SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549
                        ----------------------

                               FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2000         Commission File No. 33-62895
   ------------------------------------------------------------------

               John Hancock Variable Life Insurance Company
               --------------------------------------------
            (Exact name of registrant as specified in its charter)

      Massachusetts                              04-2664016
      -------------                              ----------
    (State or other jurisdiction        (I.R.S. Employer incorporation
         of organization)                    or Identification No.)

   200 Clarendon Street, Boston, Massachusetts             02117
   -------------------------------------------             -----
 (Address of principal executive offices)               (Zip Code)

 Registrant's telephone number, including area code:   (617)572-9196
                                                        -------------
                                      None
                                      ----
     (Former  name, former address, and former fiscal year if changed since last
              report.)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required to file such reports), and (2) been subject to such filing requirements
for the past 90 days.

                                Yes X    No
                                    -       -


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class                               Shares Outstanding at September 30, 2000
-----                               ----------------------------------------
Common stock, $50 par value               50,000

<PAGE>

                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
                  --------------------------------------------
                                   FORM 10-Q

                      FOR THE QUARTER ENDED SEPTEMBER 30, 2000

                               TABLE OF CONTENTS


PART I.

FINANCIAL INFORMATION

                                                                        Page
Item 1. Unaudited Financial Statements

   Statements of Financial Position as of September 30,
   2000 and December 31, 1999 ...........................................  1

   Statements of Operations and Unassigned Deficit
   for the Three and Nine Months Ended September 30, 2000 and 1999 ......  2

   Statements of Cash Flows for the Nine Months
   Ended September 30, 2000 and 1999 ....................................  3

   Statements of Stockholder's Equity for the
   Nine Months Ended September 30, 2000 and 1999 ........................  4

   Condensed Notes to Financial Statements ..............................  5

Item 2. Management's Discussion and Analysis ............................  6

Item 3. Quantitative an Qualitative Disclosures
           About Market Risk ............................................ 11
PART II.

OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ................................ 13

<PAGE>

                                     PART 1
                              FINANCIAL INFORMATION

ITEM 1.  UNAUDITED FINANCIAL STATEMENTS

                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                        STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
                                                                                      (Unaudited)
                                                                             September 30      December 31
                                                                                 2000             1999
                                                                          ------------------------------------
                                                                                     (In millions)
<S>                                                                               <C>               <C>
ASSETS
    Bonds                                                                      $1,378.1          $1,216.3
    Preferred stocks                                                               40.9              35.9
    Common stocks                                                                   1.9               3.2
    Investment in affiliates                                                       81.5              80.7
    Mortgage loans on real estate                                                 478.2             433.1
    Real estate                                                                    24.7              25.0
    Policy loans                                                                  205.3             172.1
    Cash Items:
      Cash in banks                                                                 7.7              27.2
      Temporary cash investments                                                  242.6             222.9
                                                                           -----------------------------------
                                                                                  250.3             250.1

    Premiums due and deferred                                                      33.4              29.9
    Investment income due and accrued                                              45.6              33.2
    Other general account assets                                                   27.9              65.3
    Assets held in separate accounts                                            8,618.1           8,268.2
                                                                           -----------------------------------
                                                          TOTAL ASSETS        $11,185.9         $10,613.0
                                                                           ===================================

OBLIGATIONS AND STOCKHOLDER'S EQUITY

OBLIGATIONS
    Policy reserves                                                            $2,116.9          $1,866.6
    Federal income and other taxes payable                                         29.8              67.3
    Other general account obligations                                             209.8             219.0
    Transfers from separate account, net                                         (232.7)           (221.6)
    Asset valuation reserve                                                        22.4              23.1
    Obligations related to separate accounts                                    8,611.2           8,261.6
                                                                           -----------------------------------
                                                     TOTAL OBLIGATIONS         10,757.4          10,216.0

STOCKHOLDER'S EQUITY
    Common Stock, $50 par value; authorized 50,000
      shares; issued and outstanding 50,000 shares                                  2.5               2.5
    Paid-in capital                                                               572.4             572.4
    Unassigned deficit                                                           (146.4)           (177.9)
                                                                           -----------------------------------
                                            TOTAL STOCKHOLDER'S EQUITY            428.5             397.0
                                                                           -----------------------------------

                            TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY        $11,185.9         $10,613.0
                                                                           ===================================
</TABLE>

See condensed notes to the financial statements (unaudited).

