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John Hancock Life Insurance Company
Law Sector
John Hancock Place [LOGO OF JOHN HANCOCK]
P.O. Box 111
Boston, Massachusetts 02117-0111
(617) 572-9197
James C. Hoodlet
Vice President & Counsel
April 20, 2006
By EDGAR and Overnight Mail
Alison White, Esq.
Senior Counsel
Division of Investment Management
Office of Insurance Products
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: John Hancock Life Insurance Company (U.S.A.) Separate Account A File
No. 333-85284 Template Registration (Accum VUL)
John Hancock Life Insurance Company of New York Separate Account B
File Nos. 333-131134, 333-131139 (Accum VUL-NY; CVUL 05- NY)
John Hancock Life Insurance Company (U.S.A.) Separate Account A File
No. 333-131299 (MPVUL)
Dear Alison:
The following are our responses to your comments made in the telephone
conversation with Eileen Riley and me on April 18, 2006.
Separately, we are filing under EDGAR revised forms of the prospectuses and
the Part C which are responsive to these staff comments. We are also providing
to you by overnight mail a package of the prospectuses and the Part Cs.
1. Withdrawals
In response to the staff's comment, we have amended the provisions
regarding withdrawals to specify that we will not charge a fee that would
exceed 2% of the withdrawal amount.
2. Fund Expense Table
(a) We corrected the typo in footnote H - it now refers to "1.53%".
(b) In response to the staff's comment, we have amended footnote I to
reflect the portfolio expenses if the adviser's fee waiver were reflected.
Note that we are confirming that the numbers in the Table are the expenses
before the waiver.
3. Part C
(a) Item 27 In response to the staff's comment, we have included
Directors' POAs which are specific to the registration statement.
(b) Item 34 In response to the staff's comment, we have updated the
disclosure to reflect the correct Depositor's name.
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Request for Acceleration
We hereby request an order to accelerate the effectiveness of the
above-referenced amendments to May 1, 2006. The Registrant and its Principal
Underwriter have authorized us to hereby state to the Commission on their behalf
that they are aware of their obligations under the Securities Act of 1933.
The Commission staff has requested that the Registrant acknowledge and
agree, and the Registrant does, hereby acknowledge and agree, that:
. should the Commission or the Staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
. the action of the Commission or the Staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the Registrant from its full responsibility for the adequacy
and accuracy of the disclosure in the filing; and
. the Registrant may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
If you have any questions about the enclosed documents, please call me at
(617) 572-9197. Thank you.
Sincerely,
/s/James C. Hoodlet
Enclosures
Prospectus dated May 1, 2006
for interests in
Separate Account A
Interests are made available under
MAJESTIC PERFORMANCE VARIABLE UNIVERSAL LIFE
a flexible premium variable universal life insurance policy issued by
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
("John Hancock USA")
The policy provides fixed account options with fixed rates of return declared
by John Hancock USA
and the following investment accounts:
Science & Technology
Pacific Rim
Health Sciences
Emerging Growth
Small Cap Growth
Emerging Small Company
Small Cap
Small Cap Index
Dynamic Growth
Mid Cap Stock
Natural Resources
All Cap Growth
Strategic Opportunities
Financial Services
International Opportunities
International Small Cap
International Equity Index B
Overseas Equity
American International
International Value
International Core
Quantitative Mid Cap
Mid Cap Index
Mid Cap Core
Global
Capital Appreciation
American Growth
US Global Leaders Growth
Quantitative All Cap
All Cap Core
Total Stock Market Index
Blue Chip Growth
U.S. Large Cap
Core Equity
Strategic Value
Large Cap Value
Classic Value
Utilities
Real Estate Securities
Small Cap Opportunities
Small Cap Value
Small Company Value
Special Value
Mid Value
Mid Cap Value
Value
All Cap Value
Growth & Income
500 Index B
Fundamental Value
U.S. Core
Large Cap
Quantitative Value
American Growth-Income
Equity-Income
American Blue Chip Income and Growth
Income & Value
Managed
PIMCO VIT All Asset
Global Allocation
High Yield
U.S. High Yield Bond
Strategic Bond
Strategic Income
Global Bond
Investment Quality Bond
Total Return
American Bond
Real Return Bond
Bond Index B
Core Bond
Active Bond
U.S. Government Securities
Short-Term Bond
Money Market B
Lifestyle Aggressive
Lifestyle Growth
Lifestyle Balanced
Lifestyle Moderate
Lifestyle Conservative
Brandes International Equity
Turner Core Growth Equity
Frontier Capital Appreciation
Business Opportunity Value
* * * * * * * * * * * *
Please note that the Securities and Exchange Commission ("SEC") has not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
GUIDE TO THIS PROSPECTUS
This prospectus is arranged in the following way:
. Starting on the next page is a Table of Contents for this prospectus.
. The section after the Table of Contents is called "Summary of Benefits
and Risks". It contains a summary of the benefits available under the
policy and of the principal risks of purchasing the policy. You should
read this section before reading any other section of this prospectus.
. Behind the Summary of Benefits and Risks section is a section called
"Fee Tables" that describes the fees and expenses you will pay when
buying, owning and surrendering the policy.
. Behind the Fee Tables section is a section called "Detailed
Information". This section gives more details about the policy. It may
repeat certain information contained in the Summary of Benefits and
Risks section in order to put the more detailed information in proper
context.
. Finally, on the back cover of this prospectus is information
concerning the Statement of Additional Information (the "SAI") and how
the SAI, personalized illustrations and other information can be
obtained.
Prior to making any investment decisions, you should carefully review this
product prospectus and all applicable supplements. In addition, you will
receive the prospectuses for the underlying funds that we make available as
investment options under the policies. The funds' prospectuses describe the
investment objectives, policies and restrictions of, and the risks relating to,
investment in the funds. In the case of any of the portfolios that are operated
as "feeder funds", the prospectus for the corresponding "master fund" is also
provided. If you need to obtain additional copies of any of these documents,
please contact your John Hancock representative or contact our Service Office
at the address and telephone number on the back page of this product
prospectus.
2
TABLE OF CONTENTS
Page No.
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SUMMARY OF BENEFITS AND RISKS ......................... 4
The nature of the policy .............................. 4
Summary of policy benefits ............................ 4
Death benefit ...................................... 4
Surrender of the policy ............................ 4
Withdrawals ........................................ 4
Policy loans ....................................... 4
Optional supplementary benefit riders .............. 5
Investment options ................................. 5
Summary of policy risks ............................... 5
Lapse risk ......................................... 5
Investment risk .................................... 5
Transfer risk ...................................... 5
Early surrender risk ............................... 5
Market timing risk ................................. 5
Tax risks .......................................... 6
FEE TABLES ............................................ 7
DETAILED INFORMATION .................................. 14
Table of Investment Options and Investment
Subadvisers ........................................ 14
Description of John Hancock USA ....................... 23
Description of Separate Account A ..................... 24
The fixed account options ............................. 24
The death benefit ..................................... 24
Limitations on payment of death benefit ............ 25
Base Face Amount vs. Supplemental Face
Amount .......................................... 25
The minimum death benefit .......................... 26
When the insured person reaches 121 ................ 27
Requesting an increase in coverage ................. 27
Requesting a decrease in coverage .................. 27
Change of death benefit option ..................... 27
Tax consequences of coverage changes ............... 27
Your beneficiary ................................... 27
Ways in which we pay out policy proceeds ........... 28
Changing a payment option .......................... 28
Tax impact of payment option chosen ................ 28
Premiums .............................................. 28
Planned premiums ................................... 28
Minimum initial premium ............................ 28
Maximum premium payments ........................... 28
Processing premium payments ........................ 29
Ways to pay premiums ............................... 29
Lapse and reinstatement ............................... 29
Lapse .............................................. 29
No-lapse guarantee ................................. 29
Cumulative premium test ............................ 30
Death during grace period .......................... 30
Reinstatement ...................................... 30
The policy value ...................................... 31
Allocation of future premium payments .............. 31
Transfers of existing policy value ................. 31
Surrender and withdrawals ............................. 32
Surrender .......................................... 32
Withdrawals ........................................ 32
Policy loans .......................................... 33
Repayment of policy loans .......................... 33
Effects of policy loans ............................ 34
Description of charges at the policy level ............ 34
Deduction from premium payments .................... 34
Deductions from policy value ....................... 34
Additional information about how certain policy
charges work .................................... 35
Sales expenses and related charges ................. 35
Effect of premium payment pattern .................. 35
Method of deduction ................................ 36
Reduced charges for eligible classes ............... 36
Other charges we could impose in the future ........ 36
Description of charges at the portfolio level ......... 36
Other policy benefits, rights and limitations ......... 36
Optional supplementary benefit riders you can
add ............................................. 36
Variations in policy terms ......................... 38
Procedures for issuance of a policy ................ 38
Commencement of insurance coverage ................. 39
Backdating ......................................... 39
Temporary coverage prior to policy delivery ........ 39
Monthly deduction dates ............................ 39
Changes that we can make as to your policy ......... 39
The owner of the policy ............................ 40
Policy cancellation right .......................... 40
Reports that you will receive ...................... 40
Assigning your policy .............................. 40
When we pay policy proceeds ........................ 41
General ............................................ 41
Delay to challenge coverage ........................ 41
Delay for check clearance .......................... 41
Delay of separate account proceeds ................. 41
Delay of general account surrender proceeds ........ 41
How you communicate with us ........................ 41
General rules ...................................... 41
Telephone, facsimile and internet transactions ..... 42
Distribution of policies ........................... 42
Tax considerations .................................... 43
General ............................................ 43
Policy death benefit proceeds ...................... 44
Other policy distributions ......................... 44
Policy loans ....................................... 45
Diversification rules and ownership of the
Account ......................................... 45
7-pay premium limit and modified endowment
contract status ................................. 45
Corporate and H.R. 10 retirement plans ............. 46
Withholding ........................................ 46
Life insurance purchases by residents of Puerto
Rico ............................................ 46
Life insurance purchases by non-resident aliens..... 46
Financial statements reference ........................ 47
Registration statement filed with the SEC ............. 47
Independent registered public accounting firm ......... 47
3
SUMMARY OF BENEFITS AND RISKS
The nature of the policy
The policy's primary purpose is to provide lifetime protection against
economic loss due to the death of the insured person. The policy is unsuitable
as a short-term savings vehicle because of the substantial policy-level
charges. We are obligated to pay all amounts promised under the policy. The
value of the amount you have invested under the policy may increase or decrease
daily based upon the investment results of the investment accounts that you
choose. The amount we pay to the policy's beneficiary upon the death of the
insured person (we call this the "death benefit") may be similarly affected.
That's why the policy is referred to as a "variable" life insurance policy. We
call the investments you make in the policy "premiums" or "premium payments".
The amount we require as your first premium depends upon the specifics of your
policy and the insured person. Except as noted in the "Detailed Information"
section of this prospectus, you can make any other premium payments you wish at
any time. That's why the policy is called a "flexible premium" policy.
Summary of policy benefits
Death benefit
When the insured person dies, we will pay the death benefit minus any
outstanding loans and accrued interest. There are two ways of calculating the
death benefit (Option 1 and Option 2). You choose which one you want in the
application. The two death benefit options are:
. Option 1 - The death benefit will equal the greater of (1) the Total
Face Amount, or (2) the minimum death benefit (as described under "The
minimum death benefit" provision in the "Detailed Information" section
of this prospectus).
. Option 2 - The death benefit will equal the greater of (1) the Total
Face Amount plus the policy value on the date of death, or (2) the
minimum death benefit.
Surrender of the policy
You may surrender the policy in full at any time. If you do, we will pay
you the policy value less any outstanding policy debt and less any surrender
charge that then applies. This is called your "net cash surrender value". You
must return your policy when you request a surrender.
If you have not taken a loan on your policy, the "policy value" of your
policy will, on any given date, be equal to:
. the amount you invested,
. gain or loss of the investment experience of the investment options
you've chosen,
. minus all charges we deduct, and
. minus all withdrawals you have made.
If you take a loan on your policy, your policy value will be computed
somewhat differently. See "Effects of policy loans".
Withdrawals
You may make a withdrawal of part of your surrender value. Generally, each
withdrawal must be at least $500. We reserve the right to charge a fee of up to
the lesser of 2% of the withdrawal amount or $25 for each withdrawal. Your
policy value is automatically reduced by the amount of the withdrawal and the
fee. We reserve the right to refuse a withdrawal if it would reduce the net
cash surrender value or the Total Face Amount below certain minimum amounts.
Policy loans
You may borrow from your policy at any time by completing the appropriate
form. Generally, the minimum amount of each loan is $500. The maximum amount
you can borrow is determined by a formula (see the section entitled "Policy
loans" for the formula). Interest is charged on each loan. You can pay the
interest or allow it to become part of the outstanding loan balance. You can
repay all or part of a loan at any time. If there is an outstanding loan when
the insured person dies, it will be deducted from the death benefit. Policy
loans permanently affect the calculation of your policy value, and may also
result in adverse tax consequences.
4
Optional supplementary benefit riders
When you apply for the policy, you can request any of the optional
supplementary benefit riders that we make available. Availability of riders
varies from state to state. Charges for most riders will be deducted monthly
from the policy value.
Investment options
The policy offers a number of investment options, as listed on the cover
of this prospectus. We currently offer two "fixed account" options - the
standard fixed account option, and the enhanced yield fixed account option
offered as a supplementary benefit rider. The rest of the options have returns
that vary depending upon the investment results of underlying portfolios. These
options are referred to in this prospectus as "investment accounts". The fixed
accounts and the investment accounts are sometimes collectively referred to in
this prospectus as the "accounts". The investment accounts cover a broad
spectrum of investment styles and strategies. Although the portfolios of the
Series Funds that underlie those investment accounts operate like publicly
traded mutual funds, there are important differences between the investment
accounts and publicly-traded mutual funds. On the plus side, you can transfer
money from one investment account to another without tax liability. Moreover,
any dividends and capital gains distributed by each underlying portfolio are
automatically reinvested and reflected in the portfolio's value and create no
taxable event for you. On the negative side, if and when policy earnings are
distributed (generally as a result of a surrender or withdrawal), they will be
treated as ordinary income instead of as capital gains. Also, you must keep in
mind that you are purchasing an insurance policy and you will be assessed
charges at the policy level as well as at the fund level. Such policy level
charges, in aggregate, are significant and will reduce the performance of your
policy.
Summary of policy risks
Lapse risk
If the net cash surrender value is insufficient to pay the charges when
due and the no-lapse guarantee is not in effect, your policy can terminate
(i.e. "lapse"). This can happen because you haven`t paid enough premiums or
because the investment performance of the investment accounts you've chosen has
been poor or because of a combination of both factors. You'll be given a "grace
period" within which to make additional premium payments to keep the policy in
effect. If lapse occurs, you'll be given the opportunity to reinstate the
policy by making the required premium payments and satisfying certain other
conditions.
Since withdrawals reduce your policy value, withdrawals increase the risk
of lapse. Policy loans also increase the risk of lapse.
Investment risk
As mentioned above, the investment performance of any investment account
may be good or bad. Your policy value will rise or fall based on the investment
performance of the investment accounts you've chosen. Some investment accounts
are riskier than others. These risks (and potential rewards) are discussed in
detail in the prospectuses of the underlying portfolios.
Transfer risk
There is a risk that you will not be able to transfer your policy value
from one investment account to another because of limitations on the dollar
amount or frequency of transfers you can make. The limitations on transfers out
of the fixed account options are more restrictive than those that apply to
transfers out of investment accounts.
Early surrender risk
There are surrender charges assessed if you surrender your policy in the
first 10 policy years. Depending on the policy value at the time you are
considering surrender, there may be little or no surrender value payable to
you.
Market timing risk
Variable investment accounts in variable life insurance products can be a
prime target for abusive transfer activity because these products value their
investment accounts on a daily basis and allow transfers among investment
accounts without immediate tax consequences. As a result, some investors may
seek to frequently transfer into and out of investment accounts in reaction to
market news or to exploit a perceived pricing inefficiency. Whatever the
reason, long-term investors in
5
an investment account can be harmed by frequent transfer activity since such
activity may expose the investment account's underlying portfolio to increased
portfolio transaction costs and/or disrupt the portfolio manager's ability to
effectively manage the portfolio's investments in accordance with the
portfolio's investment objectives and policies, both of which may result in
dilution with respect to interests held for long-term investment.
To discourage disruptive frequent trading activity, we impose restrictions
on transfers (see "Transfers of existing policy value") and reserve the right
to change, suspend or terminate telephone, facsimile and internet transaction
privileges (see "How you communicate with us"). In addition, we reserve the
right to take other actions at any time to restrict trading, including, but not
limited to: (i) restricting the number of transfers made during a defined
period, (ii) restricting the dollar amount of transfers, and (iii) restricting
transfers into and out of certain investment accounts. We also reserve the
right to defer a transfer at any time we are unable to purchase or redeem
shares of the underlying portfolio.
While we seek to identify and prevent disruptive frequent trading
activity, it may not always be possible to do so. Therefore, no assurance can
be given that the restrictions we impose will be successful in preventing all
disruptive frequent trading and avoiding harm to long-term investors.
Tax risks
In order for you to receive the tax benefits extended to life insurance
under the Internal Revenue Code, your policy must comply with certain
requirements of the Code. We will monitor your policy for compliance with these
requirements, but a policy might fail to qualify as life insurance in spite of
our monitoring. If this were to occur, you would be subject to income tax on
the income credited to your policy for the period of disqualification and all
subsequent periods. The tax laws also contain a so-called "7 pay limit" that
limits the amount of premium that can be paid in relation to the policy's death
benefit. If the limit is violated, the policy will be treated as a "modified
endowment contract", which can have adverse tax consequences. There are also
certain Treasury Department rules referred to as the "investor control rules"
that determine whether you would be treated as the "owner" of the assets
underlying your policy. If that were determined to be the case, you would be
taxed on any income or gains those assets generate. In other words, you would
lose the value of the so-called "inside build-up" that is a major benefit of
life insurance.
In general, you will be taxed on the amount of distributions that exceed
the premiums paid under the policy. Any taxable distribution will be treated as
ordinary income (rather than as capital gains) for tax purposes. If you have
elected the Long-Term Care Acceleration Rider, you may be deemed to have
received a distribution for tax purposes each time a deduction is made from
your policy value to pay the rider charge. The tax laws are not clear on this
point.
There is a tax risk associated with policy loans. Although no part of a
loan is treated as income to you when the loan is made unless your policy is a
"modified endowment contract", surrender or lapse of the policy would result in
the loan being treated as a distribution at the time of lapse or surrender.
This could result in a considerable tax bill. Under certain circumstances
involving large amounts of outstanding loans and an insured person of advanced
age, you might find yourself having to choose between high premium requirements
to keep your policy from lapsing and a significant tax burden if you allow the
lapse to occur.
Tax consequences of ownership or receipt of policy proceeds under Federal,
state and local estate, inheritance, gift and other tax laws can vary greatly
depending upon the circumstances of each owner or beneficiary. There can also
be unfavorable tax consequences on such things as the change of policy
ownership or assignment of ownership interests. For these and all the other
reasons mentioned above, we recommend you consult with a qualified tax adviser
before buying the policy and before exercising certain rights under the policy.
6
FEE TABLES
This section contains five tables that describe all of the fees and
expenses that you will pay when buying and owning the policy. In the first
three tables, certain entries show the minimum charge, the maximum charge and
the charge for a representative insured person. Other entries show only the
maximum charge we can assess and are labeled as such. Except where necessary to
show a rate greater than zero, all rates shown in the tables have been rounded
to two decimal places as required by prospectus disclosure rules. Consequently,
the actual rates charged may be slightly higher or lower than those shown in
the tables.
The first table below describes the fees and expenses that you will pay at
the time that you pay a premium, withdraw policy value, surrender the policy,
lapse the policy or transfer policy value between investment accounts. We
reserve the right to increase the premium charge beyond the level indicated on
the Transaction Fees table in order to correspond with changes in state premium
tax levels or in the Federal income tax treatment of the deferred acquisition
costs for this type of policy. Currently, state premium tax levels range from
0% to 3.5%.
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Transaction Fees
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Charge When Charge is Deducted Amount Deducted
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Maximum premium charge Upon payment of premium 8% of all premiums/(1)/
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Maximum withdrawal fee Upon making a withdrawal lesser of 2% of withdrawal amount or
$25 (currently $0)/(2)/
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Surrender charge/(3)/ Upon surrender, policy lapse or any reduction
in Base Face Amount
Maximum surrender charge $125.44 per thousand dollars of Base
Face Amount
Minimum surrender charge $2.72 per thousand dollars of Base Face
Amount
Surrender charge for $13.82 per thousand dollars of Base
respresentative insured person Face Amount
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Maximum transfer fee Upon each transfer into or out of an $25 (currently $0)/(1)/
investment account beyond an annual limit of
not less than 12
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(1) The amount stated in the table is the maximum premium charge in all policy
years. Currently, a premium charge of 6.4% is deducted from each premium
paid up to the Target Premium in each of the first 5 policy years. A
premium charge of 2% is deducted from each premium in excess of Target
Premium for the first 5 policy years, and a charge of 2% is deducted from
all premiums paid in policy years 6 and after. If the premium received in
the first policy year is less than the Target Premium, the premium received
in the second policy year will be treated as if received in the first
policy year until premiums received equal the Target Premium. The "Target
Premium" will appear in the "Policy Specifications" section of the policy.
(2) This fee is not currently imposed, but we reserve the right to do so in the
policy.
(3) A surrender charge is applicable for 10 policy years from the policy date
and is calculated as a percentage of the lesser of the sum of the premiums
paid in the first two policy years or the Target Premium stated in the
Policy Specifications page of your policy. If the premium received in the
first policy year is less than the Target Premium, the premium received in
the second policy year will be treated as if received in the first policy
year until premiums received equal the Target Premium. The percentage
applied to the calculation starts out at 100% and reduces over the
surrender charge period. The Target Premium varies by the sex, issue age
and underwriting risk class of the insured person. The maximum charge shown
in the table is for a 90 year old male substandard smoker underwriting
risk, the minimum charge shown is for a 0 year old female standard
non-smoker underwriting risk, and the charge for a representative insured
person is for a 45 year old male standard non-smoker underwriting risk.
7
The next two tables describe the charges and expenses that you will pay
periodically during the time you own the policy. These tables do not include
fees and expenses paid at the portfolio level. Except for the policy loan
interest rate, all of the charges shown in the tables are deducted from your
policy value. The second table is devoted only to optional supplementary rider
benefits.
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Periodic Charges Other Than Fund Operating Expenses
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Amount Deducted
When Charge is ------------------------------------------------------------------
Charge Deducted Guaranteed Rate Current Rate
- --------------------------------------------------------------------------------------------------------------------------------
Cost of insurance charge:/(1)/ Monthly
Minimum charge $0.02 per $1,000 of NAR $0.02 per $1,000 of NAR
Maximum charge $83.33 per $1,000 of NAR $83.33 per $1,000 of NAR
Charge for representative $0.20 per $1,000 of NAR $0.10 per $1,000 of NAR
insured person
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Face Amount charge:/(2)/ Monthly for 4 policy
years from the Policy
Date
Minimum charge $0.02 per $1,000 of Base Face $0.02 per $1,000 of Base Face
Amount Amount
Maximum charge $1.47 per $1,000 of Base Face $1.47 per $1,000 of Base Face
Amount Amount
Charge for representative $0.14 per $1,000 of Base Face $0.14 per $1,000 of Base Face
insured person Amount Amount
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Administrative charge Monthly $ 15 $ 15
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Asset-based risk charge/(3)/ Monthly 0.06% of policy value 0.05% of policy value
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Maximum policy loan interest Accrues daily 4.25% 4.25%
rate/(4)/ Payable annually
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(1) The cost of insurance charge is determined by multiplying the amount of
insurance for which we are at risk (the net amount at risk or "NAR") by the
applicable cost of insurance rate. The rates vary widely depending upon the
length of time the policy has been in effect, the insurance risk
characteristics of the insured person and (generally) the gender of the
insured person. The "minimum" rate shown in the table is the rate in the
first policy year for a policy issued to cover a 5 year old female
preferred underwriting risk. The "maximum" rate shown in the table at both
guaranteed and current rates is the rate in the first policy year for a
policy issued to cover a 90 year old male substandard smoker underwriting
risk. This includes the so-called "extra mortality charge". The
"representative insured person" referred to in the table is a 45 year old
male standard non-smoker underwriting risk with a policy in the first
policy year. The charges shown in the table may not be particularly
relevant to your current situation. For more information about cost of
insurance rates, talk to your John Hancock USA representative.
(2) This charge is determined by multiplying the Base Face Amount at issue by
the applicable rate. The rates vary by the sex, issue age and underwriting
risk class of the insured person. The "minimum" rate shown in the table is
for a 0 year old female underwriting risk. The "maximum" rate shown in the
table is for a 90 year old male standard non-smoker underwriting risk. The
"representative insured person" referred to in the table is a 45 year old
male standard non-smoker underwriting risk.
(3) This charge only applies to that portion of policy value held in the
investment accounts. The charge determined does not apply to any fixed
account. The percentage amount indicated in the table is the amount
assessed in policy years 1-15. In policy year 16 and after, the guaranteed
rate is 0.02%.
(4) 4.25% is the maximum effective annual interest rate we can charge and
applies only during policy years 1-10. The effective annual interest rate
is 3.0% thereafter (although we reserve the right to increase the rate
after the tenth policy year to as much as 3.25%). The amount of any loan is
transferred from the accounts to a special loan account which earns
interest at an effective annual rate of 3.0%. Therefore, the cost of a loan
is the difference between the loan interest we charge and the interest we
credit to the special loan account.
8
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Rider Charges
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When Charge is
Charge Applied Amount
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Extended No-Lapse Guarantee Rider:/(1)/ Monthly
Minimum charge $0.02 per $1,000 of Base Face Amount
Maximum charge $0.08 per $1,000 of Base Face Amount
Charge for representative insured person $0.03 per $1,000 of Base Face Amount
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Acceleration of Death Benefit for Qualified Monthly
Long-Term Care Services Rider:/(2)/
Minimum charge $0.01 per $1,000 of NAR
Maximum charge $1.80 per $1,000 of NAR
Charge for representative insured person $0.08 per $1,000 of NAR
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Residual Life Insurance Benefit and Monthly
Continuation of Acceleration Rider:/(3)/
Minimum charge $2.12 per $1,000 of LMAX Maximum Monthly Benefit Amount
Maximum charge $130.37 per $1,000 of LMAX Maximum Monthly Benefit
Amount
Charge for representative insured person $7.29 per $1,000 of LMAX Maximum Monthly Benefit Amount
- ------------------------------------------------------------------------------------------------------------------------------------
Optional Enhanced Surrender Value Rider Upon payment 2% of the lesser of either the sum of premiums received during
of premium the first 2 policy years or the Target Premium shown in the Policy
Specifications section of your policy
- ------------------------------------------------------------------------------------------------------------------------------------
Return of Premium Death Benefit Rider:/(4)/ Monthly
Minimum charge $0.02 per $1,000 of NAR
Maximum charge $83.33 per $,1000 of NAR
Charge for representative insured person $0.10 per $1,000 of NAR
- ------------------------------------------------------------------------------------------------------------------------------------
Change of Life Insured Rider At exercise of $250.00/(5)/
benefit
- ------------------------------------------------------------------------------------------------------------------------------------
Accelerated Benefit Rider At exercise of $150.00/(6)/
benefit
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The charge for this rider is determined by multiplying the Base Face Amount
by the applicable rate. The rates vary by sex, issue age, and risk
classification of the insured person. The "minimum" rate shown in the table
is for a 0 year old female standard non-smoker underwriting risk. The
"maximum" rate shown in the table is for a 90 year old male standard smoker
underwriting risk. The "representative insured person" referred to in the
table is a 45 year old male standard non-smoker underwriting risk.
(2) The charge for this rider is determined by multiplying the net amount of
insurance for which we are at risk (the net amount at risk or "NAR") by the
applicable rate. The rates vary by the long-term care insurance risk
characteristics of the insured person and the rider benefit level selected.
The "minimum" rate shown in the table is for a 20 year old female standard
non-smoker underwriting risk with a 1% Monthly Acceleration Percentage. The
Monthly Acceleration Percentage is stated in the Policy Specifications page
of your policy. The "maximum" rate shown in the table is for an 80 year old
male substandard smoker underwriting risk with a 4% Monthly Acceleration
Percentage. The "representative insured person" referred to in the table is
a 45 year old male standard non-smoker underwriting risk with a 4% Monthly
Acceleration Percentage.
(3) The charge for this rider is determined by multiplying the LMAX Maximum
Monthly Benefit Amount for this rider by the applicable rate. The LMAX
Maximum Monthly Benefit Amount is stated in the Policy Specifications page
of your policy. The rates vary by the long-term care insurance risk
characteristics of the insured person and the rider benefit level selected.
The "minimum" rate shown in the table is for a 20 year old female standard
non-smoker underwriting risk with a 1% Monthly Acceleration Percentage. The
"maximum" rate shown in the table is for a 80 year old male substandard
smoker underwriting class with a 4% Monthly Acceleration Percentage. The
"representative insured person" referred to in the table is a 45 year old
male standard non-smoker underwriting risk with a 4% Monthly Acceleration
Percentage.
(4) The Return of Premium Death Benefit Rider charge is determined by
multiplying the amount of insurance for which we are at risk (the net
amount at risk or "NAR") by the applicable rate. The rates vary depending
upon the insurance risk characteristics of the insured person and
(generally) the gender of the insured person. The "minimum" rate shown in
the table is the rate in the first policy year for a poicy issued to cover
a 0 year old female standard non-smoker underwriting risk. The "maximum"
rate shown in the table is the rate in
9
the first policy year for a policy issued to cover a 90 year old male
substandard smoker underwriting risk. This includes the so-called "extra
mortality charge". The "representative insured person" referred to in the
table is a 45 year old male standard non-smoker underwriting risk with a
policy in the first policy year. The charges shown in the table may not be
particularly relevant to your current situtation.
(5) The charge for this benefit will be assessed separately and will not be
deducted from the policy value.
(6) This charge is not currently imposed, but we reserve the right to do so in
the policy.
The next table describes the minimum and maximum portfolio level fees and
expenses charged by any of the portfolios underlying a variable investment
option offered through this prospectus, expressed as a percentage of average
net assets (rounded to two decimal places). These expenses are deducted from
portfolio assets.
- ----------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses Minimum Maximum
- ----------------------------------------------------------------------------------------------
Range of expenses, including management fees, distribution and/
or service (12b-1) fees, and other expenses 0.50% 1.53%
- ----------------------------------------------------------------------------------------------
The next table describes the fees and expenses for each class of shares of
each portfolio underlying a variable investment option offered through this
prospectus. None of the portfolios charge a sales load or surrender fee.The
fees and expenses do not reflect the fees and expenses of any variable
insurance contract or qualified plan which may use the portfolio as its
underlying investment medium. Except for the American International, American
Growth, American Growth-Income, American Blue Chip Income and Growth, American
Bond and PIMCO VIT All Asset portfolios, all of the portfolios shown in the
table are NAV class shares that are not subject to Rule 12b-1 fees. Except as
indicated in the footnotes appearing at the end of the table, the expense
ratios are based upon the portfolio's actual expenses for the year ended
December 31, 2005.
Portfolio Annual Expenses
(as a percentage of portfolio average net assets, rounded to two decimal
places)
Management 12b-1 Other Total
Portfolio Fees Fees Expenses Annual Expenses
- --------- ---------- ------ --------- ----------------
Science & Technology ...................... 1.05%/A/ N/A 0.07% 1.12%
Pacific Rim ............................... 0.80% N/A 0.24% 1.04%
Health Sciences ........................... 1.05%/A/ N/A 0.12% 1.17%
Emerging Growth ........................... 0.80% N/A 0.08% 0.88%
Small Cap Growth .......................... 1.07% N/A 0.06% 1.13%
Emerging Small Company .................... 0.97% N/A 0.07% 1.04%
Small Cap/B/ .............................. 0.85% N/A 0.03% 0.88%
Small Cap Index ........................... 0.49% N/A 0.04% 0.53%
Dynamic Growth ............................ 0.95% N/A 0.07% 1.02%
Mid Cap Stock ............................. 0.84% N/A 0.08% 0.92%
Natural Resources ......................... 1.00% N/A 0.07% 1.07%
All Cap Growth ............................ 0.85% N/A 0.06% 0.91%
Strategic Opportunities ................... 0.80% N/A 0.08% 0.88%
Financial Services ........................ 0.82%/C/ N/A 0.09% 0.91%
International Opportunities ............... 0.90% N/A 0.06% 0.96%
International Small Cap ................... 0.92% N/A 0.21% 1.13%
International Equity Index B /B/D/I/ ....... 0.55% N/A 0.04% 0.59%
Overseas Equity/B/ ........................ 1.05% N/A 0.23% 1.28%
American International/E/H/ ............... 0.52% 0.60% 0.08% 1.20%
International Value ....................... 0.82%/F/ N/A 0.19% 1.01%
International Core ........................ 0.89% N/A 0.07% 0.96%
Quantitative Mid Cap ...................... 0.74% N/A 0.10% 0.84%
Mid Cap Index ............................. 0.49% N/A 0.04% 0.53%
Mid Cap Core .............................. 0.87% N/A 0.08% 0.95%
Global .................................... 0.82%/F/ N/A 0.16% 0.98%
Capital Appreciation ...................... 0.81% N/A 0.05% 0.86%
10
Management 12b-1 Other Total
Portfolio Fees Fees Expenses Annual Expenses
- --------- ---------- ------ --------- ----------------
American Growth/E/ ........................ 0.33% 0.60% 0.04% 0.97%
U.S. Global Leaders Growth ................ 0.70% N/A 0.06% 0.76%
Quantitative All Cap ...................... 0.71% N/A 0.06% 0.77%
All Cap Core .............................. 0.80% N/A 0.07% 0.87%
Total Stock Market Index .................. 0.49% N/A 0.04% 0.53%
Blue Chip Growth .......................... 0.81%/A/ N/A 0.07% 0.88%
U.S. Large Cap ............................ 0.83% N/A 0.06% 0.89%
Core Equity ............................... 0.79% N/A 0.06% 0.85%
Strategic Value ........................... 0.85% N/A 0.08% 0.93%
Large Cap Value ........................... 0.84% N/A 0.08% 0.92%
Classic Value ............................. 0.80% N/A 0.24% 1.04%
Utilities ................................. 0.85% N/A 0.19% 1.04%
Real Estate Securities .................... 0.70% N/A 0.06% 0.76%
Small Cap Opportunities ................... 0.99% N/A 0.08% 1.07%
Small Cap Value/B/D/ ...................... 1.07% N/A 0.05% 1.12%
Small Company Value/D/ .................... 1.03%/A/ N/A 0.05% 1.08%
Special Value ............................. 1.00% N/A 0.21% 1.21%
Mid Value ................................. 0.98%/A/ N/A 0.08% 1.06%
Mid Cap Value ............................. 0.85% N/A 0.05% 0.90%
Value ..................................... 0.74% N/A 0.06% 0.80%
All Cap Value ............................. 0.83% N/A 0.07% 0.90%
Growth & Income/B/ ........................ 0.68% N/A 0.08% 0.76%
500 Index B/B/D/I/ ........................ 0.47% N/A 0.03% 0.50%
Fundamental Value ......................... 0.77%/C/ N/A 0.05% 0.82%
U.S. Core ................................. 0.76% N/A 0.05% 0.81%
Large Cap/B/ .............................. 0.84% N/A 0.05% 0.89%
Quantitative Value ........................ 0.70% N/A 0.06% 0.76%
American Growth-Income/E/ ................. 0.28% 0.60% 0.05% 0.93%
Equity-Income ............................. 0.81%/A/ N/A 0.05% 0.86%
American Blue Chip Income and Growth/E/ ... 0.44% 0.60% 0.04% 1.08%
Income & Value ............................ 0.79% N/A 0.08% 0.87%
Managed/B/ ................................ 0.69% N/A 0.06% 0.75%
PIMCO VIT All Asset ....................... 0.20% 0.25% 1.08%/G/ 1.53%
Global Allocation ......................... 0.85% N/A 0.19% 1.04%
High Yield ................................ 0.66% N/A 0.07% 0.73%
U.S. High Yield Bond/B/D/ ................. 0.74% N/A 0.21% 0.95%
Strategic Bond ............................ 0.67% N/A 0.08% 0.75%
Strategic Income .......................... 0.73% N/A 0.30% 1.03%
Global Bond ............................... 0.70% N/A 0.12% 0.82%
Investment Quality Bond ................... 0.60% N/A 0.09% 0.69%
Total Return .............................. 0.70% N/A 0.07% 0.77%
American Bond/E/ .......................... 0.43% 0.60% 0.04% 1.07%
Real Return Bond .......................... 0.70% N/A 0.07% 0.77%
Bond Index B /B/D/I/ ....................... 0.47% N/A 0.03% 0.50%
Core Bond/B/ .............................. 0.67% N/A 0.07% 0.74%
Active Bond/B/ ............................ 0.60% N/A 0.07% 0.67%
U.S. Government Securities ................ 0.59% N/A 0.07% 0.66%
Short-Term Bond/B/ ........................ 0.59% N/A 0.09% 0.68%
Money Market B /B/D/I/ ..................... 0.49% N/A 0.04% 0.53%
11
Management 12b-1 Other Total
Portfolio Fees Fees Expenses Annual Expenses
- --------- ---------- ------ --------- ----------------
Lifestyle Aggressive ...................... 0.05% N/A 0.95%/H/ 1.00%
Lifestyle Growth .......................... 0.05% N/A 0.89%/H/ 0.94%
Lifestyle Balanced ........................ 0.05% N/A 0.86%/H/ 0.91%
Lifestyle Moderate ........................ 0.05% N/A 0.81%/H/ 0.86%
Lifestyle Conservative .................... 0.05% N/A 0.78%/H/ 0.83%
Brandes International Equity/J/ ........... 0.69% N/A 0.23% 0.92%
Turner Core Growth/J/ ..................... 0.45% N/A 0.23% 0.68%
Frontier Capital Appreciation/J/ .......... 0.90% N/A 0.21% 1.11%
Business Opportunity Value/J/ ............. 0.65% N/A 0.36% 1.01%
/A/The adviser has voluntarily agreed to waive a portion of its advisory fee for
the Blue Chip Growth, Equity-Income, Health Sciences, Mid Value, Science &
Technology, and Small Company Value portfolios. This waiver is based on the
combined average daily net assets of these portfolios and the following funds of
John Hancock Funds II: Blue Chip Growth Fund, Equity-Income Fund, Health
Sciences Fund, Science & Technology Fund, Small Company Value Fund, Spectrum
Income Fund and Real Estate Equity Fund (collectively, the "T. Rowe
Portfolios").
The percentage fee reduction is as follows:
Combined Average Daily Net Fee Reduction
Assets of the T. Rowe Portfolios (as a percentage of the Management Fee)
- -------------------------------- ---------------------------------------
First $750 million.............. 0.00%
Over $750 million............... 5.0%
Effective November 1, 2006, the percentage reduction will be as follows:
Combined Average Daily Net Fee Reduction
Assets of the T. Rowe Portfolios (as a percentage of the Management Fee)
- -------------------------------- ---------------------------------------
First $750 million................. 0.00%
Next $750 million.................. 5.0%
Excess over $1.5 billion........... 7.5%
This voluntary fee waiver may be terminated at any time by the adviser.
/B/ Commenced operations April 29, 2005.
/C/ For the period prior to October 14, 2005, the adviser voluntarily agreed to
reduce its advisory fee for the Financial Services and Fundamental Value
portfolios to the amounts shown below as a percentage of average annual net
assets.
Between $50 million Excess Over
Portfolio First $50 million and $500 million $500 million
- --------- ----------------- ------------------- ------------
Financial Services ......... 0.85% 0.80% 0.75%
Fundamental Value .......... 0.85% 0.80% 0.75%
Effective October 14, 2005, the advisory fees for the Financial Services and
the Fundamental Value portfolios were lowered to the rates for the voluntary
advisory fee waiver set forth above and the voluntary advisory fee waiver was
eliminated.
