<PAGE>
 
                      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, 1998     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 of                    I.R.S. Employer
 incorporation or organization)                     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) has 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.
<TABLE> 
<CAPTION> 

                                      Shares Outstanding
              Class                 at September 30, 1998    
              -----                 ---------------------   
<S>                                 <C> 
     common stock,                           50,000     
     $50 par value
</TABLE> 
<PAGE>
 
                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
                  --------------------------------------------
                                   FORM 10-Q
                   FOR THE QUARTER ENDED SEPTEMBER 30, 1998

                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 
                                                                      Page
                                                                      ----
<S>                                                                   <C> 
PART I.   FINANCIAL INFORMATION

Item 1.   Unaudited Financial Statements

          Statements of Financial Position as of September 30, 1998
          and December 31, 1997....................................     2
 
          Statements of Operations and Unassigned Deficit for the 
          Three and Nine Months Ended September 30, 1998 
          and 1997.................................................     3
 
          Statements of Cash Flows for the Nine Months Ended
          September 30, 1998 and 1997..............................     4
 
          Statements of Stockholder's Equity for the Nine Months 
          Ended September 30, 1998 and 1997........................     5
 
          Condensed Notes to Financial Statements..................     6
 
Item 2.   Management's Discussion and Analysis.....................     7
 

PART II   OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K........................     11

SIGNATURES
</TABLE>

        
<PAGE>
 
PART I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

                 JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                       STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                              (Unaudited)
                                                              September 30       December 31
                                                                  1998              1997
                                                              -------------------------------
                                                                       (In millions)
<S>                                                           <C>                 <C>
ASSETS                                          
  Bonds                                                           $1,313.1          $1,092.7
  Preferred stocks                                                    36.2              17.2
  Common stocks                                                        1.7               2.3
  Investment in affiliates                                            84.3              79.1
  Mortgage loans on real estate                                      330.1             273.9
  Real estate                                                         39.8              39.9
  Policy loans                                                       129.6             106.8
  Cash and temporary cash investments                                 12.1             143.2
  Premiums due and deferred                                           30.9              33.8
  Investment income due and accrued                                   33.9              24.7
  Other general account assets                                        46.0              16.8
  Assets held in separate accounts                                 5,476.8           4,691.1
                                                              -------------------------------
                                       TOTAL ASSETS               $7,534.5          $6,521.5
                                                              ===============================
OBLIGATIONS AND STOCKHOLDER'S EQUITY                                           

OBLIGATIONS                                                                    
  Policy reserves                                                 $1,604.2          $1,124.3
  Federal income and other taxes payable                              38.8              36.1
  Other accrued expenses                                              65.3             335.1
  Asset valuation reserve                                             20.1              18.6
  Obligations related to separate accounts                         5,471.6           4,685.7
                                                              -------------------------------
                                  TOTAL OBLIGATIONS                7,200.0           6,199.8
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                                                    377.5             377.5
  Unassigned deficit                                                 (45.5)            (58.3)
                                                              -------------------------------
                         TOTAL STOCKHOLDER'S EQUITY                  334.5             321.7
                                                              -------------------------------
         TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY               $7,534.5          $6,521.5
                                                              ===============================
</TABLE>



See condensed notes to the financial statements (unaudited).

<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
                                                          ---------------------------------------------------------------
                                                               1998            1997            1998            1997
                                                          --------------  --------------  --------------  ---------------
                                                                                  (In millions)
<S>                                                         <C>             <C>             <C>             <C>
INCOME
   Premiums                                                       $274.7          $224.8        $1,047.3          $644.8
   Net investment income                                            28.6            22.5            86.5            64.1
   Other, net                                                      203.8            96.9           459.2           267.3
                                                          ---------------------------------------------------------------
                                                                   507.1           344.2         1,593.0           976.2
BENEFITS AND EXPENSES                                   
   Payments to policyholders and beneficiaries                      74.4            64.3           224.6           181.3
   Additions to reserves to provide for future          
    payments to policyholders and beneficiaries                    333.1           214.4         1,124.0           578.7
   Expenses of providing service to                     
    policyholders and obtaining new                     
    insurance                                                       77.7            46.8           196.7           148.2
   State and miscellaneous taxes                                     6.0             4.0            23.5            13.8
                                                          ---------------------------------------------------------------
                                                                   491.2           329.5         1,568.8           922.0
                                                          ---------------------------------------------------------------
                   GAIN FROM OPERATIONS BEFORE                      
                  FEDERAL INCOME TAXES AND NET                      
               REALIZED CAPITAL GAINS (LOSSES)                      15.9            14.7            24.2            54.2
                                                        
