a brief summary
and is not intended as tax advice. The rules under the Code governing tax
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 consult a qualified tax
adviser.

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
consult a qualified tax adviser.

Further information about JHVLICO

We are JHVLICO, a stock life insurance company, organized in 1979 under the
laws of the Commonwealth of Massachusetts. JHVLICO commenced operations in
1980. Currently, JHVLICO writes term, whole, variable and universal life
insurance policies and variable annuity contracts in all states except New York.
JHVLICO is wholly-owned by John Hancock Life Insurance Company (formerly known
as John Hancock Mutual Life Insurance Company, hereinafter referred to as
"JHLICO" or "John Hancock"), a life insurance company organized under the laws
of Massachusetts in 1862. Pursuant to a Plan of Reorganization approved by the
policyholders of John Hancock and the Commonwealth of Massachusetts Division of
Insurance, effective February 1, 2000, John Hancock converted from a mutual life
insurance company to a stock life insurance company (i.e. demutualized) and
became a wholly owned subsidiary of John Hancock Financial Services, Inc. which
is a holding company. In connection with the reorganization, John Hancock
changed its name to John Hancock Life Insurance Company. In addition, on
February 1, 2000, John Hancock Financial Services, Inc. completed its initial
public offering in which 102 million shares of common stock were issued at an
initial public offering price of $17 per share. At December 31, 2000, JHVLICO
had $74.8 billion of gross life insurance in force.

JHVLICO markets its policies through

. John Hancock's sales organization, which includes a career agency
system composed of company-supported independent general agencies
and,

. various unaffiliated broker-dealers and certain financial
institutions with which John Hancock and JHVLICO have sales
agreements.

In 1993, JHVLICO acquired Colonial Penn Annuity and Life Insurance Company and
renamed it John Hancock Life Insurance Company of America. On March 5, 1998,
the name of the company was changed from John Hancock Life Insurance Company of
America to Investors Partner Life Insurance Company ("IPL").

Selected financial data

The following table sets forth certain selected financial data. The table
first presents selected financial data of our consolidated results of
operations for the year ended December 31, 2000 and statement of financial
position data as of December 31, 2000 on a basis of generally accepted
accounting principles ("GAAP"). This data has been derived from our audited
GAAP basis financial statements included elsewhere in this prospectus.
After that, the table presents selected statement of operations data for
each of the two years ended December 31, 2000 and 1999 and statement of
financial position data as of December 31, 2000 and 1999 on a basis
prescribed or permitted by the Commonwealth of Massachusetts Division of
Insurance ("statutory" or "Stat" basis). This data has been derived from
our audited statutory basis financial statements included elsewhere in this
prospectus. After that, the table presents selected statement of operations
data for the years ended December 31, 1998, 1997 and 1996 and statement of
financial position data as of December 31, 1998, 1997 and 1996 that have
been derived from our audited statutory basis financial statements not
included herein.

You should read the following selected historical financial data along with
other information including "Management's Discussion and Analysis"
immediately following this section and our financial statements and the
notes to the financial statements beginning on page 33.

Past results do not necessarily indicate future results.

Selected financial data - continued

Year Year Year Year Year
ended ended ended ended ended
December December December December December
31, 2000 31, 2000 31, 1999 31, 1998 31, 1997
(in millions-GAAP) (in millions-Stat) (in millions-Stat) (in millions-Stat) (in millions-Stat
------------------ ------------------ ------------------ ------------------ -----------------

STATEMENT OF OPERATIONS
DATA:
Premiums........................ $ 28.6 $ 945.5 $ 950.8 $1,272.3 $ 872.7
Net investment income........... 213.4 176.7 136.0 122.8 89.7
Net realized capital gains
(losses)....................... (10.6) -- -- -- --
Other income, net............... 337.3 475.6 605.4 618.1 449.1
--------- --------- --------- -------- --------
TOTAL REVENUES.................. $ 568.7 $ 1,597.8 $ 1,692.2 2,013.2 1,411.5
Total benefits and expenses..... $ 425.5 $ 1,574.4 $ 1,573.6 1,963.9 1,342.5
Federal income tax expense
(credit)....................... 43.8 (18.0) 42.9 33.1 38.5
Net realized capital gains
(losses)....................... -- (18.2) (1.7) (0.6) (3.0)
Net gain/net income............. $ 99.4 $ 23.2 $ 74.0 $ 15.6 $ 27.5
BALANCE SHEET DATA:
Total assets.................... $12,194.7 $10,720.2 $10,613.0 $8,599.0 $6,521.5
Total obligations............... 11,389.1 10,271.4 10,216.0 8,268.2 6,199.8
Total stockholder's
equity/policyholders'
contingency reserve............ $ 805.6 $ 448.8 $ 397.0 $ 330.8 $ 321.7

Year
ended
December
31, 1996
(in millions-Stat)
------------------

STATEMENT OF OPERATIONS DATA: $ 820.6
Premiums ....................... 76.1
Net investment income...........
Net realized capital gains --
(losses)....................... 427.7
Other income, net............... --------
1,324.4
TOTAL REVENUES.................. 1,249.0
Total benefits and expenses.....
Federal income tax expense 38.6
(credit).......................
Net realized capital gains (1.5)
(losses)....................... $ 35.3
Net gain/net income.............
BALANCE SHEET DATA: $4,567.8
Total assets.................... 4,284.7
Total obligations...............
Total stockholder's
equity/policyholders' $ 283.1
contingency reserve............

Management's discussion and analysis

Forward-Looking Information

The statements, analyses, and other information contained herein relating to
trends in JHVLICO's operations and financial results, the markets for JHVLICO's
products, the future development of JHVLICO's business, and the contingencies
and uncertainties to which JHVLICO may be subject, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend," "will," "should," "may," and other similar expressions, are
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. Such statements are made based upon management's current expectations
and beliefs concerning future events and their effects on JHVLICO and may not be
those anticipated by management. JHVLICO's actual results may differ materially
from the results anticipated in these forward-looking statements.

These forward-looking statements are subject to risks and uncertainties
including, but not limited to, the risks that (1) a significant downgrade in our
ratings for claims-paying ability and financial strength may lead to policy and
contract withdrawals and materially harm our ability to market our products, (2)
elimination of Federal tax benefits for our products and other changes in laws
and regulations (including in particular the possible amendment or repeal of the
Federal Estate Tax) which JHVLICO expects would adversely affect sales of our
insurance and investment advisory products, (3) we face increasing competition
in our retail business from mutual fund companies, banks and investment
management firms as well as from other insurance companies, (4) a decline or
increased volatility in the securities markets, and other economic factors, may
adversely affect our business, particularly our variable life insurance and
variable annuity business, (5) our life insurance sales are highly dependent on
a third party distribution relationship, (6) customers may not be responsive to
new or existing products or distribution channels, (7) interest rate volatility
may adversely affect our profitability, (8) our net income and revenues will
suffer if customers surrender annuities and variable and universal life
insurance policies, (9) we will face losses if the claims on our insurance
products, or reductions in rates of mortality on our annuity products, are
greater than we projected, (10) we face risks relating to our investment
portfolio, (11) we may experience volatility in net income due to changes in
standards for accounting for derivatives and other changes, (12) we are subject
to risk-based capital requirements and possible guaranty fund assessments, (13)
the National Association of Insurance Commissioners' codification of statutory
accounting practices will adversely affect our statutory surplus, (14) we may be
unable to retain personnel who are key to our business, (15) we face risks from
ceded reinsurance business in respect to life insurance,and (16) litigation and
regulatory proceedings may result in financial losses, harm our reputation and
divert management resources.

You are also directed to other risks and uncertainties discussed, as well as
to further discussion of the risks described above, in other documents filed by
us with the United States Securities and Exchange Commission. We specifically
disclaim any obligation to update or revise any forward-looking information,
whether as a result of new information, future developments, or otherwise.

Overview

Our GAAP revenues are derived principally from:

. premiums on individual life insurance and annuities with life
contingencies;

. product charges from variable and universal life insurance products and
annuities;

. net investment income and realized investment gains on general account
assets.

expenses in accordance with pricing assumptions and (2) the maintenance of our
target spreads between the rate of earnings on our investments and rates
credited on policyholders' general account balances.

Our sales and financial results of our retail business over the last several
years have been affected by general economic and industry trends. Variable
products, including variable life insurance and variable annuities, have
accounted for the majority of recent increases in total premiums and deposits
for the insurance industry as a result of the strong equity market growth in
recent years and the ''baby boom'' generation reaching its high-earnings years
and seeking tax-advantaged investments to prepare for retirement.

Premiums and deposits of our individual annuity products were $94.3 million in
2000 as compared to $231.3 million in 1999. Our variable life insurance product
deposits were $853.1 million in 2000 as compared to $719.7 million in 1999.

Reconciliation of GAAP and Statutory Financial Results for the Year Ended
December 31, 2000

GAAP basis net income was $99.4 million and statutory gain from operations was
$41.4 million for the year ended December 31, 2000. Statutory gain from
operations of $41.4 million does not include $3.3 million of statutory gain from
operations from JHVLICO's wholly-owned subsidiary, Investors Partner Life
Insurance Company (IPL) which is accounted for on the statutory equity method of
accounting. In determining statutory gain from operations of $41.4 million,
certain items are either added to, or subtracted from, GAAP basis net income, as
these items receive differing treatment on a GAAP and statutory basis. A
discussion of these reconciling items follows.

The most significant reconciling item was deferred acquisition costs (DAC).
DAC expenses are costs associated with acquiring business that are expensed
immediately for statutory purposes, but capitalized and amortized for GAAP
purposes. For the year ended December 31, 2000, there was $141.6 million of DAC
that was capitalized for GAAP purposes. Amortization of these costs of $34.0
million partially offset this adjustment. Other decreases to GAAP basis net
income, included $6.6 million of capitalized software development costs, and
$4.9 of post employment benefit costs resulting from a different calculation
between statutory and GAAP accounting. These decreases to GAAP basis net income
were offset mainly by increases of $61.8 million for taxes and $22.8 million for
policyholder benefit reserves. Statutory basis accounting calculates taxes on a
tax return basis, with no recognition given to timing differences. GAAP basis
accounting does recognize these timing differences. Also offsetting decreases
to GAAP basis net income were $10.6 million of realized capital losses as
realized capital losses are not part of statutory gain from operations.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
(Statutory Discussion)

Gain from operations before income taxes and net realized capital losses of
$23.4 million for the year ended December 31, 2000 decreased by $95.2 million,
or 80.2%, as compared to gain from operations before income taxes and net
realized capital losses of $118.6 million for the year ended December 31, 1999.
The decrease was primarily attributable to decreases in gain from operations
before income taxes and net realized capital losses of $52.7 million in
annuities, and $38.2 million in traditional life insurance. The annuity
decrease can be partially attributable to a 1999 $22.7 million pre-tax expense
reimbursement adjustment under a modified coinsurance agreement that did not
recur during 2000. Reserve increases in 2000 resulting from the effect of recent
changes in statutory reserve requirements, especially for guaranteed minimum
death in combination with poor separate account performance further contributed
to the annuity decrease. The traditional life decrease was primarily due to a
change in expense allocation that resulted in a $33.3 million pre-tax expense
re-allocation in the fourth quarter of 2000. This adjustment was to properly
reflect expense amounts allocated between JHVLICO and John Hancock.

Premium revenue, net of premium ceded to reinsurers, was $945.5 million for
2000, a decrease of $5.3 million, or .6%, from $950.8 million in 1999. The
decrease was attributable to a decrease of $137.0 million in annuities, which
was largely offset by a combined increase of $131.7 million in variable life,
universal life, and traditional life insurance. The annuity decrease was driven
largely by lower Independence Preferred Annuity product deposits which was
partially offset by higher deposits of the Revolution Annuity product, which
was first sold during the third quarter of 1999. Variable life insurance had an
increase in net premium of $54.5 million compared to 1999, due to increased
sales of the Variable Estate Protection product. Universal life net premium
revenue increased by $48.7 million compared to 1999, driven largely by the
result of single premium ($52.5 million) bank owned life insurance sales
occurring during 2000 that did not occur during 1999. Traditional life
insurance premium revenue increased by $28.5 million compared to 1999 as a
result of an increase in the number of states JHVLICO is licensed to sell
traditional products compared to 1999.

of $15.7 million related to variable life insurance, both attributable to an
increasing average asset base.

Additions to reserves to provide for future payments to policyholders and
beneficiaries were $844.4 million for 2000, a decrease of $44.4 million, or
5.0%, from $888.8 million in 1999. The decrease was primarily attributable to a
decrease of $196.0 million in annuities, the result of lower net annuity
deposits, and lower transfers to JHVLICO's separate accounts compared to 1999.
This decrease was offset by increases of $76.4 million, $52.3 million, and
$22.9 million in universal life insurance, variable life insurance, and
traditional life insurance, respectively, compared to 1999. The universal life
insurance reserve increase was primarily the result of single premium ($52.5
million) bank owned life insurance sales occurring during 2000 that did not
occur during 1999. Both the variable life insurance and traditional life
insurance increases are a result of continued growth in insurance in-force.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
(Statutory Discussion)

Premium revenue, net of premium ceded to reinsurers, was $950.8 million for
1999, a decrease of $321.5 million, or 25.3%, from $1,272.3 million in 1998. The
decrease was primarily attributable to a decrease of $326.5 million in universal
life premium, due to large single premium ($340.0 million) bank owned life
insurance sales that occurred during 1998 and did not recur during 1999. A
$53.3 million decrease in annuity deposits was offset by an increase in variable
life insurance premium of $53.0 million.

million in universal life insurance. The variable life increase was principally
due to increased surrenders. The annuity decrease was primarily the result of
increased ceded surrender benefits under a modified coinsurance agreement with
John Hancock. The universal life insurance decrease can be attributed to
decreased death benefits.

Additions to reserves to provide for future payments to policyholders and
beneficiaries were $888.8 million for 1999, a decrease of $471.4 million, or
34.7%, from $1,360.2 million in 1998. The decrease was attributable to
decreases of $345.3 million in universal life insurance, $91.0 million in
annuities, and $52.1 million in variable life insurance. These decreases were
partially offset by an increase of $17.0 million in traditional life insurance.
The universal life decrease is primarily the result of lower 1999 sales of bank
owned life insurance. The annuity and variable life decreases were the result of
lower net amounts transferred to JHVLICO's separate accounts. The increase in
traditional life was due to continued growth in the business.

Expenses of providing service to policyholders and obtaining new insurance
were $314.4 million for 1999, an increase of $40.2 million, or 14.7%, from
$274.2 million in 1998. The increase was primarily due to an increase of $33.3
million in variable life insurance. Of this increase, $9.7 million was due to an
increase of new and renewal commissions, and the remaining $23.6 million was
primarily due to higher systems expenses. . Income taxes were $42.9 million in
1999 compared to $33.1 million for 1998.

General Account Investments

Overall Composition of the General Account
The following discussion is presented on a statutory basis of accounting.

The following table shows the composition of investments in our general
account portfolio.

Bonds (1)................ $1,400.5 55.3% $1,216.3 54.6%
Preferred stocks......... 44.0 1.7 35.9 1.6
Common stocks............ 2.8 0.1 3.2 0.1
Investment in affiliates. 84.8 3.4 80.7 3.6
Mortgage loans (2)....... 456.0 18.0 433.1 19.4
Real estate.............. 24.5 1.0 25.0 1.1
Policy loans (3)......... 218.9 8.7 172.1 7.7
Other invested assets.... 24.7 1.0 14.8 0.7
Short-term investments... 226.6 9.0 222.9 10.0
Temporary cash
investments (4)......... 45.4 1.8 27.2 0.2
-------- ----- -------- -----
Total invested assets... $2,528.2 100.0% $2,231.2 100.0%
======== ===== ======== =====

(1) The total fair value of our bond portfolio was $1,366.9 million and $1,163.2
million at December 31, 2000 and December 31, 1999, respectively.
(2) The fair value for our mortgage loan portfolio was $467.3 million and $421.7
million as of December 31, 2000 and December 31, 1999, respectively.
(3) Policy loans are secured by the cash value of the underlying life insurance
policies.
(4) Cash and temporary investments are included in total invested assets in the
table above for the purposes of calculating yields on the income producing
assets for JHVLICO. Cash and temporary investments are not considered part
of Total Investments of JHVLICO of $2,482.8 million and $2,204.0 million at
December 31, 2000 and December 31, 1999, respectively.

Bonds

maintaining our policy to limit the overall level of these bonds to no more than
10% of invested assets and two thirds of that balance in the BB category.
Allocations are based on our assessment of relative value and the likelihood of
enhancing risk-adjusted portfolio returns. While the general account has
profited from the below-investment-grade asset class in the past, care is taken
to manage its growth strategically by limiting its size relative to our total
invested assets.

The following table shows the composition of our bond portfolio.

Bond Portfolio -- By Issuer

As of December 31,
---------------------------------------
2000 1999
------------------- ------------------
Carrying % of Carrying % of
Value Total Value Total
---------- ------- -------- --------
(in
millions) (in millions)

Corporate
securities...... $1,158.9 82.7% $ 964.9 79.3%
MBS/ABS.......... 223.3 16.0 229.4 18.9
U.S. Treasury
securities and
obligations of
U.S. government
agencies........ 5.7 0.4 5.9 0.5
Debt securities
issued by
foreign
governments..... 10.8 0.8 13.9 1.1
Obligations of
states and
political
Subdivisions.... 1.8 0.1 2.2 0.2
-------- ----- -------- -----
Total........... $1,400.5 100.0% $1,216.3 100.0%
======== ===== ======== =====

Mortgage Loans

As of December 31, 2000, we held mortgage loans with an amortized cost of $0.5
billion.

The following table shows the distribution of our mortgage loan portfolio by
property type as of the dates indicated. Our commercial mortgage loan portfolio
consists primarily of non-recourse fixed-rate mortgages on fully, or nearly
fully, leased commercial properties.