If the advisory fee waiver for the period prior to October 14, 2005 were
reflected, it is estimated that the management fees for these portfolios would
have been as follows:
Financial Services ......... 0.82%
Fundamental Value .......... 0.77%
/D/ Based on estimates for the current fiscal year.
/E/ Reflects the aggregate annual operating expenses of each portfolio and its
corresponding master fund. In the case of the American Blue Chip Income and
Growth, American Bond, American Growth, American Growth-Income and American
International portfolios, and during the year ended December 31, 2005, Capital
Research Management Company (the adviser to the American Blue Chip Income and
Growth, American Bond, American Growth, American Growth-Income and American
International portfolios) voluntarily reduced investment management fees to
rates provided by amended agreement effective April 1, 2004. If such fee waiver
had been reflected, the management fee would be 0.40%, 0.39%, 0.30%, 0.25% and
0.47% and Total Annual Expenses would be 1.04%, 1.03%, 0.94%, 0.90% and 1.15%.
12
/F/ Effective December 9, 2003, due to a decrease in the subadvisory fees for
the Global and International Value portfolios, the adviser voluntarily agreed to
waive its advisory fees so that the amount retained by the adviser after payment
of the subadvisory fees for each such portfolio does not exceed 0.45% of the
portfolio's average net assets. For the year ended December 31, 2005, the
effective annual advisory fee for the Global and International Value portfolios
was 0.77% and 0.78%, respectively. These advisory fee waivers may be rescinded
at any time.
/G/ Other Expenses for the PIMCO All Asset portfolio reflect an administrative
fee of 0.25%, a service fee of 0.20% and expenses of underlying funds in which
the PIMCO All Asset portfolio invests ("PIMCO Underlying Funds"). The PIMCO
Underlying Funds` expenses (0.63%) are estimated based upon an allocation of the
portfolio's assets among the PIMCO Underlying Funds and upon the total annual
operating expenses of the Institutional Class shares of these PIMCO Underlying
Funds. PIMCO Underlying Fund expenses will vary with changes in the expenses of
the PIMCO Underlying Funds, as well as allocation of the portfolio's assets, and
may be higher or lower than those shown above. PIMCO has contractually agreed,
for the portfolio`s current fiscal year, to waive its advisory fee to the extent
that the PIMCO Underlying Funds' expenses attributable to advisory and
administrative fees exceed 0.64% of the total assets invested in PIMCO
Underlying Funds.
/H/ Each of the Lifestyle Trusts may invest in all the other Trust portfolios
except the American Growth, the American International, the American Blue Chip
Income, American Bond, and Growth and the American Growth-Income (the
"Underlying Portfolios"). The Total Annual Expenses for the Underlying
Portfolios range from 0.50% to 1.53%.
/I/ The adviser for this fund has agreed, pursuant to its agreement with the
John Hancock Trust, to waive its management fee (or, if necessary, reimburse
expenses of the fund) to the extent necessary to limit the fund`s "Annual
Operating Expenses". A fund's "Annual Operating Expenses" includes all of its
operating expenses including advisory fees and Rule 12b-1 fees, but excludes
taxes, brokerage commissions, interest, litigation and indemnification expenses
and extraordinary expenses of the fund not incurred in the ordinary course of
the fund`s business. Under the agreement, the adviser's obligation will remain
in effect until May 1, 2007 and will terminate after that date only if the John
Hancock Trust, without the prior written consent of the adviser, sells shares
of the fund to (or has shares of the fund held by) any person other than the
variable life insurance or variable annuity insurance separate accounts of John
Hancock Life Insurance Company (U.S.A.) or any of its affiliates that are
specified in the agreement. If this fee waiver had been reflected, the
management fee shown for the 500 Index Trust B, Bond Index Trust B,
International Equity Index Trust B and Money Market Trust B would be 0.22%,
0.22%, 0.30% and 0.24%, respectively, and the Total Fund Annual Expenses shown
would be 0.25%, 0.25%, 0.34% and 0.28%, respectively.
/J/For the period ending May 1, 2006 to April 30, 2007, the adviser has
contractually agreed to reimburse the portfolio for any expenses (other than
advisory fees, brokerage or other portfolio expenses) to the extent that such
expenses exceed 0.25% of the portfolio's annualized average daily net assets.
Fees and expenses shown are for the year end December 31, 2005. Future fees and
expenses may be different.
13
DETAILED INFORMATION
This section of the prospectus provides additional detailed information
that is not contained in the Summary of Benefits and Risks section.
Table of Investment Options and Investment Subadvisers
When you select a Separate Account investment option, we invest your money
in shares of a corresponding portfolio of the John Hancock Trust (the "Trust")
(or the PIMCO Variable Insurance Trust (the "PIMCO Trust") with respect to the
All Asset portfolio) and hold the shares in a sub-account of the Separate
Account. The Fee Tables show the investment management fees, Rule 12b-1 fees
and other operating expenses for these portfolio shares as a percentage
(rounded to two decimal places) of each portfolio's average net assets for
2005, except as indicated in the footnotes appearing at the end of the table.
Fees and expenses of the portfolios are not fixed or specified under the terms
of the policies and may vary from year to year. These fees and expenses differ
for each portfolio and reduce the investment return of each portfolio.
Therefore, they also indirectly reduce the return you will earn on any Separate
Account investment options you select.
The John Hancock Trust and the PIMCO Trust are so-called "series" type
mutual funds and each is registered under the Investment Company Act of 1940
("1940 Act") as an open-end management investment company. John Hancock
Investment Management Services, LLC ("JHIMS LLC") provides investment advisory
services to the Trust and receives investment management fees for doing so.
JHIMS pays a portion of its investment management fees to other firms that
manage the Trust's portfolios. We and our affiliate own JHIMS LLC and
indirectly benefit from any investment management fees JHIMS LLC retains. The
All Asset portfolio of the PIMCO Trust receives investment advisory services
from Pacific Investment Management Company LLC ("PIMCO") and pays investment
management fees to PIMCO.
Each of the American Blue Chip Income and Growth, American Bond, American
Growth-Income, American Growth, and American International portfolios invests
in Series 1 shares of the corresponding investment portfolio of the Trust and
are subject to a 0.60% 12b-1 fee. The American Growth, American International,
American Growth-Income, American Blue Chip Income and Growth and American Bond
portfolios operate as "feeder funds", which means that the portfolio does not
buy investment securities directly. Instead, it invests in a "master fund"
which in turn purchases investment securities. Each of the American feeder fund
portfolios has the same investment objective and limitations as its master
fund. The prospectus for the American Fund master fund is included with the
prospectuses for the underlying funds.
The Brandes International Equity, Turner Core Growth, Frontier Capital
Appreciation and Business Opportunity Value portfolios are series of M Fund,
Inc. (the "M Fund"), an open-end management investment company registered under
the 1940 Act. The assets of the Brandes International Equity, Turner Core
Growth, Frontier Capital Appreciation and Business Opportunity Value
subaccounts are invested in the corresponding portfolios of the M Fund. M
Financial Investment Advisers, Inc. ("M Financial") is the investment adviser
for all portfolios of the M Fund. The entities shown in the table below as
"Portfolio Managers" of the M Fund portfolios are sub-investment advisers
selected by M Financial and are the entities that manage the portolio's assets.
The portfolios pay us or certain of our affiliates compensation for some
of the distribution, administrative, shareholder support, marketing and other
services we or our affiliates provide to the portfolios. The amount of this
compensation is based on a percentage of the assets of the portfolios
attributable to the variable insurance products that we and our affiliates
issue. These percentages may differ from portfolio to portfolio and among
classes of shares within a portfolio. In some cases, the compensation is
derived from the Rule 12b-1 fees that are deducted from a portfolio's assets
for the services we or our affiliates provide to that portfolio. In addition,
compensation payments of up to 0.45% of assets may be made by a portfolio's
investment advisers or its affiliates. We pay American Funds Distributors,
Inc., the principal underwriter for the American Fund Insurance Series, a
percentage of some or all of the amounts allocated to the "American" portfolios
of the Trust for the marketing support services it provides. Any of these
compensation payments do not, however, result in any charge to you in addition
to what is shown in the Fee Tables.
The following table provides a general description of the portfolios that
underlie the variable investment options we make available under the policy.
You bear the investment risk of any portfolio you choose as an investment
option for your policy. You can find a full description of each portfolio,
including the investment objectives, policies and restrictions of, and the
risks relating to investment in the portfolio in the prospectus for that
portfolio. You should read the portfolio's prospectus carefully before
investing in the corresponding variable investment option.
14
The investment options in the Separate Account are not publicly traded
mutual funds. The investment options are only available to you as investment
options in the policies, or in some cases through other variable annuity
contracts or variable life insurance policies issued by us or by other life
insurance companies. In some cases, the investment options also may be
available through participation in certain qualified pension or retirement
plans. The portfolios' investment advisers and managers (i.e. subadvisers) may
manage publicly traded mutual funds with similar names and investment
objectives. However, the portfolios are not directly related to any publicly
traded mutual fund. You should not compare the performance of any investment
option described in this prospectus with the performance of a publicly traded
mutual fund. The performance of any publicly traded mutual fund could differ
substantially from that of any of the investment options of our Separate
Account.
The portfolios available under the policies are as follows:
Portfolio Portfolio Manager
================================== ===================================
Science & Technology T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
Pacific Rim MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Health Sciences T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
Emerging Growth MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Small Cap Growth Wellington Management Company,
LLP
- ---------------------------------- -----------------------------------
Emerging Small Company Franklin Advisers, Inc.
- ---------------------------------- -----------------------------------
Small Cap Independence Investment LLC
- ---------------------------------- -----------------------------------
Small Cap Index MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Science & Technology Seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its net assets
(plus any borrowings for investment purposes) in common
stocks of companies expected to benefit from the
development, advancement, and use of science and
technology. Current income is incidental to the portfolio's
objective.
- ---------------------------------- ----------------------------------------------------------------
Pacific Rim Seeks long-term growth of capital by investing in a
diversified portfolio that is comprised primarily of common
stocks and equity-related securities of corporations
domiciled in countries in the Pacific Rim region.
- ---------------------------------- ----------------------------------------------------------------
Health Sciences Seeks long-term capital appreciation by investing, under
normal market conditions, at least 80% of its net assets
(plus any borrowings for investment purposes) in common
stocks of companies engaged in the research, development,
production, or distribution of products or services related to
health care, medicine, or the life sciences.
- ---------------------------------- ----------------------------------------------------------------
Emerging Growth Seeks superior long-term rates of return through capital
appreciation by investing, under normal circumstances,
primarily in high quality securities and convertible
instruments of small-cap U.S. companies.
- ---------------------------------- ----------------------------------------------------------------
Small Cap Growth Seeks long-term capital appreciation by investing, under
normal market conditions, primarily in small-cap
companies that are believed to offer above average potential
for growth in revenues and earnings.
- ---------------------------------- ----------------------------------------------------------------
Emerging Small Company Seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its net assets
(plus any borrowings for investment purposes) in common
stock equity securities of companies with market
capitalizations that approximately match the range of
capitalization of the Russell 2000 Growth Index* at the
time of purchase.
- ---------------------------------- ----------------------------------------------------------------
Small Cap Seeks maximum capital appreciation consistent with
reasonable risk to principal by investing, under normal
market conditions, at least 80% of its net assets in equity
securities of companies whose market capitalization is
under $2 billion.
- ---------------------------------- ----------------------------------------------------------------
Small Cap Index Seeks to approximate the aggregate total return of a small
cap U.S. domestic equity market index by attempting to
track the performance of the Russell 2000 Index.*
- ---------------------------------- ----------------------------------------------------------------
15
Portfolio Portfolio Manager
================================== ===================================
Dynamic Growth Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Mid Cap Stock Wellington Management Company,
LLP
- ---------------------------------- -----------------------------------
Natural Resources Wellington Management Company,
LLP
- ---------------------------------- -----------------------------------
All Cap Growth AIM Capital Management, Inc.
- ---------------------------------- -----------------------------------
Strategic Opportunities Fidelity Management & Research
Company
- ---------------------------------- -----------------------------------
Financial Services Davis Advisors
- ---------------------------------- -----------------------------------
International Opportunities Marisco Capital Management, LLC
- ---------------------------------- -----------------------------------
International Small Cap Templeton Investment Counsel, Inc.
- ---------------------------------- -----------------------------------
International Equity Index B SSgA Funds Management, Inc.
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Dynamic Growth Seeks long-term growth of capital by investing in stocks
and other equity securities of medium-sized U.S. companies
with strong growth potential.
- ---------------------------------- ----------------------------------------------------------------
Mid Cap Stock Seeks long-term growth of capital by investing primarily in
equity securities of mid-size companies with significant
capital appreciation potential.
- ---------------------------------- ----------------------------------------------------------------
Natural Resources Seeks long-term total return by investing, under normal
market conditions, primarily in equity and equity-related
securities of natural resource-related companies worldwide.
- ---------------------------------- ----------------------------------------------------------------
All Cap Growth Seeks long-term capital appreciation by investing the
portfolio's assets, under normal market conditions,
principally in common stocks of companies that are likely
to benefit from new or innovative products, services or
processes, as well as those that have experienced above
average, long-term growth in earnings and have excellent
prospects for future growth.
- ---------------------------------- ----------------------------------------------------------------
Strategic Opportunities Seeks growth of capital by investing primarily in common
stocks. Investments may include securities of domestic and
foreign issuers, and growth or value stocks or a
combination of both.
- ---------------------------------- ----------------------------------------------------------------
Financial Services Seeks growth of capital by investing primarily in common
stocks of financial companies. During normal market
conditions, at least 80% of the portfolio's net assets (plus
any borrowings for investment purposes) are invested in
companies that are principally engaged in financial
services. A company is "principally engaged" in financial
services if it owns financial services-related assets
constituting at least 50% of the value of its total assets, or
if at least 50% of its revenues are derived from its provision
of financial services.
- ---------------------------------- ----------------------------------------------------------------
International Opportunities Seeks long-term growth of capital by investing, under
normal market conditions, at least 65% of its assets in
common stocks of foreign companies that are selected for
their long-term growth potential. The portfolio may invest
in companies of any size throughout the world. The
portfolio normally invests in issuers from at least three
different countries not including the U.S. The portfolio may
invest in common stocks of companies operating in
emerging markets.
- ---------------------------------- ----------------------------------------------------------------
International Small Cap Seeks capital appreciation by investing primarily in the
common stock of companies located outside the U.S. which
have total stock market capitalization or annual revenues of
$1.5 billion or less.
- ---------------------------------- ----------------------------------------------------------------
International Equity Index B Seeks to track the performance of broad-based equity
indices of foreign companies in developed and emerging
markets by attempting to track the performance of the
MSCI All Country World ex-US Index*. (Series I shares
are available for sale to contracts purchased prior to May
13, 2002; Series II shares are available for sale to contracts
purchased on or after May 13, 2002).
- ---------------------------------- ----------------------------------------------------------------
16
Portfolio Portfolio Manager
============================= ===================================
Overseas Equity Capital Guardian Trust Company
- ---------------------------------- -----------------------------------
American International Capital Research Management
Company
- ---------------------------------- -----------------------------------
International Value Templeton Investment Counsel, Inc.
- ---------------------------------- -----------------------------------
International Core Grantham, Mayo, Van Otterloo &
Co. LLC
- ---------------------------------- -----------------------------------
Quantitative Mid Cap MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Mid Cap Index MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Mid Cap Core AIM Capital Management, Inc.
- ---------------------------------- -----------------------------------
Global Templeton Global Advisors Limited
- ---------------------------------- -----------------------------------
Capital Appreciation Jennison Associates LLC
- ---------------------------------- -----------------------------------
American Growth Capital Research Management
Company
- ---------------------------------- -----------------------------------
U.S. Global Leaders Growth Sustainable Growth Advisers, L.P.
- ---------------------------------- -----------------------------------
Quantitative All Cap MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Overseas Equity Seeks long-term capital appreciation by investing, under
normal conditions, at least 80% of its assets in equity
securities of a diversified mix of large established and
medium-sized foreign companies located primarily in
developed countries and, to a lesser extent, in emerging
markets.
- ---------------------------------- ----------------------------------------------------------------
American International Invests all of its assets in Class 2 shares of the International
Fund, a series of American Fund Insurance Series. The
International Fund invests primarily in common stocks of
companies located outside the United States.
- ---------------------------------- ----------------------------------------------------------------
International Value Seeks long-term growth of capital by investing, under
normal market conditions, primarily in equity securities of
companies located outside the U.S., including emerging
markets.
- ---------------------------------- ----------------------------------------------------------------
International Core Seeks to outperform the MSCI EAFE Index* by investing
typically in a diversified portfolio of equity investments
from developed markets other than the U.S.
- ---------------------------------- ----------------------------------------------------------------
Quantitative Mid Cap Seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its total assets
(plus any borrowings for investment purposes) in U.S. mid-
cap stocks, convertible preferred stocks, convertible bonds
and warrants.
- ---------------------------------- ----------------------------------------------------------------
Mid Cap Index Seeks to approximate the aggregate total return of a mid-
cap U.S. domestic equity market index by attempting to
track the performance of the S&P Mid Cap 400 Index*.
- ---------------------------------- ----------------------------------------------------------------
Mid Cap Core Seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its assets in
equity securities, including convertible securities, of mid-
capitalization companies.
- ---------------------------------- ----------------------------------------------------------------
Global Seeks long-term capital appreciation by investing, under
normal market conditions, at least 80% of its net assets
(plus any borrowings for investment purposes) in equity
securities of companies located anywhere in the world,
including emerging markets.
- ---------------------------------- ----------------------------------------------------------------
Capital Appreciation Seeks long-term capital growth by investing at least 65% of
its total assets in equity-related securities of companies that
exceed $1 billion in market capitalization and that the
subadviser believes have above-average growth prospects.
These companies are generally medium-to-large
capitalization companies.
- ---------------------------------- ----------------------------------------------------------------
American Growth Invests all of its assets in Class 2 shares of the Growth
Fund, a series of American Fund Insurance Series. The
Growth Fund invests primarily in common stocks of
companies that appear to offer superior opportunities for
growth of capital.
- ---------------------------------- ----------------------------------------------------------------
U.S. Global Leaders Growth Seeks long-term growth of capital by investing, under
normal market conditions, primarily in common stocks of
"U.S. Global Leaders."
- ---------------------------------- ----------------------------------------------------------------
Quantitative All Cap Seeks long-term growth of capital by investing, under
normal circumstances, primarily in equity securities of U.S.
companies. The portfolio will generally focus on equity
securities of U.S. companies across the three market
capitalization ranges of large, mid and small.
- ---------------------------------- ----------------------------------------------------------------
17
Portfolio Portfolio Manager
=========================== ===================================
All Cap Core Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Total Stock Market Index MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Blue Chip Growth T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
U.S. Large Cap Capital Guardian Trust Company
- ---------------------------------- -----------------------------------
Core Equity Legg Mason Funds Management,
Inc.
- ---------------------------------- -----------------------------------
Strategic Value Massachusetts Financial Services
Company
- ---------------------------------- -----------------------------------
Large Cap Value Mercury Advisors
- ---------------------------------- -----------------------------------
Classic Value Pzena Investment Management,
LLC
- ---------------------------------- -----------------------------------
Utilities Massachusetts Financial Services
Company
- ---------------------------------- -----------------------------------
Real Estate Securities Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Small Cap Opportunities Munder Capital Management
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
All Cap Core Seeks long-term growth of capital by investing primarily in
common stocks and other equity securities within all asset
classes (small, mid and large cap) primarily those within
the Russell 3000 Index*.
- ---------------------------------- ----------------------------------------------------------------
Total Stock Market Index Seeks to approximate the aggregate total return of a broad
U.S. domestic equity market index by attempting to track
the performance of the Wilshire 5000 Equity Index*.
- ---------------------------------- ----------------------------------------------------------------
Blue Chip Growth Seeks to achieve long-term growth of capital (current
income is a secondary objective) by investing, under
normal market conditions, at least 80% of the portfolio's
total assets in the common stocks of large and medium-
sized blue chip growth companies. Many of the stocks in
the portfolio are expected to pay dividends.
- ---------------------------------- ----------------------------------------------------------------
U.S. Large Cap Seeks long-term growth of capital and income by investing
the portfolio's assets, under normal market conditions,
primarily in equity and equity-related securities of
companies with market capitalization greater than $500
million.
- ---------------------------------- ----------------------------------------------------------------
Core Equity Seeks long-term capital growth by investing, under normal
market conditions, primarily in equity securities that, in the
subadviser's opinion, offer the potential for capital growth.
The subadviser seeks to purchase securities at large
discounts to the subadviser's assessment of their intrinsic
value.
- ---------------------------------- ----------------------------------------------------------------
Strategic Value Seeks capital appreciation by investing, under normal
market conditions, at least 65% of its net assets in common
stocks and related securities of companies which the
subadviser believes are undervalued in the market relative
to their long term potential.
- ---------------------------------- ----------------------------------------------------------------
Large Cap Value Seeks long-term growth of capital by investing, under
normal market conditions, primarily in a diversified
portfolio of equity securities of large cap companies located
in the U.S.
- ---------------------------------- ----------------------------------------------------------------
Classic Value Seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its net assets in
domestic equity securities.
- ---------------------------------- ----------------------------------------------------------------
Utilities Seeks capital growth and current income (income above
that available from a portfolio invested entirely in equity
securities) by investing, under normal market conditions, at
least 80% of the portfolio's net assets (plus any borrowings
for investment purposes) in equity and debt securities of
domestic and foreign companies in the utilities industry.
- ---------------------------------- ----------------------------------------------------------------
Real Estate Securities Seeks to achieve a combination of long-term capital
appreciation and current income by investing, under normal
market conditions, at least 80% of its net assets (plus any
borrowings for investment purposes) in equity securities of
real estate investment trusts ("REITS") and real estate
companies.
- ---------------------------------- ----------------------------------------------------------------
Small Cap Opportunities Seeks long-term capital appreciation by investing, under
normal circumstances, at least 80% of its assets in equity
securities of companies with market capitalizations within
the range of the companies in the Russell 2000 Index*.
- ---------------------------------- ----------------------------------------------------------------
18
Portfolio Portfolio Manager
============================= ===================================
Small Cap Value Wellington Management Company,
LLP
- ---------------------------------- -----------------------------------
Small Company Value T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
Special Value Salomon Brothers Asset
(only Series II available) Management Inc.
- ---------------------------------- -----------------------------------
Mid Value T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
Mid Cap Value Lord, Abbett & Co
- ---------------------------------- -----------------------------------
Value Van Kampen
- ---------------------------------- -----------------------------------
All Cap Value Lord, Abbett & Co
- ---------------------------------- -----------------------------------
Growth & Income Independence Investment LLC
- ---------------------------------- -----------------------------------
500 Index B MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Fundamental Value Davis Advisors
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Small Cap Value Seeks long-term capital appreciation by investing, under
normal market conditions, at least 80% of its assets in
small-cap companies that are believed to be undervalued by
various measures and offer good prospects for capital
appreciation.
- ---------------------------------- ----------------------------------------------------------------
Small Company Value Seeks long-term growth of capital by investing, under
normal market conditions, primarily in small companies
whose common stocks are believed to be undervalued.
Under normal market conditions, the portfolio will invest at
least 80% of its net assets (plus any borrowings for
investment purposes) in companies with a market
capitalization that do not exceed the maximum market
capitalization of any security in the Russell 2000 Index* at
the time of purchase.
- ---------------------------------- ----------------------------------------------------------------
Special Value Seeks long-term capital growth by investing, under normal
(only Series II available) circumstances, at least 80% of its net assets in common
stocks and other equity securities of companies whose
market capitalization at the time of investment is no greater
than the market capitalization of companies in the Russell
2000 Value Index*.
- ---------------------------------- ----------------------------------------------------------------
Mid Value Seeks long-term capital appreciation by investing, under
normal market conditions, primarily in a diversified mix of
common stocks of mid size U.S. companies that are
believed to be undervalued by various measures and offer
good prospects for capital appreciation.
- ---------------------------------- ----------------------------------------------------------------
Mid Cap Value Seeks capital appreciation by investing, under normal
market conditions, at least 80% of the portfolio's net assets
(plus any borrowings for investment purposes) in mid-sized
companies, with market capitalization of roughly $500
million to $10 billion.
- ---------------------------------- ----------------------------------------------------------------
Value Seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable risk,
by investing primarily in equity securities of companies
with capitalizations similar to the market capitalization of
companies in the Russell Midcap Value Index*.
- ---------------------------------- ----------------------------------------------------------------
All Cap Value Seeks capital appreciation by investing in equity securities
of U.S. and multinational companies in all capitalization
ranges that the subadviser believes are undervalued.
- ---------------------------------- ----------------------------------------------------------------
Growth & Income Seeks income and long-term capital appreciation by
investing, under normal market conditions, primarily in a
diversified mix of common stocks of large U.S. companies.
- ---------------------------------- ----------------------------------------------------------------
500 Index B Seeks to approximate the aggregate total return of a broad
U.S. domestic equity market index investing, under normal
market conditions, at least 80% of its net assets (plus any
borrowings for investment purposes) in (a) the common
stocks that are included in the S&P 500 Index* and (b)
securities (which may or may not be included in the S&P
500 Index) that MFC Global (U.S.A.) believes as a group
will behave in a manner similar to the index.
- ---------------------------------- ----------------------------------------------------------------
Fundamental Value Seeks growth of capital by investing, under normal market
conditions, primarily in common stocks of U.S. companies
with market capitalizations of at least $5 billion that the
subadviser believes are undervalued. The portfolio may also
invest in U.S. companies with smaller capitalizations.
- ---------------------------------- ----------------------------------------------------------------
19
Portfolio Portfolio Manager
================================== ===================================
U.S. Core Grantham, Mayo, Van Otterloo &
Co. LLC
- ---------------------------------- -----------------------------------
Large Cap UBS Global Asset Management
- ---------------------------------- -----------------------------------
Quantitative Value MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
American Growth-Income Capital Research Management
Company
- ---------------------------------- -----------------------------------
Equity-Income T. Rowe Price Associates, Inc.
- ---------------------------------- -----------------------------------
American Blue Chip Income Capital Research Management
and Growth Company
- ---------------------------------- -----------------------------------
Income & Value Capital Guardian Trust Company
- ---------------------------------- -----------------------------------
Managed Independence Investment LLC
Capital Guardian Trust Company
Declaration Management &
Research LLC
- ---------------------------------- -----------------------------------
PIMCO VIT All Asset Portfolio Pacific Investment Management
(a series of the PIMCO Variable Company
Insurance Trust) (only Class M
is available for sale)
- ---------------------------------- -----------------------------------
Global Allocation UBS Global Asset Management
- ---------------------------------- -----------------------------------
High Yield Salomon Brothers Asset
Management Inc.
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
U.S. Core Seeks long-term growth of capital and income, consistent
with prudent investment risk, by investing primarily in a
diversified portfolio of common stocks of U.S. issuers
which the subadviser believes are of high quality.
- ---------------------------------- ----------------------------------------------------------------
Large Cap Seeks to maximize total return, consisting of capital
appreciation and current income by investing, under normal
circumstances, at least 80% of its net assets (plus
borrowings for investment purposes, if any) in equity
securities of U.S. large capitalization companies.
- ---------------------------------- ----------------------------------------------------------------
Quantitative Value Seeks long-term capital appreciation by investing primarily
in large-cap U.S. securities with the potential for long-term
growth of capital.
- ---------------------------------- ----------------------------------------------------------------
American Growth-Income Invests all of its assets in Class 2 shares of the Growth-
Income Fund, a series of American Fund Insurance Series.
The Growth-Income Fund invests primarily in common
stocks or other securities which demonstrate the potential
for appreciation and/or dividends.
- ---------------------------------- ----------------------------------------------------------------
Equity-Income Seeks to provide substantial dividend income and also long-
term capital appreciation by investing primarily in
dividend-paying common stocks, particularly of established
companies with favorable prospects for both increasing
dividends and capital appreciation.
- ---------------------------------- ----------------------------------------------------------------
American Blue Chip Income Invests all of its assets in Class 2 shares of the Blue Chip
and Growth Income and Growth Fund, a series of American Fund
Insurance Series. The Blue Chip Income and Growth Fund
invests primarily in common stocks of larger, more
established companies based in the U.S. with market
capitalizations of $4 billion and above.
- ---------------------------------- ----------------------------------------------------------------
Income & Value Seeks the balanced accomplishment of (a) conservation of
principal and (b) long-term growth of capital and income
by investing the portfolio's assets in both equity and fixed-
income securities. The subadviser has full discretion to
determine the allocation between equity and fixed income
securities.
- ---------------------------------- ----------------------------------------------------------------
Managed Seeks the balanced accomplishment of (a) conservation of
principal and (b) long-term growth of capital and income
by investing the portfolio's assets in both equity and fixed-
income securities. The subadviser has full discretion to
determine the allocation between equity and fixed income
securities.
- ---------------------------------- ----------------------------------------------------------------
PIMCO VIT All Asset Portfolio The portfolio invests primarily in a diversified mix of: (a)
(a series of the PIMCO Variable common stocks of large and mid sized U.S. companies, and
Insurance Trust) (only Class M (b) bonds with an overall intermediate term average
is available for sale) maturity.
- ---------------------------------- ----------------------------------------------------------------
Global Allocation Seeks total return, consisting of long-term capital
appreciation and current income, by investing in equity and
fixed income securities of issuers located within and
outside the U.S.
- ---------------------------------- ----------------------------------------------------------------
High Yield Seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable risk,
by investing primarily in high yield debt securities,
including corporate bonds and other fixed-income
securities.
- ---------------------------------- ----------------------------------------------------------------
20
Portfolio Portfolio Manager
========================== ===================================
U.S. High Yield Bond Wells Fargo Fund Management,
LLC
- ---------------------------------- -----------------------------------
Strategic Bond Salomon Brothers Asset
Management Inc.
- ---------------------------------- -----------------------------------
Strategic Income Sovereign Asset Management, LLC,
LLC
- ---------------------------------- -----------------------------------
Global Bond Pacific Investment Management
Company
- ---------------------------------- -----------------------------------
Investment Quality Bond Wellington Management Company,
LLP
- ---------------------------------- -----------------------------------
Total Return Pacific Investment Management
Company
- ---------------------------------- -----------------------------------
American Bond Capital Research Management Co
LLC
- ---------------------------------- -----------------------------------
Real Return Bond Pacific Investment Management
Company
- ---------------------------------- -----------------------------------
Bond Index B Declaration Management &
Research LLC
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
U.S. High Yield Bond Seeks total return with a high level of current income by
investing, under normal market conditions, primarily in
below investment-grade debt securities (sometimes referred
to as "junk bonds" or high yield securities). The portfolio
also invests in corporate debt securities and may buy
preferred and other convertible securities and bank loans.
- ---------------------------------- ----------------------------------------------------------------
Strategic Bond Seeks a high level of total return consistent with
preservation of capital by giving its subadviser broad
discretion to deploy the portfolio's assets among certain
segments of the fixed income market as the subadviser
believes will best contribute to achievement of the
portfolio's investment objective.
- ---------------------------------- ----------------------------------------------------------------
Strategic Income Seeks a high level of current income by investing, under
normal market conditions, primarily in foreign government
and corporate debt securities from developed and emerging
markets; U.S. Government and agency securities; and U.S.
high yield bonds.
- ---------------------------------- ----------------------------------------------------------------
Global Bond Seeks to realize maximum total return, consistent with
preservation of capital and prudent investment
management, by investing the portfolio's assets primarily in
fixed income securities denominated in major foreign
currencies, baskets of foreign currencies (such as the ECU),
and the U.S. dollar.
- ---------------------------------- ----------------------------------------------------------------
Investment Quality Bond Seeks a high level of current income consistent with the
maintenance of principal and liquidity, by investing in a
diversified portfolio of investment grade bonds.
Investments will tend to focus on corporate bonds and U.S.
Government bonds with intermediate to longer term
maturities. The portfolio may also invest up to 20% of its
assets in non-investment grade fixed income securities.
- ---------------------------------- ----------------------------------------------------------------
Total Return Seeks to realize maximum total return, consistent with
preservation of capital and prudent investment
management, by investing, under normal market
conditions, at least 65% of the portfolio's assets in a
diversified portfolio of fixed income securities of varying
maturities. The average portfolio duration will normally
vary within a three-to six-year time frame based on the
subadviser's forecast for interest rates.
- ---------------------------------- ----------------------------------------------------------------
American Bond Seeks to maximize current income and preserve capital.
- ---------------------------------- ----------------------------------------------------------------
Real Return Bond Seeks maximum return, consistent with preservation of
capital and prudent investment management, by investing,
under normal market conditions, at least 80% of its net
assets in inflation-indexed bonds of varying maturities
issued by the U.S. and non-U.S. governments and by
corporations.
- ---------------------------------- ----------------------------------------------------------------
Bond Index B Seeks to track the performance of the Lehman Brothers
Aggregate Index** (which represents the U.S. investment
grade bond market) by investing at least 80% of its assets in
securities listed in the Lehman Index.
- ---------------------------------- ----------------------------------------------------------------
21
Portfolio Portfolio Manager
============================= ===================================
Core Bond Wells Fargo Fund Management,
LLC
- ---------------------------------- -----------------------------------
Active Bond Declaration Management &
Research LLC
- ---------------------------------- -----------------------------------
Sovereign Asset Management, LLC
U.S. Government Securities Salomon Brothers Asset
Management Inc.
- ---------------------------------- -----------------------------------
Short Term Bond Declaration Management &
Research LLC
- ---------------------------------- -----------------------------------
Money Market B MFC Global Investment
Management (U.S.A.) Limited
- ---------------------------------- -----------------------------------
Lifestyle Aggressive MFC Global Investment
Management (U.S.A.) Limited
Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Lifestyle Growth MFC Global Investment
Management (U.S.A.) Limited
Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Lifestyle Balanced MFC Global Investment
Management (U.S.A.) Limited
Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Lifestyle Moderate MFC Global Investment
Management (U.S.A.) Limited
Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Core Bond Seeks total return consisting of income and capital
appreciation by investing, under normal market conditions,
in a broad range of investment-grade debt securities. The
subadviser invests in debt securities that the subadviser
believes offer attractive yields and are undervalued relative
to issues of similar credit quality and interest rate
sensitivity. From time to time, the portfolio may also invest
in unrated bonds that the subadviser believes are
comparable to investment-grade debt securities. Under
normal circumstances, the subadviser expects to maintain
an overall effective duration range between 4 and 5 1/2
years.
- ---------------------------------- ----------------------------------------------------------------
Active Bond Seeks income and capital appreciation by investing at least
80% of its assets in a diversified mix of debt securities and
instruments.
- ---------------------------------- ----------------------------------------------------------------
U.S. Government Securities Seeks a high level of current income consistent with
preservation of capital and maintenance of liquidity, by
investing in debt obligations and mortgage-backed
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and derivative securities such
as collateralized mortgage obligations backed by such
securities.
- ---------------------------------- ----------------------------------------------------------------
Short Term Bond Seeks income and capital appreciation by investing at least
80% of its assets in a diversified mix of debt securities and
instruments.
- ---------------------------------- ----------------------------------------------------------------
Money Market B Seeks maximum current income consistent with
preservation of principal and liquidity by investing in high
quality money market instruments with maturities of 397
days or less issued primarily by U. S. entities.
- ---------------------------------- ----------------------------------------------------------------
Lifestyle Aggressive Seeks to provide long-term growth of capital (current
income is not a consideration) by investing 100% of the
Lifestyle Trust's assets in other portfolios of the Trust
which invest primarily in equity securities.
- ---------------------------------- ----------------------------------------------------------------
Lifestyle Growth Seeks to provide long-term growth of capital with
consideration also given to current income by investing
approximately 20% of the Lifestyle Trust's assets in other
portfolios of the Trust which invest primarily in fixed
income securities and approximately 80% of its assets in
other portfolios of the Trust which invest primarily in
equity securities.
- ---------------------------------- ----------------------------------------------------------------
Lifestyle Balanced Seeks to provide a balance between a high level of current
income and growth of capital with a greater emphasis given
to capital growth by investing approximately 40% of the
Lifestyle Trust's assets in other portfolios of the Trust
which invest primarily in fixed income securities and
approximately 60% of its assets in other portfolios of the
Trust which invest primarily in equity securities.
- ---------------------------------- ----------------------------------------------------------------
Lifestyle Moderate Seeks to provide a balance between a high level of current
income and growth of capital with a greater emphasis given
to current income by investing approximately 60% of the
Lifestyle Trust's assets in other portfolios of the Trust
which invest primarily in fixed income securities and
approximately 40% of its assets in other portfolios of the
Trust which invest primarily in equity securities.
- ---------------------------------- ----------------------------------------------------------------
22
Portfolio Portfolio Manager
================================ ===================================
Lifestyle Conservative MFC Global Investment
Management (U.S.A.) Limited
Deutsche Asset Management Inc.
- ---------------------------------- -----------------------------------
Brandes International Equity Brandes Investment Partners, LLC
- ---------------------------------- -----------------------------------
Turner Core Growth Turner Investment Partners, LLC
- ---------------------------------- -----------------------------------
Frontier Capital Appreciation Frontier Capital Management
Company, LLC
- ---------------------------------- -----------------------------------
Business Opportunity Value Iridian Asset Management, LLC
- ---------------------------------- -----------------------------------
Portfolio Investment Description
================================== ================================================================
Lifestyle Conservative Seeks to provide a high level of current income with some
consideration also given to growth of capital by investing
approximately 80% of the Lifestyle Trust's assets in other
portfolios of the Trust which invest primarily in fixed
income securities and approximately 20% of its assets in
other portfolios of the Trust which invest primarily in
equity securities.
- ---------------------------------- ----------------------------------------------------------------
Brandes International Equity Seeks long-term capital appreciation through investment in
equity securities of foreign issuers, including common
stocks, and securities that are convertible into common
stocks.
- ---------------------------------- ----------------------------------------------------------------
Turner Core Growth Seeks long-term capital appreciation through investment
mainly in common stocks of U.S. companies that the
portfolio manager believes have strong earnings-growth
potential.
- ---------------------------------- ----------------------------------------------------------------
Frontier Capital Appreciation Seeks maximum capital appreciation through investment in
common stock of U.S. companies of all states, with
emphasis on stocks with capitalizations consistent with the
capitalizations of those companies found in the Russell
2500 Index*.
- ---------------------------------- ----------------------------------------------------------------
Business Opportunity Value Seeks long-term capital appreciation through investment
primariliy in equity securities of U.S. issuers in the large-to-
medium capitalization segment of the U.S. stock market.
- ---------------------------------- ----------------------------------------------------------------
* "Standard & Poor's(R)," "S&P 500(R)," "Standard and Poor's 500(R)" and "S&P
Mid Cap 400(R)" are trademarks of The McGraw-Hill Companies, Inc. "Russell
2000(R)," "Russell 2000(R) Growth" and "Russell 3000(R)" are trademarks of Frank
Russell Company. "Wilshire 5000(R)" is a trademark of Wilshire Associates. "MSCI
All Country World ex US Index" and "EAFE(R)" are trademarks of Morgan Stanley &
Co. Incorporated. None of the portfolios are sponsored, endorsed, managed,
advised, sold or promoted by any of these companies, and none of these companies
make any representation regarding the advisability of investing in the
portfolios.
** The Lehman Brothers Aggregate Index is a Bond Index. A Bond Index relies on
indicators such as quality, liquidity, term and duration as relevant measures
of performance.