                                       1
<PAGE>

                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                 STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

<TABLE>
<CAPTION>

                                                                                     (Unaudited)
                                                                    Three months ended          Nine months ended
                                                                       September 30                September 30
                                                                --------------------------- ---------------------------
                                                                     2000          1999          2000          1999
                                                                     ----          ----          ----          ----

                                                                                          (In millions)
<S>                                                                   <C>           <C>           <C>            <C>
INCOME
     Premiums                                                       $217.9        $236.9        $704.9        $689.1
     Net investment income                                            45.1          35.0         128.1          99.4
     Other, net                                                      124.9         162.9         367.4         424.8
                                                                ------------- ------------- ------------- -------------
                                                                     387.9         434.8       1,200.4       1,213.3

BENEFITS AND EXPENSES
     Payments to policyholders and beneficiaries                      86.1          91.5         268.5         265.9
     Additions to reserves to provide for future
       payments to policyholders and beneficiaries                   189.3         223.0         619.0         659.8
     Expenses of providing service to
       policyholders and obtaining new
       insurance                                                      85.1          71.8         239.0         225.3
     State and miscellaneous taxes                                     3.2           5.0          16.5          15.9
                                                                ------------- ------------- ------------- -------------
                                                                     363.7         391.3       1,143.0       1,166.9
                                                                ------------- ------------- ------------- -------------

                       GAIN FROM OPERATIONS BEFORE
                      FEDERAL INCOME TAXES AND NET
                   REALIZED CAPITAL GAINS (LOSSES)                    24.2          43.5          57.4          46.4

Federal income taxes                                                   2.8          20.8          19.7          20.4
                                                                ------------- ------------- ------------- -------------
                   GAIN FROM OPERATIONS BEFORE NET
                   REALIZED CAPITAL GAINS (LOSSES)                    21.4          22.7          37.7          26.0


Net realized capital gains (losses)                                   (1.0)          1.4          (0.5)          0.4
                                                                ------------- ------------- ------------- -------------
                                        NET INCOME                    20.4          24.1          37.2          26.4

Unassigned deficit at beginning of period                           (163.4)        (52.2)       (177.9)        (49.2)
Net unrealized capital gains (losses) and
  other adjustments                                                   (3.2)        ( 0.4)         (5.2)        ( 3.5)
Provision for litigation reserve                                       0.0        (194.9)          0.0        (194.9)
Other reserves and adjustments                                        (0.2)        ( 1.0)       (  0.5)         (3.2)
                                                                ------------- ------------- ------------- -------------

          UNASSIGNED DEFICIT AT END OF PERIOD                     $ (146.4)     $ (224.4)    $  (146.4)     $ (224.4)
                                                                ============= ============= ============= =============
</TABLE>




See condensed notes to the financial statements (unaudited).

                                       2
<PAGE>

                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                         (Unaudited)
                                                                                      Nine months ended
                                                                                         September 30
                                                                                  ---------------------------
                                                                                      2000          1999
                                                                                      ----          ----
                                                                                        (In millions)
<S>                                                                                    <C>          <C>
Cash flows from operating activities:
   Insurance premiums                                                               $ 709.2       $ 691.1
   Net investment income                                                              115.4          92.1
   Benefits to policyholders and beneficiaries                                      ( 249.3)       (358.0)
   Dividends paid to policyholders                                                  (  19.5)      (  19.0)
   Insurance expenses and taxes                                                      (264.8)       (268.1)
   Net transfers to separate accounts                                                (379.5)       (519.4)
   Other, net                                                                         317.4         386.7
                                                                                  ------------- -------------
                                           NET CASH PROVIDED FROM OPERATIONS          228.9           5.4
                                                                                  ------------- -------------