As of December 31,
---------------------------------------------
2000 1999
-------------------- ----------------------
Carrying % of Carrying % of
Value Total Value Total
------------- ------ ------------- -------
(in millions) (in millions)

Apartment...... $ 93.6 20.5% $112.1 25.9%
Office
Buildings..... 84.7 18.6 86.4 20.0
Retail......... 35.4 7.8 25.5 5.9
Agricultural... 142.5 31.3 99.6 23.0
Industrial..... 63.5 13.9 66.0 15.2
Hotels......... 13.0 2.9 11.3 2.6
Multi-Family... -- -- -- --
Mixed Use...... 12.9 2.8 -- --
Other.......... 10.2 2.2 32.2 7.4
------ ----- ------ -----
Total......... $456.0 100.0% $433.1 100.0%
====== ===== ====== =====

The following table shows the distribution of our mortgage loan portfolio by
geographical region.

As of December 31,
---------------------------------------------------
2000 1999
------------------- -------------------
Number
of Carrying % of Carrying % of
Loans Value Total Value Total
--------- -------- ---------- -------- -------
(in millions) (in millions)

East
North Central....... 17 $ 64.3 14.1% $ 71.3 16.5%
East
South Central....... 17 20.9 4.6 7.4 1.7
Middle
Atlantic............ 8 20.9 4.6 28.5 6.6
Mountain............. 11 27.0 5.9 21.0 4.8
New
England............. 9 23.4 5.1 37.5 8.7
Pacific.............. 46 108.0 23.7 111.1 25.7
South
Atlantic............ 37 120.7 26.5 87.6 20.2
West
North Central....... 5 16.0 3.5 16.6 3.8
West
South Central....... 17 51.5 11.3 48.6 11.2
Canada............... 1 3.3 0.7 3.5 0.8
-------- ------ ------- ------ -------
Total............... 168 $456.0 100.0% $433.1 100.0%
======== ====== ======= ====== =======

Investment Results

for the year ended december 31,
-------------------------------------------------
2000 1999
-------------------------------- ---------------
yield amount yield amount
------------- ----------------- ----- --------
(in millions) (in millions)

General account
assets- excluding
policy loans
Gross income........... 8.0% $ 174.6 7.2% $ 138.6
Ending assets-
excluding policy
Loans................. 2,309.3 2,059.1
POLICY LOANS
Gross income........... 6.2% 12.1 6.2% 9.6
Ending assets.......... 218.9 172.1
Total gross income... 7.8% 186.7 7.2% 148.1
Less: investment
expenses.............. (10.1) (12.1)
-------- --------
Net investment
income................. 7.4% $ 176.7 6.6% $ 136.0
======== ========

Liquidity and Capital Resources

The following discussion is presented on a statutory basis of accounting.

Net cash provided by operating activities was $236.7 million, $236.0 million,
and $475.7 million for the years ended December 31, 2000, 1999 and 1998,
respectively. December 31, 2000 remained relatively unchanged as compared to
December 31, 1999. The decrease in 1999 as compared to 1998 of $239.7 million
resulted primarily from decreases in insurance premiums of $316.8 million,
insurance expenses and taxes of $47.9 million, benefits to policyholders and
beneficiaries of $46.1 million, other expenses of $10.7 million and dividends
paid to policyholders of $3.3 million. Offsetting these decreases were
increases of $169.1 million in net transfers to separate accounts and net
investment income of $16.0 million.

Net cash used in investing activities was $214.8 million, $138.8 million and
$660.9 million for the years ended December 31, 2000, 1999, and 1998,
respectively. The increase

in net cash used in 2000 as compared to 1999 of $76.0 million resulted primarily
from an increase in bond purchases of $210.0 million. Offsetting this increase
in bond purchases were increases in cash provided by other investing activities
of $92.6 million and mortgage loan repayments of $36.3 million. The decrease in
net cash used in 1999 as compared to 1998 of $522.1 million resulted primarily
from a decrease in bond purchases of $378.1 million, a decrease of $366.3
million in cash used in other investing activities, and a decrease in cash
provided by the sale of bonds of $232.4 million.

Quantitative and Qualitative Disclosures About Market Risk.

The following discussion is presented on a statutory basis of accounting.

Capital Markets Risk Management

Our principal capital market exposures are credit and interest rate risk which
includes the impact of inflation, although we have certain exposures to changes
in equity prices and foreign currency exchange rates. Credit risk pertains to
the uncertainty associated with the ability of an obligor or counterparty to
continue to make timely and complete payments of contractual principal and/or
interest. Interest rate risk pertains to the market value fluctuations that
occur within fixed maturity securities or liabilities as market interest rates
move. Equity and foreign currency risk pertain to price fluctuations,
associated with JHVLICO's ownership of equity investments or non-US dollars
denominated investments and liabilities, driven by dynamic market environments.

Credit Risk

JHVLICO manages the credit risk inherent in its fixed maturity securities by
applying strict credit and underwriting standards, with specific limits
regarding the proportion of permissible below investment grade holdings. We
also diversify our fixed maturity securities with respect to investment quality,
and credit concentration. Credit concentrations are monitored with respect to
issuer, industry, geographic location and loan property-type. Where possible,
consideration of external measures of creditworthiness, such as ratings assigned
by nationally recognized rating agencies, supplement our internal credit
analysis. JHVLICO uses simulation models to examine the probability
distribution of credit losses to ensure that it can readily withstand feasible
adverse scenarios. In addition, JHVLICO periodically examines, on various
levels of aggregation, its actual default loss experience on significant asset
classes to determine if the losses are consistent with the (1) levels assumed in
product pricing, (2) ACLI loss experience and (3) rating agencies'
quality-specific cohort default data. These tests have generally found
JHVLICO's aggregate experience to be favorable relative to these external
benchmarks and consistent with priced-for-levels.

Interest Rate Risk

We project asset and liability cash flows, and then discount them against
credit-specific interest rate curves to attain fair values. Duration is then
calculated by re-pricing these cash flows against a modified or "shocked"
interest rate curve and evaluating the percentage change in fair value versus
the base case. The risk management method for non-guaranteed rate products, such
as whole life insurance or single premium deferred annuities, is less formulaic,
but very data intensive, due to the less predictable nature of the liability
cash flows. For these products, we manage interest rate risk based on
scenario-based portfolio modeling that seeks to identify the most appropriate
investment strategy given probable policyholder behavior and liability crediting
needs under a wide range of interest rate environments.

Derivative Instruments

As of December 31, 2000
--------------------------------------------------------
Fair Value
----------------------------------------------
Weighted-
Average -100 +100
Notional Term Basis Point As of Basis Point
Amount (Years) Change 12/31/00 Change
-------- --------- ----------- -------- -----------
(in millions, except for Weighted-Average Term)

Interest rate
swaps........ $1,150.0 4.2 (17.2) -- 13.3
Futures contracts
(1)........ 43 8.0 0.2 0.1 (0.2)
Interest rate
floors...... 361.4 9.5 3.1 1.4 0.8
Interest rate
caps........ 239.4 6.8 0.8 2.1 4.1
-------- --- ----- --- ----
Totals......... 1,793.8 5.7 (13.1) 3.6 18.0
======== === ===== === ====

(1) Represents the notional value on open contracts as of December 31, 2000.

Equity Risk

The fair value of our equity collar agreements as of December 31, 2000 was $0.4
million. A 15% decline in the value of our equity securities, hedged with
equity collar agreements, would result in effectively no change in fair value.

Foreign Currency Risk

Foreign currency risk is the possibility that JHVLICO will incur economic
losses due to adverse changes in foreign currency exchange rates. This risk
arises from the purchase of fixed income securities that are denominated in
foreign currencies; however, JHVLICO uses derivatives to hedge the foreign
currency risk of these securities (both interest payments and the final maturity
payment). At December 31, 2000, the notional value of JHVLICO's foreign
currency denominated fixed maturity securities was approximately $22.0 million.
JHVLICO uses currency swap agreements of the same currency to hedge the foreign
exchange risk related to its investments in securities denominated in foreign
currencies. The fair value of JHVLICO's currency swap agreements at December 31,
2000 was $(0.6) million.

The estimate that as of December 31, 2000, a 10% immediate change in each
of the foreign currency exchange rates to which we are exposed, including the
currency swap agreements, would result in no material change to the net fair
value of our currency-denominated instruments identified above. The selection of
a 10% immediate change in all currency exchange rates should not be construed as
a prediction by us of future market events but rather as an illustration of the
potential impact of such an event.

The modeling technique JHVLICO uses to calculate its exposure does not take
into account correlation among foreign currency exchange rates or correlation
among various financial markets. JHVLICO's actual experience may differ from
the results noted above due to the correlation assumptions utilized or if events
occur that were not included in the methodology, such as significant liquidity
or market events.

Effects of Inflation

JHVLICO does not believe that inflation has had a material effect on the
results of its operations except insofar as inflation may affect interest rates.

Reinsurance

To reduce its exposure to large losses under its insurance policies,
JHVLICO enters into reinsurance arrangements with its parent, John Hancock, and
other non-affiliated insurance companies. For more information about JHVLICO's
reinsurance arrangements, see Notes 5 and 7 of the Notes to Statutory Financial
Statements.

Separate Accounts

Competition

Employees and Facilities

John Hancock provides JHVLICO with personnel, property, and facilities for
the performance of certain of JHVLICO's corporate functions. John Hancock
annually determines a fee for these services and facilities based on a number of
criteria, which are revised annually to reflect continuing changes in the
JHVLICO's operations. The amount of service fee charged to JHVLICO was $164.5
million for the year ended December 31, 2000.

Transactions with John Hancock

As indicated, property, personnel, and facilities are provided, at a
service fee, by John Hancock for purposes of JHVLICO's operations. In addition,
John Hancock has contributed all of JHVLICO's capital, of which $1.8 million of
paid-in capital was returned to John Hancock during 1993. It is expected that
arrangements and transactions such as the foregoing will continue in the future
to an indeterminate extent.

See Note 2 to our audited consolidated GAAP financial statements.

John Hancock receives no additional compensation for its services as
underwriter and distributor of the contracts issued by JHVLICO. See Note 2 to
our audited consolidated GAAP financial statements.

Legal Proceedings.

Sales Practice Class Action Settlement

Over the past several years, companies engaged in the life insurance
business have faced extensive claims, including class-action lawsuits, alleging
improper marketing and sales of individual life insurance policies or annuities.
On December 31, 1997, the United States District Court for the District of
Massachusetts approved a settlement of a nationwide class action lawsuit
regarding sales practices against John Hancock Mutual Life Insurance Company,
John Hancock Variable Life Insurance Company and John Hancock Distributors,
Inc., Duhaime, et al. v. John Hancock Mutual Life Insurance Company, John
Hancock Variable Life Insurance Company and John Hancock Distributors, Inc. With
certain limited exceptions, the class that is bound by the terms of the
settlement includes persons and entities who at any time during the class period
(January 1, 1979 through December 31, 1996) had an ownership interest in one or
more of our whole life, universal life or variable life insurance policies (and
certain annuities) issued during the class period.

In conjunction with this settlement, we have established a reserve that
stood at $66.3 million at December 31, 2000. Given the uncertainties associated
with estimating the reserve, it is reasonably possible that the final cost of
the settlement could differ materially from the amounts presently provided for
by us. We will continue to update this estimate of the final cost of the
settlement as the claims are processed and more specific information is
developed, particularly as the actual cost of the claims subject to alternative
dispute resolution becomes available. However, based on information available at
the time, and the uncertainties associated with the final claim processing and
alternate dispute resolution and arbitration, the range of any additional costs
related to the settlement cannot be estimated with precision. If JHVLICO's share
of the settlement increases, John Hancock will contribute additional capital to
JHVLICO so that JHVLICO's total stockholder's equity would not be impacted.

Regulation

JHVLICO complies with extensive state regulation in the jurisdictions in
which it does business. This extensive state regulation along with proposals to
adopt a federal regulatory framework may in the future adversely affect the
JHVLICO's ability to sustain adequate returns. JHVLICO's business also could be
adversely affected by changes in state law relating to asset and reserve
valuation requirements, limitations on investments and risk-based capital
requirements, and, at the Federal level, laws and regulations that may affect
certain aspects of the insurance industry.

States levy assessments against John Hancock companies as a result of
participation in various types of state guaranty associations, state insurance
pools for the uninsured or other arrangements.

Regulators have discretionary authority to limit or prohibit an insurer
from issuing new business to policyholders if the regulators determine that such
insurer is not maintaining minimum statutory surplus or capital or further
transaction of business would be hazardous to the policyholders.

products in some circumstances. In addition, bank holding companies that qualify
and elect to be treated as "financial holding companies" may engage in
activities, and acquire companies engaged in activities, that are "financial" in
nature or "incidental" or "complementary" to such financial activities,
including acting as principal, agent or broker in selling life, property and
casualty and other forms of insurance, including annuities. A financial holding
company can own any kind of insurance company or insurance broker or agent, but
its bank subsidiary cannot own the insurance company. Under state law, the
financial holding company would need to apply to the insurance commissioner in
the insurer's state of domicile for prior approval of the acquisition of the
insurer, and the act provides that the commissioner, in considering the
application, may not discriminate against the financial holding company because
it is affiliated with a bank. Under the act, no state may prevent or interfere
with affiliations between banks and insurers, insurance agents or brokers, or
the licensing of a bank or affiliate as an insurer or agent or broker.

Moreover, the United States Supreme Court held in 1995 in Nationsbank of
North Carolina v. Variable Annuity Life Insurance Company that annuities are not
insurance for purposes of the National Bank Act. Although the effect of these
developments on us and our competitors is uncertain, both the persistency of our
existing products and our ability to sell new products may be materially
impacted by these developments in the future.

Directors and Executive Officers

The directors and executive officers of JHVLICO are as follows:

- ------------------------------------------------------------------------------------------------------------------------------------
Name Age Position with JHVLICO Other business within past 5 years
---- --- --------------------- ----------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------

David D'Alessandro, Chairman President and Chief Executive Off Director Insurance Company
Director 50
- ------------------------------------------------------------------------------------------------------------------------------------
Michele G. Van Leer, Vice Chairman & President Senior Vice President, Life Product Management, John Hancock
Director 43
- ------------------------------------------------------------------------------------------------------------------------------------
Robert S. Paster, Vice President Second Vice President, Direct Distribution, John Hancock
Director 48
- ------------------------------------------------------------------------------------------------------------------------------------
Robert R. Reitano Vice President & CIO Senior Vice President, and Chief Investment Strategist,
Director 50 Investment Policy & Research, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara L. Luddy, Vice President & Actuary Senior Vice President, Financial Reporting & Analysis,
Director 49 John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce M. Jones Vice President Vice President, Annuity Product Management, John
Director 43 Hancock; Prior to July, 1999, Senior Vice President &
Chief Operation Officer, Phoenix Home Life Insurance
Company; Vice President, Marketing Department, Phoenix
Home Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald J. Bocage, Vice President & Counsel Vice President & Counsel, Insurance and Separate Account
Director 55 Products Division, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Lee, Vice President Vice President, Life Product and Systems Management,
Director 45 John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Paul J. Strong 54 Vice President Vice President, Retail Life Product Management, John
Director Hancock; Prior to September, 1999, Senior Vice President,
Product Management, Jefferson Pilot Financial Insurance
Company; Senior Vice President, Marketing, Chubb Life
Insurance Company of America
- ------------------------------------------------------------------------------------------------------------------------------------
Earl W. Baucom 54 Controller Senior Vice President and Controller, Controller's
Department, John Hancock; Prior to 1999, Senior Vice
President and CFO, Franklin Life Insurance Company;
Prior to June, 1996, Senior Vice President and CFO of
Providian Direct Insurance
- ------------------------------------------------------------------------------------------------------------------------------------

Julie H. Indge 47 Treasurer Assistant Treasure, Financial Sector Management, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------
Peter H. Scavongelli 43 Secretary State Compliance Officer, John Hancock
- ------------------------------------------------------------------------------------------------------------------------------------

Executive Compensation

The following table provides information on the allocated compensation paid
to the chief executive officer for 2000. There were no other executive officers
of JHVLICO whose allocated compensation exceeded $100,000 during 2000. Executive
officers of JHVLICO also serve one or more of the affiliated companies of
JHLICO. Allocations have been made as to each individual's time devoted to his
or her duties as an executive officer of JHVLICO.

Directors of JHVLICO receive no compensation in addition to their
compensation as employees of JHLICO.

Annual Compensation Long-Term Compensation
------------------- ----------------------
Name Title Salary Bonus Other LTIP All Other
---- ----- ------ ----- ----- ---- ---------

D. F. D'Alessandro Chairman $45,846 $68,000 $ 313 $36,495 $ 0

Performance information

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:

. the mortality and expense risk charges,

. the administrative charge,

. the annual contract fee, and

. any withdrawal payable if the owner surrender his contract at the end of
the relevant period.

We may advertise "current yield" and "effective yield" for investments in a
money market variable investment option. Current yield refers to the income
earned on your investment in the money market investment option over a 7-day
period an 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.

Current yield and effective yield reflect all the recurring charges at the
Account level, but will not reflect any premium tax, any withdrawal charge, or
any charge for optional benefit riders.

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 Series Funds.

Voting privileges

Certain changes

Changes to the Account

We reserve the right, subject to applicable law, including any required
shareholder approval,

. to add or delete variable investment options,

. to change the underlying investment vehicles,

. to operate the Account in any form permitted by law, and

. to terminate the 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 guarantee period. 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 premium payment,

. the size of the group or class,

. the total amount of premium payments expected to be received from the group
or class and the manner in which the premium 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 or rates 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.
Any variation in charges 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 Funds, Inc. ("JHFI") acts as principal distributor of the
contracts sold through this prospectus. JHFI is registered as a broker-dealer
under the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. Its address is 101 Huntington Avenue,
Boston, Massachusetts 02199.

You can purchase a contract through broker-dealers and certain financial
institutions who have entered into selling agreements with JHFI and JHVLICO and
whose representatives are authorized by applicable law to sell annuity products.
We do not expect the compensation to such broker-dealers and financial
institutions to exceed 7.0% of premium payments. We offer these contracts on a
continuous basis, but neither JHVLICO nor JHFI is obligated to sell any
particular amount of contracts. We reimburse JHFI for direct and indirect
expenses actually incurred in connection with the marketing and sale of these
contracts. JHFI is a subsidiary John Hancock Life Insurance Company.