Federal income taxes                                                 7.6            10.2            13.6            27.2
                                                          ---------------------------------------------------------------
                          GAIN FROM OPERATIONS                           
                   BEFORE NET REALIZED CAPITAL                     
                                GAINS (LOSSES)                       8.3             4.5            10.6            27.0
                                                        
Net realized capital gains (losses)                                  0.3          (  0.2)         (  0.6)         (  0.2)
                                                          ---------------------------------------------------------------
                                      NET GAIN                       8.6             4.3            10.0            26.8
                                                        
Unassigned deficit at beginning of period                          (55.2)          (70.5)          (58.3)          (96.9)
Net unrealized capital gains (losses) and               
 other adjustments                                                   1.2          (  0.2)            3.7             4.3
Change in reserves on account of change in              
 valuation basis                                                     0.0             6.7             0.0             6.7
Other reserves and adjustments                                    (  0.1)         (  0.2)         (  0.9)         (  0.8)
                                                          ---------------------------------------------------------------
           UNASSIGNED DEFICIT AT END OF PERIOD                    $(45.5)         $(59.9)       $  (45.5)         $(59.9)
                                                          ===============================================================
</TABLE>



See condensed notes to the financial statements (unaudited).
<PAGE>
 
 
                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                      (Unaudited)
                                                                                   Nine months ended
                                                                                      September 30
                                                                             ------------------------------
                                                                                  1998            1997
                                                                             --------------  --------------
                                                                                     (In millions)
<S>                                                                          <C>             <C>
Cash flows from operating activities:
 Insurance premiums                                                               $1,051.7         $ 650.0
 Net investment income                                                                81.0            61.9
 Benefits to policyholders and beneficiaries                                        (203.2)         (169.2)
 Dividends paid to policyholders                                                   (  16.6)        (  13.7)
 Insurance expenses and taxes                                                       (243.7)         (189.4)
 Net transfers to separate accounts                                                 (676.5)         (513.9)
 Other, net                                                                          459.7           262.0
                                                                             ------------------------------
                              NET CASH PROVIDED FROM OPERATIONS                      452.4            87.7
                                                                             ------------------------------
Cash flows used in investing activities:
 Bond purchases                                                                     (533.8)         (297.8)
 Bond sales                                                                          192.6            76.7
 Bond maturities and scheduled redemptions                                            71.9            36.7
 Bond prepayments                                                                     52.3            45.2
 Stock purchases                                                                    ( 20.9)         ( 15.7)
 Proceeds from stock sales                                                             1.7             6.2
 Real estate purchases                                                              (  2.0)         (  0.9)
 Real estate sales                                                                     1.3             0.1
 Other invested assets purchases                                                       0.0             0.0
 Proceeds from the sale of other invested assets                                       0.2             0.0
 Mortgage loans issued                                                              ( 76.2)         ( 59.3)
 Mortgage loan repayments                                                             20.9            25.0
 Other, net                                                                         (291.5)           64.2
                                                                             ------------------------------
                          NET CASH USED IN INVESTING ACTIVITIES                     (583.5)         (119.6)
                                                                             ------------------------------
                                 DECREASE IN CASH AND TEMPORARY
                                               CASH INVESTMENTS                     (131.1)        (  31.9)
Cash and temporary cash investments at beginning of year                             143.2            31.9
                                                                             ------------------------------
                            CASH AND TEMPORARY CASH INVESTMENTS
                                           AT THE END OF PERIOD                   $   12.1         $   0.0
                                                                             ==============================
</TABLE>


See condensed notes to the financial statements (unaudited).
<PAGE>
 
                  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                       STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
                                                         Common           Paid-in         Unassigned
                                                          Stock           Capital          Deficit            Total
                                                   ---------------------------------------------------------------------
<S>                                                  <C>              <C>              <C>               <C>
                                                                              (In millions)
For the nine months ended September 30, 1997
(unaudited)
Balance at January 1, 1997                                $2.5            $377.5           $(96.9)           $283.1
1997 Transactions:                                 
  Net gain                                                                                   26.8              26.8
  Net unrealized capital gains and other           
    adjustments                                                                               4.3               4.3
  Change in reserve on account of change in        
    valuation basis                                                                           6.7               6.7
  Other reserves and adjustments                                                           (  0.8)         (    0.8)
                                                   ---------------------------------------------------------------------
Balance at September 30, 1997                             $2.5            $377.5           $(59.9)           $320.1
                                                   =====================================================================
For the nine months ended September 30, 1998
(unaudited)
Balance at January 1, 1998                                $2.5            $377.5           $(58.3)           $321.7
1998 Transactions:
  Net gain                                                                                   10.0              10.0
  Net unrealized capital gains and other
    adjustments                                                                               3.7               3.7
  Change in reserve on account of change in
    valuation basis                                                                           0.0               0.0
 Other reserves and adjustments                                                              (0.9)             (0.9)
                                                   ---------------------------------------------------------------------
Balance at September 30, 1998                             $2.5            $377.5           $(45.5)           $334.5
                                                   =====================================================================
</TABLE>



