497 1 d497.txt MEVL III SUPPLEMENT - ACCT UV SUPPLEMENT dated February 8, 2002 TO PROSPECTUSES Dated May 1, 2001 OR LATER -------------------------- This Supplement is intended to be distributed with the prospectuses dated May 1, 2001 or later, as supplemented, for MEDALLION EXECUTIVE VARIABLE LIFE III variable life insurance policies issued by John Hancock Life Insurance Company or John Hancock Variable Life Insurance Company ("JHVLICO"). 1. The Premium tax charge, DAC tax charge and Premium sales charge that we currently deduct from your investment in the policy will be revised effective March 1, 2002. The description of each of these charges on pages 8 and 9 of the prospectuses is deleted and replaced with the following: . Premium tax charge - A charge to cover state premium taxes we currently expect to pay, on average. This charge is currently 0.5% of each premium. We guarantee that this charge will never exceed 2.35% of each premium. . DAC tax charge - Although we do not currently impose this charge, we may do so to cover a Federal income tax burden that may be imposed on us as a result of our receipt of premiums. If we do impose this charge, however, we guarantee that it will never exceed 1.25% of each premium. . Premium sales charge - A charge to help defray our sales costs. The current charge is a percentage of a certain portion of the premium you pay. The percentage is currently 5.1% in policy years 1 through 10 and will never exceed 7% in any of those policy years. We currently intend to stop making this charge on premiums received after the 10th policy year, but this is not guaranteed. Because policies of this type were first offered for sale in 1999, no termination of this charge has yet occurred. In no event will this charge exceed 3% after the 10th policy year. The portion of each year's premium that is currently subject to the charge is called the "Target Premium". It's determined at the time the policy is issued and will appear in the "Policy Specifications" section of the policy. We currently impose no sales charge on premiums in excess of the Target Premium. However, we reserve the right to impose a charge of up to 3% of such excess premiums paid in any policy year. 1 2. The description of the "Optional enhanced cash value rider charge" on page 9 of the prospectus for Medallion Executive Variable Life III policies issued through JHVLICO is deleleted, and the following inserted in its place: . Optional enhanced cash value rider charge - a charge to cover the cost of this rider, if elected, equal to 1% of all premiums paid in the first policy year. 3. The illustrations that begin on page 23 in the prospectuses do not reflect the revised charges to the Medallion Executive Variable Life III variable life insurance policies and should be disregarded. The following tables on pages 4 through 9 of this Supplement illustrate the changes in death benefit, account value and surrender value of the policy under certain hypothetical circumstances that we assume solely for this purpose. Each table separately illustrates the operation of a policy for a specified issue age, premium payment schedule and Total Sum Insured. The amounts shown are for the end of each policy year and assume that all of the account value is invested in funds that achieve investment returns at constant gross annual rates of 0%, 6% and 12% (i.e., before any fees or expenses deducted from Series Fund assets). After the deduction of average fees and expenses at the Series Fund level (as described below) the corresponding net annual rates of return would be -0.87%, 5.08% and 11.03%. Investment return reflects investment income and all realized and unrealized capital gains and losses. The tables assume annual Planned Premiums that are paid at the beginning of each policy year, as noted on the illustrations, for an insured person who is a 45 year old male nontobacco underwriting risk when the policy is issued. Tables are provided for each of the two death benefit options. The tables headed "Current Charges" assume that the current rates for all charges deducted by us will apply in each year illustrated, including the intended waiver of the premium sales charge after the tenth policy year. The tables headed "Maximum Charges" are the same, except that the maximum permitted rates for all years are used for all charges. The tables do not reflect any charge that we reserve the right to make but are not currently making. The tables assume that no Additional Sum Insured or optional rider benefits