Experts

Ernst & Young LLP, independent auditors, have audited the financial
statements of John Hancock Variable Life Insurance Company that appear herein
and the financial statements of the Account that appear in the Statement of
Additional Information, which also is a part of the registration statement that
contains this prospectus. Those financial statements are included in the
registration statement in reliance upon Ernst & Young's reports given upon the
firm's authority as experts in accounting and auditing.

Registration Statement

This prospectus omits certain information contained in the registration
statement filed with the SEC. Among other things, the registration statement
contains a "Statement of Additional Information" that we will send you without
charge upon request. The Table of Contents of the Statement of Additional
Information lists the following subjects that it covers:

page of SAI

Distribution...................................... 2
Calculation of Performance Data................... 2
Other Performance Information..................... 7
Calculation of Annuity Payments................... 8
Additional Information About Determining
Unit Values...................................... 10
Purchases And Redemptions of Fund Shares......... 11
The Account....................................... 11
Delay of Certain Payments......................... 11
Liability for Telephone Transfers................. 11
Voting Privileges................................. 12
Financial Statements.............................. 13

CONDENSED FINANCIAL INFORMATION
JOHN HANCOCK VARIABLE ANNUITY ACCOUNT JF

The following table provides selected data for Patriot accumulation shares
for contracts with initial premium payments of less than $250,000. Each period
begins on January 1, except that the first year of operation of an investment
option begins on the date shown in the Notes at the end of this table.

Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
2000 1999 1998 1997 1996
------------ ------------ ------------ ------------ ------------

V.A. Financial Industries
Accumulation share value:
Beginning of period (2)...................................... $ 14.25 $ 14.36 $ 13.39 $ 10.00 --
End of period............................................... $ 17.90 $ 14.25 $ 14.36 $ 13.39 --
Number of Accumulation Shares outstanding at end of period.... 59,272 59,300 1,826,652 645,730 --
V.A. Small Cap Growth
Accumulation share value:
Beginning of period (1)...................................... $ 19.44 $ 11.68 $ 10.20 $ 9.30 $ 10.0
End of period............................................... $ 14.91 $ 19.44 $ 11.68 $ 10.20 $ 9.30
Number of Accumulation Shares outstanding at end of period.... 59,434 40,186 258,922 135,012 4,394
V.A. Mid Cap Growth
Accumulation share value:
Beginning of period (3)...................................... $ 16.81 $ 10.90 $ 10.00 -- --
End of period............................................... $ 14.66 $ 16.81 $ 10.90 -- --
Number of Accumulation Shares outstanding at end of period.... 36,141 23,076 54,353 -- --
V.A. Large Cap Growth
Accumulation share value:
Beginning of period (1)...................................... $ 15.48 $ 11.99 $ 10.55 $ 9.35 $ 10.00
End of period............................................... $ 10.50 $ 15.48 $ 11.99 $ 10.55 $ 9.35
Number of Accumulation Shares outstanding at end of period.... 45,424 34,478 633,493 123,249 5,866
V.A. Relative Value
Accumulation share value:
Beginning of period (3)...................................... $ 18.55 $ 12.99 $ 10.00 -- --
End of period............................................... $ 17.44 $ 18.55 $ 12.99 -- --
Number of Accumulation Shares outstanding at end of period.... 103,522 97,821 281,068 -- --
V.A. Core Equity
Accumulation share value:
Beginning of period (1)...................................... $ 20.49 $ 18.22 $ 14.36 $ 11.13 $ 10.00
End of period............................................... $ 18.80 $ 20.49 $ 18.22 $ 14.36 $ 11.13
Number of Accumulation Shares outstanding at end of period.... 118,815 125,278 703,630 259,402 2,760
V.A. Sovereign Investors
Accumulation share value:
Beginning of period (1)...................................... $ 16.19 $ 15.79 $ 13.68 $ 10.78 $ 10.00
End of period............................................... $ 15.93 $ 16.19 $ 15.79 $ 13.68 $ 10.78
Number of Accumulation Shares outstanding at end of period.... 83,507 84,581 1,123,202 457,510 2,637
V.A. Bond
Accumulation share value:
Beginning of period (1)...................................... $ 12.00 $ 12.22 $ 11.31 $ 15.11 $ 10.00
End of period............................................... $ 13.27 $ 12.00 $ 12.22 $ 11.31 $ 15.11
Number of Accumulation Shares outstanding at end of period.... 14,936 26,350 356,434 79,719 1,170
V.A.Strategic Income
Accumulation share value:
Beginning of period (1)...................................... $ 12.62 $ 12.19 $ 11.78 $ 10.70 $ 10.00
End of period............................................... $ 12.64 $ 12.62 $ 12.19 $ 11.78 $ 10.70
Number of Accumulation Shares outstanding at end of period.... 55,045 73,588 522,909 144,638 188

V.A. High Yield Bond
Accumulation share value:
Beginning of period (3)...................................... $ 9.92 $ 8.88 $ 10.00 -- --
End of period............................................... $ 9.67 $ 9.92 $ .88 -- --
Number of Accumulation Shares outstanding at end of period.... 8,644 8,803 294,896 -- --
V.A. Money Market
Accumulation share value:
Beginning of period (1)...................................... $ 1.12 $ 1.08 $ 1.05 $ 1.02 $ 1.00
End of period............................................... $ 1.18 $ 1.12 $ 1.08 $ 1.05 $ 1.00
Number of Accumulation Shares outstanding at end of period.... 455,211 1,377,260 7,219,761 4,783,240 100,008
Managed
Accumulation share value:
Beginning of period (4)...................................... $ 10.80 $ 10.00 -- -- --
End of period............................................... $ 10.67 $ 10.80 -- -- --
Number of Accumulation Shares outstanding at end of period.... 26,890 25,357 -- -- --
Equity Index
Accumulation share value:
Beginning of period (4)...................................... $ 11.97 $ 10.00 -- -- --
End of period............................................... $ 10.74 $ 11.97 -- -- --
Number of Accumulation Shares outstanding at end of period.... 115,506 110,398 -- -- --
Large Cap Value
Accumulation share value:
Beginning of period (4)...................................... $ 10.20 $ 10.00 -- -- --
End of period............................................... $ 11.38 $ 10.20 -- -- --
Number of Accumulation Shares outstanding at end of period.... 80,984 101,992 -- -- --
Large Cap Growth
Accumulation share value:
Beginning of period (4)...................................... $ 12.31 $ 10.00 -- -- --
End of period............................................... $ 9.98 $ 12.31 -- - -
Number of Accumulation Shares outstanding at end of period.... 86,341 72,822 -- -- --
Large/Mid Cap Value II
Accumulation share value:
Beginning of period (4)...................................... $ 10.44 $ 10.00 -- -- --
End of period............................................... $ 13.23 $ 10.44 - -- --
Number of Accumulation Shares outstanding at end of period.... 23,039 41,446 -- -- --
Mid Cap Growth
Accumulation share value:
Beginning of period (4)...................................... $ 21.87 $ 10.00 -- -- --
End of period............................................... $ 13.85 $ 21.87 -- -- --
Number of Accumulation Shares outstanding at end of period.... 154,934 143,380
Real Estate Equity
Accumulation share value:
Beginning of period (4)...................................... $ 9.60 $ 10.00 -- -- --
End of period............................................... $ 12.54 $ 9.60 -- -- --
Number of Accumulation Shares outstanding at end of period... 2,599 2,363 -- -- --
Small/Mid Cap Core
Accumulation share value:
Beginning of period (4)...................................... $ 11.96 $ 10.00 -- -- --
End of period............................................... $ 12.36 $ 11.96 -- -- --
Number of Accumulation Shares outstanding at end of period.... 16,718 12,272 -- -- --
Small Cap Equity
Accumulation share value:
Beginning of period (4)...................................... $ 9.56 $ 10.00 -- -- --
End of period............................................... $ 8.60 $ 9.56 -- -- --
Number of Accumulation Shares outstanding at end of period.... 16,236 14,326 -- -- --

Global Balanced
Accumulation share value:
Beginning of period (4)...................................... $ 10.16 $ 10.00 -- -- --
End of period............................................... $ 9.12 $ 10.16 -- -- --
Number of Accumulation Shares outstanding at end of period.... 5,357 6,608 -- -- --
International Equity Index
Accumulation share value:
Beginning of period (4)...................................... $ 12.59 $ 10.00 -- -- --
End of period............................................... $ 10.27 $ 12.59 -- -- --
Number of Accumulation Shares outstanding at end of period.... 19,558 18,759 -- -- --
International Opportunities
Accumulation share value:
Beginning of period (4)...................................... $ 12.91 $ 10.00 -- -- --
End of period............................................... $ 10.66 $ 12.91 -- -- --
Number of Accumulation Shares outstanding at end of period.... 50,459 21,856 -- -- --
Emerging Markets Equity
Accumulation share value:
Beginning of period (4)...................................... $ 17.48 $ 10.00 -- -- --
End of period............................................... $ 10.35 $ 17.48 -- -- --
Number of Accumulation Shares outstanding at end of period.... 7,636 8,609 -- -- --
Short-Term Bond
Accumulation share value:
Beginning of period (4)...................................... $ 10.17 $ 10.00 -- -- --
End of period............................................... $ 10.84 $ 10.17 -- -- --
Number of Accumulation Shares outstanding at end of period.... 6,207 5,058 -- -- --
Bond Index
Accumulation share value:
Beginning of period (4)...................................... $ 9.63 $ 10.00 -- -- --
End of period............................................... $ 10.64 $ 9.63 -- -- --
Number of Accumulation Shares outstanding at end of period.... 19,106 22,733 -- -- --
Global Bond
Accumulation share value:
Beginning of period (4)...................................... $ 9.65 $ 10.00 -- -- --
End of period............................................... $ 10.68 $ 9.65 -- -- --
Number of Accumulation Shares outstanding at end of period.... 8,203 8,837
High Yield Bond
Accumulation share value:
Beginning of period (4)...................................... $ 10.35 $ 10.00 -- -- --
End of period............................................... $ 9.11 $ 10.35 -- -- --
Number of Accumulation Shares outstanding at end of period.... 10,644 11,541 -- -- --

(1) Values shown for 1996 begin on August 29, 1996.
(2) Values shown for 1997 begin on April 30, 1997.
(3) Values shown for 1998 begin on the commencement of operations.
(4) Values shown for 1999 begin on May 3, 1999.

The following table provides selected data for accumulation shares for
contracts with initial premium payments of $250,000 or more. Each period begins
on January 1, except that the first year of operation of an investment option
begins on the date shown in the Notes at the end of this table.

Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2000 1999 1998 1997
------------ ------------ ------------ ------------

V.A. Financial Industries
Accumulation share value:
Beginning of period (1)........................................ $ 14.35 $ 14.42 $ 13.41 $ 10.00
End of period................................................. $ 18.06 $ 14.35 $ 14.42 $ 13.41
Number of Accumulation Shares outstanding at end of period...... 13,558 17,470 149,851 73,106
V.A. Small Cap Growth
Accumulation share value:
Beginning of period............................................ $ 19.60 $ 11.75 $ 10.23 $ 10.00
End of period................................................. $ 15.07 $ 19.60 $ 11.75 $ 10.23
Number of Accumulation Shares outstanding at end of period...... 9,813 -- 58,818 44,095
V.A. Mid Cap Growth
Accumulation share value:
Beginning of period (2)........................................ $ 16.90 $ 10.93 $ 10.00 --
End of period................................................. $ 14.77 $ 16.90 $ 10.93 --
Number of Accumulation Shares outstanding at end of period...... 5,755 -- 2,143 --
V.A. Large Cap Growth
Accumulation share value:
Beginning of period............................................ $ 15.61 $ 12.02 $ 10.59 $ 10.00
End of period................................................. $ 10.61 $ 15.61 $ 12.02 $ 10.59
Number of Accumulation Shares outstanding at end of period...... -- -- 39,844 48,828
V.A. Relative Value
Accumulation share value:
Beginning of period (2)........................................ $ 18.64 $ 13.06 $ 10.00 --
End of period................................................. $ 17.57 $ 18.64 $ 13.06 --
Number of Accumulation Shares outstanding at end of period...... 17,719 17,022 60,054 --
V.A. Core Equity
Accumulation share value:
Beginning of period............................................ $ 20.66 $ 18.32 $ 14.41 $ 10.00
End of period................................................. $ 19.00 $ 20.66 $ 18.32 $ 14.41
Number of Accumulation Shares outstanding at end of period...... 16,466 23,106 49,598 34,004
V.A. Sovereign Investors
Accumulation share value:
Beginning of period............................................ $ 16.33 $ 15.88 $ 13.72 $ 10.00
End of period................................................. $ 16.11 $ 16.33 $ 15.88 $ 13.72
Number of Accumulation Shares outstanding at end of period...... 12,125 12,092 202,960 80,430
V.A. Bond
Accumulation share value:
Beginning of period............................................ $ 12.11 $ 12.29 $ 11.35 $ 10.00
End of period................................................. $ 13.42 $ 12.11 $ 12.29 $ 11.35
Number of Accumulation Shares outstanding at end of period...... 11,583 17,982 46,646 21,295
V.A.Strategic Income
Accumulation share value:
Beginning of period............................................ $ 12.73 $ 12.26 $ 11.82 $ 10.00
End of period................................................. $ 12.78 $ 12.73 $ 12.26 $ 11.82
Number of Accumulation Shares outstanding at end of period...... -- -- 51,125 17,907
V.A. High Yield Bond
Accumulation share value:
Beginning of period (2)........................................ $ 9.97 $ 8.90 $ 10.00 --
End of period................................................. $ 9.28 $ 9.97 $ 8.90 --
Number of Accumulation Shares outstanding at end of period...... 2,609 6,766 4,428 --

Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2000 1999 1998 1997
------------ ------------ ------------ ------------

V.A. Money Market
Accumulation share value:
Beginning of period........................................... $ 1.13 $ 1.09 $ 1.05 $ 1.00
End of period................................................ $ 1.18 $ 1.13 $ 1.09 $ 1.05
Number of Accumulation Shares outstanding at end of period..... 917,357 1,979,576 724,906 660,312
Managed
Accumulation share value:
Beginning of period (3)....................................... $ 10.83 $ 10.00 -- --
End of period................................................ $ 10.72 $ 10.83 -- --
Number of Accumulation Shares outstanding at end of period..... -- -- -- --
Equity Index
Accumulation share value:
Beginning of period (3)....................................... $ 12.00 $ 10.00 -- --
End of period................................................ $ 10.79 $ 12.00 -- --
Number of Accumulation Shares outstanding at end of period..... 79,917 61,962 -- --
Large Cap Value
Accumulation share value:
Beginning of period (3)....................................... $ 10.22 $ 10.00 -- --
End of period................................................ $ 11.44 $ 10.22 -- --
Number of Accumulation Shares outstanding at end of period..... 47,784 36,375 -- --
Large Cap Growth
Accumulation share value:
Beginning of period (3)....................................... $ 12.34 $ 10.00 -- --
End of period................................................ $ 10.03 $ 12.34 -- --
Number of Accumulation Shares outstanding at end of period..... 49,959 38,907 -- --
Mid Cap Value
Accumulation share value:
Beginning of period (3)....................................... $ 10.46 $ 10.00 -- --
End of period................................................ $ 13.30 $ 10.46 -- --
Number of Accumulation Shares outstanding at end of period..... 38,768 22,398 -- --
Mid Cap Growth
Accumulation share value:
Beginning of period (3)....................................... $ 21.92 $ 10.00 -- --
End of period................................................ $ 13.92 $ 21.92 -- --
Number of Accumulation Shares outstanding at end of period..... 20,511 27,163 -- --
Real Estate Equity
Accumulation share value:
Beginning of period (3)....................................... $ 9.63 $ 10.00 -- --
End of period................................................ 12.61 $ 9.63 -- --
Number of Accumulation Shares outstanding at end of period..... 11,730 11,845 -- --
Small/Mid Cap Core
Accumulation share value:
Beginning of period (3)....................................... $ 11.99 $ 10.00 -- --
End of period................................................ $ 12.42 $ 11.99 -- --
Number of Accumulation Shares outstanding at end of period..... 6,516 5,870 -- --
Small Cap Equity
Accumulation share value:
Beginning of period (3)....................................... $ 9.58 $ 10.00 -- --
End of period................................................ $ 8.64 $ 9.58 -- --
Number of Accumulation Shares outstanding at end of period..... -- 1,452 -- --
Global Balanced
Accumulation share value:
Beginning of period (3)....................................... $ 10.18 $ 10.00 -- --
End of period................................................ $ 9.16 $ 10.18 -- --
Number of Accumulation Shares outstanding at end of period..... -- -- -- --
International Equity Index
Accumulation share value:
Beginning of period (3)....................................... $ 12.62 $ 10.00 -- --
End of period................................................ $ 10.32 $ 12.62 -- --
Number of Accumulation Shares outstanding at end of period..... 8,148 -- -- --

Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2000 1999 1998 1997
------------ ------------ ------------ ------------

International Opportunities
Accumulation share value:
Beginning of period (3)....................................... $12.94 $10.00 -- --
End of period................................................ $10.72 $12.94 -- --
Number of Accumulation Shares outstanding at end of period..... 7,506 5,408 -- --
Emerging Markets Equity
Accumulation share value:
Beginning of period (3)....................................... $17.52 $10.00 -- --
End of period................................................ $10.40 $17.52 -- --
Number of Accumulation Shares outstanding at end of period..... -- -- -- --
Short-Term Bond
Accumulation share value:
Beginning of period (3)....................................... $10.19 $10.00 -- --
End of period................................................ $10.89 $10.19 -- --
Number of Accumulation Shares outstanding at end of period..... -- 4,987 -- --
Bond Index
Accumulation share value:
Beginning of period (3)....................................... $ 9.66 $10.00 -- --
End of period................................................ $10.66 $ 9.66 -- --
Number of Accumulation Shares outstanding at end of period..... 9,826 9,826 -- --
Global Bond
Accumulation share value:
Beginning of period (3)....................................... $ 9.68 $10.00 -- --
End of period................................................ $10.73 $ 9.68 -- --
Number of Accumulation Shares outstanding at end of period..... -- -- -- --
High Yield Bond
Accumulation share value:
Beginning of period (3)....................................... $10.38 $10.00 -- --
End of period................................................ $ 9.16 $10.38 -- --
Number of Accumulation Shares outstanding at end of period..... 2,473 2,423

(1) Values shown for 1997 begin on April 30, 1997.
(2) Values shown for 1998 begin on the commencement of operations.
(3) Values shown for 1999 begin on May 3, 1999.