See condensed notes to the financial statements (unaudited).
<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, 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 months period ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998.
<PAGE>
 
Item 2. Management's Discussion and Analysis

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

   Financial Condition

   As of September 30, 1998, total assets grew by 15.5% to $7,534.5 million,
from $6,521.5 million at December 31, 1997. This increase is principally due to
the growth in the separate accounts where assets increased by 16.7% during 1998
from $4,691.1 million at December 31, 1997, to $5,476.8 million at September 30,
1998. Total obligations grew by 16.1% to $7,200.0 million from $6,199.8 million
at December 31, 1997. As with assets, most of this growth was in the separate
accounts, which grew by 16.8% during 1998, from $4,685.7 million at December 31,
1997, to $5,471.6 million at September 30, 1998. Separate account assets and
liabilities consist primarily of the fund balances associated with variable life
and annuity business. The asset holdings include fixed income, equity growth,
total return real estate, and international mutual funds, with liabilities
representing amounts due to policyholders. Total stockholder's equity grew by
4.0% from $321.7 million at December 31, 1997, to $334.5 million at September
30, 1998.


   Investments

   JHVLICO's bond portfolio is highly diversified. It maintains diversity by
geographic region, industry group, and limiting the size of individual
investments relative to the total portfolio. The Company invests new money
predominately in long-term investment grade corporate bonds. As a result, the
Company's holdings in investment (NAIC SVO classes 1 and 2) and medium (NAIC SVO
class 3) grade bonds are 88.0% and 9.1%, respectively, of total general account
bonds at September 30, 1998. The corresponding percentages at December 31, 1997
were 90.2% and 7.5%, respectively.  Most of the medium grade bonds are private
placements that provide long-term financing for medium size companies. These
bonds typically are protected by individually negotiated financial covenants
and/or collateral.  At September 30, 1998, the balance (NAIC SVO classes 4, 5,
and 6) of 2.9% of total general account bonds consists of lower grade bonds and
bonds in default.  Bonds in default represent 0.4% of total general account
bonds.

   Management believes the Company's commercial mortgage lending philosophy and
practices are sound.  The Company generally makes mortgage loans against
properties with proven track records and high occupancy levels, and typically
does not make construction or condominium loans nor lend more than 75% of the
property's value at the time of the loan. To assist in the management of its
mortgage loans, the Company uses a computer-based mortgage risk analysis system.

   The Company has outstanding commitments to purchase long-term bonds and issue
real estate mortgages totaling $18.6 million and $76.4 million, respectively at
September 30, 1998. The corresponding amounts at December 31, 1997 were $168.6
million and $28.3 million, respectively. The Company monitors the
creditworthiness of borrowers under long-term bond commitments and requires
collateral as deemed necessary. The majority of these commitments expire in 1998
and 1999.


   Reserves and Obligations

   The Company's obligations principally consist of aggregate reserves for life
policies and contracts of $1,604.2 million in the general account and
obligations of $5,471.6 million in the separate accounts at September 30, 1998.
The corresponding amounts at December 31, 1997 were $1,124.3 million and
$4,685.7 million, respectively. These liabilities are computed in accordance
with commonly accepted actuarial standards and are based on actuarial
<PAGE>
 
assumptions which are in accordance with, or more conservative than, those
called for in state regulations. All reserves meet the requirements of the
insurance laws of the Commonwealth of Massachusetts. Intensive asset adequacy
testing was performed in 1997 for the vast majority of reserves. During 1997,
the Company refined certain assumptions inherent in the calculation of reserves
related to AIDS claims under individual life policies resulting in a $6.4
million increase in stockholder's equity at December 31, 1997. During the first
nine months of 1998, there was no refinement of reserves. Adequacy testing is
done annually and generally performed in the fourth quarter.