Cash flows used in investing activities:
   Bond purchases                                                                    (386.2)       (194.8)
   Bond sales                                                                         140.4          61.2
   Bond maturities and scheduled redemptions                                           56.7          57.5
   Bond prepayments                                                                    23.8          16.6
   Stock purchases                                                                   (  5.9)       (  1.2)
   Proceeds from stock sales                                                            1.4           3.6
   Real estate purchases                                                             (  0.3)       (  1.9)
   Real estate sales                                                                    0.1          17.8
   Other invested assets purchases                                                     (3.6)       (  4.5)
   Proceeds from the sale of other invested assets                                      0.9           0.0
   Mortgage loans issued                                                            (  71.7)       ( 48.0)
   Mortgage loan repayments                                                            26.1          19.6
   Other, net                                                                         (10.4)         13.3
                                                                                  ------------- -------------
                                       NET CASH USED IN INVESTING ACTIVITIES         (228.7)        (60.8)
                                                                                  ------------- -------------

Cash flows from financing activities:
   Capital contribution                                                                 0.0         170.4
   Net increase (decrease) in short-term note payable                                   0.0         (62.1)
                                                                                  ------------- -------------
                                 NET CASH PROVIDED FROM FINANCING ACTIVITIES            0.0         108.3
                                                                                  ------------- -------------


                                   INCREASE (DECREASE) IN CASH AND TEMPORARY
                                                            CASH INVESTMENTS            0.2          52.9
Cash and temporary cash investments at beginning of year                              250.1          19.9
                                                                                  ------------- -------------

                                         CASH AND TEMPORARY CASH INVESTMENTS
                                                        AT THE END OF PERIOD      $   250.3      $   72.8
                                                                                  ============= =============
</TABLE>

See condensed notes to the financial statements (unaudited).

                                       3
<PAGE>

                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                       STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>


                                                             Common         Paid-in       Unassigned
                                                             Stock          Capital         Deficit         Total
                                                         --------------- --------------- -------------- ---------------
                                                                                 (In millions)
<S>                                                             <C>            <C>               <C>           <C>
For the nine months ended September 30, 1999
(unaudited)
Balance at January 1, 1999                                    $  2.5          $377.5          $(49.2)        $330.8
1999 Transactions:
    Capital contribution                                                       170.4                          170.4
    Net income                                                                                  26.4           26.4
    Net unrealized capital gains and other
      adjustments                                                                             (  3.5)        (  3.5)
    Provision for litigation reserve                                                          (194.9)        (194.9)
    Other reserves and adjustments                                                            (  3.2)        (  3.2)
                                                         --------------- --------------- -------------- ---------------
Balance at September 30, 1999                                 $  2.5          $547.9         $(224.4)        $326.0
                                                         =============== =============== ============== ===============

For the nine months ended September 30, 2000
(unaudited)
Balance at January 1, 2000                                    $  2.5          $572.4         $(177.9)        $397.0
2000 Transactions:
    Capital contribution
    Net income                                                                                  37.2           37.2
    Net unrealized capital gains and other
      adjustments                                                                               (5.2)          (5.2)
    Provision for litigation reserve                                                             0.0            0.0
    Other reserves and adjustments                                                            (  0.5)        (  0.5)
                                                         --------------- --------------- -------------- ---------------
Balance at September  30, 2000                                $  2.5          $572.4         $(146.4)        $428.5
                                                         =============== =============== ============== ===============
</TABLE>


See condensed notes to the financial statements (unaudited).

                                       4
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

CONDENSED NOTES TO FINANCIAL STATEMENTS
(unaudited)


NOTE 1--BASIS OF PRESENTATION

The accompanying  unaudited interim  financial  statements have been prepared on
the basis of accounting practices prescribed or permitted by the Commonwealth of
Massachusetts  Division of Insurance and in conformity with the practices of the
National Association of Insurance  Commissioners  (NAIC), which practices differ
from generally  accepted  accounting  principles  (GAAP).  Pursuant to Financial
Accounting Standard Board Interpretation 40,  "Applicability of General Accepted
Accounting  Principles to Mutual Life Insurance and Other Enterprises" (FIN 40),
as  amended  which  was  effective  for  1996  financial  statements,  financial
statements based on statutory accounting practices can no longer be described as
prepared in conformity with GAAP.

In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the nine-month  period ending  September 30, 2000 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 2000.