The indexes referred to in the portfolio descriptions track companies
having the ranges of market capitalization, as of December 31, 2005, set out
below:
Russell 2000 Growth Index -- $26 million to $4.4 billion
Russell 2000 Index -- $105 million to $4.4 billion
Russell 2500 Index -- $25 million to $11.2 billion
Russell 3000 Index -- $26 million to $370 billion
Russell 2000 Value Index -- $41 million to $3.5 billion
Russell Midcap Value Index -- $582 million to $18.2 billion
Wilshire 5000 Equity Index -- $1 million to $370 billion
MSCI All Country World ex US Index -- $419 million to $219.5 billion
MSCI EAFE Index -- $419 million to $219.5 billion
S&P Mid Cap 400 Index -- $423 million to $14.6 billion
S&P 500 Composite Stock Price Index -- $768 million to $370 billion
Description of John Hancock USA
We are a stock life insurance company incorporated in Maine on August 20,
1955 by a special act of the Maine legislature and redomesticated under the
laws of Michigan. We are a licensed life insurance company in the District of
Columbia and all states of the United States except New York. Our ultimate
parent is Manulife Financial Corporation ("MFC"), a publicly traded company,
based in Toronto, Canada. MFC is the holding company of John Hancock USA and
its subsidiaries. However, neither John Hancock USA nor any of its affiliated
companies guarantees the investment performance of the Account.
23
We have received the following ratings from independent rating agencies:
A++ A.M. Best
Superior companies have a very strong ability to meet their obligations;
1st category of 16
AA+ Fitch Ratings
Very strong capacity to meet policyholder and contract obligations; 2nd
category of 24
AA+ Standard & Poor's
Very strong financial security characteristics; 2nd category of 21
Aa2 Moody's
Excellent in financial strength; 3rd category of 21
These ratings, which are current as of the date of this prospectus and are
subject to change, are assigned as a measure of our ability to honor any
guarantees provided by the policy and any applicable optional riders, but do
not specifically relate to our products, the performance (return) of these
products, the value of any investment in these products upon withdrawal or to
individual securities held in any portfolio. These ratings do not apply to the
safety and performance of the Separate Account.
Description of Separate Account A
The investment accounts shown on page 1 are in fact subaccounts of
Separate Account A (the "Account"), a separate account established under
Pennsylvania law and operated by us under Michigan law. The Account meets the
definition of "separate account" under the Federal securities laws and is
registered as a unit investment trust under the 1940 Act. Such registration
does not involve supervision by the SEC of the management of the Account or of
us.
The Account's assets are our property. Each policy provides that amounts
we hold in the Account pursuant to the policies cannot be reached by any other
persons who may have claims against us and can't be used to pay any
indebtedness of John Hancock USA other than those arising out of policies that
use the Account. Income, gains and losses credited to, or charged against, the
Account reflect the Account's own investment experience and not the investment
experience of the John Hancock USA's other assets.
New subaccounts may be added and made available to policy owners from time
to time. Existing subaccounts may be modified or deleted at any time.
The fixed account options
Our obligations under any fixed account options are backed by our general
account assets. Our general account consists of assets owned by us other than
those in the Account and in other separate accounts that we may establish.
Subject to applicable law, we have sole discretion over the investment of
assets of the general account and policy owners do not share in the investment
experience of, or have any preferential claim on, those assets. Instead, we
guarantee that the policy value allocated to any fixed account will accrue
interest daily at an effective annual rate that we determine without regard to
the actual investment experience of the general account. We currently offer two
fixed account options - the standard fixed account, and the enhanced yield
fixed account offered as a supplementary benefit rider. The effective annual
rate we declare for the fixed account options will never be less than 3%. We
reserve the right to offer one or more additional fixed accounts with
characteristics that differ from those of the current fixed account options,
but we are under no obligation to do so.
Because of exemptive and exclusionary provisions, interests in our fixed
account options have not been and will not be registered under the Securities
Act of 1933 ("1933 Act") and our general account has not been registered as an
investment company under the 1940 Act. Accordingly, neither the general account
nor any interests therein are subject to the provisions of these acts, and we
have been advised that the staff of the SEC has not reviewed the disclosure in
this prospectus relating to any fixed account. Disclosure regarding fixed
accounts may, however, be subject to certain generally-applicable provisions of
the Federal securities laws relating to accuracy and completeness of statements
made in prospectuses.
The death benefit
In your application for the policy, you will tell us how much life
insurance coverage you want on the life of the insured person. This is called
the "Total Face Amount". Total Face Amount is composed of the Base Face Amount
and any Supplemental Face Amount you elect. The Supplemental Face Amount you
can have generally cannot exceed 400% of the
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Base Face Amount at the Issue Date. Thereafter, increases to the Supplemental
Face Amount cannot exceed 400% of the Total Face Amount at the Issue Date.
There are a number of factors you should consider in determining whether to
elect coverage in the form of Base Face Amount or in the form of Supplemental
Face Amount. These factors are discussed under "Base Face Amount vs.
Supplemental Face Amount" below.
When the insured person dies, we will pay the death benefit minus any
outstanding loans, accrued interest and unpaid fees and charges. There are two
ways of calculating the death benefit. You must choose which one you want in
the application. The two death benefit options are:
. Option 1 - The death benefit will equal the greater of (1) the Total
Face Amount, or (2) the minimum death benefit (as described below).
. Option 2 - The death benefit will equal the greater of (1) the Total
Face Amount plus the policy value on the date of death, or (2) the
minimum death benefit.
For the same premium payments, the death benefit under Option 2 will tend
to be higher than the death benefit under Option 1. On the other hand, the
monthly insurance charge will be higher under Option 2 to compensate us for the
additional insurance risk. Because of that, the policy value will tend to be
higher under Option 1 than under Option 2 for the same premium payments.
Limitations on payment of death benefit
If the insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy.
Also, if an application misstated the age or gender of the insured person, we
will adjust the amount of any death benefit as described in the policy.
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Base Face Amount vs. Supplemental Face Amount
As noted above, you should consider a number of factors in determining
whether to elect coverage in the form of Base Face Amount or in the form of
Supplemental Face Amount.
For the same amount of premiums paid, the amount of the premium charge on
premium payments and the face amount charge deducted from policy value and the
amount of compensation paid to the selling insurance agent will generally be
less if coverage is included as Supplemental Face Amount, rather than as Base
Face Amount. On the other hand, the amount of any Supplemental Face Amount may
be subject to a shorter No-Lapse Guarantee Period (see "No-lapse guarantee").
Also, the amount of any Supplemental Face Amount coverage expires on the policy
anniversary nearest the insured person's 121st birthday.
If your priority is to reduce your Face Amount charges and the premium
charge on your premiums, you may wish to maximize the proportion of the
Supplemental Face Amount. However, if your priority is to take advantage of the
No-Lapse Guarantee feature after the 2nd policy year or to maximize the death
benefit when the insured person reaches 121, then you may wish to maximize the
proportion of the Base Face Amount.
If you want to purchase Supplemental Face Amount coverage, you may select
either a level amount of coverage or an amount of coverage that increases each
year up to a prescribed limit. If you elect to forego any scheduled increase in
coverage, we reserve the right to discontinue scheduled increases for all
following years.
The minimum death benefit
In order for a policy to qualify as life insurance under Federal tax law,
there has to be a minimum amount of insurance in relation to policy value.
There are two tests that can be applied under Federal tax law - the "guideline
premium test" and the "cash value accumulation test". When you elect the death
benefit option, you must also elect which test you wish to have applied. Once
elected, the test cannot be changed without our approval. Under the guideline
premium test, we compute the minimum death benefit each business day by
multiplying the policy value on that date by the death benefit factor
applicable on that date. In this case, the factors are derived by applying the
guideline premium test. Factors for some ages are shown in the table below:
Attained Age Applicable Factor
- ------------ ------------------
40 and under ......... 250%
45 ................... 215%
50 ................... 185%
55 ................... 150%
60 ................... 130%
65 ................... 120%
70 ................... 115%
75 ................... 105%
90 ................... 105%
95 and above ......... 100%
A table showing the factor for each age will appear in the policy.
Under the cash value accumulation test, we compute the minimum death
benefit each business day by multiplying the policy value on that date by the
death benefit factor applicable on that date. In this case, the factors are
derived by applying the cash value accumulation test. The factor decreases as
attained age increases. A table showing the factor for each age will appear in
the policy.
As noted above, you have to elect which test will be applied when you
elect the death benefit option. The cash value accumulation test may be
preferable if you want an increasing death benefit in later policy years and/or
want to fund the policy at the "7 pay" limit for the full 7 years (see "Tax
considerations"). The guideline premium test may be preferable if you want the
policy value under the policy to increase without increasing the death benefit
as quickly as might otherwise be required.
To the extent that the calculation of the minimum death benefit under the
selected life insurance qualification test causes the death benefit to exceed
our limits, we reserve the right to return premiums or distribute a portion of
the policy value so that the resulting amount of insurance is maintained within
our limits. Alternatively, if we should decide to accept the additional amount
of insurance, we may require additional evidence of insurability.
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When the insured person reaches 121
At and after the policy anniversary nearest the insured person's 121st
birthday, the following will occur:
. Any Supplemental Face Amount will be limited (see "Base Face Amount
vs. Supplemental Face Amount").
. We will stop deducting any monthly deductions.
. We will stop accepting any premium payments.
Requesting an increase in coverage
After the first policy year, we may approve an unscheduled increase in the
Supplemental Face Amount at any time, subject to the maximum limit stated in
the policy. Generally, each such increase must be at least $50,000. However,
you will have to provide us with evidence that the insured person still meets
our requirements for issuing insurance coverage. An approved increase will take
effect on the policy anniversary on or next following the date we approve the
request.
Requesting a decrease in coverage
After the first policy year, we may approve a reduction in the Base Face
Amount or the Supplemental Face Amount, but only if:
. the remaining Total Face Amount and Base Face Amount will each be at
least $100,000, and
. the remaining Total Face Amount will at least equal the minimum
required by the tax laws to maintain the policy's life insurance
status.
A pro-rata portion of the surrender charge will be payable upon any
requested reduction in the Base Face Amount (see "Surrender charge"). An
approved decrease will take effect on the monthly deduction date on or next
following the date we approve the request. We reserve the right to require that
the Supplemental Face Amount be fully depleted before the Base Face Amount can
be reduced.
Change of death benefit option
Under our current administrative rules, we permit the death benefit option
to be changed from Option 2 to Option 1, after the first policy year. We
reserve the right to limit a request for a change if the change would cause the
policy to fail to qualify as life insurance for tax purposes.
A change in the death benefit option will result in a change in the
policy's Total Face Amount, in order to avoid any change in the amount of the
death benefit. The new Total Face Amount will be equal to the Total Face Amount
prior to the change plus the policy value as of the date of the change. The
change will take effect on the monthly deduction date on or next following the
date the written request for the change is received at our Service Office.
If you change the death benefit option, the Federal tax law test
("guideline premium test" or "cash value accumulation test") that you elected
at issue will continue to apply. Please read "The minimum death benefit" for
more information about these Federal tax law tests.
Tax consequences of coverage changes
A change in the death benefit option or Total Face Amount will often
change the policy's limits under the life insurance qualification test that you
elected. To avoid having the policy cease to qualify as life insurance for tax
purposes, we reserve the right to (i) refuse or limit a change in the death
benefit option or Total Face Amount and (ii) change the Guideline Single
Premium or Guideline Level Premium, as applicable. Please read "Tax
considerations" to learn about possible tax consequences of changing your
insurance coverage under the policy.
Your beneficiary
You name your beneficiary when you apply for the policy. The beneficiary
is entitled to the proceeds we pay following the insured person's death. You
may change the beneficiary during the insured person's lifetime. Such a change
requires the consent of any named irrevocable beneficiary. A new beneficiary
designation is effective as of the date you sign it, but will not affect any
payments we make before we receive it. If no beneficiary is living when the
insured person dies, we will pay the insurance proceeds to the owner or the
owner's estate.
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Ways in which we pay out policy proceeds
You may choose to receive proceeds from the policy as a single sum. This
includes proceeds that become payable because of death or surrender.
Alternatively, you can elect to have proceeds of $1,000 or more applied to any
of the other payment options we may offer at the time. You cannot choose an
option if the monthly payments under the option would be less than $50. We will
issue a supplementary agreement when the proceeds are applied to any
alternative payment option. That agreement will spell out the terms of the
option in full. If no alternative payment option has been chosen, proceeds will
be paid as a single sum.
Changing a payment option
You can change the payment option at any time before the proceeds are
payable. If you haven't made a choice, the payee of the proceeds has a
prescribed period in which he or she can make that choice.
Tax impact of payment option chosen
There may be tax consequences to you or your beneficiary depending upon
which payment option is chosen. You should consult with a qualified tax adviser
before making that choice.
Premiums
Planned premiums
The Policy Specifications page of your policy will show the "Planned
Premium" for the policy. You will also choose how often to pay premiums -
annually, semi-annually or quarterly. You may also choose to pay premiums by
monthly electronic funds transfers. The premium reminder notice we send you is
based on the amount and period you choose. However, payment of Planned Premiums
is not necessarily required. You need only invest enough to keep the policy in
force (see "Lapse and reinstatement").
Minimum initial premium
The minimum initial premium is set forth in the Policy Specifications page
of your policy. After the payment of the initial premium, premiums may be paid
at any time and in any amount until the insured person reaches age 121, subject
to the limitations on premium amount described below.
Maximum premium payments
Federal tax law limits the amount of premium payments you can make
relative to the amount of your policy's insurance coverage. We will not
knowingly accept any amount by which a premium payment exceeds this limit. If
you exceed certain other limits, the law may impose a penalty on amounts you
take out of your policy. More discussion of these tax law requirements is
provided under "Tax considerations".
Large premium payments may expose us to unanticipated investment risk. In
order to limit our investment risk exposure under certain market conditions, we
may refuse to accept additional premium payments. This may be the case, for
example, in an environment of decreasing interest rates, where we may not be
able to acquire investments for our general account that will sufficiently
match the liabilities we are incurring under our fixed account guarantees.
Excessive allocations may also interfere with the effective management of our
variable investment account portfolios, if we are unable to make an orderly
investment of the additional premium into the portfolios. Also, we may refuse
to accept an amount of additional premium if the amount of the additional
premium would increase our insurance risk exposure, and the insured person
doesn't provide us with adequate evidence that he or she continues to meet our
requirements for issuing insurance.
We will notify you in writing of our refusal to accept additional premium
under these provisions within three days following the date that it is received
by us, and will promptly thereafter take the necessary steps to return the
premium to you. Notwithstanding the foregoing limits on the additional premium
that we will accept, we will not refuse to accept any premium necessary to
prevent the policy from terminating.
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Processing premium payments
No premiums will be accepted prior to our receipt of a completed
application at our Service Office. All premiums received prior to the Issue
Date of the policy will be held in the general account and credited with
interest from the date of receipt at the rate of return then being earned on
amounts allocated to the Money Market B investment account. After the Issue
Date but prior to the Allocation Date, premiums received are allocated to the
Money Market B investment account.The "Allocation Date" of the policy is the
10th day after the Issue Date. The Issue Date is shown on the Policy
Specifications page of the policy. On the Allocation Date, the Net Premiums
paid plus interest credited, if any, will be allocated among the investment
accounts or the fixed account in accordance with the policy owner's
instructions. The "Net Premium" is the premium paid less the premium charge we
deduct from it.
Any Net Premium received on or after the Allocation Date will be allocated
among investment accounts or any fixed account option as of the business day on
or next following the date the premium is received at the Service Office.
Monthly deductions are normally due on the Policy Date and at the beginning of
each policy month thereafter. However, if the monthly deductions are due prior
to the Contract Completion Date, they will be deducted from policy value on the
Contract Completion Date instead of the dates they were due (see "Procedures
for issuance of a policy" for the definition of "Contract Completion Date").
Payment of premiums will not guarantee that the policy will stay in force.
Conversely, failure to pay premiums will not necessarily cause the policy to
lapse. However, in states where permitted, the policy will have a No-Lapse
Guarantee which would prevent the policy from lapsing during the guarantee
period, provided certain criteria are satisfied.
Ways to pay premiums
If you pay premiums by check or money order, they must be drawn on a U.S.
bank in U.S. dollars and made payable to "John Hancock". We will not accept
credit card checks. We will not accept starter or third party checks if they
fail to satisfy our administrative requirements. Premiums after the first must
be sent to the John Hancock USA Service Office at the appropriate address shown
on the back cover of this prospectus.
We will also accept premiums:
. by wire or by exchange from another insurance company, or
. via an electronic funds transfer program (any owner interested in
making monthly premium payments must use this method).
Lapse and reinstatement
Lapse
Unless the No-Lapse Guarantee is in effect, a policy will go into default
if at the beginning of any policy month the policy's net cash surrender value
would be zero or below after deducting the monthly deductions then due.
Therefore, a policy could lapse eventually if increases in policy value (prior
to deduction of policy charges) are not sufficient to cover policy charges. A
lapse could have adverse tax consequences as described under "Tax
considerations". We will notify you of the default and will allow a 61 day
grace period in which you may make a premium payment sufficient to bring the
policy out of default. The required payment will be equal to the amount
necessary to bring the net cash surrender value to zero, if it was less than
zero on the date of default, plus the monthly deductions due at the date of
default and payable at the beginning of each of the two policy months
thereafter, plus any applicable premium charge. If the required payment is not
received by the end of the grace period, the policy will terminate (i.e.,
"lapse") with no value.
No-lapse guarantee
In those states where it is permitted, as long as the cumulative premium
test is satisfied during the No-Lapse Guarantee Period, as described below, we
will guarantee that the policy will not go into default, even if adverse
investment experience or other factors should cause the policy's surrender
value to fall to zero or below during such period.
The Monthly No-Lapse Guarantee Premium is one-twelfth of the No-Lapse
Guarantee Premium.
The No-Lapse Guarantee Premium is set at issue on the basis of the Face
Amount and reflects the age, sex and risk class of the proposed insured, as
well as any additional rating and supplementary benefits, if applicable. It is
subject to change if (i) the Face Amount of the policy is changed, (ii) there
is a death benefit option change, (iii) there is a decrease in the Face
29
Amount of insurance due to a withdrawal, (iv) there is any change in the
supplementary benefits added to the policy or in the risk classification of the
insured person or (v) a temporary additional rating is added (due to a Face
Amount increase).
The No-Lapse Guarantee Period is set at issue and is stated in the policy.
The No-Lapse Guarantee Period for any Supplemental Face Amount is the first 2
policy years. Certain state limitations may apply, but generally the No-Lapse
Guarantee Period for the Base Face Amount is (i) the lesser of twenty years or
to age 75 or (ii) 5 years if the insured person's issue age is 70 or older. The
No-Lapse Guarantee Period for the Base Face Amount under any policy that has
elected an increasing Supplemental Face Amount or a Return of Premium rider,
however, is limited to the first 2 policy years.
While the No-Lapse Guarantee is in effect, we will determine at the
beginning of the policy month that your policy would otherwise be in default,
whether the cumulative premium test, described below, has been met. If the test
has not been satisfied, we will notify you of that fact and allow a 61-day
grace period in which you may make a premium payment sufficient to keep the
policy from going into default. This required payment, as described in the
notification, will be equal to the lesser of:
(a) the outstanding premium requirement to satisfy the cumulative premium
test at the date of default, plus the monthly No-Lapse Guarantee
Premium due for the next 3 policy months, or
(b) the amount necessary to bring the net cash surrender value to zero
plus the monthly deductions due, plus the next 3 monthly deductions
plus the applicable premium charge.
If the required payment is not received by the end of the grace period,
the No-Lapse Guarantee and the policy will terminate.
Cumulative premium test
The cumulative premium test is satisfied if, as of the beginning of the
policy month that your policy would otherwise be in default, the sum of all
premiums paid to date less any withdrawals taken on or before the date of the
test and less any policy debt is equal to or exceeds the sum of the Monthly
No-Lapse Guarantee Premiums due from the policy date to the date of the test.
Death during grace period
If the insured person should die during the grace period, the policy value
used in the calculation of the death benefit will be the policy value as of the
date of default and the insurance benefit will be reduced by any outstanding
monthly deductions due at the time of death.
Reinstatement
You can reinstate a policy that has gone into default and terminated at
any time within 21 days following the date of termination without furnishing
evidence of insurability, subject to the following conditions:
(a) The insured person's risk classification is standard or preferred, and
(b) The insured person's attained age is less than 46.
By making a written request, you can reinstate a policy that has gone into
default and terminated at any time within the three-year period following the
date of termination subject to the following conditions:
(a) You must provide to us evidence of the insured person's insurability
that is satisfactory to us; and
(b) You must pay a premium equal to the amount that was required to bring
the policy out of default immediately prior to termination, plus the
amount needed to keep the policy in force to the next scheduled date
for payment of the Planned Premium.
If the reinstatement is approved, the date of reinstatement will be the
later of the date we approve your request or the date the required payment is
received at our Service Office. In addition, any surrender charges will be
reinstated to the amount they were at the date of default. The policy value on
the date of reinstatement, prior to the crediting of any Net Premium paid in
connection with the reinstatement, will be equal to the policy value on the
date the policy terminated. Any policy debt not paid upon termination of a
policy will be reinstated if the policy is reinstated.
Generally, the suicide exclusion and incontestability provision will apply
from the effective date of the reinstatement. Your policy will indicate if this
is not the case. A surrendered policy cannot be reinstated.
30
The policy value
From each premium payment you make, we deduct the premium charge described
under "Deduction from premium payments". We invest the rest (known as the "Net
Premium") in the accounts (fixed or investment) you've elected. Special
investment rules apply to premiums processed prior to the Allocation Date. (See
"Processing premium payments".)
Over time, the amount you've invested in any investment account will
increase or decrease the same as if you had invested the same amount directly
in the corresponding underlying portfolio and had reinvested all portfolios'
dividends and distributions in additional portfolio shares; except that we will
deduct certain additional charges which will reduce your policy value. We
describe these charges under "Description of charges at the policy level".
We calculate the unit values for each investment account once every
business day. Sales and redemptions within any investment account will be
transacted using the unit value next calculated after we receive your request
either in writing or other form that we specify. If we receive your request
before the close of our business day, which is usually the close of day-time
trading on the New York Stock Exchange, we'll use the unit value calculated as
of the end of that business day. If we receive your request at or after the
close of our business day, we'll use the unit value calculated as of the end of
the next business day. If a scheduled transaction falls on a day that is not a
business day, we'll process it as of the end of the next business day.
The amount you've invested in a fixed account option will earn interest at
the rates we declare from time to time. We guarantee that this rate will be at
least 3%. If you want to know what the current declared rate is for a fixed
account, just call or write to us. Amounts you invest in a fixed account will
not be subject to the asset-based risk charge described under "Deductions from
policy value". Otherwise, the policy level charges applicable to any fixed
account are the same as those applicable to the investment accounts.
Allocation of future premium payments
At any time, you may change the accounts (fixed or investment) in which
future premium payments will be invested. You make the original allocation in
the application for the policy. The percentages you select must be in whole
numbers and must total 100%.
Transfers of existing policy value
You may also transfer your existing policy value from one account (fixed
or investment) to another. To do so, you must tell us how much to transfer,
either as a whole number percentage or as a specific dollar amount. A
confirmation of each transfer will be sent to you. Without our approval, the
maximum amount you may transfer to or from any account in any policy is
$1,000,000.
The policies are not designed for professional market timing organizations
or other persons or entities that use programmed or frequent transfers among
investment accounts. As a consequence, we have reserved the right to impose
limits on the number and frequency of transfers into and out of investment
accounts and to impose a fee of up to $25 for any transfer beyond an annual
limit (which will not be less than 12). No transfer fee will be imposed on any
transfer from an investment account into a fixed account if the transfer occurs
during the following periods:
. within 18 months after the policy's Issue Date, or
. within 60 days after the later of the effective date of a material
change in the investment objectives of any investment account or the
date you are notified of the change.
Subject to the restrictions that we've specified, you may transfer existing
policy value into or out of investment accounts. Transfers out of a fixed
account are subject to additional limitations noted below.
Our current practice is to restrict transfers into or out of investment
accounts to two per calendar month (except with respect to those policies
described in the following paragraph). For purposes of this restriction, and in
applying the limitation on the number of free transfers, transfers made during
the period from the opening of a business day (usually 9:00 a.m. Eastern Time)
to the close of that business day (usually 4:00 p.m. Eastern Time) are
considered one transfer. You may, however, transfer to the Money Market B
investment account even if the two transfer per month limit has been reached,
but only if 100% of the account value in all investment accounts is transferred
to the Money Market B investment account. If such a transfer to the Money
Market B investment account is made, then, for the 30 calendar day period after
such transfer, no transfers from the Money Market B investment account to any
other investment accounts (variable or fixed) may be made. If your policy
offers a dollar cost averaging or automatic asset allocation rebalancing
program, any transfers pursuant to such
31
program are not considered transfers subject to these restrictions on frequent
trading. The restrictions described in this paragraph will be applied uniformly
to all policy owners subject to the restrictions.
Policies such as yours may be purchased by a corporation or other entity
as a means to informally finance the liabilities created by an employee benefit
plan, and to this end the entity may aggregately manage the policies purchased
to match its liabilities under the plan. Policies sold under these
circumstances are subject to special transfer restrictions. In lieu of the two
transfers per month restriction, we will allow the policy owner under these
circumstances to rebalance the investment options in its policies within the
following limits: (i) during the 10 calendar day period after any policy values
are transferred from one investment account into a second investment account,
the values can only be transferred out of the second investment account if they
are transferred into the Money Market B investment account; and (ii) any policy
values that would otherwise not be transferable by application of the 10 day
limit described above and that are transferred into the Money Market B
investment account may not be transferred out of the Money Market B investment
account into any other accounts (fixed or investment) for 30 calendar days. The
restrictions described in this paragraph will be applied uniformly to all
policy owners subject to the restrictions.
The most you can transfer at any one time out of the enhanced yield fixed
account is the greater of (i) the fixed account maximum transfer amount of
$2,000, or (ii) the enhanced yield fixed account maximum transfer percentage of
10% multiplied by the amount in the enhanced yield fixed account on the
immediately preceding policy anniversary. Transfers out of the standard fixed
account option are limited to the greater of (i) $2,000, or (ii) the standard
fixed account maximum transfer percentage of 15% multiplied by the amount in
the standard fixed account on the immediately preceding policy anniversary. Any
transfer which involves a transfer out of a fixed account option may not
involve a transfer to the Money Market B investment account.
We reserve the right to impose a minimum amount limit on transfers out of
a fixed account. We also reserve the right to impose different restrictions on
any additional fixed account that we may offer in the future.
Dollar cost averaging. We may offer policy owners a dollar cost averaging
("DCA") program. Under the DCA program, the policy owner will designate an
amount which will be transferred monthly from the Money Market B investment
account into any other investment account(s) or any fixed account. If
insufficient funds exist to effect a DCA transfer, the transfer will not be
effected and you will be so notified. No fee is charged for this program.
We reserve the right to cease to offer this program as of 90 days after
written notice is sent to you.
Asset allocation balancer transfers. Under the asset allocation balancer
program the policy owner will designate an allocation of policy value among
investment accounts. At six-month intervals beginning six months after the
Policy Date, we will move amounts among the investment accounts as necessary to
maintain your chosen allocation. A change to your premium allocation
instructions will automatically result in a change in asset allocation balancer
instructions so that the two are identical unless you either instruct us
otherwise or have elected the dollar cost averaging program. No fee is charged
for this program.
We reserve the right to cease to offer this program as of 90 days after
written notice is sent to you.
Surrender and withdrawals
Surrender
You may surrender your policy in full at any time. If you do, we will pay
you the policy value less any policy debt and surrender charge that then
applies. This is called your "net cash surrender value". You must return your
policy when you request a surrender. We will process surrenders on the day we
receive the surrender request (unless such day is not a business day, in which
case we will process surrenders as of the business day next following the date
of the receipt).
Withdrawals
You you may make a withdrawal of part of your net cash surrender value
once in each policy month. Generally, each withdrawal must be at least $500. If
the withdrawal results in a reduction in Base Face Amount, a charge equal to a
pro-rata portion of any surrender charge will be applied. In addition, we
reserve the right to charge a withdrawal fee of up to $25. We will
automatically reduce the policy value of your policy by the amount of the
withdrawal and the related charges. Unless otherwise specified by you, each
account (fixed and investment) will be reduced in the same proportion as the
policy value is then allocated among them. We will not permit a withdrawal if
it would cause your surrender value to fall below 3 months'
32
worth of monthly deductions (see "Deductions from policy value"). We also
reserve the right to refuse any withdrawal that would cause the policy's Total
Face Amount or the Base Face Amount to fall below $100,000.
Because it reduces the policy value, any withdrawal will reduce your death
benefit under either Option 1 or Option 2 (see "The Death Benefit"). Under
Option 1, such a withdrawal may also reduce the Total Face Amount. Any such
reduction in the Total Face Amount will be implemented by first reducing any
Supplemental Face Amount then in effect. The Base Face Amount will be reduced
only after the Supplemental Face Amount has been reduced to zero. If such a
reduction in Total Face Amount would cause the policy to fail the Internal
Revenue Code's definition of life insurance, we will not permit the withdrawal.
As noted, above, if the withdrawal results in a reduction in Base Face Amount,
a pro-rata portion of the applicable surrender charge will be deducted from the
policy value (see "Surrender charge"). We reserve the right to waive the
pro-rata surrender charge on any reduction in Base Face Amount if the
withdrawal is designed to serve certain administrative purposes (such as the
payment of fees associated with the provision of asset management services).
For example, assume a policy owner that has elected death benefit Option 1
requests a withdrawal of $25,000 on a policy with a Base Face Amount of
$200,000 and a current surrender charge of $10,000. The $25,000 withdrawal
would reduce the Base Face Amount from $200,000 to $175,000. The reduction in
Base Face Amount would trigger a partial surrender charge equal to the
surrender charge times the proportionate reduction in Base Face Amount, in this
case equal to $10,000 X (25,000/200,000) or $1,250. The surrender charge after
the withdrawal would be equal to $10,000 - $1,250 or $8,750. If the policy
owner had instead purchased a policy with $200,000 of Base Face Amount and
$100,000 of Supplemental Face Amount, the withdrawal of $25,000 would reduce
the Supplemental Face Amount from $100,000 to $75,000. Since the Base Face
Amount would remain at $200,000, no partial surrender charge would be deducted.
Policy loans
You may borrow from your policy at any time by completing a form
satisfactory to us. The maximum amount you can borrow is the greater of (i) 90%
of net cash surrender value and (ii) the amount determined as follows:
. We first determine the net cash surrender value of your policy.
. We then subtract an amount equal to the monthly deductions then being
deducted from policy value times the number of full policy months
until the next policy anniversary.
. We then multiply the resulting amount by 1.25% in policy years 1
through 10 and 0% thereafter (although we reserve the right to
increase the percentage after the tenth policy year to as much as
.25%).
. We then subtract the third item above from the second item above.
The minimum amount of each loan is $500. The interest charged on any loan
is an effective annual rate of 4.25% in the first 10 policy years and 3.0%
thereafter. However, we reserve the right to increase the percentage after the
tenth policy year to as much as 3.25%. Accrued interest will be added to the
loan daily and will bear interest at the same rate as the original loan amount.
Unless otherwise specified by you, the amount of the loan is deducted from the
accounts (fixed and investment) in the same proportion as the policy value is
then allocated among them. The amount of the loan is then placed in a special
loan account. This special loan account will earn interest at an effective
annual rate of 3.0%. However, if we determine that a loan will be treated as a
taxable distribution because of the differential between the loan interest rate
and the rate being credited on the special loan account, we reserve the right
to increase the rate charged on the loan to a rate that would, in our
reasonable judgement, result in the transaction being treated as a loan under
Federal tax law. The right to increase the rate charge on the loan is
restricted in some states. Please see your John Hancock USA representative for
details. We process policy loans as of the business day on or next following
the day we receive the loan request.
Repayment of policy loans
You can repay all or part of a loan at any time. Each repayment will be
allocated among the accounts as follows:
. The same proportionate part of the loan as was borrowed from any fixed
account option will be repaid to that fixed account.
. The remainder of the repayment will be allocated among the accounts in
the same way a new premium payment would be allocated (unless
otherwise specified by you).
If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments. We process loan repayments as of the day we receive the
repayment.
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Effects of policy loans
The policy value, the net cash surrender value, and any death benefit are
permanently affected by any loan, whether or not it is repaid in whole or in
part. This is because the amount of the loan is deducted from the accounts and
placed in a special loan account. The accounts and the special loan account
will generally have different rates of investment return.
The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.
Taking out a loan on the policy increases the risk that the policy may
lapse because of the difference between the interest rate charged on the loan
and the interest rate credited to the special loan account. Also, whenever the
outstanding loan equals or exceeds your policy value at and after the insured
person reaches age 121, the policy will terminate 31 days after we have mailed
notice of termination to you (and to any assignee of record at such assignee's
last known address) specifying the amount that must be paid to avoid
termination, unless a repayment of at least the amount specified is made within
that period. Policy loans may also result in adverse tax consequences under
certain circumstances (see "Tax considerations").
Description of charges at the policy level
Deduction from premium payments
. Premium charge - A charge to help defray our sales costs and related
taxes. The maximum premium charge is 8% in all policy years.
Currently, however, we plan to assess a premium charge of 6.4% upon
each premium paid up to the Target Premium in each of the first 5
policy years. (If the premium received in the first policy year is
less than the Target Premium, then premium received in the second
policy year will be treated as if received in the first policy year up
to the point that total premium received equals the Target Premium.) A
premium charge of 2% of premium will be deducted from each premium in
excess of Target Premium for the first 5 policy years, and a charge of
2% will be deducted from all premiums paid in policy years 6 and
later. The "Target Premium" is determined at the time the policy is
issued and will appear in the "Policy Specification" section of the
policy.
. Optional enhanced surrender value rider charge - A charge imposed if
you elect this rider. The charge is 2% of the lesser of either the sum
of premiums paid in the first two policy years or the Target Premium.
Deductions from policy value
. Administrative charge - A monthly charge to help cover our
administrative costs. This is a flat dollar charge of $15.
. Face Amount charge - A monthly charge to primarly help cover sales
costs. The duration of the Face Amount charge is 10 years from the
policy date. The charge is determined by multiplying the Base Face
Amount by the applicable rate. The rate will vary based upon sex, age
and underwriting risk class of the insured person.
. Cost of insurance charge - A monthly charge for the cost of insurance.
To determine the charge, we multiply the net amount of insurance for
which we are then at risk by a cost of insurance rate. The rate is
derived from an actuarial table. The table in your policy will show
the maximum cost of insurance rates. The cost of insurance rates that
we currently apply are generally less than the maximum rates. The
current rates will never be more than the maximum rates shown in the
policy. The cost of insurance rates we use will depend on the age at
issue, the underwriting risk class and (usually) gender of the insured
person, and the length of time the policy has been in effect.
Regardless of the table used, cost of insurance rates generally
increase each year that you own your policy, as the insured person's
attained age increases. (The insured person's "attained age" on any
date is his or her age on the birthday nearest that date.) For death
benefit Option 1, the net amount at risk is equal to the greater of
zero, or the result of (a) minus (b) where:
(a) is the death benefit as of the first day of the policy
month, divided by 1.0024663; and
(b) is the policy value as of the first day of the policy month
after the deduction of all other monthly deductions.
Since the net amount at risk for death benefit Option 1 is based on a
formula that includes as factors the death benefit and the policy
value, the net amount at risk is affected by the investment
performance of the investment accounts chosen, payment of premiums and
charges assessed.
If the minimum death benefit is greater than the Total Face Amount,
the cost of insurance charge will reflect the amount of that
additional benefit.
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For death benefit Option 2, the net amount at risk is equal to the
Total Face Amount of insurance divided by 1.0024663.
. Asset-based risk charge - A monthly charge to help cover sales,
administrative and other costs. The charge is a percentage of that
portion of your policy value allocated to investment accounts. This
charge does not apply to the current fixed account options.
. Supplementary benefits charges - Monthly charges for any supplementary
insurance benefits added to the policy by means of a rider.
. Withdrawal fee - A fee for each withdrawal of policy value to
compensate us for the administrative expenses of processing the
withdrawal. The charge is the lesser of 2% of the withdrawal amount or
$25. This charge is not currently imposed, but we reserve the right to
do so.
. Surrender charge - A charge we deduct if the policy lapses or is
surrendered within the first 10 policy years. We deduct this charge to
compensate us for sales expenses that we would otherwise not recover
in the event of early lapse or surrender. The charge is a percentage
of the premiums we received in the first two policy years that do not
exceed the Target Premium stated in the Policy Specifications page of
your policy. The percentage applied is dependent upon the policy year
during which lapse or surrender occurs, as shown in the following
table:
Policy Year Percentage Applied
- ----------- -------------------
1-4 ................. 100%
5-6 ................. 95%
7 ................... 90%
8 ................... 70%
9 ................... 50%
10 .................. 30%
11 or later ......... 0%
The percentage is graded down proportionately at the beginning of each
policy month until the next level is reached. The above table applies
only if the insured person is less than age 45 at issue. For older
issue ages, the percentages in the above table may be reduced. A pro
rata portion of the surrender charge may also be charged in the case
of any reduction in Base Face Amount Amount (see "Withdrawals" and
"Requesting a decrease in coverage"). The pro rata charge is
calculated by dividing the reduction in Base Face Amount by the Base
Face Amount immediately prior to the reductions and then multiplying
the applicable surrender charge by that ratio.
Additional information about how certain policy charges work
Sales expenses and related charges
The premium charges help to compensate us for the cost of selling our
policies. (See "Description of charges at the policy level"). The amount of the
charges in any policy year does not specifically correspond to sales expenses
for that year. We expect to recover our total sales expenses over the life of
the policies. To the extent that the premium charges do not cover total sales
expenses, the sales expenses may be recovered from other sources, including
gains from the asset-based risk charge and other gains with respect to the
policies, or from our general assets. Similarly, administrative expenses not
fully recovered by the administrative charge may also be recovered from such
other sources.
Effect of premium payment pattern
You may structure the timing and amount of premium payments to minimize
the premium charges, although doing so involves certain risks. Paying less than
one Target Premium in the first policy year or paying more than one Target
Premium in any policy year could reduce your total premium charges over time.
For example, if the Target Premium was $10,000 and you paid a premium of
$10,000 in each of the first ten policy years, you would pay total premium
charges of $4,200. If you paid $20,000 (i.e., two times the Target Premium
amount) in every other policy year up to and including the ninth policy year,
you would pay total premium charges of only $3,320. However, delaying the
payment of Target Premiums to later policy years could increase the risk that
the policy value will be insufficient to pay monthly policy charges as they
come due. As a result, the policy or any Supplemental Face Amount may lapse and
eventually terminate. Conversely, accelerating the payment of Target Premiums
to earlier policy years could cause aggregate premiums paid to exceed the
policy's 7-pay premium limit and, as a result, cause the policy to become a
modified endowment contract, with adverse tax consequences to you upon receipt
of policy distributions. (see "Tax considerations".)
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Method of deduction
We deduct the monthly deductions described in the Fee Tables section from
your policy's accounts (fixed and investment) in proportion to the amount of
policy value you have in each, unless otherwise specified by you.
Reduced charges for eligible classes
The charges otherwise applicable may be reduced with respect to policies
issued to a class of associated individuals or to a trustee, employer or
similar entity where we anticipate that the sales to the members of the class
will result in lower than normal sales or administrative expenses, lower taxes
or lower risks to us. We will make these reductions in accordance with our
rules in effect at the time of the application for a policy. The factors we
consider in determining the eligibility of a particular group for reduced
charges, and the level of the reduction, are as follows: the nature of the
association and its organizational framework; the method by which sales will be
made to the members of the class; the facility with which premiums will be
collected from the associated individuals and the association's capabilities
with respect to administrative tasks; the anticipated lapse and surrender rates
of the policies; the size of the class of associated individuals and the number
of years it has been in existence; the aggregate amount of premiums paid; and
any other such circumstances which result in a reduction in sales or
administrative expenses, lower taxes or lower risks. Any reduction in charges
will be reasonable and will apply uniformly to all prospective policy
purchasers in the class and will not unfairly discriminate against any owner.