REPORT OF INDEPENDENT AUDITORS

The Board of Directors John Hancock Variable Life Insurance Company

/s/ ERNST & YOUNG LLP

Boston, Massachusetts
March 16, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET

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

Assets
Investments--Notes 3 and 4
Fixed maturities:
Held-to-maturity--at amortized cost (fair value: $686.8)............................ $ 715.4
Available-for-sale--at fair value (cost: $1,018.8).................................. 1,011.8
Equity securities:
Available-for-sale--at fair value (cost: $7.1)...................................... 8.1
Mortgage loans on real estate........................................................ 554.8
Real estate.......................................................................... 23.9
Policy loans......................................................................... 334.2
Short-term investments............................................................... 21.7
Other invested assets................................................................ 34.8
------------
Total Investments............................................................... 2,704.7
Cash and cash equivalents............................................................ 277.3
Accrued investment income............................................................ 52.1
Premiums and accounts receivable..................................................... 7.0
Deferred policy acquisition costs.................................................... 994.1
Reinsurance recoverable--Note 7...................................................... 48.4
Other assets......................................................................... 28.2
Separate accounts assets............................................................. 8,082.9
------------
Total Assets.................................................................... $ 12,194.7
============

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEET -- (CONTINUED)

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

Liabilities and Shareholder's Equity
Liabilities
Future policy benefits..................................... $ 2,754.2
Policyholders' funds....................................... 14.2
Unearned revenue........................................... 212.0
Unpaid claims and claim expense reserves................... 11.1
Dividends payable to policyholders......................... 0.1
Income taxes--Note 5....................................... 64.2
Other liabilities.......................................... 250.4
Separate accounts liabilities.............................. 8,082.9
--------------
Total Liabilities........................................ 11,389.1
Shareholder's Equity--Note 9
Common stock, $50 par value; 50,000 shares authorized;
50,000 shares issued and outstanding...................... 2.5
Additional paid in capital................................. 572.4
Retained earnings.......................................... 232.9
Accumulated other comprehensive loss....................... (2.2)
--------------
Total Shareholder's Equity............................... 805.6
--------------
Total Liabilities and Shareholder's Equity............... $ 12,194.7
==============

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME

Year Ended
December 31
2000
-------------
(in millions)

Revenues
Premiums........................................................ $ 28.6
Universal life and investment-type product charges.............. 337.1
Net investment income--Note 3................................... 213.4
Net realized investment losses, net of related
amortization of deferred policy acquisition
costs of $3.8--Notes 1, 3, and 10.............................. (10.6)
Other revenue................................................... 0.2
--------
Total revenues................................................ 568.7
Benefits and expenses
Benefits to policyholders....................................... 248.6
Other operating costs and expenses.............................. 116.8
Amortization of deferred policy acquisition costs,
excluding amounts related to net realized
investment losses of $3.8--Notes 1, 3 and 10................... 34.0
Dividends to policyholders...................................... 26.1
--------
Total benefits and expenses................................... 425.5
--------
Income before income taxes...................................... 143.2
Income taxes--Note 5............................................ 43.8
--------
Net income...................................................... $ 99.4
========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME

Accumulated
Additional Other Total
Paid In Retained Comprehensive Shareholder's
Common Stock Capital Earnings Loss Equity
------------ ---------- -------- ------------- ---------------

Balance at December 31, 1999............... $2.5 $572.4 $133.5 ($13.4) $695.0
Comprehensive income:
Net income................................ 99.4 99.4
Other comprehensive income, net of tax:
Net unrealized gains...................... 11.2 11.2
Comprehensive income....................... 110.6
---- ------ ------ ------ ------
Balance at December 31, 2000............... $2.5 $572.4 $232.9 ($2.2) $805.6
==== ====== ====== ====== ======

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended
December 31
2000
---------------
(in millions)

Cash flows from operating activities:
Net income............................................................................... $ 99.4
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of discount--fixed maturities............................................. (1.9)
Realized investment losses, net........................................................ 10.6
Change in deferred policy acquisition costs............................................ (141.5)
Depreciation and amortization.......................................................... 1.9
Increase in accrued investment income.................................................. (10.2)
Decrease in premiums and accounts receivable........................................... 0.3
Decrease in other assets and other liabilities, net.................................... 70.7
Decrease in policy liabilities and accruals, net....................................... (401.1)
Increase in income taxes............................................................... 22.5
--------
Net cash used by operating activities............................................... (349.3)
Cash flows from investing activities:
Sales of:
Fixed maturities available-for-sale..................................................... 194.6
Equity securities available-for-sale.................................................... 1.0
Real estate............................................................................. 0.2
Short-term investments and other invested assets........................................ 1.3
Maturities, prepayments and scheduled redemptions of:
Fixed maturities held-to-maturity....................................................... 79.9
Fixed maturities available-for-sale..................................................... 91.5
Short-term investments and other invested assets........................................ 10.1
Mortgage loans on real estate........................................................... 85.6
Purchases of:
Fixed maturities held-to-maturity....................................................... (127.2)
Fixed maturities available-for-sale..................................................... (424.7)
Equity securities available-for-sale.................................................... (0.6)
Real estate............................................................................. (0.4)
Short-term investments and other invested assets........................................ (38.8)
Mortgage loans on real estate issued.................................................... (100.5)
Other, net.............................................................................. (41.5)
--------
Net cash used in investing activities............................................... (269.5)
Cash flows from financing activities:
Universal life and investment-type contract deposits..................................... $1,067.2
Universal life and investment-type contract maturities and withdrawals................... (430.7)
--------
Net cash provided by financing activities........................................... 636.5
--------
Net increase in cash and cash equivalents........................................... 17.7
Cash and cash equivalents at beginning of year............................................ 259.6
--------
Cash and cash equivalents at end of year............................................ $ 277.3
========

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation

Investments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

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

Short-term investments are carried at amortized cost.

Derivative Financial Instruments

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Equity collar agreements are carried at fair value and are included in
other invested assets, with the resulting unrealized gains and losses included
in realized investment gains (losses).

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Revenue Recognition

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

Future Policy Benefits and Policyholders' Funds

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Participating Insurance

Participating business represents approximately 16.3% of the Company's life
insurance in force and 30.1% of life insurance premiums in 2000.

Deferred Policy Acquisition Costs

Costs that vary with, and are related primarily to, the production of new
business have been deferred to the extent that they are deemed recoverable. Such
costs include commissions, certain costs of policy issue and underwriting, and
certain agency expenses. For participating traditional life insurance policies,
such costs are being amortized over the life of the contracts at a constant rate
based on the present value of the estimated gross margin amounts expected to be
realized over the lives of the contracts. Estimated gross margin amounts include
anticipated premiums and investment results less claims and administrative
expenses, changes in the net level premium reserve and expected annual
policyholder dividends. For universal life insurance contracts and
investment-type products, such costs are being amortized generally in proportion
to the present value of expected gross profits arising principally from
surrender charges and investment results, and mortality and expense margins. The
effects on the amortization of deferred policy acquisition costs of revisions to
estimated gross margins and profits are reflected in earnings in the period such
estimated gross margins and profits are revised. For non-participating term life
insurance products, such costs are being amortized over the premium-paying
period of the related policies using assumptions consistent with those used in
computing policy benefit reserves. Amortization expense was $30.2 million in
2000.

Cash and Cash Equivalents

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Separate Accounts

Reinsurance

Federal Income Taxes

Foreign Currency Translation

Gains or losses on foreign currency transactions are reflected in earnings.

Accounting Changes and New Accounting Principles Adopted

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 1. Summary of Significant Accounting Policies (continued)

Codification

Note 2. Transactions with Parent

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments

The following information summarizes the components of net investment
income and realized investment losses, net:

Year Ended
December 31
2000
---------------
(in millions)

Net Investment Income
Fixed maturities............................................ $138.5
Equity securities........................................... 0.2
Mortgage loans on real estate............................... 44.3
Real estate................................................. 4.1
Policy loans................................................ 17.1
Short-term investments...................................... 19.4
Other....................................................... 1.1
------
Gross investment income..................................... 224.7
Less investment expenses................................... 11.3
------
Net investment income...................................... $213.4
======
Net Realized Investment Gains (Losses), Net of Related
Amortization of Deferred Policy Acquisition Costs
Fixed maturities............................................. $(16.0)
Equity securities............................................ 0.8
Mortgage loans on real estate and real estate................ (2.3)
Derivatives and other invested assets........................ 3.1
Amortization adjustment for deferred policy acquisition costs 3.8
------
Net realized investment losses, net of related amortization
of deferred policy acquisition costs........................ $(10.6)
======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Gross gains of $1.5 million in 2000 and gross losses of $6.0 million in
2000 were realized on the sale of available-for-sale securities.

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

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)

December 31, 2000
Held-to-Maturity:
Corporate securities................................... $ 684.2 $23.4 $51.0 $ 656.6
Mortgage-backed securities............................. 29.3 0.2 1.2 28.3
Obligations of states and political subdivisions....... 1.9 0.0 0.0 1.9
-------- ----- ----- --------
Total................................................. $ 715.4 $23.6 $52.2 $ 686.8
======== ===== ===== ========
AVAILABLE-FOR-SALE:
Corporate securities................................... $ 751.6 $20.6 $27.8 $ 744.4
Mortgage-backed securities............................. 239.1 3.6 3.7 239.0
Obligations of states and political subdivisions....... 0.9 0.0 0.0 0.9
Debt securities issued by foreign governments.......... 11.1 0.3 0.6 10.8
U.S. Treasury securities and obligations of U.S
government corporations and agencies.................. 16.1 0.7 0.1 16.7
-------- ----- ----- --------
Total fixed maturities................................. 1,018.8 25.2 32.2 1,011.8
Equity securities...................................... 7.1 2.8 1.8 8.1
-------- ----- ----- --------
Total................................................. $1,025.9 $28.0 $34.0 $1,019.9
======== ===== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

The amortized cost and fair value of fixed maturities at December 31, 2000,
by contractual maturity, are shown below:

Amortized Fair
Cost Value
--------- ----------
(in millions)

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

Changes in the allowance for probable losses on mortgage loans on real
estate were as follows:

Balance at Balance at
Beginning End of
of Year Additions Deductions Year
----------- --------- ---------- -------------
(in millions)

Year ended December 31, 2000
Mortgage loans on real estate.................... $3.8 $1.2 $0.0 $5.0
==== ==== ==== ====

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

Impaired mortgage loans on real estate with provision for losses............... $4.2
Provision for losses........................................................... 1.2
----
Net impaired mortgage loans on real estate..................................... $3.0
====

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

Year Ended
December 31
2000
---------------
(in millions)

Average recorded investment in impaired loans.................................. $2.1
Interest income recognized on impaired loans................................... 0.3

Restructured commercial mortgage loans aggregated $3.4 million as of
December 31, 2000. The expected gross interest income that would have been
recorded had the loans been current in accordance with the original loan
agreements and the actual interest income recorded were as follows:

Year Ended
December 31
2000
---------------
(in millions)

Expected....................................................................... 0.34
Actual......................................................................... 0.27

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 3. Investments (continued)

At December 31, 2000, the mortgage portfolio was diversified by geographic
region and specific collateral property type as displayed below:

Carrying Geographic Carrying
Property Type Amount Concentration Amount
- ------------- ------------- ------------- ---------------
(in millions) (in millions)

Apartments.............................. $129.2 East North Central................. $ 68.1
Hotels.................................. 15.1 East South Central................. 27.6
Industrial.............................. 77.4 Middle Atlantic. .................. 27.1
Office buildings........................ 99.2 Mountain........................... 35.7
Retail.................................. 45.7 New England........................ 44.5
Mixed Use............................... 13.5 Pacific............................ 120.7
Agricultural............................ 165.6 South Atlantic..................... 156.7
Other................................... 14.1 West North Central................. 16.9
West South Central................. 59.3
Canada/Other....................... 3.2
Allowance for losses..................... (5.0) Allowance for losses .............. (5.0)
------ ------
Total................................... $554.8 Total............................. $554.8
====== ======

Bonds with amortized cost of $7.0 million were non-income producing for the
year ended December 31, 2000.

Depreciation expense on investment real estate was $0.6 million in 2000.
Accumulated depreciation was $2.5 million at December 31, 2000.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments are as follows:

Number of
Contracts/ Assets (Liabilities)
Notional ---------------------
Amounts 2000
---------- -----------------------
Carrying Fair
2000 Value Value
---------- ----------- -----------
(in millions)

Asset Hedges:
Futures contracts to sell securities.................. 6 -- --
Interest rate swap agreements.........................
Notional............................................. $600.0 -- (10.8)
Average fixed rate--paid............................. 6.38% -- --
Average float rate--received......................... 6.69% -- --
Currency rate swap agreements......................... $ 22.3 (0.6) (0.6)
Equity collar agreements.............................. -- 0.4 0.4
Liability Hedges:
Futures contracts to acquire securities............... 43 0.1 0.1
Interest rate swap agreements.........................
Notional............................................. $570.0 9.6
Average fixed rate--received......................... 6.43% -- --
Average float rate--paid............................. 6.69% -- --
Interest rate cap agreements.......................... $239.4 2.1 2.1
Interest rate floor agreements........................ 485.4 4.5 4.5

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 4. Derivatives (continued)

Note 5. Income Taxes

The components of income taxes were as follows:

Year Ended
December 31
2000
---------------
(in millions)

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

Year Ended
December 31
2000
---------------
(in millions)

Tax at 35%.................................................... $50.1
Add (deduct):
Equity base tax.............................................. (5.6)
Tax credits.................................................. (0.6)
Foreign taxes................................................ 0.6
Tax exempt investment income................................. (0.7)
-----
Total income taxes.......................................... $43.8
=====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 5. Income Taxes (continued)

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

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

The Company made income tax payments of $62.9 million in 2000.

Note 6. Debt and Line of Credit

Note 7. Reinsurance

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

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

For the year ended December 31, 2000, benefits to policyholders under life
ceded reinsurance contracts were $3.0 million.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 7. Reinsurance (continued)

Note 8. Commitments and Contingencies

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity

(a) Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

Accumulated
Other
Comprehensive
Income
---------------

Balance at January 1, 2000............................................................. ($13.4)
------
Gross unrealized gains (net of deferred income tax expense of $9.7 million)............ 18.0
Less reclassification adjustment for gains, realized in net income (net of tax
expense of $1.6 million)............................................................. (2.9)
Adjustment to deferred policy acquisition costs (net of deferred income tax
benefit of $2.1 million)............................................................. (3.9)
------
Net unrealized gains................................................................... 11.2
------
Balance at December 31, 2000........................................................... ($2.2)
======

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

2000
---------------
(in millions)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 9. Shareholder's Equity (continued)

(b) Statutory Results

The Company and its domestic insurance subsidiary prepare their statutory-
basis financial statements in accordance with accounting practices prescribed or
permitted by the state of domicile. Prescribed statutory accounting practices
include state laws, regulations and administrative rules, as well as guidance
published by the NAIC. Permitted accounting practices encompass all accounting
practices that are not prescribed by the sources noted above. Since 1988, the
Commonwealth of Massachusetts Division of Insurance has provided the Company
with approval to recognize a pension plan prepaid expense in accordance with the
requirements of SFAS No. 87, "Employers' Accounting for Pensions." The Company
furnishes the Commonwealth of Massachusetts Division of Insurance with an
actuarial certification of the prepaid expense computation on an annual basis.
The pension plan prepaid expense amounted to $55.6 million at December 31, 2000.

Statutory net income and surplus include the accounts of the Company and
its wholly-owned subsidiary, Investors Partners Life Insurance Company.