                                       5
<PAGE>


ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS


                       MANAGEMENT DISCUSSION AND ANALYSIS

Financial condition

         During the past nine months,  JHVLICO's total assets grew primarily due
to the growth in the total assets of the JHVLICO's separate accounts.  Likewise,
its total  obligations  grew. Total  stockholder's  equity also grew during this
period.  The following  chart shows a percentage  growth in total assets,  total
obligations  and total  stockholder's  equity for the  nine-month  period  ended
September 30, 2000:
<TABLE>
<CAPTION>
                                                                September 30,   December  31,
                                                                   2000             1999
                                                                   ----             ----
                                                                       (in millions)             % change
<S>                                                                  <C>             <C>            <C>
------------------------------------------------------------- ----------------- ----------------- -----------
Total assets  -  JHVLICO                                      $ 11,185.9        $ 10,613.0         5.4%
------------------------------------------------------------- ----------------- ----------------- -----------
Total assets  -  JHVLICO separate accounts                    $  8,618.1        $  8,268.2         4.2%
------------------------------------------------------------- ----------------- ----------------- -----------
Total obligations - JHVLICO                                   $ 10,757.4        $ 10,216.0         5.3%
------------------------------------------------------------- ----------------- ----------------- -----------
Total obligations - JHVLICO separate accounts                 $  8,611.2        $  8,261.6         4.2%
------------------------------------------------------------- ----------------- ----------------- -----------
Total stockholder's equity                                    $    428.5        $    397.0         7.9%
------------------------------------------------------------- ----------------- ----------------- -----------
</TABLE>

Separate account assets and liabilities  consist  primarily of the fund balances
associated with JHVLICO's variable life and annuity business. The asset holdings
include fixed  income,  equity  growth,  total return real estate,  global,  and
international  mutual  funds  with  liabilities   representing  amounts  due  to
policyholders.

Investments

         JHVLICO's bond portfolio remains highly  diversified.  It maintains the
diversity of its bond portfolio by

         (1)  investing  in a wide  variety of  geographic  regions and industry
              groups, and
         (2) limiting the size of  individual  investment  relative to the total
             portfolio.

JHVLICO invests new money predominantly in long-term  investment grade corporate
bonds.  As a result,  84.3% of JHVLICO's  general  account bonds were investment
grade bonds,  and 11.1% were medium grade bonds as of  September  30, 2000.  The
corresponding  percentages  as of  December  31,  1999,  were  86.0%  and  9.8%,
respectively.  For  medium  grade  bonds,  JHVLICO  invests  mostly  in  private
placements that provide  long-term  financing for medium size  companies.  These
bonds typically are protected by  individually  negotiated  financial  covenants
and/or  collateral.  As of September 30, 2000,  the remaining  4.6% of JHVLICO's
total general account bonds consisted of lower grade bonds and bonds in default.
Bonds in default represent 1.1% of JHVLICO's general account bonds.

         Management  believes  JHVLICO's  commercial  mortgage lending practices
continue to be strong. JHVLICO generally makes mortgage loans against properties
with proven track records and high occupancy levels. Typically, JHVLICO does not
make  construction or condominium loans nor lend more than 75% of the property's
value at the time of the loan.  JHVLICO  uses a  computer  based  mortgage  risk
analysis system in managing the credit risk related to its mortgage loans.

         JHVLICO has outstanding  commitments to purchase long-term bonds, other
invested  assets and issue real estate  mortgages  totaling $22.8 million,  $8.2
million  and  $15.3   million,   respectively,   at  September  30,  2000.   The
corresponding  amounts at December 31, 1999 were $15.4 million, $0.0 million and
$3.5 million,  respectively.  JHVLICO monitors the creditworthiness of borrowers
under long-term bond commitments and requires collateral as deemed necessary. If
funded,  loans related to real estate mortgages would be fully collateralized by
the related properties.  Most of the commitments at September 30, 2000 expire in
2000 and 2001.

                                       6
<PAGE>

Reserves and obligations

         JHVLICO's  obligations consist primarily of aggregate reserves for life
and annuity policies and contracts.  As of September 30, 2000, JHVLICO's general
account reserves  totaled $2,116.9 million and its separate account  obligations
totaled $8,611.2  million.  As of December 31, 1999, the  corresponding  amounts
were $1,866.6 million and $8,261.6 million, respectively. JHVLICO computes these
liabilities  in  accordance  with commonly  accepted  actuarial  standards.  Its
actuarial  assumptions are in accordance with, or more conservative  than, those
called  for in  state  regulations.  Total  reserves  meet the  requirements  of
Massachusetts insurance laws.