   The Company's investment reserves include the Asset Valuation Reserve ("AVR")
required by the NAIC and state insurance regulatory authorities. The AVR is
included in the Company's obligations. At September 30, 1998, and December 31,
1997, the AVR was $20.1 million and $18.6 million, respectively. Since 1995,
there have been no voluntary contributions made to the AVR.  Management believes
the Company's level of reserve is adequate.

   The AVR was established to stabilize 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 changes in interest rates.  Each year, the amount of an insurer's AVR will
fluctuate as capital gains 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 maximum AVR (as determined annually according
to the type and quality of an insurer's assets) and the actual AVR.  The AVR
provisions permitted a phase-in period whereby the required contribution was 10%
in 1992, 15% in 1993, and the full 20% factor thereafter.

   Such contributions may result in a slower rate of growth of, or a reduction
to, surplus.  Changes in the AVR are accounted for as direct increases or
decreases in surplus.  The impact of the AVR on the surplus position of the
Company in the future will depend in part on the composition of its investment
portfolio.

   The Interest Maintenance Reserve ("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.  These amounts are not
reflected in the Company's capital account and are amortized into net investment
income over the estimated remaining lives of the investments disposed.  At
September 30, 1998 and December 31, 1997 the balance of the IMR was $9.5 million
and $7.8 million, respectively. The impact of the IMR on the surplus of the
Company depends upon the amount of future interest related capital gains and
losses on fixed income investments.


   Results of Operations

   For the nine months ending September 30, 1998, the net gain from operations
was $10.0 million, $16.8 million lower than the same period during 1997. For the
quarter ending September 30, 1998, the net gain from operations was $8.6
million, $4.3 million higher than the same period during 1997.

   For the nine months ending September 30, 1998, total revenues increased by
63.2%, or $616.8 million to $1,593.0 million as compared to the same period
during 1997. For the quarter ending September 30, 1998, total revenues increased
by 47.3%, or  $162.9 million as compared to the same period in 1997. For the
nine months ending September 30, 1998, premiums, net of premium ceded to
reinsurers, increased by 62.4%, or $402.5 million to $1,047.3 million as
compared to the same period during 1997. Of this nine month increase, $300.0
million was due to sales of corporate owned life insurance. For the quarter
ending September 30, 1998 premiums, net of 
<PAGE>
 
 
premium ceded to reinsurers, increased by 22.2% or $49.9 million as compared to
the same period during 1997. For the nine months ending September 30, 1998, net
investment income increased by 34.9% or $22.4 million to $86.5 million as
compared to the same period during 1997. For the quarter ending September 30,
1998, net investment income increased by 27.1% or $6.1 million as compared to
the same period during 1997. These increases can be attributed to an increase in
gross income on long-term bonds of $19.1 million and $9.3 million, and real
estate mortgages of $3.6 million and $1.4 million for the nine and three month
periods ended September 30, 1998, respectively. These increases were the result
of an increased asset base. For the nine months ending September 30, 1998, and
for the quarter ending September 30, 1998, other income increased by $191.9
million and $106.9 million respectively compared to the same periods in 1997.
These increases were primarily attributable to the increase in commission and
expense allowances and reserve adjustments on reinsurance ceded. As a result of
a change in statutory regulation, the increases include $32.9 million of
separate account fee income previously classified as expenses of providing
service to policyholders and obtaining new insurance.

   For the nine months ending September 30, 1998, total benefits and expenses
increased by 70.2% or $646.8 million to $1,568.8 million as compared to the same
period during 1997. For the quarter ending September 30, 1998 total benefits and
expenses increased by 49.1% or $161.7 million as compared to the same period
during 1997. For the nine months ending September 30, 1998, benefit payments and
additions to reserves increased by 77.4% or $588.6 million to $1,348.6 million
as compared to the same period during 1997. For the quarter ending September 30,
1998, benefit payments and additions to reserves increased by 46.2% or $128.8
million as compared to the same period during 1997. The nine month increase was
largely the result of an increase in policy reserves associated with the sales
of corporate owned life insurance. For the nine months ending September 30,
1998, insurance expenses increased by 32.7% or $48.5 million to $196.7 million
as compared to the same period during 1997. For the quarter ending September 30,
1998, insurance expenses increased by 66.0% or $30.9 million as compared to the
same period during 1997. These increases were largely the result of
reclassifying separate account fee income as revenue as opposed to an insurance
expense, and to commission expense resulting from the sale of new business.