2000
---------------
(in millions)

Statutory net income.................................... $ 26.6
Statutory surplus....................................... 527.2

Note 10. Segment Information

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 10. Segment Information (continued)

Retail
Retail Asset
Protection Gathering Consolidated
---------- --------- --------------

2000
Revenues:
Segment revenues....................................................... $ 530.8 $ 48.5 $ 579.3
Realized investment losses, net........................................ (10.6) -- (10.6)
-------- -------- ---------
Revenues............................................................... $ 520.2 $ 48.5 $ 568.7
======== ======== =========
Net investment income.................................................. $ 215.9 ($2.5) $ 213.4

Net Income:
Segment after-tax operating income..................................... 96.0 6.3 102.3
Realized investment losses, net........................................ (6.8) -- (6.8)
Restructuring charges.................................................. (1.1) -- (1.1)
Surplus tax............................................................ 5.4 0.2 5.6
Other demutualization related cost
(0.5) (0.1) (0.6)
-------- -------- ---------
Net income............................................................. $ 93.0 $ 6.4 $ 99.4
======== ======== =========

Supplemental Information:
Equity in net income of investees accounted for by the equity method... $ 1.3 -- $ 1.3
Amortization of deferred policy acquisition costs...................... 17.6 16.4 34.0
Income tax expense..................................................... 40.7 3.1 43.8
Segment assets......................................................... 9,326.9 2,867.8 12,194.7
Net Realized Investment Gains Data:
Net realized investment losses......................................... $ (14.4) -- $ (14.4)
Add capitalization/less amortization of deferred policy acquisition
costs related to net realized investment gains (losses)............... 3.8 -- 3.8
-------- -------- ---------
Net realized investment losses, net of related amortization of deferred
policy acquisition costs--per consolidated financial statements....... (10.6) -- (10.6)
Less income tax effect................................................. 3.8 -- 3.8
-------- -------- ---------
Realized investment losses, net-after-tax adjustment made to
calculate segment operating income.................................... ($6.8) -- ($6.8)
======== ======== =========

The Company operates only in the United States. The Company has no
reportable major customers and revenues are attributed to countries based on the
location of customers.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments

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

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

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (continued)

Note 11. Fair Value of Financial Instruments (continued)

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

December 31
2000
----------------------------
Carrying Value Fair Value
-------------- ------------
(in millions)

Assets:
Fixed maturities:
Held-to-maturity.............................. $ 715.4 $ 686.8
Available-for-sale............................ 1,011.8 1,011.8
Equity securities:
Available-for-sale............................ 8.1 8.1
Mortgage loans on real estate.................. 554.8 574.2
Policy loans................................... 334.2 334.2
Short-term investments......................... 21.7 21.7
Cash and cash equivalents...................... 277.3 277.3
Liabilities:
Fixed rate deferred and immediate annuities..... 63.8 60.4
Derivatives assets/(liabilities) relating to:
Futures contracts, net........................ 0.1 0.1
Interest rate swap agreements................. (1.2)
Interest rate cap agreements.................. 2.1 2.1
Interest rate floor agreements................ 4.5 4.5
Currency rate swap agreements................. (0.6) (0.6)
Equity collar agreements...................... 0.4 0.4
Commitments..................................... -- 62.9

REPORT OF INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 9, 2001

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

December 31
---------------------------------
2000 1999 1998
--------- --------- ---------
(In Millions)

Common Stock, $50 par value; authorized
50,000 shares; issued and outstanding
50,000 shares............................ 2.5 2.5 2.5
Paid-in capital........................... 572.4 572.4 377.5
Unassigned deficit--Note 10............... (126.1) (177.9) (49.2)
--------- --------- --------
Total Stockholder's Equity............... 448.8 397.0 330.8
--------- --------- --------
Total Obligations And Stockholder's
Equity................................... $10,720.2 $10,613.0 $8,599.0
========= ========= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

Year Ended December 31
-------------------------------
2000 1999 1998
-------- -------- --------
(In Millions)

Income
Premiums..................................... $ 945.5 $ 950.8 $1,272.3
Net investment income--Note 3................ 176.7 136.0 122.8
Other, net................................... 475.6 605.4 618.1
-------- -------- --------
1,597.8 1,692.2 2,013.2
Benefits And Expenses
Payments to policyholders and beneficiaries.. 340.8 349.9 301.4
Additions to reserves to provide for future
payments to policyholders and
beneficiaries............................... 844.4 888.8 1,360.2
Expenses of providing service to
policyholders and obtaining new
insurance--Note 5........................... 363.4 314.4 274.2
State and miscellaneous taxes................ 25.8 20.5 28.1
-------- -------- --------
1,574.4 1,573.6 1,963.9
-------- -------- --------
Gain From Operations Before Federal Income
Tax (Credit) Expense and Net Realized
Capital Losses............................... 23.4 118.6 49.3
Federal income tax (credit) expense--Note 1... (18.0) 42.9 33.1
-------- -------- --------
Gain From Operations Before Net Realized
Capital Losses............................... 41.4 75.7 16.2
Net realized capital losses--Note 4........... (18.2) (1.7) (0.6)
-------- -------- --------
Net Income.................................... 23.2 74.0 15.6
Unassigned deficit at beginning of year....... (177.9) (49.2) (58.3)
Net unrealized capital gains (losses) and
other adjustments--Note 4.................... 8.0 (3.8) (6.0)
Adjustment to premiums due and deferred....... 21.4 -- --
Other reserves and adjustments--Note 10....... (0.8) (198.9) (0.5)
-------- -------- --------
Unassigned Deficit at End of Year............. $ (126.1) $ (177.9) $ (49.2)
======== ======== ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

Year Ended December 31
----------------------------
2000 1999 1998
------- -------- --------
(In Millions)

Cash flows from operating activities:
Insurance premiums............................ $ 939.9 $ 958.5 $1,275.3
Net investment income......................... 166.0 134.2 118.2
Benefits to policyholders and beneficiaries... (315.1) (321.6) (275.5)
Dividends paid to policyholders............... (26.1) (25.6) (22.3)
Insurance expenses and taxes.................. (362.4) (344.8) (296.9)
Net transfers to separate accounts............ (513.0) (705.3) (874.4)
Other, net.................................... 347.4 540.6 551.3
------- ------- --------
NET CASH PROVIDED FROM OPERATIONS........... 236.7 236.0 475.7
------- ------- --------
Cash flows used in investing activities:
Bond purchases................................ (450.7) (240.7) (618.8)
Bond sales.................................... 148.0 108.3 340.7
Bond maturities and scheduled redemptions..... 80.0 78.4 111.8
Bond prepayments.............................. 29.4 18.7 76.5
Stock purchases............................... (8.8) (3.9) (23.4)
Proceeds from stock sales..................... 1.7 3.6 1.9
Real estate purchases......................... (0.4) (2.2) (4.2)
Real estate sales............................. 0.2 17.8 2.1
Other invested assets purchases............... (13.8) (4.5) --
Mortgage loans issued......................... (85.7) (70.7) (145.5)
Mortgage loan repayments...................... 61.6 25.3 33.2
Other, net.................................... 23.7 (68.9) (435.2)
------- ------- --------
Net Cash Used in Investing Activities........ (214.8) (138.8) (660.9)
------- ------- --------
Cash flows from financing activities:
Capital contribution.......................... -- 194.9 --
Net (decrease) increase in short-term note
payable...................................... -- (61.9) 61.9
------- ------- --------
Net Cash Provided From Financing Activities -- 133.0 61.9
------- ------- --------
Increase (Decrease) In Cash and Temporary
Cash Investments............................ 21.9 230.2 (123.3)
Cash and temporary cash investments at
beginning of year............................. 250.1 19.9 143.2
------- ------- --------
Cash and Temporary Cash Investments at End
of year.................................... $ 272.0 $ 250.1 $ 19.9
======= ======= ========

The accompanying notes are an integral part of the statutory-basis financial
statements.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Note 1. Nature of Operations and Significant Accounting Practices

John Hancock Variable Life Insurance Company (the Company) is a wholly-
owned subsidiary of John Hancock Life Insurance Company (John Hancock). The
Company, domiciled in the Commonwealth of Massachusetts, writes variable and
universal life insurance policies and variable annuity contracts. Those policies
primarily are marketed through John Hancock's sales organization, which includes
a career agency system composed of Company-supported independent general
agencies and a direct brokerage system that markets directly to external
independent brokers. Policies also are sold through various unaffiliated
securities broker-dealers and certain other financial institutions. Currently,
the Company writes business in all states except New York.

The preparation of financial statements requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions could change
in the future as more information becomes known, which could impact the amounts
reported and disclosed herein.

The significant differences from GAAP include:(1) policy acquisition costs
are charged to expense as incurred rather than deferred and amortized in
relation to future estimated gross profits; (2) policy reserves are based on
statutory mortality, morbidity, and interest requirements without consideration
of withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available-for-
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred. The carrying values of investment
securities and real estate are reduced through the income statement when there
has been a decline in value deemed other than temporary and mortgage loan
valuation allowances, if necessary, are established when the Company determines
it is probable that it will be unable to collect all amounts of principal and
interest due according to the contractual terms of the mortgage loan agreement;
(7) investments in affiliates are carried at their net equity value with changes
in value being recorded directly to unassigned deficit rather than consolidated
in the financial statements; (8) no provision is made for the deferred income
tax effects of temporary differences between book and tax basis reporting; and
(9) certain items, including modifications to required policy reserves resulting
from changes in actuarial assumptions, are recorded directly to unassigned
deficit rather than being reflected in income. GAAP net income for the year
ended December 31, 2000 and GAAP shareholder's equity as of December 31, 2000
and 1999 were $99.4 million, $805.6 million and $695.0 million, respectively.
The effects of variances from GAAP on net income for the year ended December 31,
1999 have not been determined but are presumed to be material.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The significant accounting practices of the Company are as follows:

Revenues and Expenses: Premium revenues are recognized over the premium-
paying period of the policies whereas expenses, including the acquisition costs
of new business, are charged to operations as incurred and policyholder
dividends are provided as paid or accrued.

Cash and Temporary Cash Investments: Cash includes currency on hand and
demand deposits with financial institutions. Temporary cash investments are
short-term, highly-liquid investments both readily convertible to known amounts
of cash and so near maturity that there is insignificant risk of changes in
value because of changes in interest rates.

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

Bond and stock values are carried as prescribed by the NAIC; bonds
generally at amortized amounts or cost, preferred stocks generally at cost
and common stocks at fair value. The discount or premium on bonds is
amortized using the interest method.

Investments in affiliates are included on the statutory equity method.

Loan-backed bonds and structured securities are valued at amortized cost
using the interest method including anticipated prepayments. Prepayment
assumptions are obtained from broker dealer surveys or internal estimates
and are based on the current interest rate and economic environment. The
retrospective adjustment method is used to value all such securities except
for interest-only securities, which are valued using the prospective
method.

The net interest effect of interest rate and currency rate swap
transactions is recorded as an adjustment of interest income as incurred.
The initial cost of interest rate cap and floor agreements is amortized to
net investment income over the life of the related agreement. Gains and
losses on financial futures contracts used as hedges against interest rate
fluctuations are deferred and recognized in income over the period being
hedged. Net premiums related to equity collar positions are amortized into
income on a straight-line basis over the term of the collars. The interest
rate cap and floor agreements and collars are carried at fair value, with
changes in fair value reflected directly in unassigned deficit.

Mortgage loans are carried at outstanding principal balance or amortized
cost.

Investment real estate is carried at depreciated cost, less encumbrances.
Depreciation on investment real estate is recorded on a straight-line
basis. Accumulated depreciation amounted to $2.5 million in 2000, $1.9
million in 1999, and $3.0 million in 1998.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Real estate acquired in satisfaction of debt and real estate held for sale
are carried at the lower of cost or fair value.

Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.

Asset Valuation and Interest Maintenance Reserves: The Asset Valuation
Reserve (AVR) is computed in accordance with the prescribed NAIC formula and
represents a provision for possible fluctuations in the value of bonds, equity
securities, mortgage loans, real estate and other invested assets. Changes to
the AVR are charged or credited directly to the unassigned deficit.

Goodwill: The excess of cost over the statutory book value of the net
assets of life insurance business acquired was $6.3 million, $8.9 million, and
$11.4 million at December 31, 2000, 1999 and 1998, respectively, and generally
is amortized over a ten-year period using a straight-line method.

The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for
cash and temporary cash investments approximate their fair values.

Fair values for public bonds are obtained from an independent pricing
service. Fair values for private placement securities and publicly traded
bonds not provided by the independent pricing service are estimated by the
Company by discounting expected future cash flows using current market
rates applicable to the yield, credit quality and maturity of the
investments.

The fair values for common and preferred stocks, other than its subsidiary
investments, which are carried at equity values, are based on quoted market
prices.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit
characteristics of the underlying loans. Mortgage loans with similar
characteristics and credit risks are aggregated into qualitative categories
for purposes of the fair value calculations.

The carrying amount in the statement of financial position for policy loans
approximates their fair value.

The fair value for outstanding commitments to purchase long-term bonds and
issue real estate mortgages is estimated using a discounted cash flow
method incorporating adjustments for the difference in the level of
interest rates between the dates the commitments were made and December 31,
2000.

Policy Reserves: Life reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest rates
and valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum or guaranteed policy cash values or the
amounts required by the Commonwealth of Massachusetts Division of Insurance.
Reserves for variable life insurance policies are maintained principally on the
modified preliminary term method using the 1958 and 1980 Commissioner's Standard
Ordinary (CSO) mortality tables, with an assumed interest rate of 4% for
policies issued prior to May 1, 1983 and 4 1/2% for policies issued on or
thereafter. Reserves for single premium policies are determined by the net
single premium method using the 1958 CSO mortality table, with an assumed
interest rate of 4%. Reserves for universal life policies issued prior to 1985
are equal to the gross account value which at all times exceeds minimum
statutory requirements. Reserves for universal life policies issued from 1985
through 1988 are maintained at the greater of the Commissioner's Reserve
Valuation Method (CRVM) using the 1958 CSO mortality table, with 4 1/2% interest
or the cash surrender value. Reserves for universal life policies issued after
1988 and for flexible variable policies are maintained using the greater of the
cash surrender value or the CRVM method with the 1980 CSO mortality table and
5 1/2% interest for policies issued from 1988 through 1992; 5% interest for
policies issued in 1993 and 1994; and 4 1/2% interest for policies issued in
1995 through 2000.

Income before taxes differs from taxable income principally due to tax-
exempt investment income, the limitation placed on the tax deductibility of
policyholder dividends, accelerated depreciation, differences in policy reserves
for tax return and financial statement purposes, capitalization of policy
acquisition expenses for tax purposes and other adjustments prescribed by the
Internal Revenue Code.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 1. Nature of Operations and Significant Accounting Practices (continued)

Amounts for disputed tax issues relating to the prior years are charged or
credited directly to policyholders' contingency reserve.

Note 2. Investment in Affiliate

Summarized statutory-basis financial information for IPL for 2000, 1999 and
1998 is as follows:

2000 1999 1998
------ ------ --------
(In millions)

Total assets...................................... $554.7 $571.0 $587.8
Total liabilities................................. 476.3 499.2 517.5
Total revenues.................................... 42.8 35.6 38.8
Net income........................................ 3.3 3.5 3.8

Note 3. Net Investment Income

Investment income has been reduced by the following amounts:

2000 1999 1998
----- ----- -------
(In millions)

Investment expenses............................... $ 9.0 $ 9.5 $ 8.3
Interest expense.................................. -- 1.7 2.4
Depreciation expense.............................. 0.6 0.6 0.8
Investment taxes.................................. 0.5 0.3 0.7
----- ----- -----
$10.1 $12.1 $12.2
===== ===== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 4. Net Capital Gains (Losses) and Other Adjustments

Net realized capital losses consist of the following items:

2000 1999 1998
------ ------ ------
(In millions)

Net unrealized capital gains (losses) and other adjustments consist of the
following items:

2000 1999 1998
------ ------ ------
(In millions)

Net gains (losses) from changes in security values
and book value adjustments......................... $11.6 $(2.6) $(2.7)
Increase in asset valuation reserve................. (3.6) (1.2) (3.3)
----- ----- -----
Net unrealized capital gains (losses) and other
adjustments....................................... $ 8.0 $(3.8) $(6.0)
===== ===== =====

Note 5. Transactions With Parent

John Hancock provides the Company with personnel, property and facilities
in carrying out certain of its corporate functions. John Hancock annually
determines a fee for these services and facilities based on a number of criteria
which were revised in 2000, 1999 and 1998 to reflect continuing changes in the
Company's operations. The amount of the service fee charged to the Company was
$162.2 million, $188.3 million, $157.5 million, in 2000, 1999, and 1998,
respectively, which has been included in insurance and investment expenses. John
Hancock has guaranteed that, if necessary, it will make additional capital
contributions to prevent the Company's stockholder's equity from declining below
$1.0 million.

The service fee charged to the Company by John Hancock includes $0.7
million, $0.2 million, and $0.7 million in 2000, 1999, and 1998, respectively,
representing the portion of the provision for retiree benefit plans determined
under the accrual method, including a provision for the 1993 transition
liability which is being amortized over twenty years, that was allocated to the
Company. John Hancock allocates a portion of the activity related to its defined
benefit pension plans to the Company. The pension plan prepaid expense allocated
to the Company amounted to $55.0 million and $41.9 million in 2000 and 1999,
respectively. Since 1988, the Massachusetts Division of Insurance has provided
the Company with approval to recognize the pension plan prepaid expense, if any,
in accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Division of Insurance with an actuarial
certification of the prepaid expense computation on an annual basis.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 5. Transactions With Parent (continued)

The Company has a modified coinsurance agreement with John Hancock to
reinsure 50% of 1994 through 2000 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, John Hancock transferred $24.2 million, $44.5 million, and
$4.9 million of cash for tax, commission, and expense allowances to the Company,
which decreased the Company's net gain from operations by $0.9 million in 2000,
and increased the Company's net gain from operations by$20.6 million, and $22.2
million in 1999, and 1998, respectively.

Effective January 1, 1997, the Company entered into a stop-loss agreement
with John Hancock to reinsure mortality claims in excess of 100% of expected
mortality claims in 2000, 1999 and 1998 for all policies that are not reinsured
under any other indemnity agreement. In connection with the agreement, John
Hancock received $1.0 million, $0.8 million, and $1.0 million in 2000, 1999, and
1998, respectively, for mortality claims to the Company. This agreement
decreased the Company's net gain from operations by $1.1 million in 2000 and
$0.5 million in both 1999 and 1998.

The Company had a $200.0 million line of credit with an affiliate, John
Hancock Capital Corp. At December 31, 2000 and 1999, the Company had no
outstanding borrowings under this agreement.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments

The statement value and fair value of bonds are shown below:

Gross Gross
Statement Unrealized Unrealized Fair
Value Gains Losses Value
--------- ---------- ---------- ---------
(In millions)

December 31, 2000
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies........ 5.7 $ -- $ -- $ 5.7
Obligations of states and
political subdivisions........... 1.8 -- -- 1.8
Debt securities issued by
foreign governments.............. 10.9 0.3 0.6 10.6
Corporate securities.............. 1,158.8 36.4 68.5 1,126.7
Mortgage-backed securities........ 223.3 3.4 4.6 222.1
-------- ------ ----- ---------
Total bonds..................... $1,400.5 $ 40.1 $73.7 $ 1,366.9
======== ====== ===== =========

December 31, 1999
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies........ $ 5.9 -- $ 0.1 $ 5.8
Obligations of states and
political subdivisions........... 2.2 $ 0.1 0.1 2.2
Debt securities issued by
foreign governments.............. 13.9 0.8 0.1 14.6
Corporate securities.............. 964.9 13.0 59.4 918.5
Mortgage-backed securities........ 229.4 0.5 7.8 222.1
-------- ------ ----- --------
Total bonds..................... $1,216.3 $ 14.4 $67.5 $1,163.2
======== ====== ===== ========

December 31, 1998
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies........ $ 5.1 $ 0.1 -- $ 5.2
Obligations of states and
political subdivisions........... 3.2 0.3 -- 3.5
Corporate securities.............. 925.2 50.4 $15.0 960.6
Mortgage-backed securities........ 252.3 10.0 0.1 262.2
-------- ------ ----- --------
Total bonds..................... $1,185.8 $ 60.8 $15.1 $1,231.5
======== ====== ===== ========

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Statement Fair
Value Value
--------- ---------
(In millions)

Due in one year or less................................ $ 72.4 $ 72.5
Due after one year through five years.................. 424.2 427.7
Due after five years through ten years................. 428.5 419.5
Due after ten years.................................... 252.1 225.1
-------- --------
1,177.2 1,144.8
Mortgage-backed securities............................. 223.3 222.1
-------- --------
$1,400.5 $1,366.9
======== ========

Gross gains of $0.9 million in 2000, $0.3 million in 1999, and $3.4 million
in 1998 and gross losses of $3.0 million in 2000, $4.0 million in 1999 and $0.7
million in 1998 were realized from the sale of bonds.