Other charges we could impose in the future
Except for a portion of the premium charge, we currently make no charge
for our Federal income taxes. However, if we incur, or expect to incur, income
taxes attributable to any subaccount of the Account or this class of policies
in future years, we reserve the right to make a charge for such taxes. Any such
charge would reduce what you earn on any affected investment accounts. However,
we expect that no such charge will be necessary.
We also reserve the right to increase the premium charge in order to
correspond with changes in the state premium tax levels or in the Federal
income tax treatment of the deferred acquisition costs for this type of policy.
Currently, state premium tax levels range from 0% to 3.5%.
Under current laws, we may incur state and local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable state or local tax laws, we may
make charges for such taxes.
Description of charges at the portfolio level
The portfolios must pay investment management fees and other operating
expenses. These fees and expenses (shown in the tables of portfolio annual
expenses under "Fee Tables") are different for each portfolio and reduce the
investment return of each portfolio. Therefore, they also indirectly reduce the
return you will earn on any investment accounts you select. We may also receive
payments from a Series Fund or its affiliates at an annual rate of up to
approximately 0.45% of the average net assets that holders of our variable life
insurance policies and other products have invested in that portfolio. Any such
payments do not, however, result in any charge to you in addition to what is
shown in the tables. Expenses of the portfolios are not fixed or specified
under the terms of the policy, and those expenses may vary from year to year.
Other policy benefits, rights and limitations
Optional supplementary benefit riders you can add
When you apply for a policy, you can request any of the optional
supplementary benefit riders that we then make available. Availability of any
rider, the benefits it provides and the charges for it may vary by state. Our
rules and procedures will govern eligibility for any rider and, in some cases,
the configuration of the actual rider benefits. Each rider contains specific
details that you should review before you decide to choose the rider. Charges
for most riders will be deducted from the policy value. We may change these
charges (or the rates that determine them), but not above any applicable
maximum amount stated in the Policy Specifications page of your policy. We may
add to, delete from or modify the list of optional supplementary benefit
riders.
. Optional Extended No-Lapse Guarantee Rider - This rider extends the
No-Lapse Guarantee Period to the earlier of : (a) termination of the
policy or rider, (b) subject to any applicable state limitations, the
number of years selected by the policy owner and (c) age 121 of the
insured person. The rider may be terminated at any time but cannot be
reinstated
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once terminated. In order for the Extended No-Lapse Guarantee to be
applicable, the Extended Cumulative Premium Test must be satisfied.
This test is described in the rider. The cost of the rider varies by
issue age and Face Amount and a change in the Face Amount of the
policy may affect the cost of the rider.
. Acceleration of Death Benefit for Qualified Long-Term Care Services
Rider - This rider provides for periodic advance payments to you of a
portion of the death benefit if the insured person becomes
"chronically ill" so that such person: (1) is unable to perform at
least 2 activities of daily living without substantial human
assistance or has a severe cognitive impairment; and (2) is receiving
certain qualified services described in the rider.
Benefits under the Long-Term Care Acceleration Rider will not begin
until we receive proof that the insured person qualifies and has
received 100 days of "qualified long-term care service" as defined in
the rider, while the policy was in force. You must continue to submit
evidence during the insured person's lifetime of the insured person's
eligiblity for rider benefits.
We determine a maximum amount of death benefit that we will advance
for each month of qualification. This amount, called the "Maximum
Monthly Benefit", is based on the percentage of the policy's death
benefit that you select when you apply for the policy, and the death
benefit amount in effect when the insured person qualifies for
benefits. The actual amount of any advance is based on the expense
incurred by the insured person, up to the Maximum Monthly Benefit, for
each day of qualified long-term care service in a calendar month. The
first 100 days of qualified long-term care service, however, are
excluded in any determination of an advance. We will recalculate the
Maximum Monthly Benefit if you make a withdrawal of policy value, and
for other events described in the rider. Each advance reduces the
remaining death benefit under your policy, and causes a proportionate
reduction in your policy value. If you have a policy loan, we will use
a pro-rata portion of each death benefit advance to repay
indebtedness. For example, if current indebtedness is $10,000, the
death benefit is $100,000, and the gross advance is $2,000, then the
net advance would be $1,800 = $2,000 X (1 - ($10,000/ $100,000)). As a
result of the advance, the indebtedness will be reduced by $200.
We restrict your policy value's exposure to market risk when benefits
are paid under the Long-Term Care Acceleration rider. We do this in
several ways. First, before we begin paying any Monthly Benefit, we
will transfer all policy value from the investment accounts to the
fixed account. (The amount to be transferred will be determined on the
business day immediately following the date we approve a request for
benefits under the rider.) In addition, you will not be permitted to
transfer policy value or allocate any additional premium payment to an
investment account while rider benefits are paid. Your participation
in any of the automatic investment plans will also be suspended during
this period.
If the insured person no longer qualifies for rider benefits and your
policy remains in force, you will be permitted to invest new premium
payments or transfer existing policy value in the investment accounts.
(The restriction on transfers from the fixed account described on page
will continue to apply.) Benefits under this rider do not reduce the
No-Lapse Guarantee Premium requirements or the Extended No-Lapse
Guarantee Premium requirements that may be necessary for the No-Lapse
Guarantee or Extended No-Lapse Guarantee to remain in effect after a
termination of rider benefits.
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.
This rider is sometimes referred to as the "LifeCare Rider".
. Residual Life Insurance Benefit and Continuation of Acceleration Rider
- This rider is available only if you also purchase the Acceleration
of Death Benefit for Qualified Long-Term Care Services Rider. This
rider provides protection against the death benefit being reduced
below $25,000. The rider also provides for a continuation of benefits
under the Acceleration of Death Benefit for Qualified Long-Term Care
Services Rider after such benefits would otherwise have ceased. The
monthly maximum continuation benefit is determined by multiplying the
Monthly Acceleration Percentage specified in the Policy Specifications
times the Total Face Amount. This rider is sometimes referred to as
the "LMAX Rider".
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. Optional Enhanced Surrender Value Rider - In the application for the
policy, you may elect to purchase the enhanced surrender value rider.
This rider provides an enhanced surrender value benefit (in addition
to the surrender value) if you surrender the policy within the first
ten policy years. The amount of the benefit will be shown in the
"Policy Specifications" section of the policy. The amount available
for partial withdrawals and loans are based on the surrender value and
will in no way be increased due to this rider.
. Return of Premium Death Benefit Rider - You may elect to have your
policy issued with an optional Return of Premium Death Benefit rider.
This rider provides an additional death benefit payable upon the death
of the life insured. The Return of Premium Rider death benefit has an
initial value equal to your initial premium times the Percentage of
Premium as elected and shown in the Policy Specifications page for the
rider. The Percentage of Premium will be applied to each subsequent
premium and will increase the coverage at the time of premium payment
by that amount. The rider also provides options to increase or
decrease the benefit amount. The Percentage of Premium is specified in
the Policy Specifications page of your policy and may range between 0%
and 5%. This rider is only available to you if death benefit Option 1
is elected.
The Return of Premium Rider death benefit will not exceed the Maximum
Benefit Amount shown in the Policy Specifications page for the rider.
If the policy owner makes a written request for a partial withdrawal
of net cash surrender value while this rider is in force, the amount
of the Return of Premium Rider death benefit will be reduced by the
amount of the withdrawal.
The No Lapse Guarantee provisions of the policy apply to the Return of
Premium Rider death benefit for the first two policy years only.
. Change of Life Insured Rider - This rider is only available to certain
owners purchasing the policy in connection with the financing of
employee benefit plan obligations. If you elect this rider, you may
change the life insured on or after the second policy anniversary. You
must have an insurable interest in the new life insured, and the new
life insured must consent in writing to the change. We will require
evidence which satisfies us of the new life insured's insurability,
and the premiums and charges after the change date will reflect the
new life insured's age, sex, risk classification and any additional
rating which applies. Supplementary benefits riders on the old life
insured will be canceled as of the change date. Supplementary benefits
riders may be added on the new life insured as of the change date,
subject to our normal requirements and restrictions for such benefits.
The validity and suicide provisions of the policy will apply to the
entire Face Amount at the change date.
. Enhanced Yield Fixed Account Rider - You may elect to allocate your
premiums or policy value to the enhanced yield fixed account that we
offer by rider. Obligations under the enhanced yield fixed account are
backed by our general account. We will credit interest at the rate we
declare. Additional transfer restrictions apply to amounts in an
enhanced yield fixed account (see "Transfers of existing policy
value").
. Accelerated Benefit Rider - This rider provides for acceleration of
payment of a portion of the death benefit should the insured person
become terminally ill and have a life expectancy of one year or less.
Payment of the accelerated benefits is subject to limits and
conditions specified in the rider.
Variations in policy terms
Insurance laws and regulations apply to us in every state in which our
policies are sold. As a result, various terms and conditions of your insurance
coverage may vary from the terms and conditions described in this prospectus,
depending upon where you reside. These variations will be reflected in your
policy or in endorsements attached to your policy.
We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the
policies. These include the type of variations discussed under "Reduced charges
for eligible classes". No variation in any charge will exceed any maximum
stated in this prospectus with respect to that charge.
Any variation discussed above will be made only in accordance with uniform
rules that we adopt and that we apply fairly to our customers.
Procedures for issuance of a policy
Generally, the policy is available with a minimum Total Face Amount at
issue of $100,000 and a minimum Base Face Amount at issue of $100,000. At the
time of issue, the insured person must have an attained age of no more than 90.
All insured persons must meet certain health and other insurance risk criteria
called "underwriting standards".
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Policies issued in Montana or in connection with certain employee plans
will not directly reflect the sex of the insured person in either the premium
rates or the charges or values under the policy.
Commencement of insurance coverage
After you apply for a policy, it can sometimes take up to several weeks
for us to gather and evaluate all the information we need to decide whether to
issue a policy to you and, if so, what the insured person's risk classification
should be. After we approve an application for a policy and assign an
appropriate insurance risk classification, we will prepare the policy for
delivery. We will not pay a death benefit under a policy unless the policy is
in effect when the insured person dies (except for the circumstances described
under "Temporary coverage prior to policy delivery" below).
The policy will take effect only if all of the following conditions are
satisfied:
. The policy is delivered to and received by the applicant.
. The minimum initial premium is received by us.
. The insured person is living and there has been no deterioration in
the insurability of the insured person since the date of the
application.
The date all of the above conditions are satisfied is referred to in this
prospectus as the "Contract Completion Date". If all of the above conditions
are satisfied, the policy will take effect on the date shown in the policy as
the "Policy Date". That is the date on which we begin to deduct monthly
charges. Policy months, policy years and policy anniversaries are all measured
from the Policy Date.
Backdating
Under limited circumstances, we may backdate a policy, upon request, by
assigning a Policy Date earlier than the date the application is signed.
However, in no event will a policy be backdated earlier than the earliest date
allowed by state law, which is generally three months to one year prior to the
date of application for the policy. The most common reasons for backdating are
to preserve a younger age at issue for the insured person or to retain a common
monthly deduction date in certain corporate-owned life insurance cases
involving multiple policies issued over time. If used to preserve age,
backdating will result in lower insurance charges. However, monthly deductions
will begin earlier than would otherwise be the case. Monthly deductions for the
period the Policy Date is backdated will actually be deducted from policy value
on the Contract Completion Date.
Temporary coverage prior to policy delivery
If a specified amount of premium is paid with the application for a policy
and other conditions are met, we will provide temporary term life insurance
coverage on the insured person for a period prior to the time coverage under
the policy takes effect. Such temporary term coverage will be subject to the
terms and conditions described in the Temporary Life Insurance Agreement and
Receipt attached to the application for the policy, including conditions to
coverage and limits on amount and duration of coverage.
Monthly deduction dates
Each charge that we deduct monthly is assessed against your policy value
at the close of business on the Policy Date and at the close of the first day
in each subsequent policy month.
Changes that we can make as to your policy
We reserve the right to make any changes in the policy necessary to ensure
the policy is within the definition of life insurance under the Federal tax
laws and is in compliance with any changes in Federal or state tax laws.
In our policies, we reserve the right to make certain changes if they
would serve the best interests of policy owners or would be appropriate in
carrying out the purposes of the policies. Such changes include the following:
. Changes necessary to comply with or obtain or continue exemptions
under the Federal securities laws
. Combining or removing fixed accounts or investment accounts
. Changes in the form of organization of any separate account
39
Any such changes will be made only to the extent permitted by applicable
laws and only in the manner permitted by such laws. When required by law, we
will obtain your approval of the changes and the approval of any appropriate
regulatory authority.
The owner of the policy
Who owns the policy? That's up to the person who applies for the policy.
The owner of the policy is the person who can exercise most of the rights under
the policy, such as the right to choose the accounts in which to invest or the
right to surrender the policy. In many cases, the person buying the policy is
also the person who will be the owner. However, the application for a policy
can name another person or entity (such as a trust) as owner. Whenever we've
used the term "you" in this prospectus, we've assumed that the reader is the
person who has whatever right or privilege is being discussed. There may be tax
consequences if the owner and the insured person are different, so you should
discuss this issue with your tax adviser.
While the insured person is alive, you will have a number of options under
the policy. Here are some major ones:
. Determine when and how much you invest in the various accounts
. Borrow or withdraw amounts you have in the accounts
. Change the beneficiary who will receive the death benefit
. Change the amount of insurance
. Turn in (i.e., "surrender") the policy for the full amount of its net
cash surrender value
. Choose the form in which we will pay out the death benefit or other
proceeds
It is possible to name so-called "joint owners" of the policy. If more
than one person owns a policy, all owners must join in most requests to
exercise rights under the policy.
Policy cancellation right
You have the right to cancel your policy within 10 days after you receive
it (the period may be longer in some states). This is often referred to as the
"free look" period. To cancel your policy, simply deliver or mail the policy
to:
. John Hancock USA at one of the addresses shown on the back cover of
this prospectus, or
. the John Hancock USA representative who delivered the policy to you.
The date of cancellation will be the date of such mailing or delivery. In
most states, you will receive a refund of any premiums you've paid. In some
states, the refund will be your policy value on the date of cancellation.
Reports that you will receive
At least annually, we will send you a statement setting forth at least the
following information as of the end of the most recent reporting period: the
amount of the death benefit, the portion of the policy value in a fixed account
and in each investment account, premiums received and charges deducted from
premiums since the last report, any outstanding policy loan (and interest
charged for the preceding policy year), and any further information required by
law. Moreover, you also will receive confirmations of premium payments,
transfers among accounts, policy loans, partial withdrawals and certain other
policy transactions.
Semiannually we will send you a report containing the financial statements
of the portfolios, including a list of securities held in each portfolio.
Assigning your policy
You may assign your rights in the policy to someone else as collateral for
a loan or for some other reason. Assignments do not require the consent of any
revocable beneficiary. A copy of the assignment must be forwarded to us. We are
not responsible for any payment we make or any action we take before we receive
a copy of the assignment at our Service Office. Nor are we responsible for the
validity of the assignment or its efficacy in meeting your objectives. An
absolute assignment is a change of ownership. All collateral assignees of
record must usually consent to any surrender, withdrawal or loan from the
policy.
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When we pay policy proceeds
General
We will ordinarily pay any death benefit, withdrawal, surrender value or
loan within 7 days after we receive the last required form or request (and,
with respect to the death benefit, any other documentation that may be
required). If we don't have information about the desired manner of payment
within 7 days after the date we receive documentation of the insured person's
death, we will pay the proceeds as a single sum.
Delay to challenge coverage
We may challenge the validity of your insurance policy based on any
material misstatements made to us in the application for the policy. We cannot
make such a challenge, however, beyond certain time limits that are specified
in the policy.
Delay for check clearance
We reserve the right to defer payment of that portion of your policy value
that is attributable to a premium payment made by check for a reasonable period
of time (not to exceed 15 days) to allow the check to clear the banking system.
Delay of separate account proceeds
We reserve the right to defer payment of any death benefit, loan or other
distribution that is derived from an investment account if (1) the New York
Stock Exchange is closed (other than customary weekend and holiday closings) or
trading on the New York Stock Exchange is restricted; (2) an emergency exists,
as a result of which disposal of securities is not reasonably practicable or it
is not reasonably practicable to fairly determine the policy value; or (3) the
SEC by order permits the delay for the protection of owners. Transfers and
allocations of policy value among the investment accounts may also be postponed
under these circumstances. If we need to defer calculation of separate account
values for any of the foregoing reasons, all delayed transactions will be
processed at the next values that we do compute.
Delay of general account surrender proceeds
State laws allow us to defer payment of any portion of the net cash
surrender value derived from any fixed account for up to 6 months. These laws
were enacted many years ago to help insurance companies in the event of a
liquidity crisis.
How you communicate with us
General rules
You should mail or express all checks and money orders for premium
payments and loan repayments to the John Hancock USA Service Office at the
appropriate address shown on the back cover.
Under our current rules, certain requests must be made in writing and be
signed and dated by you. They include the following:
. loans
. surrenders or withdrawals
. change of death benefit option
. increase or decrease in Face Amount
. change of beneficiary
. election of payment option for policy proceeds
. tax withholding elections
. election of telephone/internet transaction privilege.
The following requests may be made either in writing (signed and dated by
you) or by telephone or fax or through the Company's secured website, if a
special form is completed (see "Telephone, facsimile and internet transactions"
below):
. transfers of policy value among accounts
. change of allocation among accounts for new premium payments
41
You should mail or express all written requests to our Service Office at
the appropriate address shown on the back cover. You should also send notice of
the insured person's death and related documentation to our Service Office. We
do not consider that we've "received" any communication until such time as it
has arrived at the proper place and in the proper and complete form.
We have special forms that should be used for a number of the requests
mentioned above. You can obtain these forms from our Service Office or your
John Hancock USA representative. Each communication to us must include your
name, your policy number and the name of the insured person. We cannot process
any request that doesn't include this required information. Any communication
that arrives after the close of our business day, or on a day that is not a
business day, will be considered "received" by us on the next following
business day. Our business day currently closes at 4:00 p.m. Eastern Time, but
special circumstances (such as suspension of trading on a major exchange) may
dictate an earlier closing time.
Telephone, facsimile and internet transactions
If you complete a special authorization form, you can request transfers
among accounts and changes of allocation among accounts simply by telephoning
us at 1-800-521-1234 or by faxing us at 617-572-7008 or through the Company's
secured website. Any fax or internet request should include your name, daytime
telephone number, policy number and, in the case of transfers and changes of
allocation, the names of the accounts involved. We will honor telephone and
internet instructions from anyone who provides the correct identifying
information, so there is a risk of loss to you if this service is used by an
unauthorized person. However, you will receive written confirmation of all
telephone/internet transactions. There is also a risk that you will be unable
to place your request due to equipment malfunction or heavy phone line or
internet usage. If this occurs, you should submit your request in writing.
If you authorize telephone or internet transactions, you will be liable
for any loss, expense or cost arising out of any unauthorized or fraudulent
telephone or internet instructions which we reasonably believe to be genuine,
unless such loss, expense or cost is the result of our mistake or negligence.
We employ procedures which provide safeguards against the execution of
unauthorized transactions which are reasonably designed to confirm that
instructions received by telephone or internet are genuine. These procedures
include requiring personal identification, the use of a unique password for
internet authorization, recording of telephone calls, and providing written
confirmation to the owner. If we do not employ reasonable procedures to confirm
that instructions communicated by telephone or internet are genuine, we may be
liable for any loss due to unauthorized or fraudulent instructions.
As stated earlier in this prospectus, the policies are not designed for
professional market timing organizations or other persons or entities that use
programmed or frequent transfers among investment options. To discourage
disruptive frequent trading, we have imposed certain transfer restrictions (see
"Transfers of existing policy value"). In addition, we also reserve the right
to change our telephone, facsimile and internet transaction privileges outlined
in this section at any time, and to suspend or terminate any or all of those
privileges with respect to any owners who we feel are abusing the privileges to
the detriment of other owners.
Distribution of policies
John Hancock Distributors LLC ("JH Distributors"), a Delaware limited
liability company affiliated with us, is the principal distributor and
underwriter of the securities offered through this prospectus and of other
annuity and life insurance products we and our affiliates offer. JH
Distributors also acts as the principal underwriter of the John Hancock Trust,
whose securities are used to fund certain investment accounts under the
policies and under other annuity and life insurance products we offer.
JH Distributors' principal address is 200 Bloor Street East, Toronto,
Canada M4W 1E5 and it also maintains offices with us at 197 Clarendon Street,
Boston, Massachusetts 02116. JH Distributors is a broker-dealer registered
under the Securities Exchange Act of 1934 (the "1934 Act") and is a member of
the National Association of Securities Dealers, Inc. (the "NASD").
We offer the policies for sale through individuals who are licensed as
insurance agents and who are registered representatives of broker-dealers that
have entered into selling agreements with JH Distributors. These broker-dealers
may include our affiliate Signator Investors, Inc.
Through JH Distributors, John Hancock USA pays compensation to
broker-dealers for the promotion and sale of the policies. The registered
representative through whom your policy is sold will be compensated pursuant to
the registered representative's own arrangement with his or her broker-dealer.
Compensation to broker-dealers for the promotion and sale of
42
the policies is not paid directly by policyowners but will be recouped through
the fees and charges imposed under the policy. (See "Description of charges at
the policy level".)
A limited number of broker-dealers may also be paid commissions or
overrides to "wholesale" the policies; that is, to provide marketing support
and training services to the broker-dealer firms that do the actual selling. We
may also provide compensation to a limited number of broker-dealers for
providing ongoing service in relation to policies that have already been
purchased.
Standard compensation. The compensation JH Distributors may pay to
broker-dealers may vary depending on the selling agreement, but compensation
(inclusive of wholesaler overrides and expense allowances) paid to
broker-dealers for sale of the policies (not including riders) is not expected
to exceed the following schedule: policy year 1, 120% of the premium paid up to
the first tier and 6.5% of any excess premiums; policy years 2-5, 5.5% of the
premium paid up to the first tier and 3.25% of any excess premiums; policy
years 6-10, 3.0% of the premium paid up to the first tier and 3.0% of any
excess premiums; and policy years 11+, no commissions paid. The amount and
timing of this compensation may differ among broker-dealers, but would not be
expected to materially exceed the foregoing schedules on a present value basis.
Additional compensation and revenue sharing. To the extent permitted by
SEC and NASD rules and other applicable laws and regulations, selling
broker-dealers may receive, directly or indirectly, additional payments in the
form of cash, other compensation or reimbursement. These additional
compensation or reimbursement arrangements may include, for example, payments
in connection with the firm's "due diligence" examination of the policies,
payments for providing conferences or seminars, sales or training programs for
invited registered representatives and other employees, payment for travel
expenses, including lodging, incurred by registered representatives and other
employees for such seminars or training programs, seminars for public,
advertising and sales campaigns regarding the policies, payments to assist a
firm in connection with its systems, operations and marketing expenses and/or
other events or activities sponsored by the firms. Subject to applicable NASD
rules and other applicable laws and regulations, JH Distributors and its
affiliates may contribute to, as well as sponsor, various educational programs,
sales contests, and/or other promotions in which participating firms and their
sales persons may receive prizes such as merchandise, cash or other rewards.
These arrangements will not be offered to all firms, and the terms of such
arrangements may differ between firms. We provide additional information on
special compensation or reimbursement arrangements involving selling firms and
other financial institutions in the Statement of Additional Information, which
is available upon request. Any such compensation, which may be significant at
times, will not result in any additional direct charge to you by us.
Differential compensation. Compensation negotiated and paid by JH
Distributors pursuant to a selling agreement with a broker-dealer may differ
from compensation levels that the broker-dealer receives for selling other
variable policies or contracts. These compensation arrangements may give us
benefits such as greater access to registered representatives. In addition,
under their own arrangements, broker-dealer firms may pay a portion of any
amounts received under standard or additional compensation or revenue sharing
arrangements to their registered representatives. As a result, registered
representatives may be motivated to sell the policies of one issuer over
another issuer, or one product over another product. You should contact your
registered representative for more information on compensation arrangements in
connection with your purchase of a policy.
Tax considerations
This description of Federal income tax consequences is only a brief
summary and is not intended as tax advice. Tax consequences will vary based on
your own particular circumstances, and for further information you should
consult a qualified tax adviser. Federal, state and local tax laws, regulations
and interpretations can change from time to time. As a result, the tax
consequences to you and the beneficiary may be altered, in some cases
retroactively.
The policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans, retiree medical benefit plans and others. The tax
consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if the value of using
the policy in any such arrangement depends in part on the tax consequences, a
qualified tax advisor should be consulted for advice.
General
Generally, death benefits paid under policies such as yours are not
subject to income tax. Earnings on your policy value are ordinarily not subject
to income tax as long as we don't pay them out to you. If we do pay out any
amount of your policy
43
value upon surrender or partial withdrawal, all or part of that distribution
would generally be treated as a return of the premiums you've paid and not
subjected to income tax. However certain distributions associated with a
reduction in death benefit or other policy benefits within the first 15 years
after issuance of the policy are ordinarily taxable in whole or in part. (See
"Other policy distributions" below.) Amounts you borrow are generally not
taxable to you.
However, some of the tax rules change if your policy is found to be a
modified endowment contract. This can happen if you've paid premiums in excess
of limits prescribed by the tax laws. Additional taxes and penalties may be
payable for policy distributions of any kind. (See "7-pay premium limit and
modified endowment contract status" below.)
Policy death benefit proceeds
We expect the policy to receive the same Federal income and estate tax
treatment as fixed benefit life insurance policies. Section 7702 of the
Internal Revenue Code (the "Code") defines a life insurance contract for
Federal tax purposes. For a policy to be treated as a life insurance contract,
it must satisfy either the cash value accumulation test or the guideline
premium test. These tests limit the amount of premium that you may pay into the
policy. We will monitor compliance with these standards. If we determine that a
policy does not satisfy Section 7702, we may take whatever steps are
appropriate and reasonable to bring it into compliance with Section 7702.
If the policy complies with Section 7702, the death benefit proceeds under
the policy should be excludable from the beneficiary's gross income under
Section 101 of the Code. In addition, if you have elected the Acceleration of
Death Benefit for Qualified Long-Term Care Services rider, the rider's benefits
generally will be excludable from gross income under the Code. The tax-free
nature of these accelerated benefits is contingent on the rider meeting
specific requirements under Section 101 and/or Section 7702B of the Code. We
have designed the rider to meet these standards.
Other policy distributions
Increases in policy value as a result of interest or investment experience
will not be subject to Federal income tax unless and until values are received
through actual or deemed distributions. In general, the owner will be taxed on
the amount of distributions that exceed the premiums paid under the policy. An
exception to this general rule occurs in the case of a decrease in the policy's
death benefit or any other change that reduces benefits under the policy in the
first 15 years after the policy is issued and that results in a cash
distribution to the policy owner in order for the policy to continue to comply
with the Section 7702 definitional limits. Changes that reduce benefits include
partial withdrawals and death benefit option changes. For purposes of this rule
any distribution within the two years immediately before a reduction in
benefits will also be treated as if it caused the reduction. A cash
distribution that reduces policy benefits will be taxed in whole or in part (to
the extent of any gain in the policy) under rules prescribed in Section 7702.
The taxable amount is subject to limits prescribed in section 7702(f)(7). Any
taxable distribution will be ordinary income to the owner (rather than capital
gain).
Distributions for tax purposes include amounts received upon surrender or
partial withdrawals. You may also be deemed to have received a distribution for
tax purposes if you assign all or part of your policy rights or change your
policy's ownership. If you have elected the Acceleration of Death Benefit for
Qualified Long-Term Care Services Rider, as described in "Optional
supplementary benefit riders you can add" you may be deemed to have received a
distribution for tax purposes each time a deduction is made from your policy
value to pay the rider charge.
It is possible that, despite our monitoring, a policy might fail to
qualify as a life insurance contract under Section 7702 of the Code. This could
happen, for example, if we inadvertently failed to return to you any premium
payments that were in excess of permitted amounts, or if any of the funds
failed to meet certain investment diversification or other requirements of the
Code. If this were to occur, you would be subject to income tax on the income
credited to the policy from the date of issue to the date of the
disqualification and for subsequent periods.
Tax consequences of ownership or receipt of policy proceeds under Federal,
state and local estate, inheritance, gift and other tax laws will depend on the
circumstances of each owner or beneficiary. If the person insured by the policy
is also its owner, either directly or indirectly through an entity such as a
revocabale trust, the death benefit will be includible in his or her estate for
purposes of the Federal estate tax. If the owner is not the person insured, the
value of the policy will be includible in the owner's estate upon his or her
death. Even if ownership has been transferred, the death proceeds or the policy
value may be includible in the former owner's estate if the transfer occurred
less than three years before the former owner's death or if the former owner
retained certain kinds of control over the policy. You should consult your tax
adviser regarding these possible tax consequences.
44
Because there may be unfavorable tax consequences (including recognition
of taxable income and the loss of income tax-free treatment for any death
benefit payable to the beneficiary), you should consult a qualified tax adviser
prior to changing the policy's ownership or making any assignment of ownership
interests.
Policy loans
We expect that, except as noted below (see "7-pay premium limit and
modified endowment contract status"), loans received under the policy will be
treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, if the policy terminates for any
reason, the amount of any outstanding loan that was not previously considered
income will be treated as if it had been distributed to the owner upon such
termination. This could result in a considerable tax bill. Under certain
circumstances involving large amounts of outstanding loans, you might find
yourself having to choose between high premiums requirements to keep your
policy from lapsing and a significant tax burden if you allow the lapse to
occur.
Diversification rules and ownership of the Account
Your policy will not qualify for the tax benefits of a life insurance
contract unless the Account follows certain rules requiring diversification of
investments underlying the policy. In addition, the rules require that the
policy owner not have "investment control" over the underlying assets.
In certain circumstances, the owner of a variable life insurance policy
may be considered the owner, for Federal income tax purposes, of the assets of
the separate account used to support the policy. In those circumstances, income
and gains from the separate account assets would be includible in the policy
owner's gross income. The Internal Revenue Service ("IRS") has stated in
published rulings that a variable policy owner will be considered the owner of
separate account assets if the policy owner possesses incidents of ownership in
those assets, such as the ability to exercise investment control over the
assets. A Treasury Decision issued in 1986 stated that guidance would be issued
in the form of regulations or rulings on the "extent to which Policyholders may
direct their investments to particular sub-accounts of a separate account
without being treated as owners of the underlying assets." As of the date of
this prospectus, no comprehensive guidance on this point has been issued. In
Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be
treated as the owner of assets underlying a variable life insurance or annuity
contract despite the owner's ability to allocate funds among as many as twenty
subaccounts.
The ownership rights under your policy are similar to, but different in
certain respects from, those described in IRS rulings in which it was
determined that policyholders were not owners of separate account assets. Since
you have greater flexibility in allocating premiums and policy values than was
the case in those rulings, it is possible that you would be treated as the
owner of your policy's proportionate share of the assets of the Account.
We do not know what future Treasury Department regulations or other
guidance may require. We cannot guarantee that the funds will be able to
operate as currently described in the Series Funds` prospectuses, or that a
Series Fund will not have to change any fund's investment objectives or
policies. We have reserved the right to modify your policy if we believe doing
so will prevent you from being considered the owner of your policy's
proportionate share of the assets of the Account, but we are under no
obligation to do so.
7-pay premium limit and modified endowment contract status
At the time of policy issuance, we will determine whether the Planned
Premium schedule will exceed the 7-pay limit discussed below. If so, our
standard procedures prohibit issuance of the policy unless you sign a form
acknowledging that fact.
The 7-pay limit is the total of net level premiums that would have been
payable at any time for a comparable fixed policy to be fully "paid-up" after
the payment of 7 equal annual premiums. "Paid-up" means that no further
premiums would be required to continue the coverage in force until maturity,
based on certain prescribed assumptions. If the total premiums paid at any time
during the first 7 policy years exceed the 7-pay limit, the policy will be
treated as a modified endowment contract, which can have adverse tax
consequences.
Policies classified as modified endowment contracts are subject to the
following tax rules:
. First, all partial withdrawals from such a policy are treated as
ordinary income subject to tax up to the amount equal to the excess
(if any) of the policy value immediately before the distribution over
the investment in the policy at such time.
45
. Second, loans taken from or secured by such a policy and assignments
or pledges of any part of its value are treated as partial withdrawals
from the policy and taxed accordingly. Past-due loan interest that is
added to the loan amount is treated as an additional loan.
. Third, a 10% additional income tax is imposed on the portion of any
distribution (including distributions on surrender) from, or loan
taken from or secured by, such a policy that is included in income
except where the distribution or loan:
. is made on or after the date on which the policy owner attains
age 59 1/2;
. is attributable to the policy owner becoming disabled; or
. is part of a series of substantially equal periodic payments for
the life (or life expectancy) of the policy owner or the joint
lives (or joint life expectancies) of the policy owner and the
policy owner's beneficiary.
These exceptions to the 10% additional tax do not apply in situations
where the policy is not owned by an individual.
Furthermore, any time there is a "material change" in a policy, the policy
will begin a new 7-pay testing period as if it were a newly-issued policy. The
material change rules for determining whether a policy is a modified endowment
contract are complex. In general, however, the determination of whether a
policy will be a modified endowment contract after a material change generally
depends upon the relationship among the death benefit of the policy at the time
of such change, the policy value at the time of the change, and the additional
premiums paid into the policy during the seven years starting with the date on
which the material change occurs.
Moreover, if benefits under a policy are reduced (such as a reduction in
the death benefit or the reduction or cancellation of certain rider benefits)
during the 7 years in which a 7-pay test is being applied, the 7-pay limit will
generally be recalculated based on the reduced benefits. If the premiums paid
to date are greater than the recalculated 7-pay limit, the policy will become a
modified endowment contract.
All modified endowment contracts issued by the same insurer (or its
affiliates) to the same owner during any calendar year generally are required
to be treated as one contract for the purpose of applying the modified
endowment contract rules. A policy received in exchange for a modified
endowment contract will itself also be a modified endowment contract. You
should consult your tax advisor if you have questions regarding the possible
impact of the 7-pay limit on your policy.
Corporate and H.R. 10 retirement plans
The policy may be acquired in connection with the funding of retirement
plans satisfying the qualification requirements of Section 401 of the Code. If
so, the Code provisions relating to such plans and life insurance benefits
thereunder should be carefully scrutinized. We are not responsible for
compliance with the terms of any such plan or with the requirements of
applicable provisions of the Code.
Withholding
To the extent that policy distributions to you are taxable, they are
generally subject to withholding for your Federal income tax liability. However
if you reside in the United States, you can generally choose not to have tax
withheld from distributions.
Life insurance purchases by residents of Puerto Rico
In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service
ruled that income received by residents of Puerto Rico under life insurance
policy issued by a United States company is U.S.-source income that is subject
to United States Federal income tax.
Life insurance purchases by non-resident aliens
If you are not a U.S. citizen or resident, you will generally be subject
to U.S. Federal withholding tax on taxable distributions from life insurance
policies at a 30% rate, unless a lower treaty rate applies. In addition, you
may be subject to state and/or municipal taxes and taxes imposed by your
country of citizenship or residence. You should consult with a qualified tax
adviser before purchasing a policy.
46
Financial statements reference
The financial statements of John Hancock USA and the Account can be found
in the Statement of Additional Information. The financial statements of John
Hancock USA should be distinguished from the financial statements of the
Account and should be considered only as bearing upon the ability of John
Hancock USA to meet its obligations under the policies.
Registration statement filed with the SEC
This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. More details may be obtained from
the SEC upon payment of the prescribed fee.
Independent registered public accounting firm
The consolidated financial statements of John Hancock Life Insurance
Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.))
at December 31, 2005 and 2004, and for each of the three years in the period
ended December 31, 2005, and the financial statements of Separate Account A of
John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life
Insurance Company (U.S.A.)) at December 31, 2005, and for each of the two years
in the period ended December 31, 2005, appearing in the Statement of Additional
Information of the Registration Statement have been audited by Ernst & Young
LLP, independent registered public accounting firm, as set forth in their
reports thereon appearing elsewhere herein, and are included in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.
47
In addition to this prospectus, John Hancock USA has filed with the
Securities and Exchange Commission (the "SEC") a Statement of Additional
Information (the "SAI") which contains additional information about John
Hancock USA and the Account. The SAI and personalized illustrations of death
benefits, policy values and surrender values are available, without charge,
upon request. You may obtain the personalized illustrations from your John
Hancock USA representative. The SAI may be obtained by contacting the John
Hancock USA Service Office. You should also contact the John Hancock USA
Service Office to request any other information about your policy or to make
any inquiries about its operation.
SERVICE OFFICE
Express Delivery Mail Delivery
---------------- -------------
Specialty Products Specialty Products & Distribution
197 Clarendon Street, C-6 P.O. Box 192
Boston, MA 02117 Boston, MA 02117
Phone: Fax:
------ ----
1-800-521-1234 617-572-7008
Information about the Account (including the SAI) can be reviewed and
copied at the SEC's Public Reference Branch, 100 F Street, NE, Room 1580,
Washington, DC, 20549. Information on the operation of the Public Reference
Room may be obtained by calling the SEC at 202-551-5850. Reports and other
information about the Account are available on the SEC's Internet website at
http://www.sec.gov. Copies of such information may be obtained, upon payment of
a duplicating fee, by writing the Public Reference Section of the SEC at 100 F
Street, NE, Washington, DC 20549-0102.
PART C
OTHER INFORMATION
Item 27. Exhibits
The following exhibits are filed as part of this Registration Statement:
(a) Resolutions of Board of Directors of the John Hancock Life Insurance
Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.))
establishing Separate Account N. Incorporated by reference to exhibit A (1) to
the pre-effective amendment no. 1 file number 333-71312 filed with the
Commission on January 2, 2002.
(b) Not applicable.
(c)(1) Form of Principal Underwriting Agreement to be filed by
amendment.
(2) Form of General Agent and Broker Dealer Servicing Agreement by and
among John Hancock Life Insurance Company (U.S.A.) and John Hancock
Distributors. Incorporated by reference to Pre-Effective number 1, Exhibit 27
(c)(3), file number 333-126668 filed with the Commission on October 12, 2005.
(3) Form of General Agent and Broker Dealer Selling Agreement by and among
John Hancock Life Insurance Company (U.S.A.) and John Hancock Distributors.
Incorporated by reference to Pre-Effective number 1, Exhibit 27 (c)(4), file
number 333-126668 filed with the Commission on October 12, 2005.
(d)(1) Form of Specimen Flexible Premium Variable Life Insurance Policy
filed herewith.
(2) Form of Specimen Enhanced Yield Fixed Account Rider filed herewith.
(3) Form of Specimen Extended No-Lapse Guarantee Rider filed herewith.
(4) Form of Specimen Acceleration of Life Insurance Death Benefit for
Qualified Long Term Care Services Rider filed herewith.
(5) Form of Specimen Residual Life Insurance Benefit and Continuation of
Acceleration Rider filed herewith.
(6) Form of Specimen Enhanced Surrender Value Rider filed herewith.
(7) Form of Specimen Return of Premium Death Benefit Rider filed herewith.
(8) Form of Specimen Change of Life Insured Rider filed herewith.
(9) Form of Specimen Accelerated Benefit Rider filed herewith.
(e) Form of Specimen Application for the Majestic Performance VUL
Insurance Policy filed herewith.
(f)(1) Restated Articles of Redomestication of the John Hancock Life
Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company
(U.S.A.)). Incorporated by reference to Exhibit A(6) to the registration
statement file number 333-41814 filed with the Commission on July 20, 2000.
(a) Amendment to the Articles of Redomestication of the John Hancock Life
Insurance Company (U.S.A.) dated July 16, 2004. Incorporated by reference to
pre-effective amendment no. 1 file number 333-126668 filed with the Commission
on October 12, 2005.
(2) By-laws of the John Hancock Life Insurance Company (U.S.A.) (formerly,
The Manufacturers Life Insurance Company (U.S.A.)) dated December 2, 1992.