         Every year,  JHVLICO performs reserve adequacy testing,  usually during
the fourth quarter.  Intensive asset adequacy  testing was performed in 1999 for
the vast majority of reserves. During 2000 and 1999, JHVLICO made no refinements
to reserves.

         JHVLICO's  investment  reserves  include  the asset  valuation  reserve
("AVR"), and interest maintenance reserve ("IMR") required by the NAIC and state
insurance  regulatory  authorities.  The AVR stabilizes  statutory  surplus from
non-interest related fluctuations in the market value of bonds, stocks, mortgage
loans,  real  estate  and other  invested  assets.  The AVR  generally  captures
realized and unrealized capital gains or losses on such assets, other than those
resulting from interest rate changes.

         Each  year,  the  amount  of an  insurer's  AVR will  fluctuate  as the
non-interest related capital gains and/or losses are absorbed by the reserve. To
adjust for such changes over time,  an annual  contribution  must be made to the
AVR  equal  to 20% of the  difference  between  the AVR  reserve  objective  (as
determined  annually  according to the type and quality of an insurer's  assets)
and the actual AVR.

         JHVLICO includes the AVR in its obligations.  Its AVR was $22.4 million
at September 30, 2000,  and $23.1 million as of December 31, 1999.  During 1998,
JHVLICO  made  a  voluntary  contribution  of  $0.7  million  to the  AVR.  Such
contributions  may  result in a slower  rate of growth  of, or a  reduction  to,
stockholder's  equity.  During  2000 and  1999,  there  have  been no  voluntary
contributions  to the  AVR.  Changes  in the AVR  are  accounted  for as  direct
increases  or  decreases  in  stockholder's  equity.  The  impact  of the AVR on
JHVLICO's  stockholder's  equity  position  will depend,  in part,  on JHVLICO's
investment portfolio.

          The IMR captures  realized  capital gains and losses (net of taxes) on
fixed income  investments  (primarily  bonds and mortgage loans)  resulting from
changes in interest  rate levels.  JHVLICO does not reflect these amounts in its
stockholder  equity account but amortizes  them into net investment  income over
the estimated remaining lives of the investments disposed. At September 30, 2000
and December 31, 1999,  JHVLICO's IMR balance was $6.0 million and $7.4 million,
respectively.  The impact of the IMR on JHVLICO's  stockholder's  equity depends
upon the amount of future  interest  related  capital  gains and losses on fixed
income investments.


                                       7
<PAGE>

Results of operations

         For  the  nine  months  ending   September  30,  2000,  net  gain  from
operations,  before net realized capital losses, totaled $37.7 million, an $11.7
million  increase  over the same period  during  1999.  For the  quarter  ending
September  30,  2000,  net gain from  operations,  before net  realized  capital
losses,  totaled $21.4  million,  a $1.3 million  decrease  compared to the same
period during 1999.  The nine-month  increase in net gain is principally  due to
positive  results in the life insurance line of business  within  JHVLICO.  This
line of business had a growth in net gain of $11.9 million.  Increased  separate
account  fees and a continued  overall  reduction to the  Company's  expenses of
providing  service to  policyholders  further  increased the operating gain. The
quarter ending decrease is primarily due to a 1999 $14.6 million pre-tax expense
reimbursement  adjustment under a modified coinsurance agreement in the variable
annuity line of business.  This occurred during the quarter ending September 30,
1999, which has not recurred during the quarter ending September 30, 2000.