At December 31, 2000, bonds with an admitted asset value of $9.6 million
were on deposit with state insurance departments to satisfy regulatory
requirements.

The cost of common stocks was $3.1 million at December 31, 2000 and 1999
and $2.1 million at December 31, 1998. At December 31, 2000, gross unrealized
appreciation on common stocks totaled $1.5 million, and gross unrealized
depreciation totaled $1.8 million. The fair value of preferred stock totaled
$41.6 million, $35.9 million, and $36.5 million at December 31, 2000, 1999, and
1998, respectively.

Bonds with amortized cost of $5.1 million were non-income producing for the
twelve months ended December 31, 2000.

Statement Geographic Statement
Property Type Value Concentration Value
- ------------- ------------- ------------- ---------------
(In millions) (In millions)

Apartments............ $ 93.7 East North Central.... $ 64.3
Hotels................ 13.0 East South Central.... 20.9
Industrial............ 63.5 Middle Atlantic....... 20.9
Office buildings...... 84.7 Mountain.............. 27.0
Retail................ 35.4 New England........... 23.4
Agricultural.......... 142.5 Pacific............... 108.0
Other................. 23.2 South Atlantic........ 120.7
------
West North Central.... 16.0
West South Central.... 51.5
Other................. 3.3
------
$456.0 $456.0
====== ======

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 6. Investments (continued)

Note 7. Reinsurance

The Company cedes business to reinsurers to share risks under variable
life, universal life and flexible variable life insurance policies for the
purpose of reducing exposure to large losses. Premiums, benefits and reserves
ceded to reinsurers in 2000 were $588.1 million, $187.3 million, and $19.9
million, respectively. The corresponding amounts in 1999 were $594.9 million,
$132.8 million, and $13.6 million, respectively, and the corresponding amounts
in 1998 were $590.2 million, $63.2 million, and $8.2 million, respectively.

Neither the Company, nor any of its related parties, control, either
directly or indirectly, any external reinsurers with which the Company conducts
business. No policies issued by the Company have been reinsured with a foreign
company which is controlled, either directly or indirectly, by a party not
primarily engaged in the business of insurance.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk

The notional amounts, carrying values and estimated fair values of the
Company's derivative instruments were as follows at December 31:

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 2000
---------------- ----------------------
Carrying Fair
2000 Value Value
---------------- ----------- --------
($ In millions)

Futures contracts to sell
securities........................... $ -- $ -- $ --
Futures contracts to buy securities... 43 0.1 0.1
Interest rate swap agreements......... $ 1,150.0 --
Interest rate cap agreements.......... 239.4 2.1 2.1
Currency rate swap agreements......... 22.3 -- (0.6)
Equity collar agreements.............. -- 0.4 0.4
Interest rate floor agreements........ 361.4 1.4 1.4

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1999
---------------- ----------------------
Carrying Fair
1999 Value Value
---------------- ----------- --------
($ In millions)

Futures contracts to sell
securities....................... 362 $0.6 $ 0.6
Interest rate swap agreements..... $965.0 -- 11.5
Interest rate cap agreements...... 239.4 5.6 5.6
Currency rate swap agreements..... 15.8 -- (1.6)

Number of
Contracts/ Assets (Liabilities)
Notional Amounts 1998
---------------- ---------------------
Carrying Fair
1998 Value Value
---------------- --------- ---------
($ In millions)

Futures contracts to sell securities 947 $(0.5) $ (0.5)
Interest rate swap agreements.......... $365.0 -- (17.7)
Interest rate cap agreements........... 89.4 3.1 3.1
Currency rate swap agreements.......... 15.8 -- (3.3)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 8. Financial Instruments With Off-Balance-Sheet Risk (Continued)

The Company invests in common stock that is subject to fluctuations from
market value changes in stock prices. The Company sometimes seeks to reduce its
market exposure to such holdings by entering into equity collar agreements. A
collar consists of a call that limits the Company's potential gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The futures contracts expire in 2001. The interest rate swap agreements
expire in 2000 to 2011. The interest rate cap agreements expire in 2006 to 2008.
The currency rate swap agreements expire in 2006 to 2015. The equity collar
agreements expire in 2005.

Note 9. Policy Reserves, Policyholders' and Beneficiaries' Funds and
Obligations Related To Separate Accounts

The Company's annuity reserves and deposit fund liabilities that are
subject to discretionary withdrawal, with and without adjustment, are summarized
as follows:

December 31, 2000 Percent
----------------- -------
(In millions)

Subject to discretionary withdrawal (with
adjustment).......................................
With market value adjustment...................... $ 30.3 1.1%
At book value less surrender charge............... 54.7 2.1
At market value................................... 2,250.3 84.8
-------- -----
Total with adjustment............................ 2,335.3 88.0
Subject to discretionary withdrawal at book
value (without adjustment......................... 312.8 11.8
Not subject to discretionary withdrawal--
general account................................... 7.1 0.2
-------- -----
Total annuity reserves and deposit liabilities... $2,655.2 100.0%
======== =====

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 10. Commitments and Contingencies

During 1997, John Hancock entered into a court-approved settlement relating
to a class action lawsuit involving certain individual life insurance policies
sold from 1979 through 1996. In entering into the settlement, John Hancock
specifically denied any wrongdoing. During 1999, the Company recorded a $194.9
million reserve, through a direct charge to its unassigned deficit, representing
the Company's share of the settlement and John Hancock contributed $194.9
million of capital to the Company. The reserve held at December 31, 2000
amounted to $39.5 million and is based on a number of factors, including the
estimated cost per claim and the estimated costs to administer the claims.

Given the uncertainties associated with estimating the reserve, it is
reasonably possible that the final cost of the settlement could differ
materially from the amounts presently provided for by the Company. John Hancock
and the Company will continue to update their estimate of the final cost of the
settlement as claims are processed and more specific information is developed,
particularly as the actual cost of the claims subject to alternative dispute
resolution becomes available. However, based on information available at this
time, and the uncertainties associated with the final claim processing and
alternative dispute resolution, the range of any additional costs related to the
settlement cannot be estimated with precision. If the Company's share of the
settlement increases, John Hancock will contribute additional capital to the
Company so that the Company's total stockholder's equity would not be impacted.

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

Note 11 -- Fair Value of Financial Instruments

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

Assets
Bonds--Note 6................................................. $1,400.5 $1,366.9 $1,216.3 $1,163.2
Preferred stocks--Note 6...................................... 44.0 41.6 35.9 35.9
Common stocks--Note 6......................................... 2.8 2.8 3.2 3.2
Mortgage loans on real estate--Note 6......................... 456.0 467.3 433.1 421.7
Policy loans--Note 1.......................................... 218.9 218.9 172.1 172.1
Cash items--Note 1............................................ 272.0 272.0 250.1 250.1

Derivatives assets (liabilities) relating to: Note 8
Futures contracts............................................. 0.1 0.1 0.6 0.6
Interest rate swaps........................................... -- (0.4) -- 11.5
Currency rate swaps........................................... -- (0.6) -- (1.6)
Interest rate caps............................................ 2.1 2.1 5.6 5.6
Equity collar agreements...................................... -- 0.4 -- --

Liabilities
Commitments--Note 10.......................................... -- 56.4 -- 19.4

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS (continued)

NOTE 11 -- FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

December 31
---------------------
1998
---------------------
Carrying Fair
Amount Value
--------- ----------
(In Millions)

Assets
Bonds--Note 6......................................... $ 1,185.8 $ 1,231.5
Preferred stocks--Note 6.............................. 36.5 36.5
Common stocks--Note 6................................. 3.1 3.1
Mortgage loans on real estate--Note 6................. 388.1 401.3
Policy loans--Note 1.................................. 137.7 137.7
Cash items--Note 1.................................... 19.9 19.9

Derivatives assets (liabilities) relating to: Note 8
Futures contracts..................................... (0.5) (0.5)
Interest rate swaps................................... -- (17.7)
Currency rate swaps................................... -- (3.3)
Interest rate caps.................................... 3.1 3.1

Liabilities
Commitments--Note 10.................................. -- 32.1

100

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Type of Investment Cost (2) Value Balance Sheet
------------------ -------- ----- ---------------

Equity securities, trading:
Common stocks:
Public utilities
Banks, trust and insurance companies
Industrial, miscellaneous and all other
Non-redeemable preferred stock
Total equity securities, trading.............................................. 0.0 0.0 0.0
------- ------- -------
Mortgage loans on real estate, net (1)........................................ 559.8 XXXX 554.8

101

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES (continued)

As of December 31, 2000
(in millions of dollars)

Amount at Which
Shown in the
Consolidated
Cost (2) Value Balance Sheet
-------- ----- ---------------

Real estate, net:
Investment properties (1).............. 23.9 XXXX 23.9
Acquired in satisfaction of debt (1)... 0.0 XXXX 0.0
Policy loans........................... 334.2 XXXX 334.2
Other long-term investments (2)........ 34.8 XXXX 34.8
Short-term investments................. 21.7 XXXX 21.7
------- ------- -------
Total investments..................... 2,715.7 1,706.7 2,704.7
======= ======= =======

See accompanying independent auditors' report.

102

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

GAAP
2000:
Protection............................... $819.3 $2,698.4 $212.0 $11.1 $ 28.6
Asset Gathering.......................... 174.8 70.0 -- -- --
------ -------- ------ ----- --------
Total................................... $994.1 $2,768.4 $212.0 $11.1 $ 28.6
------ -------- ------ ----- --------
Statutory Basis
2000:
Variable Products....................... N/A $2,206.0 $ 8.8 $16.4 $ 945.4
------ -------- ------ ----- --------
1999:
Variable Products....................... N/A $1,864.9 $ 3.9 $15.4 $ 950.8
------ -------- ------ ----- --------
1998:
Variable Products....................... N/A $1,651.7 $ 2.3 $13.1 $1,272.3
------ -------- ------ ----- --------

103

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION (continued)

As of December 31, 2000, 1999 and 1998 and for the year then ended
(in millions of dollars)

Amortization Of
Benefits, Deferred Policy
Claims, Losses, Acquisition Costs,
Net and Excluding Amounts Other
Investment Settlement Related to Realized Operating
Segment Income Expenses Investment Gains Expenses
------- ---------- --------------- ------------------- ---------

GAAP
2000:
Protection........................... $215.9 $ 242.2 $17.6 $100.5
Asset Gathering...................... (2.5) 6.4 16.4 16.3
------ -------- ----- ------
Total............................... $213.4 $ 248.6 $34.0 $116.8
------ -------- ----- ------
STATUTORY BASIS
2000:
Variable Products................... $176.7 $1,185.2 N/A $389.2
------ -------- ----- ------
1999:
Variable Products................... $136.0 $1,238.7 N/A $334.9
------ -------- ----- ------
1998:
Variable Products................... $122.8 $1,661.6 N/A $302.3
------ -------- ----- ------

104

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV -- REINSURANCE

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Assumed
Amount Companies Companies Net Amount to Net
------ --------- ---------- ---------- ----------

GAAP
2000
Life insurance in force........................ $98,737.2 $39,495.8 $37.1 $59,278.5 0.1%
--------- --------- ----- --------- ---
Premiums:
Life insurance................................. $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
Accident and health insurance.................. -- -- -- -- 0.0%
P&C............................................ -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................................ $ 34.1 $ 5.5 $ -- $ 28.6 0.0%
========= ========= ===== ========= ===
Statutory Basis
2000
Life insurance in force........................ $96,574.3 $38,059.7 $ -- $58,514.6 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance................................. $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
Accident and health insurance.................. -- -- -- -- 0.0%
P&C............................................ -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................................ $ 1,533.6 $ 588.1 $ -- $ 945.5 0.0%
========= ========= ===== ========= ===
1999
Life insurance in force........................ $74,831.8 $ 8,995.0 $ -- $55,836.8 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance................................. $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
Accident and health insurance.................. -- -- -- -- 0.0%
P&C............................................ -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total........................................ $ 1,545.7 $ 594.9 $ -- $ 950.8 0.0%
========= ========= ===== ========= ===

105

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY AND SUBSIDIARY

SCHEDULE IV--REINSURANCE (continued)

As of December 31, 2000
(in millions of dollars)

Percentage
Ceded to Assumed of Amount
Gross Other from Other Net Assumed
Amount Companies Companies Amount to Net
------ --------- ---------- ------ ----------

1998
Life insurance in force................... $62,628.7 $15,302.1 $ -- $47,326.6 0.0%
--------- --------- ----- --------- ---
Premiums:
Life insurance............................ $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
Accident and health insurance............. -- -- -- -- 0.0%
P&C....................................... -- -- -- -- 0.0%
--------- --------- ----- --------- ---
Total................................... $ 1,862.5 $ 590.2 $ -- $ 1,272.3 0.0%
========= ========= ===== ========= ===

See accompanying independent auditors' report.

106

APPENDIX A - DETAILS ABOUT OUR GUARANTEED PERIODS

Investments that support our guarantee periods

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.

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
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period

107

Computation of Market Value Adjustment

n/12
1+g
(-------------) - 1
1 + c + 0.005

where,

. g is the guaranteed rate in effect for the current guarantee period.

. c is the current guaranteed rate in effect for new guarantee periods
with duration equal to the number of years remaining in the current
guarantee period (rounded to the nearest whole number of years). If
we are not currently offering such a guarantee period, 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 guarantee period. (If less than one complete
month remains, n equals one unless the withdrawal is made on the
last day of the guarantee period, in which case no adjustment
applies.)

Sample Calculation 1: Positive Adjustment

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

Amount withdrawn or transferred $10,000
- ------------------------------------------------------------------------------------------------
Guarantee period 7 years
- ------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- ------------------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- ------------------------------------------------------------------------------------------------
Guaranteed rate for new 5 year guarantee (c) 7%
- ------------------------------------------------------------------------------------------------
Remaining guarantee period (n) 60 months
- ------------------------------------------------------------------------------------------------

Market value adjustment:

60/12
1 + 0.08
10,000 x [(----------------) - 1] = 234.73
1 + 0.07 + 0.005

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
+ $234.73 = $10,234.73

108

Sample Calculation 2: Negative Adjustment

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

Amount withdrawn or transferred $10,000
- ----------------------------------------------------------------------------------------------
Guarantee period 7 years
- ----------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- ----------------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- ----------------------------------------------------------------------------------------------
Guaranteed rate for new 5 year guarantee (c) 9%
- ----------------------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- ----------------------------------------------------------------------------------------------

Market value adjustment:

60/12
1 + 0.08
10,000 x [(----------------) - 1] = -666.42
1 + 0.09 + 0.005

Amount withdrawn or transferred (adjusted for money market adjustment): $10,000
- - 666.42 = $9,333.58

Sample Calculation 3: Negative Adjustment

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

Market value adjustment:

60/12
1 + 0.08
10,000 x [(-------------------) - 1] = -114.94
1 + 0.0775 + 0.005

Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - 114.94 = $9,885.06

________________________________________________________________________

* All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we are
actually guaranteeing at any time.

109

APPENDIX B - EXAMPLE OF WITHDRAWAL CHARGE CALCULATION

Assume The Following Facts:

On January 1, 1997, you make a $5000 initial premium payment and we issue
you a contract.
On January 1, 1998, you make a $1000 premium payment
On January 1, 1999, you make a $1000 premium 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.

$6000.00 -- withdrawal request payable to you
+ 272.23 -- withdrawal charge payable to us
--------
$6272.23 -- total amount withdrawn from your contract

Here Is How We Determine The Withdrawal Charge:

1. We first reduce your $5000 INITIAL PREMIUM 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.

$5000
-30 -- 1998 contract fee payable to us
-30 -- 1999 contract fee payable to us
-30 -- 2000 contract fee payable to us
-----
$4910 -- amount of your initial premium 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 premium 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 premium payment. We pay the
remainder of $3809.50 to you as a part of your withdrawal request.

$4910
-900 -- free withdrawal amount (payable to you)
-----
$4010
x .05
-----
$200.50 -- withdrawal charge on initial premium payment (payable to us)

$4010.00
-200.50
-------
3809.50 -- part of withdrawal request payable to you

2.We next deem the entire amount of your 1998 PREMIUM PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1000 amount. Because
you made this premium 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 premium payment. We pay the remainder
of $950 to you as a part of your withdrawal request.

$1000
x.05
-----
$ 50 -- withdrawal charge on 1998 premium payment (payable to us)

110

$1000
- 50
----
$ 950 -- part of withdrawal request payable to you

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 premium
payment, and $950 from your 1999 premium payment. Therefore, $340.50 is
needed to reach $6000.

$6000.00 -- total withdrawal amount requested
-900.00 -- free withdrawal amount
-3809.50 -- payment deemed from initial premium payment
-950.00 -- payment deemed from 1998 premium 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 premiums 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

$340.5
------
0.94 = x

$362.23 = x

$362.23 -- deemed withdrawn from 1999 premium payment
-$340.50 -- part of withdrawal request payable to you
--------
$ 21.73 -- withdrawal charge on 1999 premium deemed withdrawn (payable
to us)

111

Prospectus Dated May 1, 2001
--------------------------------------------------------------------
DECLARATION VARIABLE ANNUITY
--------------------------------------------------------------------

a deferred combination fixed and variable annuity contract
issued by

John Hancock Variable Life Insurance Company ("JHVLICO")

The contract enables you to earn fixed rates of interest that we
guarantee for stated periods of time ("guarantee periods") and
investment-based returns in the following variable investment
options:

- --------------------------------------------------------------------------------
Variable Investment Option Managed By
-------------------------- ----------
V.A. International............. Nicholas-Appelgate Capital Management
V.A. Regional Bank............. John Hancock Advisers, Inc.
V.A. Financial Industries...... John Hancock Advisers, Inc.
V.A. Small Cap Growth.......... John Hancock Advisers, Inc.
V.A. Mid Cap Growth............ John Hancock Advisers, Inc.
V.A. Large Cap Growth.......... John Hancock Advisers, Inc.
V.A. Relative Value............ John Hancock Advisers, Inc.
V.A. Core Equity............... Independence Investment LLC
V.A. Sovereign Investors....... John Hancock Advisers, Inc.
V.A. 500 Index................. John Hancock Advisers, Inc.
V.A. Bond...................... John Hancock Advisers, Inc.
V.A. Strategic Income.......... John Hancock Advisers, Inc.
V.A. High Yield Bond........... John Hancock Advisers, Inc.
V.A. Money Market.............. John Hancock Advisers, Inc.
- --------------------------------------------------------------------------------

The variable investment options shown on page 1 are those available as of
the date of this prospectus. We may add or delete variable investment options in
the future.