Incorporated by reference to pre-effective amendment no. 1 file number
333-126668 filed with the Commission on October 12, 2005.
(a) Amendment to the By-laws of the John Hancock Life Insurance Company
(U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated
June 7, 2000. Incorporated by reference to pre-effective amendment no. 1 file
number 333-126668 filed with the Commission on October 12, 2005.
(b) Amendment to the By-laws of the John Hancock Life Insurance Company
(U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated
March 12, 1999. Incorporated by reference to pre-effective amendment no. 1 file
number 333-126668 filed with the Commission on October 12, 2005.
(g) Not Applicable.
(h)(1) Form of Participation Agreement among The Manufacturers Insurance
Company (U.S.A.), The Manufacturers Insurance Company of New York, PIMCO
Variable Insurance Trust and PIMCO Advisors Distributors LLC dated April 30,
2004. Incorporated by reference to pre-effective amendment no. 1 file number
333-126668 filed with the Commission on October 12, 2005.
(2) Participation Agreement among John Hancock Life Insurance Company
(U.S.A.), John Hancock Life Insurance Company of New York, John Hancock Life
Insurance Company, John Hancock Variable Life Insurance Company and John
Hancock Trust. Incorporated by reference to pre-effective amendment no. 1 file
number 333-126668 filed with the Commission on October 12, 2005.
(i)(1) Form of Service Agreement between The Manufacturers Life Insurance
Company and the John Hancock Life Insurance Company (U.S.A.) (formerly,The
Manufacturers Life Insurance Company (U.S.A.)). Incorporated by reference to
Exhibit A(8)(a) (i), (ii), (iii), (iv), (v)and (vi) to pre-effective amendment
No. 1 file number 333-51293 filed with the Commission on August 28, 1998.
(2) Form of Amendment to Service Agreement between The Manufacturers Life
Insurance Company and the John Hancock Life Insurance Company (U.S.A.)
(formerly, The Manufacturers Life Insurance Company (U.S.A.)). Incorporated by
reference to Exhibit A(8)(a)(vii) to post-effective amendment No. 11 file
number 33-57018 filed with the Commission March 1, 1999.
(3)Form of Service Agreement. Incorporated byreference to Exhibit
A(8)(c)(i) to pre-effective amendment no. 1 file number 333-51293 filed with
the Commission on August 28, 1998.
(4)Form of Amendment to Service Agreement. Incorporated by reference to
Exhibit A(8)(c)(ii) to pre-effective amendment no. 1 file number 333-51293
filed with the Commission on August 28, 1998.
(j) Not Applicable
(k)Opinion and consent of counsel for John Hancock Life Insurance Company
(U.S.A.). Incorporated by reference to Exhibit 2 (a) to pre-effective amendment
no. 1 file number 333-100597 filed with the Commission on December 16, 2002.
(l) Not Applicable.
(m) Not Applicable.
(n) Consent of Independent Registered Public Accounting Firm to be filed
by amendment.
(o) Not Applicable.
(p) Not Applicable.
(q) Memorandum Regarding Issuance, Face Amount Increase, Redemption and
Transfer Procedures for the Policies. Incorporated by reference to Exhibit A(6)
to pre-effective amendment no. 1 file number 333-100597 filed with the
Commission on December 16, 2002.
Powers of Attorney
(i) Powers of Attorney for Alison Alden, James Boyle, Robert, Cook, John
DesPrezIII, John Ostler, Rex Schlaybaugh Jr., Diana Scott and Warren Thomson
filed herewith.
Item 28. Directors and Officers of the Depositor
OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) as of
April 1, 2006
Name and Principal Business Address . Position with Depositor
Directors ...........................
Alison Alden** ...................... Director
James R. Boyle* ..................... Director
Robert Cook** ....................... Director
John D. DesPrez III* ................ Director
John R. Ostler**** .................. Director
Rex Schlaybaugh Jr.******* .......... Director
Diana Scott* ........................ Director
Warren Thomson** .................... Director
Officers ............................
John D. DesPrez III* ................ Chairman and President
James Boyle* ........................ Executive Vice President, Annuities
Robert A Cook** ..................... Executive Vice President, Life Insurance
Steven Mannik**** ................... Executive Vice President & General Manager, Reinsurance
Katherine MacMillan***** ............ Senior Vice President and General Manager, RPS
Marc Costantini* .................... Senior Vice President & Chief Financial Officer
Alison Alden** ...................... Senior Vice President, Human Resources
Emanuel Alves* ...................... Vice President and Secretary
Jonathan Chiel* ..................... Executive Vice President & General Counsel
Joseph Scott* ....................... Vice President & Chief Administrative Officer
Mitchell A. Karman*** ............... Vice President, Chief Compliance Officer & Counsel
Senior Executive Vice President and Chief Investments
Donald A. Guloien**** ............... Officer
Steven Finch**** .................... Senior Vice President, Finance Protection
Warren Thomson** .................... Executive Vice President, Investments
Patrick Gill* ....................... Senior Vice President and Controller
Peter Copestake***** ................ Senior Vice President and Treasurer
Peter Mitsopoulos****** ............. Vice President, Treasury
Ian Cook**** ........................ Senior Vice President and CFO, Investments
Philip Clarkson*** .................. Vice President, Taxation
Brian Collins**** ................... Vice President, Taxation
John H. Durfey**** .................. Assistant Secretary
Kwong Yiu**** ....................... Assistant Secretary
Grace O'Connell* .................... Assistant Secretary
Elizabeth Clark* .................... Assistant Secretary
*Principal Business Office is 601 Congress Street, Boston, MA 02210
**Principal Business Office is 197 Clarendon Street, Boston, MA 02117
***Principal Business Office is 200 Clarendon Street, Boston, MA 02117
****Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5
*****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5
******Principal Business Office is 380 Stuart Street, Boston, MA 02117
*******Principal Business Office is 400 Renaissance Center, Detroit, MI 48243
Item 29. Persons Controlled by or Under Common Control with the Depositor or the
Registrant
Registrant is a separate account of John Hancock (USA), operated as a unit
investment trust. Registrant supports benefits payable under John Hancock USA's
variable life insurance policies by investing assets allocated to various
investment options in shares of John Hancock Trust and other mutual funds
registered under the Investment Company Act of 1940 as open-end management
investment companies of the "series" type.
A list of persons directly or indirectly controlled by or under common
contract with John Hancock (USA) as of December 31, 2005 appears below:
Manulife Reinsurance Limited (Bermuda)
Cavalier Cable, Inc.
John Hancock Investment Management Services, LLC
Manulife Reinsurance (Bermuda) Limited
Manulife Service Corporation
John Hancock Life Insurance Company of New York
Ennal, Inc.
John Hancock Distributors, LLC
Ironside Venture Partners I LLC
Ironside Venture Partners II LLC
Avon Long Term Care Leaders LLC
Manulife Leasing Co., LLC
Item 30. Indemnification
Article XII of the Restated Articles of Redomestication of The
Manufacturers Life Insurance Company (U.S.A.) provides as follows:
No director of this Corporation shall be personally liable to the
Corporation orits shareholders or policyholders for monetarydamages for breach
of the director's fiduciary duty, provided,that the foregoingshall not
eliminate or limit the liability of a director for any of the following:
(i) a breach of the director's duty or loyalty to the Corporation or its
shareholders or policyholders;
(ii) acts or omissions not in good faith or that involve intentional misconduct
or knowing violation of law;
(iii) a violation of Sections 5036, 5276 or 5280 of the Michigan Insurance
Code, being MCLA 500.5036, 500.5276 and 500.5280;
(iv) a transaction from which the director derived an improper personal
benefit; or
(v) an act or omission occurring on or before the date of filing of these
Articles of Incorporation.
If the Michigan Insurance Code is hereafter amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation, in addition to the limitation on
personal liability contained herein, shall be eliminated or limited to the
fullest extent permitted by the Michigan Insurance Code as so amended. No
amendment or repeal of this Article XII shall apply to or have any effect on
the liability or alleged liability or any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to the
effective date of any such amendment or repeal.
Notwithstanding the foregoing, Registrant hereby makes the following
undertaking pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 31. Principal Underwriter
(a) Set forth below is information concerning other investment companies
for which John Hancock Distributors, LLC ("JHD LLC"), the principal underwriter
of the contracts, acts as investment adviser or principal underwriter.
Name of Investment Company ........................ Capacity in Which Acting
John Hancock Variable Life Separate Account S ..... Principal Underwriter
John Hancock Variable Life Separate Account U ..... Principal Underwriter
John Hancock Variable Life Separate Account V ..... Principal Underwriter
John Hancock Variable Life Separate Account UV .... Principal Underwriter
John Hancock Variable Annuity Separate Account I .. Principal Underwriter
John Hancock Variable Annuity Separate Account JF . Principal Underwriter
John Hancock Variable Annuity Separate Account U .. Principal Underwriter
John Hancock Variable Annuity Separate Account V .. Principal Underwriter
John Hancock Variable Annuity Separate Account H .. Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account A ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account N ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account H ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account I ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account J ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account K ................................ Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account M ................................ Principal Underwriter
John Hancock Life Insurance Company of New York
Separate Account B ................................ Principal Underwriter
John Hancock Life Insurance Company of New York
Separate Account A ................................ Principal Underwriter
(b) John Hancock Life Insurance Company (U.S.A.) is the sole member of JHD
LLC and the following comprise the Board of Managers and officers of JHD LLC.
Name Title
- --------------------------------- -----------------------------------------------------------
Marc Costantini* ................ Chairman
Steve Finch**** ................. President and Chief Executive Officer
Kevin Hill * .................... Senior Vice President, U.S. Annuities and Managed Accounts
Katherine MacMillan***** ........ Senior Vice President, Retirement Plan Services
Christopher Walker**** .......... Vice President and Chief Compliance Officer
Marc Costantini* ................ Chairman
Steve Finch**** ................. President and CEO
Peter Copestake***** ............ Vice President and Treasurer
James C. Hoodlet*** ............. Secretary and General Counsel
Kevin Hill* ..................... Senior Vice President, U.S. Annuities and Managed Accounts
Katherine MacMillan***** ........ Senior Vice President, Retirement Plan Services
Christopher M. Walker**** ....... Vice President and Chief Compliance Officer
Brian Collins**** ............... Vice President, U.S. Taxation
Philip Clarkson*** .............. Vice President, U.S. Taxation
Jeffrey H. Long* ................ Chief Financial Officer and Financial Operations Principal
David Crawford**** .............. Assistant Secretary
*Principal Business Office is 601 Congress Street, Boston, MA 02210
**Principal Business Office is 197 Clarendon Street, Boston, MA 02117
***Principal Business Office is 200 Clarendon Street, Boston, MA 02117
****Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5
*****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5
(c) John Hancock Distributors, LLC
The information contained in the section titled "Principal Underwriter and
Distributor" in the Statement of Additional Information, contained in this
Registration Statement, is hereby incorporated by reference in response to Item
31.(c)(2-5).
Item 32. Location of Accounts and Records
The following entities prepare, maintain, and preserve the records
required by Section 31(a) of the Act for the Registrant through written
agreements between the parties to the effect that such services will be
provided to the Registrant for such periods prescribed by the Rules and
Regulations of the Commission under the Act and such records will be
surrendered promptly on request: John Hancock Distributors LLC, John Hancock
Place, Boston, Massachusetts 02117, serves as Registrant's distributor and
principal underwriter, and, in such capacities, keeps records regarding
shareholders account records, cancelled stock certificates. John Hancock Life
Insurance Company (U.S.A.) (at the same address), in its capacity as
Registrant's depositor keeps all other records required by Section 31 (a) of
the Act.
Item 33. Management Services
None
Item 34. Fee Representation
Representation of Insurer Pursuant to Section 26 of the Investment Company
Act of 1940
The John Hancock Life Insurance Company (U.S.A.) hereby represents that
the fees and charges deducted under the contracts issued pursuant to this
registration statement, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by the Company.
POWER OF ATTORNEY
I, Alison Alden, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 24, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ Alison Alden Director March 24, 2006
- --------------------------------
Alison Alden
POWER OF ATTORNEY
I, James R. Boyle, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 25, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ James R. Boyle Director March 25, 2006
- --------------------------------
James R. Boyle
POWER OF ATTORNEY
I, John D. DesPrez III, in my capacity as a Director of John Hancock
Life Insurance Company (U.S.A.) (the "Company"), do hereby constitute and
appoint John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello,
Arnold R. Bergman, and James C. Hoodlet or any of them individually, my true
and lawful attorneys and agents to execute, in the name of, and on behalf of,
the undersigned as a member of said Board of Directors, the Registration
Statements listed below filed with the Securities and Exchange Commission
("SEC") under the Securities Act of 1933 and the Investment Company Act of
1940, and any and all amendments to the Registration Statements listed below
filed with the SEC, and the undersigned hereby ratifies and confirms as his or
her own act and deed all that each of said attorneys and agents shall do or
cause to have done by virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 25, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ John D. DesPrez III Director March 25, 2006
- --------------------------------
John D. DesPrez III
POWER OF ATTORNEY
I, Diana Scott, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 27, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ Diana Scott Director March 27, 2006
- --------------------------------
Diana Scott
POWER OF ATTORNEY
I, Rex Schlaybaugh Jr., in my capacity as a Director of John Hancock
Life Insurance Company (U.S.A.) (the "Company"), do hereby constitute and
appoint John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello,
Arnold R. Bergman, and James C. Hoodlet or any of them individually, my true
and lawful attorneys and agents to execute, in the name of, and on behalf of,
the undersigned as a member of said Board of Directors, the Registration
Statements listed below filed with the Securities and Exchange Commission
("SEC") under the Securities Act of 1933 and the Investment Company Act of
1940, and any and all amendments to the Registration Statements listed below
filed with the SEC, and the undersigned hereby ratifies and confirms as his or
her own act and deed all that each of said attorneys and agents shall do or
cause to have done by virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 29, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ Rex Schlaybaugh Jr. Director March 29, 2006
- --------------------------------
Rex Schlaybaugh Jr.
POWER OF ATTORNEY
I, Robert Cook, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 24, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ Robert Cook Director March 24, 2006
- --------------------------------
Robert Cook
POWER OF ATTORNEY
I, John R. Ostler, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 30, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ John R. Ostler Director March 30, 2006
- --------------------------------
John R. Ostler
POWER OF ATTORNEY
I, Warren Thomson, in my capacity as a Director of John Hancock Life
Insurance Company (U.S.A.) (the "Company"), do hereby constitute and appoint
John D. DesPrez III, Marc Costantini, Emanuel Alves, John Danello, Arnold R.
Bergman, and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
listed below filed with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 and the Investment Company Act of 1940, and any and
all amendments to the Registration Statements listed below filed with the SEC,
and the undersigned hereby ratifies and confirms as his or her own act and deed
all that each of said attorneys and agents shall do or cause to have done by
virtue hereof.
Variable Life Registration Statement filed under the Securities Act of 1933:
333-131299
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Power of
Attorneys in connection with the above mentioned acts, and is effective
March 25, 2006 and remains in effect until revoked or revised.
Signature Title Date
- --------- ----------------------------- --------------
/s/ Warren Thomson Director March 25, 2006
- --------------------------------
Warren Thomson
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
A Stock Company
LIFE INSURED [John J. Doe]
POLICY NUMBER [12 345 678]
PLAN NAME [Majestic Performance VUL]
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ADJUSTABLE DEATH BENEFIT
BENEFIT PAYABLE ON LIFE INSURED'S DEATH
FLEXIBLE PREMIUMS PAYABLE TO AGE 121 DURING THE LIFE INSURED'S LIFETIME
NON-PARTICIPATING (NOT ELIGIBLE FOR DIVIDENDS)
Subject to the conditions and provisions of this policy, if the Life Insured
dies while the policy is in force, the John Hancock Life Insurance Company
(U.S.A.) ("the Company") agrees to pay the Insurance Benefit to the beneficiary
in a lump sum, and to provide the other benefits, rights, and privileges, if
any, of the policy. The Insurance Benefit is described in Section 6. If the
Company makes other plans of payment available other than a lump sum, then a
Beneficiary may request written election of any such other plans in lieu of a
lump sum.
Your Net Premiums are added to your Policy Value. You may allocate them to one
or more of the Investment Accounts and to the Fixed Account, subject to
Section 17, and any other applicable provisions of the policy.
The portion of your Policy Value that is in an Investment Account will vary
from day to day. The amount is not guaranteed; it may increase or decrease,
depending on the investment experience of the underlying Subaccounts for the
Investment Accounts that you have chosen.
The portion of your Policy Value that is in the Fixed Account will accumulate,
after deductions, at rates of interest we determine. Such rates will not be
less than the Fixed Account Annual Rate shown in Section 1.
The amount of the Insurance Benefit, or the duration of the insurance coverage,
or both, may be variable or fixed under specified conditions and may increase
or decrease as described in Section 6.
READ YOUR POLICY CAREFULLY. It is a contract between you and us.
RIGHT TO RETURN POLICY. If for any reason you are not satisfied with your
policy, you may return it for cancellation by delivering or mailing it to us or
to the agent who sold it. If this policy does not replace another policy, you
may return it within TEN days after receiving it, or if it replaces another
policy, you may return it within TWENTY days after receiving it. We will refund
in full the payment made. The policy will be void from the beginning.
Signed for the Company by:
/s/ James P. O'Malley /s/ Emanuel Alves
President Secretary
06MAJPVUL MV0106A
Policy Provisions
Section
1. Policy Specifications
2. Table of Rates
3. Definitions
4. Qualification as Life Insurance
5. Total Face Amount
6. Insurance Benefit
7. Interest on Proceeds
8. Premiums
9. No-Lapse Guarantee
10. Grace Period
11. Policy Termination
12. Reinstatement
13. Coverage at and after Age 121
14. Policy Value
15. Loan Account, Fixed Account, Investment Accounts
16. Separate Account and Subaccounts
17. Allocations and Transfers
18. Loans
19. Surrenders and Withdrawals
20. Owner and Beneficiary
21. Assignment
22. Misstatements
23. Suicide
24. Incontestability
25. The Contract
26. Right to Postpone Payment of Benefits
27. Claims of Creditors
28. Reports to Owner
29. How Values are Computed
2
1. POLICY SPECIFICATIONS
Life Insured [JOHN DOE] Plan [Majestic
Performance VUL]
Age at Policy Date [35] Policy Number [12 345 678]
[Sex] [MALE] Issue Date [January 1, 2006]
Risk Classification [Standard] Policy Date [January 1, 2006]
[Non Smoker]
Additional Ratings [not
applicable]
Owner, Beneficiary As designated in the
application or subsequently
changed
Death Benefit Option at Issue [Option 1]
Life Insurance Qualification [Guideline Premium Test]
Test Elected
Base Face
Amount at
Issue $[500,000]
Supplemental
Face Amount
at Issue $[600,000]
-----------------
Total Face
Amount at
Issue $[1,100,000]
Governing Law [Arkansas]
PREMIUMS AT ISSUE
Premium Mode [Annual]
Planned Premium $ [7,400.00 per year]
Minimum Initial Premium $ [ 227.50]
No- Lapse Guarantee Premium $ [2,730.04 per year]
Notice: This policy provides life insurance coverage for the lifetime of the
Life Insured if sufficient premiums are paid. Premium payments in addition to
the planned premium shown may need to be made to keep this policy and coverage
in force. Keeping the policy and coverage in force will be affected by factors
such as: changes in the current cost of insurance rates; the amount, timing and
frequency of premium payments; the interest rate being credited to the Fixed
Account; the investment experience of the Investment Accounts; changes to the
death benefit option; changes in the Total Face Amount; loan activity;
withdrawals; and deductions for any applicable Supplementary Benefit riders
that are attached to, and made a part of, this policy. Also refer to the Grace
Period and Policy Termination provisions in Sections 10 and 11.
3 MV0306A
1. POLICY SPECIFICATIONS (continued) - Policy [12 345 678]
SCHEDULE OF SUPPLEMENTAL FACE AMOUNTS
Supplemental Face Amount At Issue $[600,000]
Maximum Increasing Supplemental Face Amount $[1,050,000]
Maximum Total Supplemental Face Amount $[1,650,000]
Effective at Supplemental
Beginning of Face Amount Total Supplemental
Policy Year Increases Face Amount
------------ ------------ ------------------
1 $ 0 $ 600,000
2 $ 50,000 $ 650,000
3 $ 50,000 $ 700,000
4 $ 75,000 $ 775,000
5 $ 75,000 $ 850,000
6 $100,000 $ 950,000
7 $100,000 $1,050,000
8 $100,000 $1,150,000
9 $150,000 $1,300,000
10 $150,000 $1,450,000
11 $200,000 $1,650,000
12 to 65 $ 0 $1,650,000
3(continued) MV0306A
1. POLICY SPECIFICATIONS (continued) - Policy [12 345 678]
OTHER BENEFITS AND SPECIFICATIONS
[Not Applicable]
3(continued) MV03206A
1. POLICY SPECIFICATIONS (continued) - Policy [12 345 678]
MAXIMUM EXPENSE CHARGES
Deductions from Premium Payments
Premium Charge 8% of each premium paid
Monthly Deductions: the following charges are deducted monthly from the
Policy Value
Administrative Charge $15.00
Face Amount Charge $[0.0600] per $1000 of Base Face Amount for the first 4
Policy Years
Cost of Insurance Determined in accordance with Section 14. Maximum
Charge monthly rates per $1,000 are shown in Section 2.
Asset-Based Risk Percentage of Investment Account assets deducted
Charge monthly as shown below:
Percentage of Investment
Policy Years Account assets
------------------------------- ------------------------
1 - 15 0.0625%
16+ 0.0200%
Other Charges
Surrender Charge Charge deducted from Policy Value equal to the
percentage shown below multiplied by the lesser of
either the sum of Premiums received during the first
two Policy Years or the Target Premium shown under
Table of Values of this Section 1. See Sections 5
and 19 for details of when a Surrender Charge
applies.
Policy Year Percentage* Policy Year Percentage*
----------- ------------ ----------- ------------
1 [100.00]% 7 [90.00]%
2 [100.00]% 8 [70.00]%
3 [100.00]% 9 [50.00]%
4 [100.00]% 10 [30.00]%
5 [95.00]% 11+ [0.00]%
6 [95.00]%
- --------
* Percentages shown are at the beginning of each Policy Year. A proportionate
grading percentage applies for other Policy Months.
Supplementary Benefit Charges for applicable riders are shown under
Rider Charges Supplementary Benefits of this Section 1.
Withdrawal Fee $25.00 per withdrawal, or 2% of the withdrawal if less
3A MV03A06A
1. POLICY SPECIFICATIONS (continued) - Policy [12 345 678]
TABLE OF VALUES
Refer to your policy provisions for details on the terms and values shown in
this table.
Minimum Total Face Amount $ 100,000
Minimum Base Face Amount $ 100,000
Minimum Total Face Amount Decrease $ 50,000
No-Lapse Guarantee Period
Base Face Amount First [2] Policy Years from Policy Date
Supplemental Face Amount (if
elected) First 2 Policy Years from Policy Date
Allocation Date [10TH day after the Issue Date]
Fixed Account Annual Rate Not less than 3%
Loan Interest Credited Annual Rate Not less than 3%
Maximum Loan Interest Charged
Annual Rate
Policy Years 1-10 4.25%
Policy Years 11+ 3.25%
Maximum Loan Interest Credited
Differential
Policy Years 1-10 1.25%
Policy Years 11+ .25%
Minimum Loan Amount $ 500
Minimum Withdrawal Amount $ 500
Death Benefit Discount Factor 1.0024663
Maximum Transfer Fee $ 25
(See Section 17 for Transfer
Restrictions)
Fixed Account Maximum Transfer
Percentage 15%
Fixed Account Maximum Transfer
Amount $ 2,000
Investment Account Maximum Transfer
Amount $1,000,000
Target Premium $[3,920.00]
3B MV03B06A
2. TABLE OF RATES- Policy [12 345 678]
A. RATE TABLE
Maximum Maximum
Monthly Monthly
Rates per Rates per
$1,000 of Minimum $1,000 of Minimum
Net Death Net Death
Amount Benefit Amount Benefit
Age at Risk Factors Age at Risk Factors
--- --------- ------- ---- --------- -------
35 0.0909 2.5000 79 5.2198 1.0500
36 0.0959 2.5000 80 5.8398 1.0500
37 0.1001 2.5000 81 6.5510 1.0500
38 0.1076 2.5000 82 7.2976 1.0500
39 0.1142 2.5000 83 8.1096 1.0500
40 0.1217 2.5000 84 9.0174 1.0500
41 0.1318 2.4300 85 10.0423 1.0500
42 0.1443 2.3600 86 11.1922 1.0500
43 0.1585 2.2900 87 12.4650 1.0500
44 0.1752 2.2200 88 13.8494 1.0500
45 0.1944 2.1500 89 15.3334 1.0500
46 0.2127 2.0900 90 16.9088 1.0500
47 0.2328 2.0300 91 18.4163 1.0400
48 0.2445 1.9700 92 20.0153 1.0300
49 0.2579 1.9100 93 21.7336 1.0200
50 0.2771 1.8500 94 23.5854 1.0100
51 0.2997 1.7800 95 25.5731 1.0000
52 0.3306 1.7100 96 27.4319 1.0000
53 0.3641 1.6400 97 29.4579 1.0000
54 0.4067 1.5700 98 31.6727 1.0000
55 0.4595 1.5000 99 34.0995 1.0000
56 0.5131 1.4600 100 36.7714 1.0000
57 0.5710 1.4200 101 38.9513 1.0000
58 0.6204 1.3800 102 41.3354 1.0000
59 0.6775 1.3400 103 43.9462 1.0000
60 0.7464 1.3000 104 46.8129 1.0000
61 0.8304 1.2800 105 49.9253 1.0000
62 0.9331 1.2600 106 53.3626 1.0000
63 1.0485 1.2400 107 57.1735 1.0000
64 1.1700 1.2200 108 61.4190 1.0000
65 1.2984 1.2000 109 66.1732 1.0000
66 1.4287 1.1900 110 71.5294 1.0000
67 1.5608 1.1800 111 77.6167 1.0000
68 1.7034 1.1700 112 83.3333 1.0000
69 1.8512 1.1600 113 83.3333 1.0000
70 2.0309 1.1500 114 83.3333 1.0000
71 2.2322 1.1300 115 83.3333 1.0000
72 2.4974 1.1100 116 83.3333 1.0000
73 2.7779 1.0900 117 83.3333 1.0000
74 3.0739 1.0700 118 83.3333 1.0000
75 3.3986 1.0500 119 83.3333 1.0000
76 3.7540 1.0500 120 83.3333 1.0000
77 4.1684 1.0500 121+ 0 1.0000
78 4.6548 1.0500
Maximum Monthly Rates are the same for the Base Face Amount and the
Supplemental Face Amount and have been adjusted for any applicable Additional
Ratings that are applied to the Cost of Insurance rates as shown in Section 1.
4 MV0406A
3. DEFINITIONS
The term "Additional Rating" is an increase in the Cost of Insurance that is
applied when a Life Insured does not meet, at a minimum, our underwriting
requirements for the standard Risk Classification.
The term "Age" means, on any policy anniversary, the age of the person in
question at his or her birthday nearest that date.
The term "Annual Processing Date" means every 12th Processing Date starting
with the Processing Date next after the Policy Date.
The term "Business Day" means any day that we are open for business and the New
York Stock Exchange is open for trading. The net asset value of the underlying
shares of a Subaccount will be determined at the end of each Business Day. We
will deem each Business Day to end at the close of regularly scheduled trading
of the New York Stock Exchange (currently 4:00 p.m. Eastern Time) on that day.
The term "Cash Surrender Value" equals the Policy Value less the Surrender
Charge.
The term "date" means a calendar day ending at midnight local time at our
Service Office.
The term "Fixed Account" is that part of the Policy Value which reflects the
value you have in our general account.
The term "Fund" means each division, with a specific investment objective, of a
Series Fund.
The term "in force" means that the policy has not terminated in accordance with
Sections 9, 10, or 11, or surrendered in accordance with Section 19.
The term "Investment Account" means that part of the Policy Value which
reflects the value you have in one of our Subaccounts.
The term "Issue Date" is the date shown in the Policy Specifications of this
policy from which the Suicide and Incontestability provisions are applied.
Issue Date is also used to determine the Allocation Date shown in Section 1.
The term "Loan Account" is that part of the Policy Value which reflects amounts
transferred from the Fixed Account or the Investment Accounts as collateral for
a policy loan.
The term "Minimum Initial Premium" means the minimum premium needed to put the
policy in force and is shown in Section 1.
The term "Net Cash Surrender Value" equals the Cash Surrender Value less the
Policy Debt.
The term "Net Premium" is the gross premium paid less any Premium Charge. It is
the amount of premium allocated to the Fixed Account and or to the Investment
Accounts.
The term "Planned Premium" means the premium that is selected in the
application for the policy, which is intended to be paid on a regular modal
basis. It is shown in Section 1.
The term "Policy Date" is the date from which charges for the first Monthly
Deductions are calculated. The Policy Date is shown in Section 1. Policy Years,
Policy Months, and Policy Anniversaries are determined from the Policy Date.
The term "Policy Debt" as of any date equals (a) plus (b) plus (c), minus (d),
where:
(a) is the total amount of loans borrowed as of such date;
(b) is the total amount of any unpaid loan interest charges borrowed
against the policy on a Policy Anniversary;
(c) is any interest charges accrued from the last Policy Anniversary to
the current date; and
(d) is the total amount of loan repayments as of such date.
The term "Policy Value" is the sum of the values in the Loan Account, the
Investment Accounts, and the Fixed Account.
5 MV0506A
3. DEFINITIONS (continued)
The term "Policy Year" means (a) or (b) below, whichever is applicable.
(a) The first Policy Year is the period beginning on the Policy Date and
ending on the Business Day immediately preceding the first Annual
Processing Date.
(b) Each subsequent Policy Year is the period beginning on an Annual
Processing Date and ending on the Business Day immediately preceding
the next Annual Processing Date.
The term "Processing Date" means the first day of a Policy Month. A Policy
Month shall begin on the day in each calendar month that corresponds to the day
of the calendar month on which the Policy Date occurred. If the Policy Date is
the 29th, 30th, or 31st day of a calendar month, then for any calendar month
that has fewer days, the first day of the Policy Month will be the last day of
such calendar month. The Policy Date is not a Processing Date.
The term "Separate Account" means Separate Account A of the John Hancock Life
Insurance Company (U.S.A.).
The term "Series Fund" means a series type mutual fund registered under the
Investment Company Act of 1940 as an open-end diversified management investment
company.
The term "Service Office" is the office that we designate to service this
policy as shown on the back cover of your policy.
The term "Subaccount" refers to one of the subaccounts of the Separate Account.
The term "Surrender Charge Period" is the period beginning on the Policy Date
during which we will assess surrender charges. Surrender charges will apply
during this period if you surrender the policy, request a decrease in the Base
Face Amount, make a withdrawal that reduces the Base Face Amount, or if the
policy terminates due to default. The Surrender Charge Period is shown in
Section 1.
The terms "we", "us", and "our" refer only to the Company.
The term "written request" is your request to us which must be in a form
satisfactory to us, signed and dated by you, and filed at our Service Office
or, if permitted by our administrative practices, an electronic mail message
("e-mail") received by us at the internet address specified by us for receipt
of such messages.
The terms "you" and "your" refer only to the Owner of this policy.
4. QUALIFICATION AS LIFE INSURANCE
It is the intent that this policy be considered as life insurance for federal
income tax purposes, notwithstanding any other provisions of the policy to the
contrary, in order to comply with Section 7702 of the Internal Revenue Code of
1986, or any other equivalent section of the Code. We reserve the right to make
any reasonable adjustments to the terms or conditions of this policy if it
becomes necessary to allow it to qualify as life insurance. This provision
should not be construed to guarantee that this policy will receive tax
treatment as life insurance or that the tax treatment of life insurance will
never be changed by the future actions of any tax authority. In order for this
policy to qualify as life insurance, one of the following tests will apply to
the policy. The test you elected is shown in Section 1. Your election cannot be
changed after issue.
Guideline Premium Test
Under this test, if at any time the premiums received under the policy exceed
the amount allowable for such tax qualification, such excess amount shall be
removed from the policy together with interest and/or investment experience
thereon from the date of its payment, and any appropriate adjustment in the
Death Benefit shall be made as of such date. This excess amount shall be
refunded to you no later than 60 days after the end of the applicable Policy
Year. If this excess amount is not refunded by then, the Total Face Amount
under the policy shall be increased retroactively so that at no time is the
Death Benefit ever less than the amount necessary to ensure or maintain such
tax qualification. In no event, however, will we refuse to accept any premium
necessary to prevent the policy from terminating but only if such premium
payment would result in a zero Policy Value at the end of the Policy Year. In
addition, the Minimum Death Benefit, as described in Section 6, must be
maintained.
6
4. QUALIFICATION AS LIFE INSURANCE (continued)
Cash Value Accumulation Test
Under this test, the Minimum Death Benefit, as described in Section 6, must be
maintained. We reserve the right to modify the Minimum Death Benefit Factors
shown in Section 2, retroactively if necessary, to ensure or maintain
qualification of this policy as a life insurance contract for federal income
tax purposes, notwithstanding any other provisions of this policy to the
contrary.
Effect on Life Insurance Qualification Tests
A change in Death Benefit Option or Total Face Amount, or certain other policy
changes, will often change the policy's limits under the life Insurance
qualification test that you elected.
We reserve the right to refuse or limit any request for a change if the change
would cause the policy to fail to qualify as life insurance for tax purposes.
5. TOTAL FACE AMOUNT
The Total Face Amount is made up of two components: (i) the Base Face Amount,
and (ii) any Supplemental Face Amount. Minimum Base Face Amount and the minimum
Total Face Amount limits are shown in Section 1. Scheduled increases in any
Supplemental Face Amount are elected on the application and if approved, their
amounts, when they are to become effective and the Maximum Increasing
Supplemental Face Amount will be shown in Section 1. If you later request that
an approved scheduled increase should not become effective or request a
decrease in your Supplemental Face Amount coverage, we will abide by your
request but we reserve the right to not put into effect all approved scheduled
increases for subsequent policy years. After the first Policy Year, while the
Life Insured is alive and the policy is in force, unscheduled changes to the
Supplemental Face Amount may be requested in writing. We reserve the right to
limit the number of such unscheduled changes to one per Policy Year. We also
reserve the right to limit the maximum and minimum amounts of unscheduled
changes. All requested changes will be subject to our approval. You may not
increase your Base Face Amount of insurance under this policy except where such
an increase may result from a change in Death Benefit Option from Option 2 to 1
as described in Section 6.
Increase in Supplemental Face Amount
As a condition of our approval of any unscheduled increase in Supplemental Face
Amount, we may require evidence of insurability satisfactory to us. A minimum
premium payment may also be required. When a requested change becomes
effective, and if required by our then current rules, a change in future
Planned Premiums will automatically be affected to comply with those rules. Any
change will be effective on the next Annual Processing Date after our approval.
If an increase in Supplemental Face Amount is elected and approved after the
Policy Date, any remaining No Lapse Guarantee Period for the Base Face Amount
will be reduced to zero.
Reduction of Total Face Amount
You may request a reduction in Total Face Amount while this policy is in force.
The Minimum Total Face Amount Decrease is shown in Section 1. Any reduction in
the Total Face Amount generally will be implemented by first reducing any
Supplemental Face Amount, although we reserve the right to allow a reduction in
Base Face Amount first. If there is a reduction in Base Face Amount, a charge
may be deducted from the Policy Value. This charge will be equal to a
proportionate part of the Surrender Charge that would have applied if the
policy had been surrendered on the date the reduction in Base Face Amount takes
effect. The proportion will be equal to the amount of the reduction in Base
Face Amount divided by the amount of Base Face Amount in effect immediately
before the reduction. This charge will also apply if a withdrawal, as described
in Section 19, results in a reduction in Base Face Amount. Without our prior
approval, the Base Face Amount cannot be reduced below the minimum as shown in
Section 1. Any reduction in Supplemental Face Amount or Base Face Amount will
be effective on the next Processing Date after our approval.
6. INSURANCE BENEFIT
If the Life Insured dies while the policy is in force, we will pay the
Insurance Benefit upon receipt of due proof of death of the Life Insured,
subject to any applicable provisions of the policy. If the Life Insured dies on
or after the date we receive a request from you to surrender the policy, no
Insurance Benefit will be paid. We will pay the amount payable under the
Surrenders and Withdrawals provision instead.
7 MV0706A
6. INSURANCE BENEFIT (continued)
Insurance Benefit
The Insurance Benefit payable is:
(a) the Death Benefit as described below; plus
(b) any amounts payable under any Supplementary Benefit riders as a
result of the Life Insured's death that form part of the policy; less
(c) any outstanding Policy Debt at the date of death.
If the Life Insured dies during a grace period, the Policy Value used in the
calculation of the Death Benefit will be the Policy Value as of the date of
death of the Life Insured, and the Insurance Benefit will be reduced by any
outstanding Monthly Deductions due.
Death Benefit
The Death Benefit will depend on whether Option 1 or Option 2 is in effect on
the date of the Life Insured's death.
Death Benefit Options
Under Option 1, the Death Benefit is equal to the Total Face Amount at the date
of death of the Life Insured. Under Option 2, the Death Benefit is equal to the
Total Face Amount at the date of death of the Life Insured plus the Policy
Value at the date of death of the Life Insured.
The Death Benefit after the Life Insured's Age 121 will be as described in
Section 13.
If any withdrawals are made, the Death Benefit, whether Option 1 or Option 2 is
in effect, will be less than it would have been if no withdrawals were made.
Withdrawals reduce the Death Benefit by reducing:
(a) the Total Face Amount if Option 1 is in effect, as specified in
Section 19; or
(b) the Policy Value if Option 2 is in effect.
Change of Death Benefit Options
You may request in writing to change your Death Benefit Option from Option 2 to
Option 1 at any time after the first Policy Year, while the policy is in force.
The change will be effective on the next Processing Date following the date we
approve the request, and the Total Face Amount after the change will be equal
to the Total Face Amount immediately before the change plus the Policy Value as
of the effective date of the change.
Minimum Death Benefit
The sum of the Death Benefit as described above and the Benefit payable under
any Supplementary Benefit riders will never be less than the Minimum Death
Benefit. The Minimum Death Benefit is equal to the Policy Value on the date of
death multiplied by the Minimum Death Benefit Factor for the Age of the Life
Insured. The Minimum Death Benefit Factors are shown in Section 2. To the
extent that the Net Amount at Risk associated with the Minimum Death Benefit
that results from this calculation exceeds our guidelines and limitations that
may be in effect, we reserve the right to:
(a) distribute to you a portion of the Policy Value such that the Net
Amount at Risk associated with the resulting Minimum Death Benefit
does not exceed our guidelines and limitations in effect; or
(b) if we should decide to accept the additional death benefit, require
evidence of insurability satisfactory to us.
7. INTEREST ON PROCEEDS
We will pay the Insurance Benefit in one lump sum including interest as
stipulated by the state. If the state does not specify the interest rate, we
will use the rate for insurance benefits left on deposit with us.
8. PREMIUMS
The Minimum Initial Premium is shown in Section 1. No insurance will take
effect under this policy until our underwriters approve issuance of this policy
and the conditions specified in the application form have been satisfied,
including receipt of at least the Minimum Initial Premium at our Service Office.
Subsequent premiums can be paid at any time at our Service Office, and in any
amount subject to the limits described below. On request, we will give you a
receipt signed by one of our officers.
8
8. PREMIUMS (continued)
If coverage under the policy takes effect in accordance with the provisions of
the application, we will process any premium payment as of the end of the
Business Day the payment is received at our Service Office, subject to the
limitations of the life insurance qualification test elected by you and to our
maximum limits then in effect, unless one of the following exceptions applies.
(i) We will process a payment received prior to the Policy Date as if
received on the Policy Date.