         For the nine months ending September 30, 2000, total revenues decreased
by 1.1% (or $12.9  million) to  $1,200.4  million as compared to the same period
during 1999. For the quarter ending September 30, 2000, total revenues decreased
by 10.8% (or $46.9  million)  to $387.9  million as  compared to the same period
during 1999.  For the nine months  ending  September 30, 2000,  premium,  net of
premium  ceded to  reinsurers,  increased  by 2.3% (or $15.8  million) to $704.9
million as compared  to the same  period  during  1999.  For the quarter  ending
September 30, 2000,  premium,  net of premium ceded to reinsurers,  decreased by
8.0% (or $19.0  million) to $217.9 million as compared to the same period during
1999.  For the nine months ending  September  30, 2000,  net  investment  income
increased by 28.9% (or $28.7  million) to $128.1 million as compared to the same
period during 1999.  For the quarter  ending  September 30, 2000, net investment
income increased by 28.9% (or $10.1 million) to $45.1 million as compared to the
same period during 1999.  These  increases are primarily due to a $12.6 million,
and a $4.0 million increase in gross income on short-term bonds for the nine and
three month period ended September 30, 2000,  respectively.  These increases can
both be attributed to an increased liquid asset base. For the nine months ending
September 30, 2000, and for the quarter ending  September 30, 2000, other income
decreased by $57.4 million and $38.0 million  respectively  compared to the same
periods in 1999. These decreases were primarily  attributable to the decrease in
commission and expense allowances, and reserve adjustments on reinsurance ceded.

         For the nine months ending September 30, 2000, total benefits and
expenses decreased by 2.0% (or $23.9 million) to $1,143.0 million as compared to
the same period during 1999. For the quarter ending September 30, 2000, total
benefits and expenses decreased by 7.1% (or $27.6 million) to $363.7 million as
compared to the same period during 1999. For the nine months ending September
30, 2000, benefit payments and additions to reserves decreased by 4.1% (or $38.2
million) to $887.5 million as compared to the same period during 1999. For the
quarter ending September 30, 2000, benefit payments and additions to reserves
decreased by 12.4% (or $39.1 million) to $275.4 million as compared to the same
period during 1999. For the nine months ending September 30, 2000, insurance
expenses increased by 6.1% (or $13.7 million) to $239.0 million as compared to
the same period during 1999. For the quarter ending September 30, 2000,
insurance expenses increased by 18.5% (or $13.3 million) to $85.1 million as
compared to the same period during 1999. This consists of a $27.4 million
increase in commission expenses resulting from the sale of new and renewal
business, and a $13.7 million decrease in expense due to lower systems expense
(less Y2K and demutualization systems expense in 2000).


                                       8
<PAGE>

Liquidity and capital resources

         JHVLICO's  liquidity resources for the period ending September 30, 2000
and December 31, 1999 were as follows:

<TABLE>
<CAPTION>
                                                                    September 30,  December  31,
                                                                        2000          1999
                                                                        ----          ----
           Type of investment                                               (in millions)
          <S>                                                            <C>            <C>
          ------------------------------------------------------- --------------- ---------------
          Cash and short-term investments                         $250.3             $250.1
          ------------------------------------------------------- --------------- ---------------
          Public bonds                                            $709.0             $454.1
          ------------------------------------------------------- --------------- ---------------
          Investment grade private placement bonds                $522.6             $609.4
          ------------------------------------------------------- --------------- ---------------
</TABLE>

In addition,  JHVLICO's separate accounts assets are highly liquid and available
to meet most outflow needs for variable life insurance.

         JHVLICO's management believes the liquidity resources above of $1,481.9
million as of September  30,  2000,  strongly  position  JHVLICO to meet all its
obligations to  policyholders  and others.  Funds provided by normal  operations
generally  satisfy  JHVLICO's   financing  needs.   There  were  no  outstanding
borrowings as of September 30, 2000 and December 31, 1999.

         Total  surplus,  also  known  as  stockholder's  equity,  plus the AVR,
amounted to $450.9  million as of September 30, 2000,  and $420.1  million as of
December  31,  1999.  The current  statutory  accounting  treatment of taxes for
deferred  acquisition  costs ("DAC taxes")  currently  results in a reduction to
JHVLICO's  surplus.  This reduction will persist during periods of growth in new
business.  DAC  taxes  result  from  federal  income  tax law that  approximates
acquisition  expenses,  and then spreads the  corresponding tax deduction over a
period  of  years.  As a  result,  the  DAC  tax is  collected  immediately  and
subsequently returned through tax deductions in later years.

         Since it began  operations,  JHVLICO  has  received  a total of  $576.7
million in capital  contributions  from the John Hancock Life Insurance  Company
("John  Hancock"),  its parent  company,  of which $572.4 million is credited to
paid-in  capital and $2.5 million was credited to capital  stock as of September
30, 2000. In 1993, JHVLICO returned $1.8 million of capital to John Hancock.  To
support  JHVLICO's  operations,  for the  indefinite  future,  John Hancock will
continue to make capital  contributions,  if  necessary,  to ensure that JHVLICO
maintains  a   stockholder's   equity  of  at  least  $1.0  million.   JHVLICO's
stockholder's  equity, net of unassigned deficit,  amounted to $428.5 million at
September 30, 2000, and $397.0 million at December 31, 1999.