When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Declaration Trust ("the Series Fund"). In this prospectus, the investment
options of the Series Fund are referred to as "funds." In the prospectuses for
the Series Fund, the investment options may also be referred to as "funds,"
"portfolios" or "series".

The Series Fund is a so-called "series" type mutual fund registered with
the Securities and Exchange Commission ("SEC"). The investment results of each
variable investment option you select will depend on those of the corresponding
fund of the Series Fund. Each of the funds is separately managed and has its own
investment objective and strategies. Attached at the end of this prospectus is a
prospectus for the Series Fund. The Series Fund prospectus contains detailed
information about each available fund. Be sure to read that prospectus before
selecting any of the variable investment options shown on page 1.

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.

John Hancock Annuity Servicing Office

Mail Delivery Phone:
------------- ------
529 Main Street 1-800-824-0335
Charlestown, MA 02129
Fax:
----
1-617-886-2947

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

Please note that the SEC has not approved or disapproved these securities,
or determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged the
prospectus in the following way:

. The first section contains an "Index of Key Words."

. Behind the index is the "Fee Table." This section highlights the
various fees and expenses you will pay directly or indirectly, if
you purchase a contract.

. The next section is called "Basic Information." It contains basic
information about the contract presented in a question and answer
format. You should read the Basic Information before reading any
other section of the prospectus.

. Behind the Basic Information is "Additional Information." This
section gives more details about the contract. It generally does
not repeat information contained in the Basic Information.

. "Condensed Financial Information" follows the "Additional
Information." This gives some basic information about the size
and past performance of the variable investment options.

The Series Fund's prospectus is attached at the end of this prospectus. You
should save these prospectuses for future reference.

- --------------------------------------------------------------------------------
IMPORTANT NOTICES

INDEX OF KEY WORDS

We define or explain each of the following key words used in this prospectus on
the pages shown below:

Key Word Page

Accumulation units................................................... 23
Annuitant............................................................ 9
Annuity payments..................................................... 11
Annuity period....................................................... 11
Contract year........................................................ 9
Date of issue........................................................ 9
Date of maturity..................................................... 9
Free withdrawal amount............................................... 15
Funds................................................................ 2
Guarantee periods.................................................... 2
Investment options................................................... 13
Market value adjustment.............................................. 22
Premium payments..................................................... 9
Surrender value...................................................... 17
Surrender............................................................ 17
Variable investment options.......................................... cover
Withdrawal charge.................................................... 16
Withdrawal........................................................... 16

FEE TABLE

Owner Transaction Expenses and Annual Contract Fee

. Maximum Withdrawal Charge (as % of amount withdrawn) 6%

. Annual Contract Fee (applies only to contracts of less than $10,000) $30

Annual Contract Expenses (as a % of the average total value of the contract)

Initial Premium Payment less than $250,000
------------------------------------------

. Mortality and Expense Risk Charge 0.90%
. Administrative Services Charge 0.35%
-----
. Total Annual Contract Charge 1.25%

Initial Premium Payment $250,000 or more
----------------------------------------

. Mortality and Expense Risk Charge 0.90%
. Administrative Services Charge 0.10%
-----
. Total Annual Contract Charge 1.00%

These annual contract expenses don't apply to amounts held in the guarantee
periods.

Annual Fund Expenses (based on % of average net assets)

The following figures for the funds are based on historical fund expenses, as
a percentage (rounded to two decimal places) of each fund's average daily net
assets for 2000, except as indicated in the Notes appearing at the end of this
table. Expenses of the funds are not fixed or specified under the terms of the
policy, and those expenses may vary from year to year.

-------------
Total Fund Total Fund
Investment Distribution and Other Operating Operating Operating
Management Service Expenses With Expenses With Expenses Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursemet
- --------- ---------- ---------------- --------------- ------------- ---------------

John Hancock Declaration Trust
(Note 1):
V.A. International........................ 0.90% N/A 0.25% 1.15% 3.24%
V.A. Regional Bank........................ 0.80% N/A 0.21% 1.01% 1.01%
V.A. Financial Industries................. 0.80% N/A 0.10% 0.90% 0.90%
V.A. Small Cap Growth..................... 0.75% N/A 0.25% 1.00% 1.10%
V.A. Mid Cap Growth....................... 0.75% N/A 0.25% 1.00% 1.10%
V.A. Large Cap Growth..................... 0.75% N/A 0.21% 0.96% 0.96%
V.A. Core Equity.......................... 0.70% N/A 0.15% 0.85% 0.85%
V.A. Sovereign Investors.................. 0.60% N/A 0.12% 0.72% 0.72%
--------------

-------------
Total Fund Total Fund
Investment Distribution and Other Operating Operating Operating
Management Service Expenses With Expenses With Expenses Absent
Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursemet
- --------- ---------- ---------------- --------------- ------------- ---------------

V.A. 500 Index............................. 0.10% N/A 0.25% 0.35% 0.93%
V.A. Bond.................................. 0.50% N/A 0.25% 0.75% 0.92%
V.A. Strategic Income...................... 0.60% N/A 0.16% 0.76% 0.76%
V.A. High Yield Bond....................... 0.60% N/A 0.25% 0.85% 1.24%
V.A. Money Market.......................... 0.50% N/A 0.10% 0.60% 0.60%
-------------

Notes to Annual Fund Expenses
(1) Percentages shown for John Hancock Declaration Trust funds reflect the
investment management fees currently payable and other fund expenses
allocated in 2000. John Hancock Advisers, Inc. has agreed to limit
temporarily other expenses of each fund to 0.25% of the fund's average
daily assets, at least until April 30, 2002. John Hancock Advisers, Inc.
has agreed to limit the management fee on the V.A. 500 Index Fund to
0.10% of that fund's average daily net assets at least until April 30,
2002. Without this limitation, the managment fee for that fund would have
been 0.35% of that fund's average daily net assets.

Examples

The following examples on page 7 illustrate the current expenses you would pay,
directly or indirectly, on a $1,000 investment allocated to one of the variable
investment options, assuming a 5% annual return on assets. These examples do not
include any applicable premium taxes or any fees for optional benefit riders.
The examples should not be considered representations of past or future
expenses; actual charges may be greater or less than those shown above. The
examples assume fund expenses at rates set forth above for 2000, after
reimbursements. The annual contract fee has been included as an annual
percentage of assets.

If you "surrender" (turn in) your contract at the end of the applicable
time period, you would pay:

-----------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------
V.A. International $78 $120 $164 $275
-----------------------------------------------------------------
V.A. Regional Bank $77 $116 $157 $261
-----------------------------------------------------------------
V.A. Financial Industries $76 $112 $152 $250
-----------------------------------------------------------------
V.A. Small Cap Growth $77 $115 $157 $260
-----------------------------------------------------------------
V.A. Mid Cap Growth $77 $115 $157 $260
-----------------------------------------------------------------
V.A. Large Cap Growth $77 $114 $155 $256
-----------------------------------------------------------------
V.A. Relative Value $75 $109 $146 $238
-----------------------------------------------------------------
V.A. Core Equity $75 $111 $149 $244
-----------------------------------------------------------------
V.A. Sovereign Investors $74 $107 $142 $231
-----------------------------------------------------------------
VA 500 Index $70 $ 96 $123 $191
-----------------------------------------------------------------
V.A. Bond $74 $108 $144 $234
-----------------------------------------------------------------
V.A. Strategic Income $75 $108 $144 $235
-----------------------------------------------------------------
V.A. High Yield Bond $75 $111 $149 $244
-----------------------------------------------------------------
V.A. Money Market $73 $103 $136 $218
-----------------------------------------------------------------

If you begin receiving payments under one of our annuity payment options
at the end of the applicable time period, or if you do not surrender your
contact, you would pay the following current expenses:

-----------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------
V.A. International $24 $75 $129 $275
-----------------------------------------------------------------
V.A. Regional Bank $23 $71 $122 $261
-----------------------------------------------------------------
V.A. Financial Industries $22 $68 $116 $250
-----------------------------------------------------------------
V.A. Small Cap Growth $23 $71 $121 $260
-----------------------------------------------------------------
V.A. Mid Cap Growth $23 $71 $121 $260
-----------------------------------------------------------------
V.A. Large Cap Growth $23 $70 $119 $256
-----------------------------------------------------------------
V.A. Relative Value $21 $64 $110 $238
-----------------------------------------------------------------
V.A. Core Equity $21 $66 $114 $244
-----------------------------------------------------------------
V.A. Sovereign Investors $20 $62 $107 $231
-----------------------------------------------------------------
VA 500 Index $16 $51 $ 88 $191
-----------------------------------------------------------------
V.A. Bond $20 $63 $108 $234
-----------------------------------------------------------------
V.A. Strategic Income $21 $63 $109 $235
-----------------------------------------------------------------
V.A. High Yield Bond $21 $66 $114 $244
-----------------------------------------------------------------
V.A. Money Market $19 $59 $101 $218
-----------------------------------------------------------------

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked
questions about the contract. Here are the page numbers where the questions and
answers appear:

Question Starting on page
-------- ----------------

What is the contract?................................................................ 9

Who owns the contract?............................................................... 9

Is the owner also the annuitant?..................................................... 9

How can I invest money in a contract?................................................ 9

How will the value of my investment in the contract change over time?................ 11

What annuity benefits does the contract provide?..................................... 11

To what extent can JHVLICO vary the terms and conditions of the contracts?........... 12

What are the tax consequences of owning a contract?.................................. 12

How can I change my contract's investment allocations?............................... 13

What fees and charges will be deducted from my contract?............................. 14

How can I withdraw money from my contract?........................................... 16

What happens if the annuitant dies before my contract's date of maturity?............ 18

What is the contract?

The contract is a deferred payment variable annuity contract. 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 "date of maturity." 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 buying the contract will
be 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.

Is the owner also the annuitant?

Again, that's up to you. The annuitant is the person upon whose death
the contract's death benefit becomes payable. Also, the annuitant receives
payments from us under any annuity option that commences during the
annuitant's lifetime. In many cases, the same person is both the annuitant
and the owner of a contract. However, you are free to name another person
as annuitant.

How can I invest money in a contract?

Premium payments

We call the investments you make in your contract premiums or premium
payments. In general, you need at least a $1,000 initial premium payment to
purchase a contract. If you choose to contribute more money into your
contract, each subsequent premium payment must also be at least $500. If
you deposit money directly from your bank account, your subsequent premium
payments can be as small as $100.

Applying for a contract

An authorized representative of the broker-dealer or financial
institution through whom you purchase your contract will assist you in (1)
completing an application or placing an order for a contract and (2)
transmitting it, along with your initial premium payment, to the John
Hancock Annuity Servicing Office.

Once we receive your initial premium payment and all necessary
information, we will issue your contract and invest your initial premium
payment within two business days. If the information is not in good order,
we will contact you to get the necessary information. If for some reason,
we are unable to complete this process within 5 business days, we will
either send back your money or get your permission to keep it until we get
all of the necessary information.

In certain situations, we will issue a contract upon receiving the
order of your broker-dealer or financial institution, but delay the
effectiveness of the contract until we receive your signed application. In
those situations, if we do not receive your signed application within our
required time period, we will deem the contract void from the beginning and
return your premium payment.

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.

Limits on premium payments

You can make premium payments of up to $1,000,000 in any one contract
year. total of all new premium payments and transfers that you allocate to
any one variable 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 premium payments at any time before the date of maturity. However,

--------------------------------------------------------------------------------------
you may not make any premium
payments after the annuitant
if your contract is used to fund reaches age
--------------------------------------------------------------------------------------

a "tax qualified plan"* 70 1/2**
--------------------------------------------------------------------------------------
a non-tax qualified plan 84 1/2
--------------------------------------------------------------------------------------

* as that term is used in "Tax Information," beginning on page
26.
** except for a Roth IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than
age 84. We may waive any of these limits, however.

Ways to make premium payments

Premium 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."

We will not accept credit card checks. Nor will we accept starter or
third party checks that fail to meet our administrative requirements.
Premium payments after the initial premium payment should be sent to the
John Hancock Annuity Servicing Office at the address shown on page 2 of
this prospectus. We will also accept premium payments by wire. We will
accept your initial premium payment by exchange from another insurance
company. You can find information about wire payments under "Premium
payments by wire," below. You can find information about other methods of
premium payment by contacting your JHVLICO representative or by contacting
the John Hancock Annuity Servicing Office.

Once we have issued your contract and it becomes effective, we credit
you with any additional premiums you pay as of the day we receive them at
the John Hancock Annuity Servicing Office.

Premium payments by wire

If you purchase your contract through a broker-dealer firm or
financial institution, you may transmit your initial premium payment by
wire order. Your wire orders must include information necessary to allocate
the premium payment among your selected investment options.

If your wire order is complete, we will invest the premium payment in
your selected investment options as of the day we received the wire order.
If the wire order is incomplete, we may hold your initial premium payment
for up to 5 business days while attempting to obtain the missing
information. If we can't obtain the information within 5 business days, we
will immediately return your premium payment, unless you tell us to hold
the premium payment for 5 more days pending completion of the application.
Nevertheless, until we receive and accept a properly completed and signed
application, we will not:

. issue a contract;

. accept premium payments; or

. allow other transactions.

After we issue your contract, subsequent premium payments may be
transmitted by wire through your bank. Information about our bank, our
account number, and the ABA routing number may be obtained from the John
Hancock Annuity Servicing Office. Banks may charge a fee for wire services.

How will the value of my investment in the contract change over time?

Prior to a contract's date of maturity, 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
table on pages 5 and 6. 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 under "What fees and charges will be deducted from
my contract?" beginning on page 14.

The amount you've invested in a guarantee period will earn interest at
the rate we have set for that period. The interest rate depends upon the
length of the guarantee period you select. We currently make available
various guarantee periods with durations of up to ten years. As long as you
keep your money in a guarantee period 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 guarantee period 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 had on the market value of a
debt instrument with terms comparable to that guarantee period. 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")" beginning on page 22.

At any time before the date of maturity, the total value of your
contract equals

. the total amount you invested,

. minus all charges we deduct,

. minus all withdrawals you have made,

. plus or minus any positive or negative MVA's that we have made at the
time of any premature withdrawals or transfers you have made from a
guarantee period,

. plus or minus each variable investment option's positive or negative
investment return that we credit daily to any of your contract's value
daily while it is in that option, and

. plus the interest we credit to any of your contract's value while it
is in a guarantee period.

What annuity benefits does a contract provide?

If your contract is still in effect on its date of maturity, 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 date of maturity. Therefore you should exercise care in selecting your
date of maturity and your choices that are in effect on that date.

You should carefully review the discussion under "The annuity period,"
beginning on page 23, 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 reside. 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, guarantee periods, 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 "Certain changes" in the Additional Information
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:

. partial withdrawal (including systematic withdrawals),

. full withdrawal ("surrender"),

. payment of death benefit proceeds as a single sum upon the annuitant's
death,

. 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 tax qualified retirement plan for which the contract
is being used,

. the circumstances under which the payments are made.

If your contract is issued in connection with a tax-qualified
retirement plan, all or part of your premium payments may be tax-
deductible.

Special 10% tax penalties apply in many cases to the taxable portion
of any distributions from a contract before you reach age 59 1/2. Also,
most tax-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 premiums you paid or on any
earnings under the contract.

The favorable tax benefits available for annuity contracts issued in
connection with tax-qualified plans are also generally available for other
types of investments of tax-qualified plans, such as investments in mutual
funds, equities and debt instruments. You should carefully consider whether
the expenses under an annuity contract issued in connection with a tax-
qualified plan, and the investment options, death benefits and lifetime
annuity income options provided under such an annuity contract, are
suitable for your needs and objectives.

How can i change my contract's investment allocations?

Allocation of premium payments

When you apply for your contract, you specify the variable investment
options or guarantee periods (together, your investment options) in which
your premium payments will be allocated. You may change this investment
allocation for future premium payments at any time. Any change in
allocation will be effective as of receipt of your request at the John
Hancock Annuity Servicing Office.

Currently, you may use a maximum of 18 investment options over the
life of your contract. For purposes of this limit, each contribution or
transfer of assets into a variable investment option or guarantee period
that you are not then using counts as one "use" of an investment option,
even if you had used that option at an earlier time. Renewing a guarantee
period upon its expiration does not count as a new use, however, if the new
guarantee period has the same number of years as the expiring one.

Transferring your assets

Up to 12 times during each year of your contract, you may transfer:

. all or part of the assets held in one variable investment option to
any other available variable investment option or guarantee period, or

. all or part of the assets held in one guarantee period to any other
available guarantee period or variable investment option (these
transfers may, however, incur a market value adjustment--either
positive or negative).

Transfers under our dollar cost averaging program do not count toward the
12 you are allowed each year. However, you may not:

. transfer assets within 30 days prior to the contract's date of
maturity,

. transfer more than $1,000,000 in a contract year from any one variable
investment option or guarantee period, without our prior approval,

. make any transfer that would cause you to exceed the above-mentioned
maximum of 18 investment options,

. make any transfers, during the annuity period, to or from a fixed
investment option, or

. make any transfer during the annuity period that would result in more
than four investment options being used at once.