   Liquidity and Capital Resources

   The Company's liquidity resources at September 30, 1998 include cash and
short-term investments of $12.1 million, public bonds of $701.5 million, and
investment grade private placement bonds of $539.6 million.  The corresponding
amounts at December 31, 1997 were $143.2 million, $561.2 million, and $461.7
million, respectively.  In addition, the Company's separate accounts are highly
liquid and are available to meet most outflow needs for variable life insurance.

   Management believes the liquidity resources above of $1,253.2 million as of
September 30, 1998, strongly position the Company to meet all its obligations to
policyholders and others.  Generally, the Company's financing needs are met by
means of funds provided by normal operations.  As of September 30, 1998 and year
end 1997, the Company had no outstanding borrowings from sources outside its
affiliated group.

   Total surplus, or stockholder's equity, including the AVR, is $354.6 million
as of September 30, 1998 compared to $340.3 million as of December 31, 1997. The
current statutory accounting treatment of deferred acquisition cost ("DAC")
taxes results in an understatement of the Company's surplus, which will persist
during periods of growth in new business written.  These taxes result from
federal income tax law that approximates acquisition expenses and then 
<PAGE>
 
spreads the corresponding tax deduction over a period of years. The result is a
DAC tax which is collected immediately and subsequently returned through tax
deduction in later years.

   Since it began its operations, the Company has received a total of $381.8
million in capital contributions from John Hancock, of which $377.5 million is
credited to paid-in capital and $2.5 million is credited to capital stock as of
September 30, 1998.  In 1993, $1.8 million of capital was returned to John
Hancock.  To support the Company's operations, for the indefinite future, John
Hancock is committed to make additional capital contributions if necessary to
ensure that the Company maintains a positive net worth. The Company's
stockholder's equity, net of unassigned deficit, was $334.5 million at September
30, 1998 and $321.7 million at December 31, 1997.

   In December 1992, the NAIC approved risk-based capital ("RBC") standards for
life insurance companies as well as a Model Act (the "RBC Model Act") to apply
such standards at the state level.  The RBC Model Act provides that life
insurance companies must submit an annual RBC report which compares a company'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, where the formula takes into account
the risk characteristics of the company's investments and products.  The formula
is to be used by insurance regulators as an early warning tool to identify
possible weakly capitalized companies for purposes of initiating further
regulatory action. The formula is not intended as a means to rank insurers. The
RBC Model Act gives state insurance commissioners explicit regulatory authority
to require various actions by, or take various actions against, insurance
companies whose total adjusted capital does not meet the RBC standards.  The RBC
Model Act imposes broad confidentiality requirements on those engaged in the
insurance business (including insurers, agents, brokers and others) as to the
use and publication of RBC data.  As of September 30 1998, the Company's total
adjusted capital as defined by the NAIC was well in excess of RBC standards.


   Year 2000 Impact

   The Company relies on John Hancock, its parent company, for information
processing services.  John Hancock has developed a plan to modify or replace
significant portions of its computer information and automated technologies so
that its systems, including those relied upon by the Company, will function
properly with respect to the dates in the year 2000 and thereafter.  The
Company, along with John Hancock, presently believes that with modifications to
existing systems and conversions to new technologies, the year 2000 will not
pose significant operational problems for the computer systems upon which the
Company relies.  However, if certain modifications and conversions are not made,
or are not completed timely, the year 2000 issue could have an adverse impact on
the operations of the Company.

   John Hancock as early as 1994 had begun assessing, modifying and converting
the software related to its significant systems and has initiated formal
communications with significant business partners and customers to determine the
extent to which interface systems are vulnerable to those third parties' failure
to remediate their own year 2000 issues. While John Hancock is developing
alternative third party processing arrangements as it deems appropriate, there
is no guarantee that the systems of other companies on which John Hancock's
systems rely will be converted timely or will not have an adverse effect on John
Hancock's systems, including those upon which the Company relies.

   John Hancock expects the project to be substantially completed before the end
of the second quarter of 1999. This completion target was derived utilizing
numerous assumptions of future events, including availability of certain
resources and other factors. However, there can be no guarantee that this
completion target will be achieved, that the steps taken will be sufficient, or
that actual results may differ materially from those anticipated.
<PAGE>
 
 
PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits
 
               27.  Financial Data Sheet

          (b)  Reports on Form 8-K

               None



                                   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 12, 1998      /s/ Thomas J. Lee
       -----------------      ----------------------------
                              Vice President


Date:  November 12, 1998      /s/ Patrick F. Smith
       -----------------      ----------------------------
                              Controller