         During 1997,  John Hancock  entered  into a  court-approved  settlement
relating to a class action lawsuit involving  certain  individual life insurance
policies  sold from 1979 through 1996.  In entering  into the  settlement,  John
Hancock  specifically  denied any wrongdoing.  During 1999,  JHVLICO  recorded a
$194.9  million  reserve,  through a direct  charge to its  unassigned  deficit,
representing  JHVLICO's  share of the  settlement  and John Hancock  contributed
$194.9  million of capital to JHVLICO.  The reserve held at  September  30, 2000
amounted to $121.2  million and is based on a number of factors,  including  the
estimated  number of claims,  the expected  type of relief to be sought by class
members (general relief or alternative dispute  resolution),  the estimated cost
per claim and the estimated costs to administer the claims.

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


                                       9
<PAGE>

         In  December  1992,  the  NAIC  approved   risk-based  capital  ("RBC")
standards for life insurance  companies.  It also approved a model act (the "RBC
Model  Act") to apply  such  standards  at the  state  level.  The RBC Model Act
requires life insurers to submit an annual RBC report comparing  JHVLICO's total
adjusted capital (statutory surplus plus AVR, voluntary investment reserves, and
one-half the  apportioned  dividend  liability)  with its risk-based  capital as
calculated  by  an  RBC  formula.  The  formula  takes  into  account  the  risk
characteristics of the Company's investments and products.  Insurance regulators
use the formula as an early warning tool to identify possible weakly capitalized
companies for purposes of initiating  further  regulatory action, not as a means
to rank insurers.  As of September 30, 2000, JHVLICO's total adjusted capital as
defined by the NAIC was well in excess of the RBC standards.


                                       10
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK.

     JHVLICO maintains a disciplined, comprehensive approach to managing capital
market  risks  inherent in its  business  operations.  The  Company's  principal
capital  market  exposures are credit and interest  rate risk,  although we have
certain  exposures to changes in foreign  currency  exchange rates.  Credit risk
pertains  to the  uncertainty  associated  with the  ability  of an  obligor  or
counterparty  to continue to make timely and  complete  payments of  contractual
principal  and/or  interest.  Interest  rate risk  pertains to the market  value
fluctuations  that occur within fixed  maturity  securities  or  liabilities  as
market   interest   rates  move.   Foreign   currency  risk  pertains  to  price
fluctuations,   associated  with  the  Company's   ownership  of  non-US  dollar
denominated investments, driven by dynamic foreign exchange levels.

     The active  management  of  capital  market  risks is central to  JHVLICO's
operations.  Consistent  with  Company  policy,  JHVLICO  may use the  following
approaches  to manage its  exposure  to market  risk  within  defined  tolerance
ranges: (1) rebalance its existing asset or liability portfolios; (2) change the
character of future investments purchased;  or (3) use derivative instruments to
modify  the market  risk  characteristics  of  existing,  or future,  assets and
liabilities.

Interest Rate Risk

     Interest rate risk is the risk that JHVLICO will incur economic  losses due
to adverse changes in interest rates. This risk arises from certain of JHVLICO's
primary  activities,  as JHVLICO invests funds in  interest-sensitive  assets to
support the issuance of certain interest-sensitive liabilities.

      JHVLICO   seeks  to  earn  returns  that  enhance  its  ability  to  offer
competitive  rates and  prices to its  customers  while  contributing  to stable
profits  and  long-term  capital  growth.   Accordingly,   JHVLICO's  investment
objectives  and  decisions  are a function of the  underlying  risks and product
offerings of each primary business operation.  In addition,  JHVLICO diversifies
its product  portfolio  offerings to include products that contain features that
protect  against   fluctuations  in  interest  rates.   Those  features  include
adjustable   crediting  rates,  policy  surrender  charges,   and  market  value
adjustments on early liquidations.