(ii) We will process the portion of any premium payment for which we
require evidence of the Life Insured's continued insurability on the
first Business Day after we have received such evidence and found it
satisfactory to us.
(iii) If our receipt of any premium payment (or portion thereof) would
cause the policy not to qualify as a "life insurance contract" under
the federal income tax laws, we will not process such payment or
portion. However, in the case of certain other tax situations, we
will process the payment (or portion thereof) on the first Business
Day after we have received satisfactory written instructions from you.
You may pay premiums until the Life Insured reaches Age 121, at which time
Monthly Deductions cease and no further premiums may then be paid as described
in Section 13.
Subject to our maximum limits then in effect, you may pay premiums in excess of
the Planned Premium while the policy is in force.
If any premium payment would result in the Minimum Death Benefit exceeding the
Total Face Amount, we reserve the right to either refund the premium or to
require evidence of insurability satisfactory to us for any increase in the
Minimum Death Benefit.
Continuation of Insurance Upon Discontinuance of Premium Payments
If you discontinue paying premiums, we will continue taking the Monthly
Deductions from the Policy Value. Your insurance coverage will continue subject
to the No-Lapse Guarantee, Grace Period, and Policy Termination provisions in
Sections 9, 10 and 11.
9. NO-LAPSE GUARANTEE
Your policy includes a No-Lapse Guarantee. The guarantee periods applicable to
the Base Face Amount and to any Supplemental Face Amount are shown in the Table
of Values in Section 1. During your No-Lapse Guarantee Period, if the Net Cash
Surrender Value falls to zero or below, your policy will not go into default
provided it satisfies the cumulative premium test.
Cumulative Premium Test
The test will be performed on any Processing Date that your policy would
otherwise be in default in the absence of the No-Lapse Guarantee. Your policy
will satisfy the test if the sum of the premiums received, less any Policy
Debt, and less any withdrawals taken on or before the date of the test, is
equal to or greater than the sum of the monthly No-Lapse Guarantee Premiums due
from the Policy Date to the date of the test. The No-Lapse Guarantee Premium is
shown as an annualized amount in the Table of Values in Section 1.
The No-Lapse Guarantee Premium may change if any of the following changes occur
under your policy:
(a) you add, terminate or change a Supplementary Benefit rider;
(b) you change the Death Benefit Option under your policy;
(c) there is a change in the Base Face Amount or the Supplemental Face
Amount; or
(d) there is a change in the Life Insured's Risk Classification or if
applicable, Additional Rating.
We will inform you of any change to the No-Lapse Guarantee Premium resulting
from any such change. The revised No-Lapse Guarantee Premium will be effective
from the date of the change. For the purpose of performing the Cumulative
Premium Test, we will use the No-Lapse Guarantee Premium in effect as of the
Policy Date up to the date of the change, including any revised premium in
effect as of the date of a prior change.
9 MV0906A
10. GRACE PERIOD
Default
Subject to the No-Lapse Guarantee feature of the policy, the policy and any
Supplementary Benefit riders will go into default if, at the beginning of any
Policy Month, the Net Cash Surrender Value is less than or equal to zero after
we take the Monthly Deduction that is due for that month.
Grace Period Duration
We will allow 61 days from the date the policy goes into default for you to pay
the amount that is required to bring the policy out of default. At least 30
days prior to termination of coverage, we will send notice to your last known
address, specifying the amount you must pay to bring the policy out of default.
If we have notice of a policy assignment on file at our Service Office, we will
also mail a copy of the notice of the amount due to the assignee on record.
Default Payment
The amount required to bring the policy out of default, referred to as the
Default Payment, is equal to (a) plus (b) plus (c) where:
(a) is the amount necessary to bring the Net Cash Surrender Value to zero
if it is less than zero, at the date of default;
(b) is an amount equal to 3 times the Monthly Deduction due on the date
of default;
(c) is the applicable Premium Charge.
When payment is received, any expense charges which are past due and unpaid
will be immediately deducted from the Net Policy Value. If the Default Payment
has not been paid by the end of the grace period, the policy will terminate.
Upon termination of the policy, the remaining Net Cash Surrender Value, if any,
will be paid to the Owner. If the Life Insured dies during the grace period,
then we will deduct from the Death Benefit proceeds all Monthly Deductions due
and unpaid as of the date of the Life Insured's death. No Insurance Benefit
under the policy or any Supplementary Benefit riders will be in effect after
the policy terminates.
No-Lapse Guarantee
If the policy is in the No-Lapse Guarantee Period, and the Cumulative Premium
Test has been met, then one of the following will apply.
(a) During the first 2 Policy Years, the Base Face Amount, any
Supplemental Face Amount, and any Supplementary Benefit riders will
remain in effect.
(b) For the remainder of the No-Lapse Guarantee Period, if any (see
Section 1 for the duration of the No-Lapse Guarantee Period), the
Base Face Amount will remain in effect, but any Supplemental Face
Amount and any Supplementary Benefit riders (unless otherwise stated
therein) will be subject to termination. The amount required to
maintain any Supplemental Face Amount and any applicable
Supplementary Benefit riders is equal to the Default Payment
specified above. If a payment at least equal to the Default Payment
is not received by the end of the grace period, then any Supplemental
Face Amount, and any Supplementary Benefit riders (unless otherwise
stated therein), will cease to be in effect and will be terminated
from the policy.
Failure to Meet Cumulative Premium Test
If the policy is in the No-Lapse Guarantee Period, and the Cumulative Premium
Test has not been met, then the Base Face Amount, any Supplemental Face Amount,
and any Supplementary Benefit riders may go into default, as described above.
The Grace Period Duration and Default Payment provisions described above will
apply. In lieu of the Default Payment, however, you may pay the shortfall
needed to meet the Cumulative Premium Test, in which case one of the following
will apply.
(a) During the first 2 Policy Years, the Base Face Amount, any
Supplemental Face Amount, and any Supplementary Benefit riders will
remain in effect;
(b) For the remainder of the No-Lapse Guarantee Period, if any, the Base
Face Amount will remain in effect, but any Supplemental Face Amount
and any Supplementary Benefit riders (unless otherwise stated
therein) will terminate as of the end of the grace period.
The shortfall will be equal to the amount necessary to satisfy the Cumulative
Premium Test as of the date of default, plus the No-Lapse Guarantee Premium for
the next three Policy Months.
10
11. POLICY TERMINATION
This policy terminates on the earliest of the following events:
(a) the end of the grace period for which we have not received the amount
necessary to bring the policy out of default;
(b) surrender of the policy for its Net Cash Surrender Value; or
(c) the death of the Life Insured.
12. REINSTATEMENT
If the policy terminates at the end of a grace period in which you did not make
a required payment, the policy may be reinstated within 3 years from the date
of default. The policy cannot be reinstated if it has been surrendered for its
Net Cash Surrender Value.
The requirements for reinstatement are as follows:
(1) we must receive written request for reinstatement;
(2) we must receive evidence of insurability satisfactory to us for the
Life Insured, and for any insureds covered under any Supplementary
Benefit rider that you wish to reinstate;
(3) we must receive a premium equal to the amount that was required to
bring the policy out of default immediately prior to termination,
plus the amount needed to keep the policy in force to the next
scheduled date for payment of the Planned Premium.
Requirements (2) and (3) must be satisfied within 60 days after the date we
receive written request for reinstatement.
If we approve your request,
(a) the reinstatement date will be the date we receive the required
payment at our Service Office;
(b) any Surrender Charge will be reinstated to the amount it was at the
date of default;
(c) the remaining Surrender Charge Period, if any, will be the same as on
the date of default;
(d) the Policy Value on the date of reinstatement, prior to the crediting
of any Net Premium paid on the reinstatement, will be equal to the
Policy Value on the date the policy terminated.
13. COVERAGE AT AND AFTER AGE 121
Coverage under this policy at and after the Life Insured's Age 121 is subject
to the stipulations stated below.
Death Benefit
Any Supplemental Face Amount will be terminated, thereby reducing the Death
Benefit by such amount. Apart from this change, the Death Benefit will be
determined in the same respect as specified in Section 6.
Premiums and Monthly Deductions
We will not accept any further premium payments. We will cease to take Monthly
Deductions for charges listed in Section 1.
Credited Interest
We will continue to credit interest monthly to the Fixed Account portion of the
Policy Value.
Policy Debt and Default
Loan interest will continue to be charged if there is an outstanding loan when
Monthly Deductions and premium payments cease at the Life Insured's Age 121 The
policy will go into default at any time the Policy Debt exceeds the Policy
Value, and Section 10, Grace Period, and Section 18, Loans, will apply.
Withdrawals
Withdrawals will be allowed at and after the Life Insured's Age 121.
Loans
Loans will be allowed at and after the Life Insured's Age 121.
11 MV1106A
14. POLICY VALUE
Net Premiums Added
When we receive your premium payments at our Service Office, we deduct a
Premium Charge which will not exceed the amount shown in Section 1 and add the
balance remaining (the Net Premium) to your Policy Value. We will do this
before we take any deductions due on that Business Day.
For any premiums received prior to the Issue Date, we will credit interest at
the rate of return then being earned on allocations to the current money market
Investment Account, but will not deduct a Premium Charge. The Premium Charge
will be deducted on the Issue Date, and the balance remaining will be your
Policy Value from which deductions will be taken and to which any subsequent
Net Premiums will be added.
Investment allocation of the initial premium payment and any subsequent premium
payments will be in accordance with the Allocations provision of Section 17.
While a loan exists, we will treat the amounts you pay as premiums unless you
request in writing that they be treated as loan repayments. If you instruct us
to do so, we will first deduct from such payments the amount of accrued
interest on loans and then deduct the amount specified as a loan repayment
before applying any balance remaining as a premium payment.
Monthly Deductions
A deduction is due and will be taken from your Policy Value as of the Policy
Date and as of each applicable Processing Date. Monthly Deductions are
calculated from the Policy Date. If, at your request, we set the Policy Date to
a date which precedes the date on which we receive the initial premium, Monthly
Deductions due for the period prior to receipt of the initial premium will be
taken on the later of the date we receive the initial premium and the date our
underwriters approve issuance of this policy.
Unless we agree otherwise, or you do not have sufficient funds in an account,
we will take Monthly Deductions from the Investment Accounts and the Fixed
Account in the same proportion that the Policy Value in each of these accounts
bears to the Net Policy Value immediately prior to the deduction.
Monthly Deductions are due until the Policy Anniversary on which the Life
Insured reaches Age 121 at which time we will cease to take any further Monthly
Deductions as described in Section 13.
The Monthly Deduction for any Policy Month that will be deducted from your
Policy Value consists of charges (a) through (g) listed below, where:
(a) is the Asset-Based Risk Charge;
(b) is the Face Amount Charge, if any;
(c) is the Administrative Charge;
(d) is the sum of the charges for riders which are part of the policy, if
any, provided such charges are deducted from the Policy Value and are
not based on the Net Amount at Risk and are not a function of other
components of the Monthly Deduction;
(e) is the sum of all charges for Additional Ratings, if applicable;
(f) is the Cost of Insurance Charge, as described below; and
(g) is the sum of the charges for riders which are part of the policy, if
any, provided such charges are deducted from the Policy Value and are
based on the Net Amount at Risk, or are a function of other
components of the Monthly Deduction.
Cost of Insurance Charge
The rates for the Cost of Insurance Charge, as of the Policy Date and
subsequently for each increase in Total Face Amount, are based on the Life
Insured's sex, if applicable, Age, Risk Classification, Net Amount at Risk, and
duration that the coverage has been in force.
The Cost of Insurance Charge for a specific Policy Month is the charge for the
Net Amount at Risk, including any Additional Ratings and any Supplementary
Benefit riders which are part of the policy. The charge for the Net Amount at
Risk is an amount equal to the per dollar cost of insurance rate for that month
multiplied by the Net Amount at Risk, and will be based on our expectations of
future mortality, persistency, investment earnings, expense experience, capital
and reserve requirements, and tax assumptions. The Maximum Monthly Rates at any
age are shown in Section 2 as a rate per $1,000 of Net Amount at Risk. To get
the maximum rate per dollar, the rate shown must be divided by 1,000. Each Cost
of Insurance Charge is deducted in advance of the applicable insurance coverage
for which we are at risk.
12
14. POLICY VALUE (continued)
The Cost of Insurance calculation will reflect any adjustment for the Minimum
Death Benefit.
We review our Cost of Insurance rates from time to time, and may re-determine
Cost of Insurance rates at that time on a basis that does not discriminate
unfairly within any class of lives insured.
Net Amount at Risk
The Net Amount at Risk is the amount determined by subtracting (a) from the
greater of (b) or (c) where:
(a) is the Policy Value at the end of the immediately preceding Business
Day less all charges due on the Policy Date or Processing Date;
(b) (i) is the Total Face Amount divided by the Death Benefit Discount
Factor shown in Section 1 for Death Benefit Option 1; or (ii) is the
Total Face Amount divided by the Death Benefit Discount Factor shown
in Section 1 plus the Policy Value for Death Benefit Option 2; and
(c) is the amount defined in (a) multiplied by the applicable Minimum
Death Benefit Factor for the Life Insured's Age as shown in Section 2.
Other Deductions
We will deduct a Surrender Charge, as detailed in Section 19, if during the
Surrender Charge Period:
(a) you surrender this policy for its Net Cash Surrender Value;
(b) the Base Face Amount decreases;
(c) you do not pay an amount due at the end of the grace period as
described in Section 10, and your policy terminates.
15. LOAN ACCOUNT, FIXED ACCOUNT, INVESTMENT ACCOUNTS
The Policy Value at any time is equal to the sum of the values you have in the
Loan Account, the Fixed Account, and the Investment Accounts.
Loan Account Value
The amount you have in the Loan Account at any time equals:
(a) amounts transferred to it for loans and borrowed loan interest; plus
(b) interest credited to it; less
(c) amounts transferred from it for loan repayment.
For details regarding the Loan Account, see Section 18.
Fixed Account Value
The amount you have in the Fixed Account at any time equals:
(a) Net Premiums allocated to it; plus
(b) amounts transferred to it; plus
(c) interest credited to it; less
(d) amounts deducted from it; less
(e) amounts transferred from it; less
(f) amounts withdrawn from it.
We will determine the rate or rates of interest to be credited to the Fixed
Account. Any additional interest will be credited no less frequently than
annually. Additional interest is nonforfeitable after crediting. The rate or
rates of interest will be determined prospectively and will be based on our
expectations for the Fixed Account's future investment earnings, persistency,
mortality, expense and reinsurance costs and future tax, reserve, and capital
requirements, but in no event will the minimum credited interest be less than
the Fixed Account Annual Rate shown in Section 1. The rate or rates of interest
will be determined on a uniform basis for life insureds with the same timing
and amount of premium, same amount of Policy Debt, and whose policies have been
in force for the same length of time. For all transactions, interest is
calculated from the date of the transaction.
13 MV1306A
15. LOAN ACCOUNT, FIXED ACCOUNT, INVESTMENT ACCOUNTS (continued
Investment Account Value
The amount you have in an Investment Account at any time equals the number of
units in that Investment Account multiplied by the unit value of the
corresponding Subaccount at that time.
The number of units in an Investment Account at any time equals (a) minus (b),
where:
(a) is the number of units credited to the Investment Account because of:
(1) Net Premiums allocated to it; and
(2) amounts transferred to it; and
(b) is the number of units canceled from the Investment Account because
of:
(1) amounts deducted from it;
(2) amounts transferred from it; and
(3) amounts withdrawn from it.
The number of units credited or canceled for a given transaction is equal to
the dollar amount of the transaction, divided by the unit value on the Business
Day of the transaction. See the Unit Value Calculation provision in Section 16
for details on how unit values are determined.
16. SEPARATE ACCOUNT AND SUBACCOUNTS
The Separate Account is authorized to invest in the shares of the John Hancock
Trust and of other management investment companies. Each Subaccount of the
Separate Account purchases shares of corresponding funds of a Series Fund of
the John Hancock Trust or of other management investment companies.
The assets of the Separate Account are the property of the Company. They are
used to support the Policy Values of variable life insurance policies. Income,
gains, and losses of the Separate Account are credited to, or charged against,
the Separate Account without regard to other income, gains and losses. The part
of the assets that is equal to the Investment Account values in respect of all
variable life insurance policies will not be charged with liabilities from any
other business we conduct. We can transfer to our general account Separate
Account assets in excess of the liabilities of the Separate Account arising
under the variable life insurance policies supported by the Separate Account.
Right to Make Changes
We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of the owners of policies such as this or would be
appropriate in carrying out the purposes of such policies. Any changes will be
made only to the extent and in the manner permitted by applicable laws. Also,
when required by law, we will obtain your approval of the changes and approval
from any appropriate regulatory authority.
Examples of the changes we may make include the following:
(a) To operate a Separate Account in any form permitted under the
Investment Company Act of 1940, or in any other form permitted by law.
(b) To take any action necessary to comply with or obtain and continue
any exemptions from the Investment Company Act of 1940.
(c) To create new separate accounts, or to combine any two or more
separate accounts including the Separate Account, or to de-register
the Separate Account under the Investment Company Act of 1940, or to
transfer assets between the Separate Account and other separate
accounts.
(d) To transfer any assets in a Subaccount to another Subaccount, or to
add, combine or remove Subaccounts.
(e) To substitute, for the investment company shares held in any
Subaccount, another class of shares of the investment company or the
shares of another investment company or any other investment
permitted by law.
(f) To make any other necessary technical changes in this policy in order
to conform with any action this provision permits us to take.
14
16. SEPARATE ACCOUNT AND SUBACCOUNTS (continued)
The investment policy of a Subaccount within the Separate Account shall not be
materially changed unless a statement of the change is first filed with any
jurisdiction requiring such a filing. In the event of such a change in
investment policy, and while this policy is in force, you may elect a transfer
to the Fixed Account as described in Section 17.
Unit Value Calculation
We will determine the unit values for each Subaccount as of the end of each
Business Day.
The unit value for each Subaccount was established at $10 for the first
Business Day that an amount was allocated, or transferred to the particular
Subaccount. For any subsequent Business Day, the unit value for that Subaccount
is obtained by multiplying the unit value for the immediately preceding
Business Day by the net investment factor for the particular Subaccount on such
subsequent Business Day.
Net Investment Factor
The net investment factor for a Subaccount on any Business Day is equal to
(a) divided by (b) where:
(a) is the net asset value of the underlying Fund shares held by that
Subaccount as of the end of such Business Day before any policy
transactions are made on that day; and
(b) is the net asset value of the underlying Fund shares held by that
Subaccount as of the end of the immediately preceding Business Day
after all policy transactions were made for that day.
We reserve the right to adjust the above formula for any taxes determined by us
to be attributable to the operations of the Subaccount.
17. ALLOCATIONS AND TRANSFERS
Allocations
We process Net Premiums as described in Section 14. Any Net Premium credited to
the Policy Value prior to the Allocation Date, as shown in Section 1, will
automatically be invested in the current money market Investment Account. On
the Allocation Date (or on the date such Net Premium is received, if later), we
will reallocate the amount in the current money market Investment Account
attributable to any such Net Premium in accordance with the allocation
instructions then in effect. We will allocate all other Net Premiums and
credits to the Fixed Account and to any Investment Accounts in accordance with
the allocation instructions then in effect. Initial allocation instructions are
elected in your application for this policy. With regard to the first and
subsequent Net Premiums, we reserve the right to limit the dollar amount that
may be allocated to any Investment Account or Fixed Account.
You may elect to change your allocation instructions at any time. A change can
be elected by written request or by any telephone or internet notification if a
currently valid written authorization to make changes in this manner is on file
with us. A change will be effective as of the end of the Business Day on which
we receive notice satisfactory to us. Instructions to us must express
allocation percentages as greater than or equal to zero and less than or equal
to 100%, and the sum of the allocation percentages must equal 100%. Allocation
percentages must be whole numbers.
The date for allocation percentage changes will be as of the end of the
Business Day on which we are contacted, as described above, to make the
changes. We reserve the right to impose a limit on the number and frequency of
such changes and to set minimum and maximum percentages that may be allocated
to any Investment Account and the Fixed Account.
Transfers
In the same way as described above in the Allocations provision, instructions
may be given to us at any time while the policy is in force to transfer
portions of your Policy Value among the Investment Accounts and the Fixed
Account. Transfers are subject to the restrictions described below.
15 MV1506A
17. ALLOCATIONS AND TRANSFERS (continued)
General Restrictions on Transfers
You can make up to 2 transfers per calendar month. You can transfer 100% of the
Policy Value to the current money market Investment Account after this limit
has been reached. If such transfer to the current money market Investment
Account is made, no subsequent transfers from the current money market
Investment Account to another Investment Account may be made within 30 days.
There is no charge for the first 12 transfers in any Policy Year. If you make
more than 12 transfers in any Policy Year, a transfer fee not to exceed the
Maximum Transfer Fee shown in Section 1 will apply to each subsequent transfer
in the Policy Year. We will consider all transfer requests made on the same day
as one transfer. Transfers made pursuant to the Asset Allocation Balancer or
Dollar Cost Averaging options described below are not subject to the foregoing
general restrictions. Without our approval, the maximum amount that may be
transferred to or from an Investment Account in any Policy Year may not exceed
the Investment Account Maximum Transfer Amount shown in Section 1.
We and the John Hancock Trust reserve the right to impose additional
restrictions to restrict short-term trading. Additional restrictions that may
be imposed regarding transfers include, but are not limited to restricting:
(a) the number of transfers made during a defined period;
(b) the dollar amount of transfers;
(c) the method used to submit transfers; and
(d) transfers into and out of certain Investment Accounts.
We or the John Hancock Trust may terminate transfer privileges at any time.
Restrictions on Transfers to the Fixed Account
You may transfer the Policy Value from any of the Investment Accounts to the
Fixed Account without incurring any transfer charges, regardless of the number
of transfers previously made, provided such transfers occur:
(a) within 18 months after the Issue Date, as shown in Section 1; or
(b) within the later of (i) or (ii) where (i) is 60 days from the
effective date of a material change in the investment objectives of
the Subaccount, from which the Policy Value will be transferred, and
(ii) is 60 days from the notification date of such change.
Restrictions on Transfers out of the Fixed Account
The maximum amount that you can transfer out of the Fixed Account in any one
Policy Year is limited to the greater of:
(a) the Fixed Account Maximum Transfer Percentage shown in Section 1
multiplied by the value in the Fixed Account at the previous Annual
Processing Date; and
(b) the Fixed Account Maximum Transfer Amount shown in Section 1.
Any transfer out of the Fixed Account may not involve a transfer to the current
money market Investment Account.
Asset Allocation Balancer Transfers
If you elect this option, we will automatically transfer amounts among your
specified Investment Accounts in order to maintain your designated percentage
in each account. We will effect the transfers 6 months after the Policy Date
and each 6 month interval thereafter. When you change your premium allocation
instructions, your Asset Allocation Balancer will change so the two are
identical. This change will automatically occur unless you instruct us
otherwise, or a Dollar Cost Averaging request is in effect. We reserve the
right to cease to offer this option as of 90 days after we send you written
notice.
16
17. ALLOCATIONS AND TRANSFERS (continued)
Dollar Cost Averaging Transfers
If you elect this option, we will automatically transfer amounts each month
from one Investment Account to one or more of the other Investment Accounts or
the Fixed Account. You must select the amount to be transferred and the
accounts. If the value in the Investment Account from which the transfer is
being made is insufficient to cover the transfer amount, we will not effect the
transfer and we will notify you. We reserve the right to cease to offer this
option as of 90 days after we send you written notice.
18. LOANS
At any time while this policy is in force and sufficient loan value is
available, you can get a loan by written request. Each loan must be for at
least the Minimum Loan Amount shown in Section 1. We may require a loan
agreement from you as the policy is the only security for the loan. We may
defer loans as provided by law or as provided in Section 26. Loans, except
those used to pay premiums on policies with us, may not be made if the policy
is in the Grace Period as described in Section 10.
Available Loan Value
The available loan value on any date will be an amount equal to (i) the Net
Cash Surrender Value, less (ii) the Monthly Deductions then being deducted from
the Policy Value multiplied by the number of months remaining in the Policy
Year, less (iii) an amount determined as follows:
(a) Deduct (ii) above from (i) above.
(b) Multiply the result by the difference between the effective annual
rate then being charged on loans and the effective annual rate then
being credited on the Loan Account.
In no event, however, will the available loan value be less than 90% of the Net
Cash Surrender Value. Values will be determined, subject to Section 26, as of
the end of the Business Day on which the loan application is received at our
Service Office.
Loan Account
When you take out a loan, or when loan charges are borrowed, we will transfer
amounts from the Fixed Account and the Investment Accounts, as applicable, into
the Loan Account. Amounts we transfer into the Loan Account cover the loan
principal. A Loan Subaccount exists for each Investment Account and for the
Fixed Account. Amounts transferred to the Loan Account are allocated to the
appropriate Loan Subaccount to reflect the account from which the transfer was
made. We will allocate the amounts to be transferred in the same proportion
that your value in the Subaccounts bears to the new Policy Value, unless you
request otherwise, and our then current rules allow you to designate different
proportions. When an amount to be transferred is allocated to an Investment
Account, we will redeem units of that Investment Account sufficient in value to
cover the allocated amount. These transfers do not count as a transfer for the
purposes of the Transfer provisions described in Section 17.
Interest is credited to the Loan Account and interest is also charged on the
Policy Debt, as described in the Loan Interest Charged and the Loan Interest
Credited provisions.
Loan Interest Charged
Interest will accrue daily on loans. Loan interest will be payable on each
Annual Processing Date and on the date the loan is settled. Interest may be
paid in advance at the equivalent effective rate. In the event that you do not
pay the loan interest charged in any Policy Year, it will be borrowed against
the policy and added to the Policy Debt in arrears at the Policy Anniversary.
We will allocate the amount borrowed for interest payment in the same
proportion that your value in the Fixed Account and the Investment Accounts
bears to the Net Policy Value as of the Policy Anniversary.
17 MV1706A
18. LOANS (continued)
The effective loan interest charged rate will not exceed the Maximum Loan
Interest Charged Annual Rate shown in Section 1. We will increase the Loan
Interest Charged Annual Rate at any time it is determined that the rate being
charged would cause a loan to be taxable under any applicable ruling,
regulation, or court decision. In such case, we will increase the Loan Interest
Charged Annual Rate to an amount that would result in the transaction being
treated as a loan under federal tax law.
Loan interest will continue to be charged, as described in Section 13, when
Monthly Deductions and premium payments cease at the Life Insured's Age 121.
Loan Interest Credited
Loan interest will accrue daily to amounts in the Loan Account. The effective
loan interest rate credited is the difference between the effective loan
interest rate charged and the Loan Interest Credited Differential. The
difference, in terms of dollars, is the cost of keeping a loan. The
differential will not exceed the Maximum Loan Interest Credited Differential
shown in Section 1.
Loan Repayment
You may repay the Policy Debt in whole or in part at any time prior to the
death of the Life Insured and while the policy is in force. When you make a
loan payment or repay a loan, we credit the amount remaining after deduction of
the loan interest charges, specified above, to the Loan Account, and make a
transfer to the Fixed Account and the Investment Accounts, as applicable.
Upon loan repayment, the same proportionate amount of the entire loan as was
borrowed from the Fixed Account will be repaid to the Fixed Account. The
remainder of the loan repayment will be allocated to the appropriate Investment
Accounts in accordance with the allocation instructions then in effect (unless
our then current rules allow you to designate a different allocation with your
repayment and you in fact do so).
Subject to any rider, endorsement, or other provisions, while a loan exists, we
will treat any amounts you pay as premiums, unless you request in writing that
they be treated as loan repayments. However, when a portion of the Loan Account
is allocated to the Fixed Account, we reserve the right, where permitted by
state law, to require that premium payments be applied as loan repayments.
19. SURRENDERS AND WITHDRAWALS
Surrender of the Policy
You may surrender this policy upon written request for its Net Cash Surrender
Value at any date prior to the death of the Life Insured. We will determine the
Net Cash Surrender Value as of the end of the Business Day on which we have
received at our Service Office your written request for full surrender of the
policy (the "Surrender Date"). We will process the request and pay the Net Cash
Surrender Value only if we have not received due proof that the Life Insured
died prior to the Surrender Date. After we receive your written request to
surrender the policy, no insurance will be in force. If you surrender the
policy during the Surrender Charge Period, we will deduct a Surrender Charge
from your Policy Value in calculating the Net Cash Surrender Value. The
Surrender Charge and Surrender Charge Period are shown in Section 1.
Withdrawals
Once per Policy Month after the first Policy Anniversary, you may request a
withdrawal of part of the Net Cash Surrender Value if available. For each
withdrawal we reserve the right to deduct a Withdrawal Fee as shown in
Section 1. Withdrawals are subject to the following conditions:
(a) without our approval, each withdrawal must be for at least the
Minimum Withdrawal Amount shown in Section 1;
(b) after the withdrawal, the remaining Net Cash Surrender Value must be
at least equal to 3 times the Monthly Deductions at the time of the
withdrawal;
(c) we will process the withdrawal, thereby reducing the Policy Value, as
of the end of the Business Day on which we receive your written
request;
(d) we will deduct a pro-rata Surrender Charge if the withdrawal occurs
during the Surrender Charge Period, and the withdrawal results in a
reduction in Base Face Amount;
18
19. SURRENDERS AND WITHDRAWALS (continued)
(e) we will reduce the amount of the withdrawal if the amount in all
accounts is not sufficient to pay the withdrawal plus the Withdrawal
Fee and any pro-rata Surrender Charge;
(f) you may specify which Investment Accounts as well as the Fixed
Account from which we should make the withdrawal. If we do not
receive such instructions, we will allocate the deduction of the
withdrawal and any pro-rata Surrender Charge in the same proportion
that the value in the Fixed Account and the Investment Accounts bears
to the Net Policy Value; and
(g) we will reduce the amount of the withdrawal if it would otherwise
cause the Base Face Amount to fall below the Minimum Base Face Amount
shown in Section 1.
If Death Benefit Option 1 is in effect at the time of the withdrawal, the Total
Face Amount of the policy will be reduced:
(a) by the amount of the withdrawal, if at the time of the withdrawal the
Death Benefit equals the Total Face Amount; otherwise
(b) by the amount, if any, by which the withdrawal (including any
applicable pro-rata Surrender Charge and withdrawal fee) exceeds the
difference between the Minimum Death Benefit and the Total Face
Amount, divided by the applicable Minimum Death Benefit Factor for
the Life Insured's Age as shown in the Table of Rates in Section 2.
Withdrawals will generally reduce the Supplemental Face Amount first, and then
the Base Face Amount. We reserve the right to allow a reduction in Base Face
Amount prior to fully reducing the Supplemental Face Amount. If the Death
Benefit on any given day is equal to the Policy Value times the applicable
Minimum Death Benefit Factor, withdrawals on such day will reduce the Death
Benefit by the amount withdrawn times the applicable Minimum Death Benefit
Factor until the Death Benefit is equal to the Total Face Amount. Your Death
Benefit will continue to be determined in accordance with Sections 6 and 13,
subject to these provisions.
If Death Benefit Option 2 is in effect, an amount equal to any withdrawal and
Withdrawal Fee will be deducted from the Policy Value. Withdrawals will not
affect the Total Face Amount. Your Death Benefit will continue to be determined
in accordance with Sections 6 and 13.
20. OWNER AND BENEFICIARY
Until the Life Insured's death, without the consent of any revocable
beneficiaries, you can receive any amount payable under the policy and exercise
all rights and privileges granted by the policy.
Change of Owner
Until the Life Insured's death, the owner can change the ownership of the
policy by written request. The change will take effect as of the date you
signed the written request. It will not apply to any payments we made or any
action we may have taken before we received your written request.
Trustee Owner
Should the owner be a trustee, payment to the trustee(s) of any amount to which
the trustee(s) is (are) entitled under the policy, either by death or
otherwise, will fully discharge us from all liability under the policy to the
extent of the amount so paid.
Joint Ownership
Two or more owners will own the policy as joint tenants with right of
survivorship, unless otherwise requested on the application or in any
subsequent assignment of the policy. On death of any of the owners, the
deceased owner's interest in the policy passes to the surviving owner(s).
Successor Owner
Upon the owner's death during the Life Insured's lifetime, a named successor
owner will, if then living, have all the owner's rights and interest in the
policy. Until the Life Insured's death, the owner, without the consent of any
beneficiary or any successor owner, can cancel or change the designation of
successor owner. This may be done from time to time by agreement in writing
with us.
19 MV1906A
20. OWNER AND BENEFICIARY (continued)
The following four provisions will apply unless there is a beneficiary
appointment in force that provides otherwise.
Beneficiary Classification
You can appoint beneficiaries for the Insurance Benefit in three classes:
primary, secondary, and final. Beneficiaries in the same class will share
equally in the Insurance Benefit payable to them.
Payment To Beneficiaries
We will pay the Insurance Benefit:
(a) to any primary beneficiaries who are alive when the Life Insured
dies; or
(b) if no primary beneficiary is then alive, to any secondary
beneficiaries who are then alive; or
(c) if no primary or secondary beneficiary is then alive, to any final
beneficiaries who are then alive.
Change Of Beneficiary
Until the Life Insured's death, you can change the beneficiary by written
request unless you make an irrevocable designation. We are not responsible if
the change does not achieve your purpose. The change will take effect as of the
date you signed such request. It will not apply to any payments we made or any
action we may have taken before we received your written request.
Death Of Beneficiary
If no beneficiary is alive when the Life Insured dies, the Insurance Benefit
will be payable to you; or if you are the Life Insured, to your estate. Unless
otherwise provided, if a beneficiary dies before the seventh day after the
death of the Life Insured, we will pay the Insurance Benefit as if the
beneficiary had died before the Life Insured.
21. ASSIGNMENT
Your interest in this policy may be assigned without the consent of any
revocable Beneficiary. Your interest, any interest of the Life Insured and of
any revocable Beneficiary shall be subject to the terms of the assignment, but
such assignment shall not affect the interest of any irrevocable Beneficiary.
We will not be on notice of any assignment unless it is in writing, nor will we
be on notice until a duplicate of the original assignment has been filed at our
Service Office. We assume no responsibility for the validity or sufficiency of
any assignment.
22. MISSTATEMENTS
If the age or sex of the Life Insured was misstated in the application, we
will, if necessary, change the Base Face Amount, any Supplemental Face Amount,
and every other benefit to that which would have been purchased at the correct
age or sex by the most recent Cost of Insurance Charge.
23. SUICIDE
If the Life Insured commits suicide, while sane or insane, within 2 years from
the Issue Date, the policy will terminate on the date of such suicide and we
will pay (in place of all other benefits, if any) an amount equal to the
premiums paid less the amount of any Policy Debt on the date of death and less
any withdrawals.
If the Life Insured commits suicide, while sane or insane, after 2 years from
the Issue Date and within 2 years from:
(a) the date we approve a schedule of increasing Supplemental Face Amount;
(b) the effective date of any unscheduled increase in Supplemental Face
Amount; or
(c) the date of an increase in Death Benefit resulting from any payment
of premium we are authorized to refuse under Section 4
the benefits payable under the policy will not include the amount of such Death
Benefit increase but will include the amount of premium that pertains to the
increase.
We reserve the right under this provision to obtain evidence of the manner and
cause of death of the Life Insured.
20
24. INCONTESTABILITY
This policy shall be incontestable after it has been in force during the
lifetime of the Life Insured for two Policy Years from the Issue Date, except
for fraud or policy termination, or any provision for reinstatement or policy
change requiring evidence of insurability.
In the case of reinstatement or any policy change requiring evidence of
insurability, the incontestable period shall be two years from the effective
date of such reinstatement or policy change. However, for a policy change
involving the approval of a schedule of increasing Supplemental Face Amount,
the incontestable period shall be two years from the date we approve such
schedule.
Any premium payment which we accept subject to insurability, and any increase
in the Death Benefit resulting from such payment, shall be considered a policy
change for purposes of this Section.
25. THE CONTRACT
The written application for the policy is attached at issue. The entire
contract between the applicant and us consists of the policy, such application,
and any riders and endorsements. However, additional written requests or
applications for policy changes or acceptance of excess payment may be
submitted to us after issue and such additional requests may become part of the
policy. All statements made in any application shall, in the absence of fraud,
be deemed representations and not warranties. We will use no statement made by
or on behalf of the Life Insured to defend a claim under the policy unless it
is in a written application.
An exchange of this policy for a new policy on a different plan may be made by
agreement between you and us in accordance with our published rules in effect
at that time.
We reserve the right to make any changes necessary in order to keep this policy
in compliance with any changes in federal or state tax laws. Other changes in
this policy may be made by agreement between you and us. Only the President,
Vice President, the Secretary, or an Assistant Secretary of the Company has
authority to waive or agree to change in any respect any of the conditions or
provisions of the policy, or to extend credit or to make an agreement for us.
26. RIGHT TO POSTPONE PAYMENT OF BENEFITS
We reserve the right to postpone the payment of Net Cash Surrender Values,
withdrawals, policy loans, and the portion of the Insurance Benefit that
depends on Investment Account values, for any period during which:
(a) the New York Stock Exchange is closed for trading (other than
customary week-end and holiday closings), or trading on the Exchange
is otherwise restricted;
(b) an emergency exists as defined by the Securities and Exchange
Commission (SEC), or the SEC requires that trading be restricted; or
(c) the SEC permits a delay for the protection of policyholders.
We also reserve the right to postpone payments, including loans, for up to 6
months if such payments are based on values that do not depend on the
investment performance of the Investment Accounts.
In addition, we may deny transfers under the circumstances stated in (a),
(b) and (c) above, and in the Allocations and Transfers provision.
27. CLAIMS OF CREDITORS
The proceeds and any income payments under the policy will be exempt from the
claims of creditors to the extent permitted by law. These proceeds and payments
may not be assigned or withdrawn before becoming payable without our agreement.
21 MV2106A
28. REPORTS TO OWNER
Within 30 days after each Policy Anniversary, we will send you a report at no
charge showing:
(a) the Death Benefit;
(b) the Policy Value;
(c) the current allocation in the Fixed Account, the Loan Account, and
each of the Investment Accounts;
(d) the value of the units in each chosen Investment Account;
(e) the Loan Account balance and loan interest charged since the last
report;
(f) the premiums paid and policy transactions for the year; and
(g) any further information required by law.
Upon request, we will provide you with a report of projected future values. We
will provide one report annually without charge. For additional reports you
request, we reserve the right to charge a reasonable fee, not to exceed $50.
29. HOW VALUES ARE COMPUTED
We provide Cash Surrender Values that are at least equal to those required by
law. We base minimum Cash Surrender Values on the Commissioners 2001 Standard
Ordinary Sex Distinct ANB Aggregate Ultimate Mortality Tables, with substandard
ratings as applicable. However, if this policy is issued on a unisex basis, we
base minimum Cash Surrender Values on the Commissioners 2001 Standard Ordinary
Male Mortality Table, with substandard ratings as applicable. We also use these
tables in determining Guaranteed Maximum Cost of Insurance Charges. Reserves
will be at least as great as the minimum required by law.
A detailed statement of the method of computing the values of this policy has
been filed with the insurance department of the state shown in Section 1.
22
Communications about this policy may be sent to the Company's Service Office,
which is currently at [197 Clarendon Street, Boston, Massachusetts 02117. Our
toll-free number is 1-800-521-1234].
Flexible Premium Variable Life Insurance policy
Death Benefit payable at death of Life Insured
Not eligible for dividends
Benefits, Premiums, and the Risk Classification are shown in Section 1.
06MAJPVUL MVBP06A
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
A Stock Company
ENHANCED YIELD FIXED ACCOUNT RIDER
This rider is attached to and made a part of your policy. It will take effect
at the same time as your policy and will remain in force while the policy
remains in force. Should any provisions in the policy conflict with this rider,
the provisions of this rider will prevail.