The contract you are purchasing was not designed for professional
market timing organizations or other persons or entities that use
programmed or frequent transfers. The use of such transfers may be
disruptive to a fund. We reserve the right to reject any premium payment or
transfer request from any person, if in our judgment, a fund would be
unable to invest effectively in accordance with its investment objectives
and policies, or would otherwise be potentially adversely affected.

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 John Hancock Annuity Servicing Office at the address shown
on page 2. Your request should include:

. your name,

. daytime telephone number,

. contract number,

. the names of the investment options being transferred to and from
each, and

. the amount of each transfer.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

Telephone transfers

Once you have completed a written authorization, you may request a
transfer by telephone or by fax. If the fax request option becomes
unavailable, another means of telecommunication will be substituted.

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

The contracts are not designed for professional market timing
organizations or other persons or entities that use programmed or frequent
transfers among investment options. For reasons such as that, we reserve
the right to change our telephone transaction policies or procedures at any
time. We also reserve the right to suspend or terminate the privilege
altogether.

What fees and charges will be deducted from my contract?

Mortality and expense risk charge

We deduct a daily charge that compensates us primarily for mortality
and expense risks that we assume under the contracts. On an annual basis,
this charge equals 0.90% of the value of the assets you have allocated to
the variable investment options. (This charge does not apply to assets you
have in our guarantee periods.)

In return for mortality risk charge, we assume the risk that
annuitants as a class will live longer than expected, requiring us to a pay
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.

Administrative services charge

We deduct a daily charge for administrative and clerical services that
the contracts require us to provide.

On an annual basis, this charge equals 0.35% of the value of the
assets you have allocated to the variable investment options. (This charge
does not apply to assets you have in our guarantee periods.) However, if
your initial premium payment was more than $250,000, we reduce the charge
to 0.10%.

Annual contract fee

Prior to the date of maturity of your contract, we will deduct $30
each year from your contract if it has a total value of less than $10,000.
We deduct this annual contract fee at the beginning of each contract year
after the first contract year. We also deduct it if you surrender your
contract. We take the deduction proportionally from each variable
investment option and each guarantee period you are then using. We reserve
the right to increase the annual contract fee to $50.

Premium taxes

We make deductions for any applicable premium or similar taxes based
on the amount of a premium payment. Currently, certain local jurisdictions
assess a tax of up to 5% of each premium 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 premium 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.

Withdrawal charge

If you withdraw some money from your contract prior to the date of
maturity ("partial withdrawal") or if you surrender (turn in) your
contract, in its entirety, for cash prior to the date of maturity ("total
withdrawal" or "surrender"), we may assess a withdrawal charge. Some people
refer to this charge as a "contingent deferred withdrawal load." We use
this charge to help defray expenses relating to the sales of the contracts,
including commissions paid and other distribution costs.

Here's how we determine the charge: In any contract year, you may
withdraw up to 10% of the total value of your contract (computed as of the
beginning of the contract year) without the assessment of any withdrawal
charge. We refer to this amount as the "free withdrawal amount." However,
if the amount you withdraw or surrender totals more than the free
withdrawal amount during the contract year, we will assess a withdrawal
charge on any amount of the excess that we attribute to premium payments
you made within seven years of the date of the withdrawal or surrender.

The withdrawal charge percentage depends upon the number of years that
have elapsed from the date you paid the premium to the date of its
withdrawal, as follows:

-----------------------------------------------------------
Years from Date of Premium Payment to
Date of Surrender or Withdrawal Withdrawal Charge*
-----------------------------------------------------------
7 or more. . . . . . 0%
------------------------------------------------------------
6 but less than 7. . 2%
------------------------------------------------------------
5 but less than 6. . 3%
------------------------------------------------------------
4 but less than 5. . 4%
------------------------------------------------------------
3 but less than 4. . 5%
------------------------------------------------------------
2 but less than 3. . 5%
------------------------------------------------------------
less than 2. . . . . 6%
------------------------------------------------------------

* As a percentage of the amount of such premium that we consider to
have been withdrawn (including the withdrawal charge), as
explained in the text immediately below.

Solely for purposes of determining the amount of the withdrawal
charge, we assume that each withdrawal (together with any associated
withdrawal charge) is a withdrawal first from the earliest premium payment,
and then from the next earliest premium payment, and so forth until all
payments have been exhausted. Once a premium payment has been considered to
have been "withdrawn" under these procedures, that premium payment will not
enter into any future withdrawal charge calculations. For this purpose, we
also consider any amounts that we deduct for the annual contract charge to
have been withdrawals of premium payments (which means that no withdrawal
charge will ever be paid on those amounts).

The amount of any withdrawal that exceeds any remaining premium
payments that have not already been considered as withdrawn will not be
subject to any withdrawal charge. This means that no withdrawal charge will
apply to any favorable investment experience that you have earned.

Here's how we deduct the withdrawal charge: We deduct the withdrawal
charge proportionally from each variable investment option and each
guarantee period being reduced by the surrender or withdrawal. For example,
if 60% of the withdrawal amount comes from a "Growth" variable investment
option and 40% from a money market variable investment 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 date of
maturity or to pay a death benefit;

. on certain withdrawals if you have elected the nursing home rider that
waives the withdrawal charge; 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 guarantee period 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 less. Similarly, if the MVA results in a
downward adjustment, we will compute any withdrawal charge as if you had
withdrawn that much more.

Other charges

We offer, subject to state availability, three optional benefit
riders. We charge a separate monthly charge for each rider selected. At the
beginning of each month, we charge an amount equal to 1/12/th/ of the
following annual percentages:

-------------------------------------------------------------------
Stepped up death benefit* 0.15% of total value of your contract
-------------------------------------------------------------------
Accidental death benefit 0.10% of total value of your contract
-------------------------------------------------------------------
Nursing home waiver 0.05% of that portion of your
contract's total value attributable to
premiums that are still subject to
surrender charges
-------------------------------------------------------------------
*Some people refer to this benefit as the "enhanced stepped-up
death benefit."

We deduct the charge proportionally from each of your investment
options, based on your value in each.

How can I withdraw money from my contract?

Surrenders and partial withdrawals

Prior to your contract's date of maturity, 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.

The surrender value of a contract is the total value of a contract, after
any market value adjustment, minus the annual contract fee and any applicable
premium tax and withdrawal charges. We will determine the amount surrendered or
withdrawn as of the date we receive your request at the John Hancock Annuity
Servicing Office.

Certain surrenders and withdrawals may result in taxable income to you or
other tax consequences as described under "Tax information," beginning on page
26. 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.

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.

You generally may not make any surrenders or partial withdrawals once we
begin making payments under an annuity option.

Nursing home waiver of withdrawal charge

If your state permits, you may purchase an optional nursing home waiver of
withdrawal charge rider when you apply for a contract. Under this rider, we will
waive the withdrawal charge 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.

You may not purchase this rider if (1) you are older than 75 years at
application or (2) if you were confined to a nursing home within the past two
years.

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 you request otherwise and we agree,
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 withdrawal charge or market value
adjustment that would apply to an otherwise comparable non-systematic
withdrawal. See "How will the value of my investment in the contract change over
time?" beginning on page 11, and "What fees and charges will be deducted from my
contract?" beginning on page 14. The same tax consequences also generally will
apply.

The following conditions apply to systematic withdrawal plans:

. you may elect the plan only if the total value of your contract equals
$15,000 or more,

. the amount of each systematic withdrawal must equal at least $10,

. if the amount of each withdrawal drops below $100 or the total value of your
contract becomes less that $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.

Dollar cost averaging program

. you may elect the program only if the total value of your contract equals
$15,000 or more,

. the amount of each transfer must equal at least $250,

. you may change your dollar cost averaging 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 guarantee periods are not permitted.

We reserve the right to suspend or terminate the program at any time.

What happens if the annuitant dies before my contract's date of maturity?

Standard death benefit

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.

The standard death benefit is the greater of:

. the total value of your contract, adjusted by any then-applicable market
value adjustment, or

. the total amount of premium payments made, minus any partial withdrawals and
related withdrawal charges.

We calculate the death benefit value as of the day we receive, in proper
order at the John Hancock Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Enhanced death benefit riders

"Stepped-up" death benefit rider

. 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
premium 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 80 1/2.

You may elect this rider only when you apply for the contract and only if
this rider is available in your state. As long as the rider is in effect, you
will pay a monthly charge for this benefit. For a description of this charge,
refer to page 14 under "What fees and charges will be deducted from my
contract?" 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.

Accidental death benefit rider

. the contract's date of maturity, and

. the annuitant's 80/th/ birthday.

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

You may elect this rider only when you apply for the contract. As long as
the rider is in effect, you will pay a monthly charge for this benefit. For a
description of this charge, refer to page 14 under "What fees and charges will
be deducted from my contract?" 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.

ADDITIONAL INFORMATION

Contents of this section Starting on page

Description of JHVLICO.................................... 21

Who should purchase a contract............................ 21

How we support the variable investment options............ 21

How we support the guarantee periods...................... 22

How the guarantee periods work............................ 22

The accumulation period................................... 23

The annuity period........................................ 23

Variable investment option valuation procedures........... 25

Distribution requirements following death of owner........ 25

Miscellaneous provisions.................................. 26

Tax information........................................... 26

Further information about JHVLICO......................... 30

Management's discussion and analysis...................... 32

Performance information................................... 43

Reports................................................... 43

Voting privileges......................................... 43

Certain changes........................................... 44

Distribution of contracts................................. 44

Experts................................................... 44

Registration statement.................................... 45

Condensed financial information........................... 47

Appendix A - Details About Our Guarantee Periods.......... 104

Appendix B - Examples of Withdrawal Charge Calculation.... 107

Description of JHVLICO

We are JHVLICO, a stock life insurance company organized, in 1979, under
the laws of the Commonwealth of Massachusetts. We have authority to transact
business in all states, except New York. We are a wholly-owned subsidiary of
John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life
insurance company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock became a
subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-
traded corporation. John Hancock's home office is at John Hancock Place, Boston,
Massachusetts 02117. At year end 2000, John Hancock's assets were approximately
$88 billion and it had invested approximately $575 million in JHVLICO in
connection with JHVLICO's organization and operation.

Who should purchase a contract?

We also designed the contracts for purchase under:

. traditional individual retirement annuity plans ("traditional IRAs")
satisfying the requirements of Section 408 of the Code;

. non-deductible IRA plans ("Roth IRAs") satisfying the requirements of
Section 408A of the Code;

. SIMPLE IRA plans adopted under Section 408(p) of the Code;

. Simplified Employee Pension plans ("SEPs") adopted under Section 408(k)
of the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by public
school systems and certain other tax-exempt organizations; and

. pension or profit-sharing plans qualified under section 401(a) of the
Code.

We may include certain requirements from the above sources in endorsements
or riders to the affected contracts. In other cases, we do not. In no event,
however, do we undertake to assure a contract's compliance with all plan, tax
law, and ERISA requirements applicable to a tax-qualified or non tax-qualified
retirement plan. Therefore, if you use or plan to use a contract in connection
with such a plan, you must consult with competent legal and tax advisers to
ensure that you know of (and comply with) all such requirements that apply in
your circumstances.

How we support the variable investment options

We hold the fund shares that support our variable investment options in
John Hancock Variable Annuity Account JF (the "Account"), a separate account
established by JHVLICO under Massachusetts law. The Account is registered as a
unit investment trust under the Investment Company Act of 1940 ("1940 Act").

The Account's assets, including the Series Fund's shares, belong to
JHVLICO. Each contract provides that amounts we hold in the Account pursuant to
the policies cannot be reached by any other persons who may have claims against
us.

How we support the guarantee periods

How the guarantee periods work

Amounts you allocate to the guarantee periods earn interest at a guaranteed
rate commencing with the date of allocation. At the expiration of the guarantee
period, we will automatically transfer its accumulated 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 guarantee period or
periods of the same or different duration as the expiring guarantee period,
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
John Hancock Annuity Servicing Office at least 30 days prior to the end of the
expiring guarantee period. We will notify you of the end of the guarantee period
at least 30 days prior its expiration. The first day of the new guarantee period
or other reallocation will begin the day after the end of the expiring guarantee
period.

Guaranteed interest rates

Each guarantee period has its own guaranteed rate. We may, at our
discretion, change the guaranteed rate for future guarantee periods. These
changes will not affect the guaranteed rates being paid on guarantee periods
that have already commenced. Each time you allocate or transfer money to a
guarantee period, a new guarantee period, 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
will not make available any guarantee period offering a guaranteed rate below
3%.

Calculation of market value adjustment ("MVA")

If you withdraw, surrender, transfer, or otherwise remove money from a
guarantee period 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.

Here is how the MVA works:

- --------------------------------------------------------------------------------
We compare

. the guaranteed rate of the guarantee period from which the assets are being
taken with

. the guaranteed rate we are currently offering for guarantee periods of the
same duration as remains in the guarantee period 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.

For this purpose, we consider that the amount withdrawn from the guarantee
period 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.

The accumulation period

Your value in our variable investment options

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

Therefore, at any time prior to the date of maturity, 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 guarantee periods

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments or transferred amounts allocated to the
guarantee period, minus

. the amount of any withdrawals or transfers paid out of the guarantee
period, 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 guarantee period,
plus

. interest compounded daily on any amounts in the guarantee period from time
to time at the effective annual rate of interest we have declared for that
guarantee period.

The annuity period

Date of maturity

. at least 6 months after the date the first premium payment is applied to
your contract, and

. no later than the maximum age specified in your contract (normally age 95).

Choosing fixed or variable annuity payments

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 guarantee periods. 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.

four investment options with the largest values (directing all guarantee periods
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 guarantee period
amounts on the date of maturity, before we apply such amounts to an annuity
payment option.

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 date of maturity pursuant to Option A: "life annuity with 10
years guaranteed" (discussed under "Annuity options" on page 25).

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

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.

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 amount we first, in accordance
with the procedures described above, calculate the amount to be applied to the
fixed annuity option as of the date of maturity. We then subtract any applicable
premium tax charge 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 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 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.

If the payee is more than 85 years old on the date of maturity, the
following two options are not available:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the death of payee."

Variable investment option valuation procedures

Distribution requirements following death of owner

If you did not purchase your contract under a tax qualified plan (as that
term is used below), the Code requires that the following distribution
provisions apply if you die. We summarize these provisions in the following box.
In most cases, these provisions do not cause a problem if you are also the
annuitant under your policy. If you have designated someone other than yourself
as the annuitant, however, your heirs will have less discretion than you would
have had in determining when and how the contract's value would be paid out.

- --------------------------------------------------------------------------------
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.

. 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 the 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 with payments commencing within one year of your
death.

If you are the last surviving annuitant, as well as the owner, the entire
interest in the contract on the date of your death equals the death benefit
that then becomes payable. If you are the owner 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 with payments commencing within one year of
your death.

If you die on or after annuity payments have begun:

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.

Notice of the death of an owner or annuitant should be furnished promptly
to the John Hancock Annuity Servicing Office.

Miscellaneous provisions

Assignment; change of owner or beneficiary

Subject to these limits, while the annuitant is alive, you may designate
someone else as the owner by written notice to the John Hancock Annuity
Servicing Office. The contract designates the person you choose as beneficiary.
You may change the beneficiary by written notice no later than receipt of due
proof of the death of the annuitant. Changes of owner or beneficiary will take
effect whether or not you or the annuitant is then alive. However, these changes
are subject to:

. the rights of any assignees of record,

. the any action taken prior to receipt of the notice, and

. certain other conditions.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser before
taking any such action.

Tax information

Our income taxes

We are taxed as a life insurance company under the Internal Revenue Code
(the "Code"). The Account is taxed as part of our operations and is not taxed
separately.

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 Account.
Currently, we do not anticipate making a charge 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.

Contracts not purchased to fund a tax qualified plan

Undistributed gains

Annuity payments

Surrenders and withdrawals before date of maturity

Penalty for premature withdrawals

Puerto Rico annuity contracts not purchased to fund a tax qualified plan

Under the Puerto Rico tax laws, distributions from a contract not purchased to
fund a tax qualified plan ("Non-Qualified Contract") before annuitization are
treated as non-taxable return of principal until the principal is fully
recovered. Thereafter, all distributions are fully taxable. Distributions after
annuitization are treated as part taxable income and part non-taxable return of
principal. The amount excluded from gross income after annuitization 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. Puerto Rico does not currently impose an early
withdrawal penalty tax. Generally, Puerto Rico does not require income tax to be
withheld from distributions of income.

Diversification requirements

Each of the funds of the Series Fund intends to qualify as a regulated
investment company under Subchapter M of the Code and meet the investment
diversification tests of Section 817(h) of the Code and the underlying
regulations. Failure to do so could result in current taxation to you on gains
in your contract for the year in which such failure occurred and thereafter.

Contracts purchased for a tax qualified plan

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 tax-qualified plan. Trustees and
administrators of tax qualified plans may, however, generally invest and
reinvest existing plan assets without regard to such Code imposed limitations on
contributions. In addition, certain distributions from tax qualified plans may
be transferred directly to another plan, unless funds are added from other
sources, without regard to such limitations.

Tax-free rollovers

You may make a tax-free rollover from:

. a traditional IRA to another traditional IRA,

. any tax-qualified plan to a traditional IRA,

. any tax-qualified plan to another tax-qualified plan of the same type
(i.e. 403(b) to 403(b), corporate plan to corporate plan, etc.), and

. from a regular IRA to a Roth IRA, subject to special restrictions discussed
below.

Traditional IRAs

A traditional individual retirement annuity (as defined in Section 408 of the
Code) generally permits an eligible purchaser to make annual contributions which
cannot exceed the lesser of:

. 100% of compensation includable in your gross income, or

. $2,000 per year.

You may be entitled to a full deduction, a partial deduction or no deduction
for your traditional IRA contribution on your federal income tax return.

The amount of your deduction is based on the following factors:

. whether you or your spouse is an active participant in an employer
sponsored retirement plan,

. your federal income tax filing status, and

. your "Modified Adjusted Gross Income."

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.

Roth IRAs

If you hold your Roth IRA for at least five years the payee will not owe any
federal income taxes or early withdrawal penalties on amounts paid out from the
contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to qualified first-time homebuyers (not to exceed a lifetime limitation of
$10,000) as specified in the Code.

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 $2,000 Roth IRA contribution limit does not apply to converted amounts.

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.