     JHVLICO seeks to reduce the effect of call or prepayment  risk in its fixed
maturity  portfolios by limiting its exposure to  investments  that are not call
protected or by requiring  incremental  yield to compensate  for the risk of the
option being  exercised.  Examples of investments that JHVLICO limits because of
option risk are residential mortgage-backed securities.

     JHVLICO  manages  the  interest  rate risk in its  assets  relative  to the
interest rate risk inherent in its liabilities. One of the measures JHVLICO uses
to quantify  this  exposure is duration,  with other  measures used for limiting
exposure to non-parallel  interest rate risk.  JHVLICO's  objective is to manage
the  duration  gap between its assets and  liabilities  to within a 10% relative
band of its  liability  duration.  In  practice,  the  mismatch has been managed
within a tolerance of +/- .05 years

     In  addition  to  the  duration  management  procedures  described  in  the
preceding  paragraphs,  a JHVLICO  subsidiary,  Investors Partner Life Insurance
Company,  maintains an actively managed public bond portfolio that uses interest
rate  futures  contracts  to help  manage its  duration  relative to that of its
benchmark.  Its investment policy permits a duration  tolerance of +/- .25 years
around the  composite  Lehman  Brothers  benchmark  duration.  In practice,  the
portfolio's duration mismatch is managed to within +/- .05 years

     JHVLICO also uses various  derivative  financial  instruments to manage its
exposure to  fluctuations  in interest  rates,  including  interest  rate swaps,
interest  rate  futures,  and interest  rate caps.  Interest rate swaps are used
primarily to more closely align the interest rate  characteristics of assets and
liabilities.  JHVLICO also uses interest rate futures to periodically  rebalance
its duration-managed accounts. JHVLICO uses interest rate caps to hedge embedded
caps on  floating-rate  assets and to manage the risk  associated  with a sudden
rise in interest rates.

     As of  September  30,  2000,  there  have been no  material  changes to the
interest  rate  exposures  as  reported in the  Company's  1999 Form 10-K Annual
Report.


                                       11
<PAGE>

Credit Risk

     The  Company  manages  the  credit  risk  inherent  in its  fixed  maturity
securities by applying strict credit and underwriting  standards,  with specific
limits regarding the proportion of permissible  below investment grade holdings.
We also  diversify  our fixed  maturity  securities  with respect to  investment
quality, issuer, industry, geographical, and property-type concentrations. Where
possible,  consideration  of  external  measures  of  creditworthiness,  such as
ratings  assigned by  nationally  recognized  rating  agencies,  supplement  our
internal credit analysis.

     JHVLICO's  exposure to  derivatives  credit risk is the risk of loss from a
counterparty  failing to perform the terms of the contract.  JHVLICO continually
monitors  its  position and the credit  ratings of the  counterparties  to these
derivative   instruments.   To  limit  exposure   associated  with  counterparty
nonperformance  on interest  rate swaps and interest rate caps,  JHVLICO  enters
into master  netting  agreements  with its  counterparties.  In addition,  where
deemed appropriate,  JHVLICO enters into bi-lateral  collateral  agreements with
certain of its counterparties. JHVLICO believes the risk of incurring losses due
to  nonperformance by its  counterparties is remote.  Futures contracts trade on
organized exchanges and, therefore, have effectively no credit risk.

Foreign Currency Risk

     Foreign  currency risk is the risk that JHVLICO will incur economic  losses
due to adverse changes in foreign currency exchange rates. JHVLICO holds certain
fixed income  securities  that are  denominated in foreign  currencies.  Company
policy  requires that we use  derivatives to hedge the foreign  currency risk of
these instruments (both interest payments and the final maturity payment). As of
September 30, 2000,  there has been no material change in the composition of the
Company's  foreign  currency risk  exposure.  For further  discussion of foreign
currency  risk  exposure,  please refer to the  Company's  1999 Form 10-K Annual
Report.

Effects of Inflation

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


                                       12
<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

     27. Financial Data Schedule

(b)      Reports on Form 8-K

     None





                                       13
<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                         John Hancock Variable Life Insurance Company
                         (Registrant)


Date: November 14, 2000  /s/ Thomas J. Lee
                         -----------------
                         Thomas J. Lee
                         Vice President


Date: November 14, 2000  /s/ Patrick J. Gill
                         --------------------
                         Patrick J. Gill
                         Controller