ENHANCED YIELD FIXED ACCOUNT
This rider adds the Enhanced Yield Fixed Account to the policy, such account
being in addition to the account referred to in the policy as the Fixed
Account. References in the policy to the Fixed Account will also apply to the
Enhanced Yield Fixed Account except to the extent of the differences that apply
to the Enhanced Yield Fixed Account as described in this rider.
The policy describes how we determine the rate or rates of interest to be
credited to the Fixed Account. We will determine the rate or rates of interest
to be credited to the Enhanced Yield Fixed Account in the same way. The minimum
credited interest rate for both these accounts will never be less than the
Fixed Account Annual Rate shown in Section 1 of the policy. However, for as
long as we set credited interest rates at more than the minimum rate, we will
set credited rates for the Enhanced Yield Fixed Account that are greater than
the credited rates we set for the Fixed Account.
Net Premiums will be allocated to the Enhanced Yield Fixed Account, the Fixed
Account, or to any Investment Account according to your allocation instructions.
RESTRICTIONS ON TRANSFERS OUT OF THE ENHANCED YIELD FIXED ACCOUNT
The maximum amount that you can transfer out of the Enhanced Yield Fixed
Account in any one Policy Year, whether it is to the Fixed Account, to one or
more Investment Accounts, or to a combination of both, is the greater of
(a) $2,000, or (b) 10% multiplied by the value in the Enhanced Yield Fixed
Account on the policy's previous Annual Processing Date.
Any transfer out of the Enhanced Yield Fixed Account may not involve a transfer
to any money market Investment Account.
NO RIDER CHARGE
There is no charge for this rider and the rider has no effect on the premiums
payable for the policy. Therefore, this rider is automatically attached to and
made part of your policy at issue without you having to elect the rider.
TERMINATION
This rider terminates on the date the policy terminates.
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
/s/ James P. O'Malley
President
06EYFAR
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
A Stock Company
SUPPLEMENTARY BENEFIT
EXTENDED NO-LAPSE GUARANTEE RIDER
This rider is part of the policy to which it is attached in consideration of
the application and charges for this rider. It takes effect at the same time as
your policy. Except where the rider provides otherwise, it is subject to all
the provisions of your policy. While this rider is in effect, we reserve the
right to restrict availability of certain Investment Accounts, in which case no
transfers or payments may be allocated to such restricted Investment Accounts.
BENEFIT PERIOD
This benefit applies to your policy for the duration shown in the Policy
Specifications section for this rider.
BENEFIT COST
The monthly cost for this benefit is included as part of the Monthly Deduction
under your policy. It is shown in the Policy Specifications section for this
rider.
BENEFIT
This benefit extends the No-Lapse Guarantee Period provided by your policy for
the Base Face Amount. The Extended No-Lapse Guarantee Period applicable to the
policy is shown in the Policy Specifications section for this rider. Provided
this benefit is in effect, we guarantee that during this extended period, your
policy will not go into default if the Net Cash Surrender Value falls to zero
or below provided the policy satisfies an Extended Cumulative Premium Test as
described below.
EXTENDED CUMULATIVE PREMIUM TEST
This test will be performed on any Processing Date during the Extended No-Lapse
Guarantee Period that your policy would otherwise be in default in the absence
of this rider. Your policy will satisfy the test if the sum of the premiums
received, less any Policy Debt, and less any withdrawals, taken on or before
the date of any test; is equal to or greater than the sum of the monthly
Extended No-Lapse Guarantee Premiums due from the Policy Date to the date of
the test. The test will exclude any period during which the Life Insured was
totally disabled if the Total Disability Waiver Of Monthly Deductions Rider
Supplementary Benefit is included in the policy. The Extended No-Lapse
Guarantee Premium is shown as an annualized amount in the Table of Values in
Section 1 of the policy. The monthly Extended No-Lapse Guarantee Premium is one
twelfth of this annualized amount.
The Extended No-Lapse Guarantee Premium may change if any of the following
changes occur under your policy:
(a) you add, terminate, or change a Supplementary Benefit rider;
(b) you change the Death Benefit Option under your policy;
(c) there is a change in the Base Face Amount or the Supplemental Face
Amount of the policy; or
(d) there is a change in the Life Insured's Risk Classification.
We will inform you of any change to the Extended No-Lapse Guarantee Premium
resulting from any such change. The revised premium will be effective from the
date of the change. For the purpose of performing the Extended Cumulative
Premium Test, we will use the Extended No-Lapse Guarantee Premiums in effect as
of the Policy Date up to the date of the change, including any revised premiums
in effect as of the date of a prior change.
(continued)
05ENLGR 1
GRACE PERIOD
The Grace Period provision of the policy applies to this rider as well.
However, while this rider is in effect, if the policy is in the Extended
No-Lapse Guarantee Period, and the Extended Cumulative Premium Test has been
met, then the Base Face Amount will remain in effect, but any Supplemental Face
Amount and any Supplementary Benefit riders (unless otherwise stated therein)
will be subject to termination. The amount required to maintain any
Supplemental Face Amount and any applicable Supplementary Benefit riders is
equal to the Default Payment specified in the Grace Period provision of the
policy. If a payment at least equal to the Default Payment is not received by
the end of the Grace Period, then any Supplemental Face Amount, and any
Supplementary Benefit riders (unless otherwise stated therein), will cease to
be in effect and will be terminated from the policy.
Failure to Meet Extended Cumulative Premium Test
If the policy is in the Extended No-Lapse Guarantee Period, and the Extended
Cumulative Premium Test has not been met, then the Base Face Amount, any
Supplemental Face Amount, and any Supplementary Benefit riders will go into
default, as described in the Grace Period provision of the policy. The Grace
Period Duration and Default Payment provisions described in the policy will
apply. In lieu of the Default Payment, however, you may pay the shortfall
needed to meet the Extended Cumulative Premium Test, in which case the Base
Face Amount will remain in effect, but any Supplemental Face Amount and any
Supplementary Benefit riders (unless otherwise stated therein) will terminate
as of the end of the Grace Period.
The shortfall will be equal to the amount necessary to satisfy the Extended
Cumulative Premium Test as of the date of default, plus the Extended No-Lapse
Guarantee Premium for the next three Policy Months.
TERMINATION
This rider terminates at the earliest of:
(a) the end of the Extended No-Lapse Guarantee Period shown in the Policy
Specifications section for this rider;
(b) the end of the Grace Period for which you have not paid the amount
necessary to bring this benefit out of default;
(c) the date your policy terminates;
(d) the date we receive your written request for termination of this
rider.
This rider cannot be reinstated after it terminates.
Signed for the Company by:
/s/ John DesPrez III
05ENLGR 2
1. POLICY SPECIFICATIONS (continued) - Policy [12 345 678]
SUPPLEMENTARY BENEFITS
Benefit Extended No-Lapse Guarantee Rider
Life Insured [John J. Doe]
Age at Effective
Date [35]
Effective Date [May 1, 2005]
Extended No-Lapse Next [66] Policy Years following the No-Lapse Guarantee
Guarantee Period Period applicable to the Base Face Amount, [until Life
Insured's attained age 121]
Extended No-Lapse
Guarantee Premium $[4,034.00]
Monthly Benefit
Cost $[15.00]
Sex [male]
Risk Classification [non-smoker, standard class]
Additional Ratings [not applicable]
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
SUPPLEMENTARY BENEFIT
ACCELERATION OF LIFE INSURANCE DEATH BENEFIT FOR QUALIFIED LONG TERM CARE
SERVICES RIDER
We agree, subject to the terms and conditions of this rider and the policy, to
make available the payments described below, as an acceleration of the Death
Benefit, in order to reimburse expenses as a result of the Life Insured
receiving "Qualified Long Term Care Services" as defined in the Definitions
section of this rider. Such payments shall reduce the Death Benefit payment
which would otherwise be payable under the policy upon the death of the Life
Insured. Any benefits payable under a Supplementary Benefit rider are excluded
from acceleration for purposes of determining benefits under this rider.
This rider is made a part of the policy to which it is attached, in
consideration of the application, a copy of which is attached to and made a
part of the policy, and the charges for this rider, which are shown in the
Policy Specifications section for this rider. If the policy is variable life
insurance, then benefits for this rider may vary in accordance with the
investment experience of a separate account. Also, if the policy contains a
Total Disability Waiver of Monthly Deductions rider and we waive monthly
deductions on the policy in accordance with that rider, we will waive the
deduction for this rider as well. This rider takes effect at the same time as
the policy, subject to the terms, conditions, and limitations provided herein.
This rider is not eligible for dividends.
FEDERAL INCOME TAX TREATMENT OF THIS RIDER
Long Term care insurance was granted favorable federal income tax treatment in
the Health Insurance Portability and Accountability Act of 1996 ("Act").
Contracts meeting certain criteria outlined in this Act are eligible for this
treatment. To the best of our knowledge, we have designed this rider to meet
the requirements of this law. This rider is intended to be a qualified long
term care insurance contract under Internal Revenue Code section 7702B(b). The
benefits provided by the policy are intended to be excludable from federal
gross income under sections 7702B and 101(g), as may be amended from time to
time. If, in the future, it is determined that this rider does not meet these
requirements, we will make reasonable efforts to amend the rider if we are
required to do so in order to comply. We will offer you an opportunity to
receive these amendments. The charges for this rider may be distributions for
income tax purposes. If you have any questions concerning the tax implications
of this rider, you should consult with an attorney or qualified tax advisor.
THIRTY-DAY FREE LOOK
If you are not completely satisfied with this rider for any reason, you may
return it within 30 days from the date it was delivered to you. To return the
rider, mail or deliver it to the agent who sold it to you, to our Service
Office, or to the agency office through which it was delivered. We will then
reverse any charges applicable to this rider, and the rider will be treated as
if it had never been issued.
NOTICE TO BUYER
This rider may not cover all of the costs associated with long term care that
the Life Insured incurs during the period of coverage. You are advised to
review all benefit limitations carefully. THIS IS NOT A MEDICARE SUPPLEMENT
POLICY.
CAUTION
The issuance of this rider is based upon our issuance of the policy and the
Life Insured's responses to the questions on the application for this rider. A
copy of the application for the policy and the application for this rider is
attached to the policy. If the Life Insured's answers are not complete, true,
and correctly recorded, we have the right (in addition to any rescission rights
described in the contract) to deny benefits or rescind the rider subject to the
Time Limit on Certain Defenses provision. The best time to clear up any
questions is now, before a claim arises! To contact us, write to: [John Hancock
Life Insurance Company (U.S.A.), John Hancock Place, P.O. Box 717, Boston,
Massachusetts, 02117, or call us at 1-800-543-6415].
NONCANCELLABLE
You have the right to continue this rider for as long as you live or until the
rider is terminated in accordance with the Termination provision.
05LTCR 1
DEFINITIONS
Accelerated Benefit(s) means the benefits paid under this rider in order to
reimburse expenses as a result of the Life Insured receiving Qualified Long
Term Care Services. The Death Benefit of the underlying policy is reduced by
the amount of each benefit paid.
Activities of Daily Living means the following activities:
(a) Bathing which means washing oneself by sponge bath, or in either a
tub or shower, including the task of getting in or out of the tub or
shower;
(b) Continence which means the ability to maintain control of bowel and
bladder function; or, when unable to maintain control of bowel or
bladder function, the ability to perform associated personal hygiene,
including caring for a catheter or colostomy bag;
(c) Dressing which means putting on and taking off all items of clothing
and any necessary braces, fasteners, or artificial limbs;
(d) Eating which means feeding oneself by getting food to his/her body
from a receptacle (such as a plate, cup or table) or being fed by a
feeding tube or intravenously. Eating does not include preparing a
meal;
(e) Toileting which means getting to and from the toilet, getting on and
off the toilet, and performing associated personal hygiene;
(f) Transferring which means moving into or out of a bed, chair, or
wheelchair.
Adult Day Care means a program that provides a protective environment and
preventive, remedial and restorative services for part of the 24-hour day.
Adult Day Care Center means a place that is licensed to provide Adult Day Care
by the jurisdiction in which the services are provided. If licensing is not
required, Adult Day Care Center means a place that provides Adult Day Care, has
enough full-time staff to maintain no more than an 8 to 1 client-staff ratio,
and has established procedures for obtaining appropriate aid in the event of a
medical emergency.
Assisted Living Facility means a facility which:
(a) is licensed according to the laws of the jurisdiction in which it is
located; or
(b) if licensing is not required, meets all of the following:
(i) has a 24-hour on-site staff to provide Custodial Care;
(ii) provides Custodial Care services for a charge, including room
and board;
(iii) has established procedures for obtaining appropriate aid in
the event of a medical emergency
(iv) provides 3 meals a day and can accommodate special dietary
needs;
(v) it provides, at a minimum, assistance with Bathing and
Dressing; and
(vi) provides Custodial Care services to 10 or more persons.
Examples of such facilities may include Alzheimer facilities or Assisted Living
Facilities that are either free standing facilities or part of a life-care
community. They may also be met by some personal care and adult congregate care
facilities.
An Assisted Living Facility does not mean:
. a hospital or clinic;
. a rest home (a home for the aged or a retirement home) which does not, as
its primary function, provide Custodial Care;
. the home of the Life Insured; or
. a facility for the treatment of alcoholism, drug addiction, or mental
illness.
Calendar Month means the consecutive day period (e.g., 28, 29, 30 or 31-day
period, as the case may be) that begins at 12:01 a.m. on the first day of a
month.
Calendar Week means the 7-day consecutive period that begins on Sunday at 12:01
a.m.
05LTCR 2
Cognitive Impairment means a deficiency in a person's short-term or long term
memory; orientation as to person, place, and time; deductive or abstract
reasoning; or judgment as it relates to safety awareness. The need for
substantial supervision due to the presence of Cognitive Impairment must be
established by any of the following:
(a) the Life Insured has a score of 6 or more wrong on the Short Portable
Mental Status Questionnaire (SPMSQ) or its current equivalent;
(b) the Life Insured exhibits behavioral problems which require
supervision in order to protect him or herself or others, and has a
score of 4 or more wrong on the SPMSQ or its current equivalent;
(c) the Life Insured requires verbal supervision or cueing in order to
perform at least two of the Activities of Daily Living more than half
of the times that those same Activities of Daily Living are performed
in a Calendar Week.
Custodial Care means care ordered by a Physician due to the Life Insured's
Cognitive Impairment or need for assistance in the Activities of Daily Living.
Date of Service means a day that the Life Insured is eligible for benefits
under this rider (including Dates of Service during the Elimination Period) on
which the Life Insured:
. is a resident in a Nursing Home or an Assisted Living Facility;
. receives Home Health Care or Hospice Care; or
. receives services covered under this rider that are Medicare eligible
(for which benefits are not payable under this rider).
Elimination Period (waiting period) means the number of Dates of Service that
would otherwise be covered by this rider, for which we will not pay benefits.
The Elimination Period is equal to 100 Dates of Service. Only one complete
Elimination Period needs to be satisfied while the policy is in force.
The Elimination Period starts on the first Date of Service. No Date of Service
may be counted as more than one day towards the satisfaction of the Elimination
Period. The Dates of Service used to satisfy the Elimination Period do not need
to be consecutive and may be accumulated under separate claims. We will not pay
benefits for charges during the Elimination Period. Days that the Life Insured
receives only Respite Care will not count toward the satisfaction of the
Elimination Period.
If the Life Insured receives Home Health Care for one or more days in a
Calendar Week, we will apply seven days toward the satisfaction of the
Elimination Period, except if Respite Care is being received during the
Calendar Week. If Respite Care is received during a Calendar Week, only the
actual Dates of Service other than Respite Care will be applied toward
satisfaction of the Elimination Period. Please note that there will be no
credit for days which occurred before the first Date of Service. (Calendar Week
means the seven consecutive day period that begins on Sunday at 12:01 a.m.)
Face Amount means, for purposes of this rider, either Face Amount or Total Face
Amount, depending on which term is used in the underlying policy.
Home Health Care means services (including Hospice and Respite Care), the
primary function of which is to provide professional care for the life
insured's benefit that meet one of the following requirements:
(a) they are provided by a Home Health Care Provider or an Adult Day Care
Center;
(b) they are performed by a home health aide whose services consist
primarily of assisting the life insured in the Activities of Daily
Living or because of a Cognitive Impairment.
Home Health Care also includes Incidental Homemaker Services.
Home Health Care Provider means either a Home Health Agency or an Independent
Home Health Care Provider that provides Home Health Care. A Home Health Care
Provider cannot be a member of the Life Insured's Immediate Family or an
individual who normally resides in the Life Insured's Home.
. A Home Health Agency must meet one of the following requirements:
. it is licensed as a Home Health Agency by the jurisdiction in which
the Home Health Care is provided; or
. it possesses one of the following certifications in the jurisdiction
in which the Home Health Care is provided - Medicare Certification;
Joint Commission of Accreditation of Health Care Organizations (JCAHO)
Certification; or Community Health Accreditation Program (CHAP)
Certification; or
. it provides Home Health Care through 2 or more employees of an
organization that is in the business of providing Home Health Care
according to the laws of the jurisdiction in which it is located.
05LTCR 3
. An Independent Home Health Care Provider means a care provider not
employed by a Home Health Agency who meets one of the following
requirements. He or she:
. is a duly licensed registered nurse, licensed vocational nurse,
licensed practical nurse, registered physical therapist, registered
occupational therapist, registered speech therapist, registered
respiratory therapist, licensed social worker, or registered
dietitian; or
. must be currently qualified as a certified home health aide or
certified nurse aide; or
. must be currently included in a government sponsored nurse aide
registry.
. In the case of a home health aide or nurse aide who does not meet one of
the standards set forth above, such aide must present written proof of
completion of an established training course which must include training
in safely assisting persons with the Activities of Daily Living.
Hospice Care means a program for meeting the Life Insured's care needs if he or
she is terminally ill. Terminally ill means there is no reasonable prospect of
cure and the Life Insured has a life expectancy, as estimated by a Physician,
of 12 months or less. Hospice Care must be provided by an organization that is
licensed to provide such care according to the laws of the jurisdiction in
which it is providing such care. Hospice Care is limited to those services
received by the Life Insured.
Immediate Family means the Life Insured's spouse or Partner, or the following
relatives of the Life Insured or the Life Insured's spouse or Partner: parents,
grandparents, siblings, children, stepchildren, grandchildren, and their
respective spouses. For purposes of this definition, "Partner" means the
unmarried person who is not related to you with whom you have lived in a
committed relationship for at least 5 years prior to the date you applied for
this rider. This person is the individual you named in your application.
Incidental Homemaker Services means services incidental to care with the
Activities of Daily Living or because of a Cognitive Impairment which are
included in a Plan of Care and which provide one of more of the following
non-medical support services necessary for the Life Insured to remain in his or
her home: meal preparation; laundry; light housekeeping; supervising
self-administration of medication; and shopping for food, medical supplies or
medication. Incidental Homemaker Services must be provided during the same
visit and by the same individual providing care with the Activities of Daily
Living or because of a Cognitive Impairment.
Independent Home Health Care Provider means a care provider not employed by a
Home Health Agency who meets one of the following requirements:
(a) is a duly licensed registered nurse, licensed vocational nurse,
licensed practical nurse, physical therapist, occupational therapist,
speech therapist, respiratory therapist, licensed social worker, or
registered dietitian;
(b) must be currently qualified as a certified home health aide or
certified nurse aide;
(c) must be currently included in a government sponsored nurse aide
registry;
(d) in the case of a home health aide or nurse aide who does not meet one
of the standards set forth above, such aide must present written
proof of completion of an established training course which must
include training in safely assisting persons with the Activities of
Daily Living.
Licensed Health Care Practitioner means a Physician, a registered nurse (R.N.),
a licensed social worker, or any other individual who meets the requirements as
may be prescribed by the U.S. Secretary of the Treasury. The Life Insured may
select any Licensed Health Care Practitioner of choice. However, a Licensed
Health Practitioner may not be a member of the Life Insured's immediate family.
Maximum Monthly Benefit Amount means the Death Benefit as of the date we
approve your request for Accelerated Benefits and the Elimination Period is
completed, multiplied by the Monthly Acceleration Percentage (shown in the
Policy Specifications section for this rider). The Maximum Monthly Benefit
Amount for any partial calendar month will be reduced proportionately for the
number of days in the month for which no monthly benefit payments are payable.
A new Maximum Monthly Benefit Amount will be calculated for each new Period of
Care, starting with the old Maximum Monthly Benefit Amount described above,
reduced by an amount proportionate to the amount of any reduction in Death
Benefit prior to the effective date of a new Period of Care. A reduction in
Death Benefit includes, but is not limited to, withdrawals, decreases in Face
Amount, or acceleration of the Death Benefit for terminal illness.
Medicaid means the reimbursement system under Title XIX of the Federal Social
Security Act, as amended.
Medicare means the reimbursement system under Title XVIII of the Federal Social
Security Act, as amended.
05LTCR 4
Nursing Care means skilled or intermediate care provided by one or more of the
following health care professionals: registered nurse, licensed vocational
nurse, licensed practical nurse, physical therapist, occupational therapist,
speech therapist, respiratory therapist, medical social worker or registered
dietitian.
Nursing Home means a facility which:
(a) is licensed and operated to provide Nursing Care for a charge
(including room and board), according to the laws of the jurisdiction
in which it is located; and
(b) has services performed by or under the continual, direct and
immediate supervision of a registered nurse, licensed practical nurse
or licensed vocational nurse, on-site twenty-four (24) hours per day.
A Nursing Home may be a freestanding facility or it may be a distinct part of a
facility, including a ward, wing, or swing-bed of a hospital or other facility.
Nursing Home does not mean:
(a) a hospital or clinic;
(b) a rehabilitation hospital or facility;
(c) an Assisted Living Facility;
(d) a rest home (a home for the aged or a retirement home) which does
not, as its primary function, provide Custodial Care;
(e) the Life Insured's primary place of residence, including living
quarters in a continuing care retirement community or similar entity;
(f) a facility for the treatment of alcoholism, drug addiction, or mental
illness.
Period of Care means the period of time that:
(a) begins with a Date of Service; and
(b) ends on the earliest of:
(i) the date we receive written notice that the Life Insured is no
longer receiving Qualified Long Term Care Services;
(ii) the date we receive a written request from you to discontinue
payment of Accelerated Benefits;
(iii) the date we determine that you are no longer eligible for the
payment of benefits, in accordance with the terms of this
rider; and
(iv) the date of the Life Insured's death.
Physician means any person bearing the designation of Medical Doctor (M.D.) or
Doctor of Osteopathy (D.O.) practicing within the scope of his or her license
issued by the jurisdiction in which the services are rendered.
Plan of Care means a written plan for long term care services designed
especially for the Life Insured. This Plan of Care must specify the type,
frequency and providers of all the services the Life Insured requires; and be
in accordance with accepted medical and nursing standards of practice. A
Licensed Health Care Practitioner must approve a Plan of Care.
A Plan of Care must be updated as the Life Insured's condition and needs
change. We must be provided with a revised Plan of Care each time it is
updated. We reserve the right to request periodic updates regarding the Plan of
Care, but not more frequently than once every 30 days. No more than one Plan of
Care may be in effect at a time.
Qualified Long Term Care Services means the actual charges made by:
(a) a Nursing Home or Assisted Living Facility for room, board and care
services (such care services being Nursing Care, Custodial Care,
Hospice Care and Respite Care);
(b) a Home Health Care Provider for care and services covered by this
rider; and
(c) an Adult Day Care Center for attendance at such Adult Day Care Center.
Qualified Long Term Care Services do NOT include any of the following:
(a) Physician's charges;
(b) hospital and laboratory charges;
(c) prescription or non-prescription medication;
(d) medical supplies;
05LTCR 5
(e) durable medical equipment;
(f) transportation; and
(g) items and services furnished for the beautification, comfort,
convenience, or entertainment of the Life Insured.
Respite Care means Nursing Care, Custodial Care or Hospice Care provided to the
Life Insured when those who normally care for the Life Insured at home
(generally family members, friends, neighbors, etc.) need relief from helping
the Life Insured to perform the Activities of Daily Living. Such care includes
confinement in a Nursing Home or an Assisted Living Facility, or Home Health
Care.
Substantial Assistance means the Life Insured need hands-on or standby
assistance more than half of the time the Activity of Daily Living is performed
in a Calendar Week. Hands-on assistance means the physical assistance of
another person without which the Life Insured would be unable to perform the
Activity of Daily Living. Standby assistance means the presence of another
person within arm's reach of the Life Insured that is necessary to prevent, by
physical intervention, injury to the Life Insured while the Life Insured is
performing the Activity of Daily Living.
Substantial Supervision means the Life Insured needs continual supervision due
to Cognitive Impairment (which may include cueing by verbal prompting,
gestures, or other demonstration) by another person that is necessary to
protect the Life Insured from threats to the Life Insured's health or safety
(such as may result from wandering).
ELIGIBILITY FOR PAYMENT OF BENEFITS
Subject to the conditions and limitations of this rider, you are eligible for
Accelerated Benefits under this rider if the Life Insured:
(a) needs Substantial Assistance to perform at least two of the
Activities of Daily Living; or
(b) requires substantial supervision to protect himself or herself from
threats to health and safety due to the presence of a Cognitive
Impairment.
LONG TERM CARE BENEFITS
Monthly Accelerated Benefits. Subject to the conditions, limitations, and
exclusions described herein, we will make a monthly payment of Accelerated
Benefits in an amount not to exceed the lesser of:
(a) the charges incurred by the Life Insured for Qualified Long Term Care
Services; and
(b) the Maximum Monthly Benefit Amount, provided we receive evidence
satisfactory to us that the Life Insured is:
(i) confined in a Nursing Home or an Assisted Living Facility and
is receiving Nursing Care, Custodial Care, Hospice Care or
Respite Care; or
(ii) receiving Home Health Care, Hospice Care, or Respite Care in
his or her home, a rest home, or in an Adult Day Care Center.
In addition, if your stay in a Nursing Home or Assisted Living Facility is
interrupted for any reason while you are otherwise still eligible for benefits
under this rider, we will continue to make such payment for up to 10 days in
any Policy Year in order to reserve your bed during your absence. Any benefit
paid under this provision will accelerate the Death Benefit to the same extent
as if your stay in a Nursing Home or Assisted Living Facility was not
interrupted for any reason.
The monthly payment of the Accelerated Benefit is based upon a Calendar Month
time period and the Accelerated Benefit we have approved for that period.
A portion of each approved monthly Accelerated Benefit amount will be used to
repay a portion of any Policy Debt under the policy (see the Loans section of
this rider for details) and will reduce the monthly payment of Accelerated
Benefits for that period.
Withdrawals, Reduction in Face Amount, Acceleration of Death Benefit (for
terminal illness). Any withdrawals, reductions in Face Amount (other than
reductions in Face Amount arising solely under the provisions of this rider),
or acceleration of the Death Benefit due to terminal illness, during a Period
of Care under this rider, reduces the Maximum Monthly Benefit Amount, resulting
in a new Maximum Monthly Benefit Amount, as determined by us. Such reduction
will be effective as of the effective date of the withdrawal, reduction in Face
Amount, or acceleration of the Death Benefit. The new Maximum Monthly Benefit
Amount is (a) times (b), where:
(a) is the Maximum Monthly Benefit Amount then in effect; and
(b) is the new Death Benefit divided by the Death Benefit then in effect.
05LTCR 6
Further, if the policy imposes a charge for a reduction in Face Amount, and a
reduction in Face Amount arises solely under the provisions of this rider, such
charge will be waived.
You may also have access to (i) information for you or a member of your family,
regarding long term care needs and questions, either directly or through a
third party arrangement, and (ii) assistance that may help you identify various
long term care service agencies available in your community.
LIMITATIONS ON OR CONDITIONS FOR ELIGIBILITY FOR PAYMENT OF BENEFITS
Conditions. To receive Accelerated Benefits under this rider:
(a) the Elimination Period must have been satisfied;
(b) the Life Insured must receive Qualified Long Term Care Services
covered under this rider and which are specified in a Plan of Care;
(c) you must submit to us a current Plan of Care and written Proof of
Loss for the Life Insured; and
(d) we must determine that you are eligible for the payment of benefits
under this rider.
You must ALSO provide us with one of the following written certifications:
(a) A Licensed Health Care Practitioner must certify that the Life
Insured is unable to perform at least two Activities of Daily Living
due to the loss of functional capacity for a period expected to last
at least 90 days.
(b) A Licensed Health Care Practitioner must certify that the Life
Insured requires substantial supervision to protect himself or
herself from threats to health and safety due to the presence of a
Cognitive Impairment.
Such written certification must be renewed and submitted to us every 12 months,
otherwise payment of Accelerated Benefits under this rider will discontinue on
the first day following the expiry of the 12 month period.
Limitations. We will not pay Accelerated Benefits for Qualified Long Term Care
Services incurred during the Elimination Period, or for any care, treatment, or
charges described in the Non-Duplication of Benefits or Exclusions provisions,
below. We will not pay Accelerated Benefits in excess of the Maximum Monthly
Benefit Amount for any Calendar Month during any Period of Care, and may modify
coverage under this rider following reinstatement.
Exclusions. Qualified Long Term Care Services does not include care or
treatment:
(a) for intentionally self-inflicted injury;
(b) required as a result of alcoholism or drug abuse (unless drug abuse
was a result of the administration of drugs as part of treatment by a
Physician);
(c) due to war (declared or undeclared) or any act of war, or service in
any of the armed forces or auxiliary units;
(d) due to participation in a felony, riot or insurrection;
(e) for which no charge is normally made in the absence of insurance;
(f) provided by a member of the Life Insured's Immediate Family;
(g) provided outside the fifty United States and the District of Columbia.
Non-Duplication of Benefits. Qualified Long Term Care Services does not include
charges covered under any of the following:
(a) Medicare (including amounts that would be reimbursable but for the
application of a deductible or coinsurance amounts);
(b) any other governmental program (except Medicaid);
(c) any state or federal workers' compensation, employer's liability or
occupational disease law, or any motor vehicle no-fault law;
(d) expenses for services or items available or paid under another long
term care insurance or health insurance policy.
05LTCR 7
EFFECT ON POLICY
Face Amount. Each monthly benefit payment reduces the Face Amount then in
effect, resulting in a new Face Amount. The new Face Amount is equal to
(a) minus the product of (b) times (c), where:
(a) is the Face Amount then in effect;
(b) is the monthly benefit payment; and
(c) is the Face Amount then in effect divided by the Death Benefit then
in effect.
A reduction in Face Amount resulting solely from a monthly payment of
Accelerated Benefits will not reduce the Maximum Monthly Benefit Amount for the
current Period of Care.
Base Face Amount, Supplemental Face Amount
If the Face Amount of the policy is made up of two components, Base Face Amount
and Supplemental Face Amount, (which will be indicated in the Specifications
Section of the policy), then we will first reduce Supplemental Face Amount, if
any, until exhausted, before reducing any Base Face Amount.
Policy Value. Each Accelerated Benefit amount we approve reduces the Policy
Value then in effect, resulting in a new Policy Value. The new Policy Value is
(a) times (b), where:
(a) is the new Face Amount (as determined above), divided by the Face
Amount then in effect; and
(b) is the Policy Value then in effect.
Loans. If there is any outstanding debt at the time we approve an Accelerated
Benefit amount, a portion of that Accelerated Benefit amount will be deemed a
loan repayment and reduce the amount of the monthly payment of Accelerated
Benefits otherwise payable to you or your designee. The amount deemed to be a
loan repayment is (a) times (b) where:
(a) is the amount of Policy Debt immediately prior to the monthly benefit
payment; and
(b) is 1 minus the ratio of the new Face Amount (as determined above)
divided by the Face Amount then in effect.
The following applies if the underlying policy is variable life insurance.
Restrictions on Transfers
During each Period of Care, we will automatically transfer any Policy Value in
an Investment Account to the Fixed Account. Such transfer will be made at the
end of the Valuation Date following our approval of a request for Accelerated
Benefits and completion of the Elimination Period. No transfer of Policy Value
from the Fixed Account to an Investment Account will be permitted following our
approval of a request for Accelerated Benefits during any given Period of Care.
Upon expiry of a Period of Care, the unloaned portion of the Policy Value will
remain in the Fixed Account unless we receive written notice satisfactory to us
requesting reallocation of such assets. Any reallocations will be effective at
the end of the Valuation Period in which we receive such written notice. The
amount and frequency that may be transferred will be subject to any
restrictions imposed under the terms of the policy.
Allocation of Premium Payment
Following approval of a request for Accelerated Benefits and completion of the
Elimination Period, no premium payment may be allocated to an Investment
Account during any Period of Care following our approval of a request for
Accelerated Benefits, unless we approve otherwise.
EXTENSION OF BENEFITS WHEN OWNER IS THE LIFE INSURED
If the Life Insured is confined in a Nursing Home, and the rider terminates for
any reason while the Life Insured is receiving continuous, uninterrupted
benefits under this rider, benefits for such Nursing Home confinement will
continue until the earlier of the following dates:
(a) the date you are discharged from the Nursing Home;
(b) the date when the Face Amount remaining after any monthly benefit
payment is zero.
If your benefits are continued under this Extension of Benefits provision, we
will calculate the Face Amount remaining as if your policy had remained in
force, but NO Insurance Benefit will be payable to the beneficiary under the
policy.
This Extension of Benefits will be subject to all of the provisions of this
rider (including but not limited to the Elimination Period and Eligibility for
the Payment of Benefits.)
05LTCR 8
CLAIMS
Request for Accelerated Benefits. To file a request for Accelerated Benefits,
you must first notify us that the Life Insured is currently receiving or plans
to receive services covered by this rider. You can notify us by:
(a) writing to us at our Service Office for this rider at [P.O. Box 717,
Boston, MA 02117];
(b) writing to any of our authorized agents; or
(c) by calling us at our Service Office at [1-800-543-6415].
The notice must include:
(a) your name and the Life Insured name;
(b) your policy number; and
(c) the type of care the Life Insured is receiving, or plans to receive.
If you send us written notice, the notice must be mailed to us postmarked
within 30 days after the services begin, or as soon as reasonably possible. If
you notify us by telephone, you must call us within 30 days after the services
begin or as soon as reasonably possible. We will confirm, in writing, the
notification within 15 days after we receive such notification.
Claim Forms and Proof of Loss. When we receive your notice of a request for
Accelerated Benefits, we will send you claim forms for filing a Proof of Loss.
You must file Proof of Loss with our Service Office.
Proof of Loss means detailed written documentation which describes and
confirms: the Life Insured's inability to perform any of the Activities of
Daily Living or Cognitive Impairment; the Life Insured's confinement in a
Nursing Home or Assisted Living Facility; or the Home Health Care, Adult Day
Care, Hospice Care or Respite Care the Life Insured is receiving.
This documentation includes:
(a) the completed claim forms;
(b) confirmation of provider licensure as required by the jurisdiction in
which it is located;
(c) copies of medical records (or we may consult with the Life Insured's
primary Physician and provider by telephone at our option);
(d) providers' daily notes of care;
(e) itemized bills for the Life Insured's care and services; and
(f) the Life Insured's Plan of Care.
We will send claim forms to you within 15 days after having received your claim
notification. If we do not provide you with the claim forms within 15 days
after having received such notification, you will be able to satisfy the Proof
of Loss provision by giving us written proof of the nature and extent of the
loss.
Proof must be given to us during the Life Insured's lifetime, and within ninety
(90) days after the first Date of Service. Failure to give us proof within the
90 day period shall not invalidate nor reduce any request for Accelerated
Benefits during the Life Insured's lifetime if it was not reasonably possible
for you to give proof within such time. However, the proof must be given to us
as soon as reasonably possible and during the Life Insured's lifetime, and in
no event, except in the absence of legal capacity, later than one year from the
time proof is otherwise required.
We must receive a signed consent form from all irrevocable beneficiaries, if
any, and all assignees, if any. We also reserve the right to require a consent
form from any person if, in our discretion, such person's consent is necessary
to protect our interest. Any such consent will be in effect for the length of
the current claim.
Time of Payment of Accelerated Benefits. We will pay Accelerated Benefits for
any loss covered by this rider provided we receive Proof of Loss as described
above. We will make these payments on a monthly basis during the Life Insured's
lifetime, after services have been rendered.
Payment of Accelerated Benefits, Non-Duplication of Death Benefit, and
Discharge of Liability. While the Life Insured is living, all Accelerated
Benefits will be paid to you or an alternative payee as designated by you or
your legal representative. Any remaining Death Benefit will be paid under the
terms of the policy, following notification of the Life Insured's death.
Any Accelerated Benefits paid under this rider prior to our receipt of written
notice of the Life Insured's death in accordance with the policy provisions
will reduce the Death Benefit payable to the beneficiary under the policy.
05LTCR 9
At our option, any payment of Accelerated Benefits of $1,000 or less may be
paid to an alternative payee, if such benefit is payable to any person who is a
minor or otherwise not competent to give a valid release. The alternative payee
must be a person who is deemed by us to be justly entitled to the benefit.
We will be fully discharged and released from all liability to you, and any
alternative payee, any assignee, and any beneficiary under the policy to the
extent of any payment made in good faith under this rider.
Examinations and Assessments. We will have the right and the opportunity to
examine the Life Insured and/or perform an on-site geriatric nursing assessment
of the Life Insured when and as often as we may reasonably require while a
claim is pending. Any such examination will be at our expense.
Appeals. We will notify you in writing if we do not approve your request for
Accelerated Benefits, and provide you with a written explanation of the reasons
for the denial. You will then have the right to appeal our claims decision and
request that we make all information directly related to such denial available
to you. We will provide you with such requested information within 60 days from
the date we receive your written request.
You must put this appeal or request for information in writing (no special form
is necessary) and send it to:
[Retail Long Term Care Claims Administration
P.O. Box 717
Boston, MA 02117
Attn: Manager of Claims Administration]
In your appeal, you should:
(a) state why you disagree with our determination;
(b) state what other factors (if any) we should take into consideration;
(c) identify whom we could contact (including names, addresses, and phone
numbers) to gather the pertinent information regarding the Life
Insured's care; and
(d) identify the facilities in which the Life Insured received care.
You may authorize someone else to act for you in this appeals process. We have
a Claim Appeals Review Board that will consider your appeal. If the Board needs
additional information to objectively evaluate your appeal, they will use at
least one of the following resources:
(a) a Physician Advisor who is a Physician living near the Life Insured
who will assess the Life Insured's condition and report it to us;
(b) an on-site geriatric assessment; or
(c) medical records from the Life Insured's Physician(s) and/or
provider(s) of care.
All requests for information will be at our expense.
The Claim Appeals Review Board will then make one of two determinations:
(a) overturn the initial claim determination and pay any benefits due; or
(b) uphold the initial claim determination.
Legal Action. You cannot bring suit against us to recover on this rider during
the 60 days after written Proof of Loss has been given to us, as required by
this rider. Also, you cannot bring suit against us to recover on this rider
after three years from the date written Proof of Loss is required to be given.
Time Limit on Certain Defenses. If this rider has been in effect for less than
six months we may rescind it or deny an otherwise valid claim if the
application contained a misrepresentation that is material to the acceptance of
the application for this rider.
If this rider has been in effect for at least six months but less than two
years, we may rescind it or deny an otherwise valid request for Accelerated
Benefits if the application contained a misrepresentation that is both:
(a) material to the acceptance of the Life Insured's application; and
(b) pertains to the condition for which the claim is made.
After this rider has been in effect for two years, it is incontestable except
for relevant facts relating to the Life Insured's health that the Life Insured
knowingly and intentionally misrepresented.
In the event this rider is rescinded after we have paid Accelerated Benefits,
we may not recover the payments already made, but we will reduce the Death
Benefit by the amount of such payments.
05LTCR 10
PROVISIONS
Grace Period. The Grace Period provision of the policy shall also apply to this
rider. During the Grace Period this rider will stay in effect.
The notice provided under the policy will be provided to you and the person or
persons you designate. The application for this rider may name the person or
persons to receive notice. You may change the designation at any time. We will
provide you with a reminder of the right to change this written designation
every two years.
Added Protection Against Termination; Reinstatement. If this rider terminates
while the Life Insured would otherwise meet the eligibility criteria set forth
in the Eligibility for the Payment of Benefits provision, this rider may be
reinstated, if you provide written request within 5 months of the date of
termination, and if all the following conditions are met:
(a) the policy is reinstated in accordance with its reinstatement
provision;
(b) you furnish us with satisfactory proof that the Life Insured would
have qualified for benefits (if not for the Elimination Period) on
the date of termination; and
(c) you pay all unpaid overdue rider charges for this rider.
The reinstated rider will not provide Accelerated Benefits during the period
from the end of the grace period for which you have not paid the amount
necessary to bring the policy out of default to the date of reinstatement.
Except for this and any new provisions added in connection with reinstatement,
your rights and ours under this rider will be the same as they were just before
the rider terminated. A physical or mental condition will be considered to have
begun when advice is supplied or treatment is recommended by or received from a
Physician.
Changes to this Rider. No change to this rider will be valid until approved by
our President or Secretary. No agent may change this rider or waive any of its
provisions.
Right to Recovery. If we make payments with respect to your request for
Accelerated Benefits in a total amount that is, at any time, in excess of the
Accelerated Benefits payable under the provisions of this rider, we will have
the right, but not the obligation, to recover such excess from:
(a) any persons to, or for, or with respect to whom, such payments were
made; and
(b) any organization which should have made such payments.
Any such excess payment, if not recovered during the Life Insured's lifetime,
shall reduce the Insurance Benefit.
Termination. This rider will terminate, and no further benefits will be paid
(except as provided in the Extension of Benefits When Owner is the Life Insured
and Added Protection Against Termination provisions), on the earliest of:
(a) the date of exchange or termination of the policy;
(b) the date this rider is discontinued on request;
(c) the date when the Face Amount remaining after any monthly benefit
payment is zero;
(d) the date we approve your request for an increase in either Base Face
Amount or Supplemental Face Amount, if applicable;
(e) the date we approve your request for a change to policy Death Benefit
Option 2.
This rider will terminate as if the Life Insured had died. Any riders which
provide insurance on the life of someone other than the Life Insured will be
treated according to their terms as if the Life Insured had died. No further
premium will be payable for the policy or this rider.
Signed for the Company by:
[SEAL APPEARS HERE]
05LTCR 11
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
SUPPLEMENTARY BENEFIT
RESIDUAL LIFE INSURANCE BENEFIT AND CONTINUATION OF ACCELERATION RIDER
We agree, subject to the terms and conditions of this rider, and any other
applicable rider(s) and the policy, to make available the payments described
below.
This rider is made a part of the policy to which it is attached, in
consideration of the application, a copy of which is attached to and made a
part of the policy, and the rider charges for this rider, which are shown in
the Specifications section of the policy.
All provisions relating to the Federal Income Tax Treatment of This Rider,
Thirty Day Free Look, Notice to Buyer, Caution, Eligibility for Payment of
Benefits, Limitations on or Conditions For Eligibility For Payment Of Benefits,
Examinations and Assessments, Appeals, Legal Action, Time Limit on Certain
Defenses, Grace Period, Added Protection Against Termination and Reinstatement,
and Changes to this Rider as set forth in the Acceleration Of Life Insurance
Death Benefit For Qualified Long-Term Care Services Rider (hereinafter
"Acceleration Rider") annexed hereto, apply in their entirety to this rider. In
addition, the definition of "Qualified Long Term Care Services" set forth in
the Acceleration Rider applies to this rider.
Notwithstanding any policy provision to the contrary, the life insurance policy
remains in effect to the extent necessary, although no benefits may be payable
under its terms, during any period in which benefits are being paid under the
terms of this rider.
DEFINITIONS
Face Amount means, for purposes of this rider, either Face Amount or Total Face
Amount, depending on which term is used in the underlying policy.
Full Acceleration means the Face Amount of the underlying policy is zero.
RESIDUAL LIFE INSURANCE BENEFIT
Upon receipt of due proof of the Life Insured's death while this rider is in
effect, and subject to the terms and conditions set forth below, we will pay a
death benefit equal to the Residual Life Insurance Amount in excess of the
death benefit under the policy, if such amount is greater than zero.
The Residual Life Insurance Amount is the lesser of:
A) $25,000; and
B) 10% of the Face Amount under the policy at issue, reduced proportionally
for any reduction in Face Amount not due to acceleration under the
Acceleration Rider.
When a payment is made pursuant to this section, the Company's obligation under
both the policy and this rider is satisfied in full.
The Residual Life Insurance Benefit may not be accelerated under the terms of
any rider.
CONTINUATION OF BENEFITS UPON FULL ACCELERATION UNDER ACCELERATION RIDER
The benefits set forth below are available only in the event there has been a
Full Acceleration of Face Amount under the policy, pursuant to the Acceleration
Rider. A Full Acceleration occurs on the date the Face Amount remaining is
zero, after any monthly benefit payment is made pursuant to the terms of the
Acceleration Rider.
05LMAXR
Continuation of Monthly Benefit Payments
Subject to the conditions, limitations, and exclusions described herein, upon a
Full Acceleration we will continue to make a monthly benefit payment pursuant
to the terms of the Acceleration Rider, notwithstanding the termination
provision of that Rider. Provided that the eligibility requirements under the
Acceleration Rider continue to be met, this monthly benefit will be an amount
not to exceed the lesser of (i) the charges incurred by the Life Insured for
Qualified Long-Term Care Services, and (ii) the Maximum Monthly Benefit Amount
(hereinafter "MMBA") under this rider . The MMBA under this rider is shown in
Section 1 of the policy.
In the month when Full Acceleration will occur, if the Face Amount remaining is
less than both the MMBA under the Acceleration Rider and the charges incurred
by the Life Insured for Qualified Long Term Care Services, a reduced amount of
the MMBA under this rider may also be payable for that month only. Such reduced
amount will be equal to the MMBA under this rider, multiplied by 1 minus the
ratio of Face Amount remaining to the MMBA under the Acceleration Rider.
Time of Payment of Benefits
We will pay the monthly benefit amount for any loss covered by this rider,
provided we receive evidence as referenced above and described in the
Acceleration Rider. After services have been rendered and during the Life
Insured's lifetime, we will make these payments on a monthly basis until the
total of all monthly payments made pursuant to this rider equals the MMBA under
this rider divided by the Maximum Acceleration Percentage under the
Acceleration Rider.
EXTENSION OF BENEFITS UNDER ACCELERATION RIDER WHEN OWNER IS THE LIFE INSURED
If this rider is in effect, the Extension of Benefits provision under the
Acceleration Rider is deleted and replaced in its entirety as follows:
If you are the Life Insured and confined in a Nursing Home, and the policy and
Acceleration Rider both terminate for any reason while you are receiving
continuous, uninterrupted benefits under the policy and Acceleration Rider,
benefits for such Nursing Home confinement will continue during the lifetime of
the Life Insured until the earlier of the following dates:
. the date you are discharged from the Nursing Home; and
. the date when the Face Amount remaining after any monthly benefit payment
under the Acceleration Rider is zero, and the total of all monthly
payments made pursuant to this rider equals the MMBA under this rider
divided by the Maximum Acceleration Percentage under the Acceleration
Rider.
If your benefits are continued under this Extension of Benefits provision, we
will calculate the "Face Amount" remaining as if your policy had remained in
force, but NO Insurance Benefit will be payable to the beneficiary under the
policy, the Acceleration Rider, or this rider.
This Extension of Benefits provision is subject to all of the provisions of the
Acceleration Rider (including but not limited to the Elimination Period and
Eligibility for the Payment of Benefits.)
PAYMENT OF BENEFITS AND DISCHARGE OF LIABILITY
While the Life Insured is living, all benefits will be paid to you or an
alternative payee as designated by you or your legal representative. Any life
insurance benefit arising under the terms of this rider will be paid as if it
were the death benefit provided by the terms of the policy, following
notification of the Life Insured's death.
At our option, a benefit payment of $1,000 or less may be paid to an
alternative payee, if such benefit is payable to any person who is a minor or
otherwise not competent to give a valid release. The alternative payee must be
a person who is deemed by us to be justly entitled to the benefit.
We will be fully discharged and released from all liability to you, and any
alternative payee, any assignee, and any beneficiary under the policy to the
extent of any payment made in good faith under this rider.
05LMAXR
TERMINATION
This rider will terminate on the earliest of:
(a) the date of exchange or termination of the policy or the Acceleration
Rider; or
(b) the payment or application of the Surrender Value under the policy; or
(c) the date this rider is discontinued on request; or
(d) the date of the Life Insured's death.
Signed for the Company by:
Secretary
05LMAXR
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
A Stock Company
SUPPLEMENTARY BENEFIT
ENHANCED SURRENDER VALUE RIDER
This rider is part of the policy to which it is attached. It takes effect at
the same time as your policy on the Policy Date. Should any provisions in the
policy conflict with this rider, the provisions of this rider will prevail.
The Life Insured for this benefit is the same person who is the Life Insured
under your policy. If this rider is attached to a survivorship policy, the
Lives Insured for this benefit will be the same persons who are the Lives
Insured under your policy. The name of the Life Insured or, if applicable, the
names of the Lives Insured, are shown in Policy Specifications, Section 1.
BENEFIT
We agree, subject to the terms and conditions of this rider and the policy, to
pay an Enhanced Surrender Value benefit in addition to the Cash Surrender Value
that would otherwise be paid under the policy should you surrender the policy
during the policy's Surrender Charge Period. The Enhanced Surrender Value
benefit described in the Benefit Amount provision below will be paid if all the
following conditions are met:
(a) your written request for a full surrender of the policy is received
at our Service Office prior to the death of the Life Insured (or if
this rider is attached to a survivorship policy, prior to the death
of the Surviving Life Insured);
(b) such surrender is not the result of an exchange under Section 1035 of
the Internal Revenue Code; and
(c) this rider has not terminated under the Termination provision below.
BENEFIT AMOUNT
The Enhanced Surrender Value benefit amount is equal to the lesser of a) 100%
of the policy's Surrender Charge applicable on the date of surrender as shown
in the Policy Specifications, Section 1, and b) the Policy Value. Such amount
will be added to the Cash Surrender Value that would otherwise be paid under
the policy. The resulting enhanced Cash Surrender Value is reduced by any
Policy Debt to arrive at the Net Cash Surrender Value.
EFFECT ON WITHDRAWALS AND LOAN VALUE
Neither the amount available for withdrawal or the available loan value of the
policy will in any way be increased due to the Enhanced Surrender Value benefit
provided by this rider.
RIGHT TO POSTPONE PAYMENT OF BENEFIT
We reserve the right to postpone the payment of any Enhanced Surrender Value
benefit for up to six months after we receive your written request for a full
surrender of the policy in the same manner that we may postpone the payment of
any Net Cash Surrender Value under the policy.
ENHANCED SURRENDER VALUE RIDER CHARGE
For this rider to take effect, there is a premium charge equal to 2% of the
lesser of either the sum of premiums received during the first two Policy Years
or the Target Premium shown in the Policy Specifications, Section 1.
06MAJESVR Page 1
TERMINATION
This rider will terminate without value, on the earliest of:
a. the end of the policy's Surrender Charge Period;
b. the exchange or termination of the policy;
c. the death of the Life Insured (or Surviving Life Insured if this
rider is attached to a survivorship policy); or
d. the next monthly Processing Date following our receipt of your
written request to terminate this rider.
This rider cannot be reinstated after it terminates.
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
/s/ James P. O'Malley
President
06MAJESVR Page 2
[LOGO OF JOHN HANCOCK] Life Insurance Company (U.S.A.)
A Stock Company
SUPPLEMENTARY BENEFIT
RETURN OF PREMIUM DEATH BENEFIT
This rider is part of the policy to which it is attached. It takes effect at
the same time as your policy, provided that Death Benefit Option 1 is in effect
under the policy on that date. Should any provisions in the policy conflict
with this rider, the provisions of this rider will prevail.
The Life Insured for this benefit is the same person who is the Life Insured
under your policy. If this rider is attached to a survivorship policy, the
Lives Insured for this benefit will be the same persons who are the Lives
Insured under your policy. The name of the Life Insured or, if applicable, the
names of the Lives Insured, are shown in Policy Specifications, Section 1.
BENEFIT
This benefit provides an additional insurance amount, payable on the death of
the Life Insured (or the death of the Surviving Life Insured if this rider is
attached to a survivorship policy). On receiving due proof that the Life
Insured (or Surviving Life Insured) died while the benefit is in force, we will
pay the benefit amount to the same beneficiary and in the same manner as the
proceeds payable under the policy.
BENEFIT AMOUNT
The benefit is equal to the amount of the Return of Premium Death Benefit
coverage as described below. The Maximum Benefit Amount is shown in the Policy
Specifications page for this rider.
RETURN OF PREMIUM DEATH BENEFIT COVERAGE
The amount of the Return of Premium Death Benefit coverage is determined as
follows:
(a) it has an initial value equal to the Percentage of Premium of your
initial premium payment. The Percentage of Premium is as elected and
shown on the Policy Specifications page for this rider. This percentage
is set at issue and cannot be changed;
(b) the Percentage of Premium will be applied to each subsequent premium and
increase the coverage at the time of premium payment by that amount;
(c) on each Processing Date, before we take any Monthly Deductions due, we
will increase the coverage by the monthly equivalent of the annual
Return of Premium Death Benefit Increase Rate;
(d) each withdrawal of part of the Net Cash Surrender Value taken under the
policy will reduce the coverage at the time of withdrawal by an amount
equal to the withdrawal, except that the coverage will not reduce to
less than zero; and
(e) each request for a decrease in the benefit amount will reduce the
coverage on the effective date of the decrease by the amount of the
decrease requested, except that the coverage will not be decreased to
less than zero.
The initial annual Return of Premium Death Benefit Increase Rate is shown in
the Policy Specifications page for this rider. You may make a Written Request
to change this rate, subject to the following:
(a) a decrease in the rate will take effect on the Annual Processing Date
coincident with or next following the date we receive the request; and
06ROPR2 Page 1
(b) an increase in the rate will be subject to you providing us with
evidence of insurability satisfactory to us and to our approval of the
increase. The increase will take effect on the Annual Processing Date
coincident with or next following the date of our approval.
The amount of the Return of Premium Death Benefit coverage will not exceed the
Maximum Benefit Amount shown in the Policy Specifications page for this rider.
NO-LAPSE GUARANTEE
This benefit is covered under the No-Lapse Guarantee in your policy for the
same period.
CESSATION OF INCREASES
Increases in the Return of Premium Death Benefit coverage will cease at the
earliest of:
(a) the Processing Date coincident with or next following the date we
receive your Written Request for cessation of any further increases;
(b) the Processing Date coincident with or next following the date we
approve your Written Request for a change to policy Death Benefit Option
2 if the policy allows for such a change to be made;
(c) the date on which the amount of the Return of Premium Death Benefit
coverage becomes equal to the Maximum Benefit Amount shown in the Policy
Specifications page for this rider;
(d) the date the Life Insured reaches Age 100 (or if this rider is attached
to a survivorship policy, the date the younger Life Insured reaches Age
100 or would have reached Age 100 if living); or
(e) the Processing Date coincident with or next following the date we
receive your Written Request to reduce the amount of the Return of
Premium Death Benefit coverage or the Supplemental Face Amount or Base
Face Amount of insurance under the policy.
After increases cease, we will not take into account any more premiums paid or
apply the Return of Premium Death Benefit Increase Rate in determining the
amount of the Return of Premium Death Benefit coverage.
DECREASE IN BENEFIT AMOUNT
You may make a Written Request to decrease the benefit amount. The decrease
will take effect on the Processing Date coincident with or next following the
date we approve the request. The Return of Premium Death Benefit coverage will
be reduced by the amount of the requested decrease. Decreases in the benefit
amount are not subject to pro-rata Surrender Charges.
PARTIAL NET CASH SURRENDER VALUE WITHDRAWALS
If you make a Written Request for a withdrawal of part of the Net Cash
Surrender Value under the policy while this benefit is in force, we will
process the withdrawal, so that the withdrawal:
(a) first reduces the amount of the Return of Premium Death Benefit
coverage; then
(b) any applicable Supplemental Face Amount under the policy will then be
reduced by the amount, if any, by which the net withdrawal exceeds
the amount of the Return of Premium Death Benefit coverage; then
(c) the Base Face Amount under the policy will be reduced by the amount,
if any, by which the net withdrawal exceeds the sum of the Return of
Premium Death Benefit coverage and any applicable Supplemental Face
Amount.
As described above, we will generally process the withdrawal so it reduces the
Supplemental Face Amount before it reduces the Base Face Amount but we reserve
the right to allow a reduction in Base Face Amount prior to fully reducing the
Supplemental Face Amount.
06ROPR2 Page 2
COST OF INSURANCE
The cost of insurance for this benefit is charged monthly as part of the
Monthly Deductions under the policy, and ceases when Monthly Deductions cease
under the policy. The monthly cost of insurance rates will always be less than
or equal to the Maximum Monthly Rates shown in the Table of Rates, Section 2 in
the policy.
INCONTESTABILITY
This benefit shall be incontestable after it has been in force during the Life
Insured's lifetime (or during the lifetime of the Lives Insured if this rider
is attached to a survivorship policy) for two years from the Issue Date shown
in the Specifications section of the policy.
For any increase which requires evidence of insurability satisfactory to us,
the contestable period will start on the effective date of the increase.
SUICIDE EXCLUSION
If the Life Insured (or either of the Lives Insured when this rider is attached
to a survivorship policy) dies by suicide, while sane or insane, within two
years of the Issue Date shown in the Specifications section of the policy, this
benefit will terminate and we will pay only the amount of Monthly Deductions
charged for the benefit.
If the Life Insured (or either of the Lives Insured when this rider is attached
to a survivorship policy) dies by suicide, while sane or insane, within two
years after the effective date of an increase which required evidence of
insurability satisfactory to us, for that increase we will pay only the Monthly
Deductions charged for the increase.
BENEFIT DEFAULT
This rider will go into default at any time the policy goes into default, and
will be subject to the same conditions for bringing the policy out of default.
TERMINATION
This rider terminates at the earliest of the date the policy terminates or the
date the Life Insured reaches Age 121. Until the Life Insured reaches Age 121,
this rider cannot be terminated prior to the policy and will terminate at the
same time as the policy. If this rider is attached to a survivorship policy,
this provision pertains to the date the younger Life Insured reaches Age 121 or
would have reached Age 121 if living.
This rider may be reinstated with the policy, subject to the same conditions
that apply for reinstating the policy. Upon reinstatement, the amount of the
Return of Premium Death Benefit coverage will be equal to the amount at
termination, plus the value equal to the Percentage of Premium of your premiums
paid for reinstatement.
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
/s/ James P. O'Malley
President
06ROPR2 Page 3
1. POLICY SPECIFICATIONS (CONTINUED) - [POLICY 12 345 678]
SUPPLEMENTARY BENEFITS
BENEFIT RETURN OF PREMIUM DEATH BENEFIT
LIFE INSURED LIFE INSURED'S NAME [LIVES INSURED NAMES], AGE, SEX,
[LIVES INSURED] DETAILS RISK CLASSIFICATION AND ADDITIONAL RATING (IF
APPLICABLE) ARE SHOWN IN THE POLICY SPECIFICATIONS
BENEFICIARY AS DESIGNATED IN THE APPLICATION OR SUBSEQUENTLY
CHANGED
BENEFIT AMOUNT AS DETERMINED BY THE RETURN OF PREMIUM DEATH BENEFIT
COVERAGE PROVISION
MAXIMUM BENEFIT $[500,000]
AMOUNT
RETURN OF PREMIUM INITIAL RATE [5]%
DEATH BENEFIT
INCREASE RATE
PERCENTAGE OF [100]%
PREMIUM
SUPPLEMENTARY BENEFIT
CHANGE OF LIFE INSURED
This benefit is a part of your policy.
BENEFIT
You may change the life insured (from the "old life insured" to a "new life
insured") under your policy on or after the second Policy Anniversary of the
policy. The change is subject to the following terms.
INSURABLE INTEREST
You must have an insurable interest in the new life insured.
CONSENT
The new life insured must consent in writing to the change.
EVIDENCE OF INSURABILITY
We will require evidence which satisfies us of the new life insured's
insurability. If we do not accept the new life insured as a standard risk, we
can apply an Additional Rating or refuse to allow the change.
CHANGE DATE
The change date will be the beginning of the Policy Month following the date we
approve the request.
EFFECT ON POLICY
The change will have the following effect on the policy.
(a) The change takes place at the change date. Before this date, the policy
provides no insurance on the new life insured. After this date, the
policy provides no insurance on the old life insured.
(b) The Face Amount, Monthly Administrative Charge and any remaining
Surrender Charge and Surrender Charge Period will be the same after the
change date as they were before the change date.
(c) The Policy Value will be the same immediately after the change date as
it was immediately prior to the change date, unless the change would
cause the policy to fail to qualify as life insurance for tax purposes.
If this occurs, we will refund any premium payments that would cause
this policy to fail to qualify as life insurance under Section 7702 of
the Internal Revenue Code of 1986, or any other equivalent section of
the code, in order to cause the policy after the change to qualify as
life insurance for tax purposes. If we refund any premium, the Policy
Value will be reduced by the amount refunded.
(d) Rates or charges under the policy or any applicable Supplementary
Benefit that are based on the life insured's age, sex or rate class will
be adjusted to reflect the age, sex or rate class of the new life
insured. Cost of Insurance rates will be based on the Attained Age of
the new life insured on the change date.
(continued)
S125-4us Page 1
(e) Supplementary Benefits on the old life insured will be canceled as of
the change date. Supplementary Benefits may be added on the new life
insured as of the change date, subject to our normal requirements and
restrictions for such benefits.
(f) Following a change of insured, the Validity and Suicide provisions of
the policy will start anew as of the change date.
CHANGE FEE
We will charge a fee to cover our expenses for the change. The fee will be the
same for all changes of this kind being made at the same time.
TERMINATION
The benefit terminates on the earliest of:
(a) The date you cease to be the owner of the policy.
(b) Termination of this policy.
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
/s/ John DesPrez III
President
S125-4us Page 2
RIDER
ACCELERATED BENEFIT
FOR TOTAL AND PERMANENT DISABILITY
In this rider Accelerated Benefit refers to an acceleration of your life
insurance benefits. This rider is not intended or designed to provide health,
nursing home or long-term care insurance.
The death benefit and, if applicable, any cash values and loan values under
your life insurance policy will be reduced if the Accelerated Benefit is paid.
Receipt of the Accelerated Benefit is intended to qualify for favorable tax
treatment under section 101(g)(1)(A) of the Internal Revenue Code of 1986 as
amended by Public Law 104-191. However, receipt of the benefit may affect
eligibility for Medicaid and certain other public assistance programs. You
should consult with your personal tax advisor and social service agencies
before you decide to receive the benefit under this rider.
This rider has been added to and forms part of your policy. Unless this rider
states otherwise, the provisions set out in your policy will apply to the rider.
Effective Date. This rider is effective on the date we attach it to your policy.
Benefit. If you meet the Conditions of Payment, we will pay you 50% of the
eligible death benefit, up to a maximum of $1,000,000 on the life insured.
If more than one policy owner make a claim, we will pay the benefit in
proportion to the amount of eligible death benefit each has on the life insured.
You will receive your payment in one lump sum. You cannot make another claim
under this rider after we have paid the benefit. We will not make a payment if
it would be less than $10,000.
Eligible Death Benefit. The eligible death benefit is equal to (a) plus (b),
minus (c), where
(a) is the death benefit of your qualifying policies, including any paid-up
additional insurance;
(b) is the death benefit of any qualifying riders and supplementary benefits
attached to your qualifying policies; and
(c) is any outstanding loan amount.
Your qualifying policies are your inforce permanent or term life insurance
policies issued by us, covering only one life insured. Your qualifying riders
and qualifying supplementary benefits are part of your qualifying policies.
They insure the same person and provide a death benefit other than accidental
death coverage. Each policy, rider and supplementary benefit must have at least
one year remaining in the benefit period. In this rider, "policy" refers to a
qualifying policy, rider and supplementary benefit.
Conditions of Payment. You must meet the following conditions before we pay the
benefit.
(a) You must provide written evidence satisfactory to us that the life
insured has a total and permanent disability. Part of the evidence must
be a written statement from a licensed medical doctor stating the
prognosis for the illness.
Total and permanent disability means a medical condition which a doctor
diagnoses will reduce the insured's life expectancy to one year or less.
(b) We must have the signed consent of any irrevocable beneficiary and any
assignee.
(c) You must claim the benefit voluntarily. We will not pay the benefit if
you are claiming it to satisfy creditors, or for government benefits.
(continued)
S134-1mi Page 1
ACCELERATED BENEFIT
FOR TOTAL AND PERMANENT DISABILITY
Premium. There is no premium for this rider, and it has no effect on the
premium due for your policy.
Administrative Expense Charge. The administrative expense charge for this
benefit will not exceed $150.
Death Benefit Reduction. We will reduce the death benefit of your policy by the
benefit amount, plus one year's interest, plus any administrative expense
charge. The interest rate charged for this benefit is the variable loan
interest rate on our currently issued policies. In no event will the interest
exceed your policy's loan interest rate, if your policy includes a loan
interest provision.
If your benefit calculation includes more than one policy, we will reduce the
most recently issued first. If necessary, we will reduce the next most recently
issued policy until we reach the desired amount.
If your policy permits a decrease in the face amount of insurance, we will not
apply the policy restrictions on the amount, timing and number of decreases to
the death benefit reduction.
Cash Value Reduction. Payment of the benefit will reduce any cash value in your
policy. The reduced cash value will be equal to the original cash value
multiplied by (a), divided by (b), where
(a) is the death benefit after the payment of the accelerated benefit, and
(b) is the death benefit before the payment of the accelerated benefit.
If your policy is a variable life insurance policy, you may tell us how to
allocate the reduction of your policy. If you do not tell us, we will base the
reduction on the proportion that each account bears to your Net Policy Value.
Effect On Policy Debt. If any qualifying policy has a loan against it, we will
reduce the policy loan by the same proportion as the cash value.
Effect On Accidental Death Benefit Provision. Payment of the accelerated
benefit will not affect any accidental death insurance coverage.
Termination. This rider will terminate on the earliest of the following dates:
(a) the date we receive your written request for termination,
(b) the date any premium for your policy is in default beyond the end of its
grace period,
(c) one year before the expiry or termination date of your policy, or
(d) the date you surrender your policy.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A)
/s/ John DesPrez III
President
S134-1mi Page 2
[LOGO OF JOHN HANCOCK] Draft 4 - March 20, 2006 [GRAPHIC APPEARS HERE]
Policy Details - Variable Life
[ ] John Hancock Life Insurance
Company (U.S.A.)
[ ] John Hancock Variable Life
Insurance Company
(hereinafter referred to as The
Company)
Service Office:
200 BLOOR STREET EAST
TORONTO, ONTARIO
CANADA M4W 1E5
. This form is part of the Application for Life
Insurance for the Proposed Life Insured(s).
. Print and use black ink. Any changes must be
initialed by the Proposed Life Insured(s) and/or
Owner(s).
Proposed Life Insured (Life One) Proposed Life Insured (Life Two)
Name First Middle Last Name First Middle Last
__________________________________ __________________________________
Name(s) of Owner(s)
__________________________________________________________
__________________________________________________________
Plan Name
Single Life [ ] Majestic VUL 98 [ ] Majestic Performance VUL
[ ] Majestic Variable COLI [ ] Variable MasterPlan Plus
Survivorship Life [ ] Majestic VEP 98 [ ] Majestic Performance
Survivorship VUL
Other
____________________________________________________________
Amount
1. Base Sum Insured (BSI) or Base Face Amount (BFA) $______
Additional Sum Insured (ASI) or Supplemental Face Amount (SFA) on Page 2.
Premiums
2.Frequency: [ ] Annual [ ] Semi-Annual [ ] Quarterly [ ] Monthly - (Automatic
Deduction)
[ ] Other
_______________________________________________________
Premium Notices and Correspondence
3. a) Send [ ] [ ]Life One [ ]Life Two
Premium Owner(s)
Notices to:
[ ] Employer's [ ] Other: Name & Address (details below)
Address
Name
____________________________________________________________
Street No. & Name, Apt No., City, State, Zip code
____________________________________________________________
b)Send [ ] Same as Premium Notices (as [ ] Other: Name &
Correspondence above) Address
to: (details below)
Name
____________________________________________________________
Street No. & Name, Apt No., City, State, Zip code
____________________________________________________________
Additional Benefits
4. a) Life Insurance Qualification Test
[ ] Guideline Premium (GPT) [ ] Cash Value Accumulation (CVAT)
Note: Elected test cannot be changed after the policy is issued. You
may request an Illustration on both tests before making your election.
b) Death Benefit Option [ ] Option A/Option 1(Face Amount)
[ ] Option B/Option 2 (Face Amount plus
Account/Policy Value)
[ ] Option M (Available on Majestic VUL 98
and Majestic VEP 98 if CVAT Chosen) with
calculation beginning in policy year ____
NB5008US (M) Page 1 of 5 M Proprietary Variable
NB5008US (05/2006) Majestic Products
Additional Sum Insured (ASI), Supplemental Face Amount (SFA) and Premium
Schedules
5. [ ] Additional Sum Insured(ASI)/Supplemental Face Amount(SFA) Check only
one option below.
a) [ ] ASI/SFA of $____
[ ] For Life of Policy
[ ] With Face Amount (TSI/TFA) of $____ increasing by __% or $____ Per
Year for
[ ] Life of Policy or __ Policy Years
b) [ ] Customized Level or Increasing Schedule
List by policy year or years. ASI/SFA amount may not decrease.
Policy Year(s) ASI/SFA Amount
-------------- -----------------------------------------
to $ (1)
to $ (2)
to $ (3)
to $ (4)
to $ (5)
to $ (6)
to $ (7)
to $ (8)
to $ (9)
to $ (10)
(If more space is required, complete and attach form NB5064.)
6. [ ] Planned Premium
a) [ ] $______ annually for _____ year(s)
[ ] Annual Increase of __%
[ ] Additional first year Planned Premium $______
b) [ ] Customized Schedule
List by policy year(s).
Policy Year(s) Planned Premium Amount
-------------- -----------------------------------------
to $ (1)
to $ (2)
to $ (3)
to $ (4)
to $ (5)
to $ (6)
to $ (7)
to $ (8)
to $ (9)
to $ (10)
(If more space is required, complete and attach form NB5064.)
Majestic VUL 98, Majestic Variable COLI, Variable MasterPlan Plus, Majestic VEP
98
7. [ ] Living Care Benefit (for terminal illness, only available on Majestic
VUL 98 )
[ ] Enhanced Cash Value Rider
[ ] Premium Cost Recovery for [ ] Life of Policy [ ] __ Policy Years
[ ] Age 100 Waiver of Charges Rider (Not available on MVCOLI or VMPP)
[ ] Policy Split Option Rider (Only available on Majestic VEP 98)
[ ] Continuation of Guaranteed Minimum Death Benefit Option after
10th Policy Year (Only available with Option A)
[ ] Other _________________________________________________________________
Majestic Performance VUL
8. [ ] Enhanced Surrender Value Rider [ ] LifeCare Benefit Rider
(Please complete form
NB5018.)
[ ] Extended No Lapse Guarantee [ ] LifeCare Benefit Max (LMAX)
(beyond Basic Period) Extension Rider
[ ] To Age ____ [ ] Period _____ [ ] Accelerated Benefit Rider
[ ] Return of Premium Death Benefit [ ] Other
(with DB Option 1 only)
Increase Rate [ ] Yes __% [ ] No
Percentage of Premiums to be
returned at death (Whole numbers
only. Maximum 100%) __ %
Majestic Performance Survivorship VUL
9. [ ] Enhanced Cash Value Rider
[ ] Premium Cost Recovery for [ ] Life of Policy [ ] __ Policy Years
[ ] Survivorship Four Year Level Term Rider
[ ] Policy Split Option Rider
[ ] Other _________________________________________________________________
NB5008US (M) Page 2 of 5 M Proprietary Variable
NB5008US (05/2006) Majestic Products
Additional Information - These questions apply to the OWNER(S) of the policy.
All questions must be answered.
10. a) If an additional or optional policy is being applied for in a separate
application, state plan and amount.
Plan name
___________________________________________________________ $______
b) Do you understand that you may need to pay premiums in addition to
Planned Premium if the current policy charges or actual investment
performance are different from the assumptions used in your Illustration
(assuming the requirements of any applicable guaranteed death benefit
feature have not been satisfied)? Yes No 11. Have you received a current
prospectus (and any supplements) for the applicable
policy? [ ] Yes [ ] No
If Yes, date of prospectus(es) mmm dd yyyy
_______ _______ ___
Date of supplement(s) mmm dd yyyy
_______ _______ ___
Date of John Hancock Trust prospectus (if applicable) mmm dd yyyy
_______ _______ ___
Date of supplement mmm dd yyyy
_______ _______ ___
12. With the above in mind, does the policy meet your insurance objectives and
your anticipated financial needs? [ ] Yes [ ] No
Investor Suitability Statements
13.I UNDERSTAND THAT UNDER THE APPLIED FOR POLICY:
(A)THE AMOUNT OF THE INSURANCE BENEFITS, OR THE DURATION OF THE INSURANCE
COVERAGE, OR BOTH, MAY BE VARIABLE OR FIXED.
(B)THE AMOUNT OF THE INSURANCE BENEFITS, THE DURATION OF THE INSURANCE
COVERAGE, AND THE POLICY/ACCOUNT VALUE, MAY INCREASE OR DECREASE
DEPENDING ON THE INVESTMENT EXPERIENCE OF THE CHOSEN INVESTMENT ACCOUNTS
AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. ILLUSTRATIONS OF BENEFITS,
INCLUDING DEATH BENEFITS, POLICY/ACCOUNT VALUES AND CASH SURRENDER
VALUES ARE AVAILABLE ON REQUEST.
(C)THE ENTIRE INVESTMENT COULD BE LOST BECAUSE OF THE PERFORMANCE OF THE
INVESTMENT FUND AND IN THE ABSENCE OF ADDITIONAL PREMIUM PAYMENT, THE
INSURANCE COVERAGE COULD LAPSE.
Telephone/Allocation Change Authorization
14.I understand and agree that:
a) Telephone transfers and allocation changes will also be subject to the
conditions of the policy, the administrative requirements of The
Company, and the provisions of the policy's prospectus.
b) The Company may act on telephone instructions from the Owner or from any
such person, if the policy is jointly owned. The Company, its agents, or
representatives of employees who act on its behalf, will not be subject
to any claim, liability, loss, expense or cost if it acted on good faith
upon telephone instructions it reasonably believes to be genuine in
reliance on this signed authorization. The Company will employ
reasonable procedures to confirm that the instructions communicated by
telephone are genuine. Such procedures shall consist of confirming a
valid telephone authorization form is on file and providing written
confirmation of tape recorded instructions.
c) The Company, at its option alone and without prior or subsequent notice
to the Owner(s), or any other person or representative of the Owner(s),
may record all or part of any telephone conversation containing
telephone transfer and/or allocation change instructions.
d) All terms of authorization are binding upon the agents, heirs and
assignees of the Owner(s).
e) This Telephone/Allocation Change Authorization will be effective until
such time as (a) written revocation is received by The Company's Service
Office, or (b) The Company discontinues this privilege, whichever occurs
first.
Please check [X] ONLY one box:
[ ] I authorize The Company to accept telephone instructions from me or any
co-owner.
[ ] I authorize The Company to accept telephone instructions from me, any
co-owner or our Registered Representative.
(Registered Representatives should contact their broker/dealer for
procedures regarding this authorization.)
NB5008US (M) Page 3 of 5 M Proprietary Variable
NB5008US (05/2006) Majestic Products
15.INVESTMENT ALLOCATION OF NET PREMIUMS - Allocation must be whole numbers.
Total must be 100%.
Majestic VUL 98, Majestic Performance VUL, Majestic Variable COLI, Variable
MasterPlan Plus, Majestic VEP98, Majestic Performance Survivorship VUL
AGGRESSIVE GROWTH PORTFOLIOS
__% Science & Technology
__% Pacific Rim
__% Health Sciences
__% Emerging Growth
__% Small Cap Growth
__% Emerging Small Company
__% Small Cap
__% Small Cap Index
__% Dynamic Growth
__% Mid Cap Stock
__% Natural Resources
__% All Cap Growth
__% Strategic Opportunities
__% Financial Services
__% International Opportunities
__% International Small Cap
__% International Equity Index B
__% Overseas Equity
__% American International
__% International Value
__% International Core
__% FIXED ACCOUNT
NOTE: Liquidity restrictions apply when allocating funds to the Fixed
Account.
GROWTH PORTFOLIOS
__% Quantitative Mid Cap
__% Mid Cap Index
__% Mid Cap Core
__% Global
__% Capital Appreciation
__% American Growth
__% U.S. Global Leaders Growth
__% Quantitative All Cap
__% All Cap Core
__% Total Stock Market Index
__% Blue Chip Growth
__% U.S. Large Cap
__% Core Equity
__% Strategic Value
__% Large Cap Value
__% Classic Value
__% Utilities
__% Real Estate Securities
__% Small Cap Opportunities
__% Small Cap Value
__% Small Company Value
__% Special Value
__% Mid Value
__% Mid Cap Value
__% Value
__% All Cap Value
M FUNDS
__% Brandes International Equity
__% Turner Core Growth
__% Frontier Capital Appreciation
__% Business Opportunity Value
OTHER PORTFOLIO
__% ______________________________
GROWTH & INCOME PORTFOLIOS
__% Growth & Income
__% 500 Index B
__% Fundamental Value
__% U.S. Core
__% Large Cap
__% Quantitative Value
__% American Growth - Income
__% Equity - Income
__% American Blue Chip Income & Growth
__% Income & Value
__% Managed
__% PIMCO VIT All Asset
__% Global Allocation
INCOME PORTFOLIOS
__% High Yield
__% U.S. High Yield Bond
__% Strategic Bond
__% Strategic Income
__% Global Bond
__% Investment Quality Bond
__% Total Return
__% American Bond
__% Real Return Bond
__% Bond Index B
__% Core Bond
__% Active Bond
__% U.S. Government Securities
__% Short Term Bond
CONSERVATIVE PORTFOLIO
__% Money Market B
LIFESTYLE PORTFOLIOS
__% Lifestyle Aggressive
__% Lifestyle Growth
__% Lifestyle Balanced
__% Lifestyle Moderate
__% Lifestyle Conservative
NB5008US (M) Page 4 of 5 M Proprietary Variable
NB5008US (05/2006) Majestic Products
Allocation of Monthly Charges
16.Please deduct the monthly charges from the following accounts (except
Mortality and Expense Risk/Asset based Risk charges).
Account No. __________________________ __% [ ] Check box and attach
sheet with additional
__________________________ __% information, if necessary.
Owner(s) Signature(s)
Signed at City State This Day of Year
____________________________ _______ ____________________________ ________
Signature of Witness/Registered
Representative (as Witness) Signature of Owner
X X
___________________________________ ______________________________________
Signature of Owner
X
______________________________________
Agent/Registered Representative Certification - All Agents/Registered
Representatives sharing commissions must sign this form.
I certify that a current prospectus (and any supplement) for the policy applied
for has been given to the Proposed Life Insured(s), and to the Owner(s) if
other than the Proposed Life Insured(s).
Signature of Agent/Registered
Representative Place and Date
X
_____________________________________ ______________________________________
Signature of Agent/Registered
Representative Place and Date
X
_____________________________________ ______________________________________
Signature of Agent/Registered
Representative Place and Date
X
_____________________________________ ______________________________________
Signature of Agent/Registered
Representative Place and Date
X
_____________________________________ ______________________________________
Signature of Agent/Registered
Representative Place and Date
X
_____________________________________ ______________________________________
NB5008US (M) Page 5 of 5 M Proprietary Variable
NB5008US (05/2006) Majestic Products