have been elected and that no loans or withdrawals are made. With respect to fees and expenses deducted from Series Fund assets, the amounts shown in all tables reflect (1) investment management fees equivalent to an effective annual rate of .77%, and (2) an assumed average asset charge for all other Series Fund operating expenses equivalent to an effective annual rate of .10%. These rates are the arithmetic average for all funds of the Series Funds. In other words, they are based on the hypothetical assumption that policy account values are allocated equally among the variable investment options. The actual rates associated with any policy will vary depending upon the actual allocation of policy values among the investment options. The charge shown above for all other Series Fund operating expenses reflects reimbursements to certain funds as described in the footnotes to the table beginning on page 10 of the prospectuses. We currently expect those reimbursement arrangements to continue indefinitely, but that is not guaranteed. Without those arrangements, the assumed average asset charge for all other operating expenses shown above would be higher. This would result in lower values than those shown in the following tables. The second column of each table shows the amount you would have at the end of each policy year if an amount equal to the assumed Planned Premiums were invested to earn interest, after 2 taxes, at 5% compounded annually. This is not a policy value. It is included for comparison purposes only. Because your circumstances will no doubt differ from those in the illustrations that follow, values under your policy will differ, in most cases substantially. Upon request, we will furnish you with a comparable illustration reflecting your proposed insured person's issue age, sex and underwriting risk classification, and the Total Sum Insured and annual Planned Premium amount requested. 3 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE $100,000 TOTAL SUM INSURED AT ISSUE MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS* USING CURRENT CHARGES
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 5,135 5,447 5,759 2 12,159 100,000 100,000 100,000 10,060 10,998 11,972 3 18,699 100,000 100,000 100,000 14,884 16,768 18,803 4 25,565 100,000 100,000 100,000 19,626 22,785 26,335 5 32,775 100,000 100,000 100,000 20,513 25,061 30,417 6 40,345 100,000 100,000 100,000 19,881 25,849 33,250 7 48,294 100,000 100,000 100,000 19,230 26,648 36,361 8 50,709 100,000 100,000 100,000 18,558 27,459 39,782 9 53,244 100,000 100,000 100,000 17,891 28,306 43,568 10 55,906 100,000 100,000 100,000 17,226 29,190 47,757 11 58,702 100,000 100,000 100,000 16,579 30,164 52,509 12 61,637 100,000 100,000 100,000 15,898 31,155 57,764 13 64,718 100,000 100,000 100,000 15,173 32,156 63,579 14 67,954 100,000 100,000 100,000 14,409 33,172 70,025 15 71,352 100,000 100,000 100,333 13,604 34,206 77,179 16 74,920 100,000 100,000 108,928 12,764 35,264 85,100 17 78,666 100,000 100,000 118,237 11,861 36,328 93,839 18 82,599 100,000 100,000 128,316 10,889 37,396 103,480 19 86,729 100,000 100,000 139,226 9,840 38,466 114,119 20 91,065 100,000 100,000 151,031 8,703 39,532 125,859 25 95,619 100,000 100,000 239,683 2,466 46,231 208,420 30 100,400 ** 100,000 362,705 ** 53,290 345,433 35 105,420 ** 100,000 602,731 ** 60,293 574,029
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefits Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 4,353 4,632 4,912 2 12,159 100,000 100,000 100,000 8,616 9,444 10,305 3 18,699 100,000 100,000 100,000 12,790 14,444 16,234 4 25,565 100,000 100,000 100,000 16,878 19,644 22,757 5 32,775 100,000 100,000 100,000 17,291 21,250 25,921 6 40,345 100,000 100,000 100,000 16,255 21,404 27,813 7 48,294 100,000 100,000 100,000 15,180 21,518 29,865 8 50,709 100,000 100,000 100,000 14,060 21,584 32,090 9 53,244 100,000 100,000 100,000 12,887 21,593 34,505 10 55,906 100,000 100,000 100,000 11,649 21,534 37,128 11 58,702 100,000 100,000 100,000 10,340 21,397 39,981 12 61,637 100,000 100,000 100,000 8,951 21,173 43,092 13 64,718 100,000 100,000 100,000 7,475 20,852 46,494 14 67,954 100,000 100,000 100,000 5,904 20,423 50,223 15 71,352 100,000 100,000 100,000 4,226 19,871 54,323 16 74,920 100,000 100,000 100,000 2,425 19,179 58,839 17 78,666 100,000 100,000 100,000 481 18,322 63,829 18 82,599 ** 100,000 100,000 ** 17,271 69,358 19 86,729 ** 100,000 100,000 ** 15,992 75,504 20 91,065 ** 100,000 100,000 ** 14,446 82,363 25 95,619 ** 100,000 147,271 ** 1,025 128,062 30 100,400 ** ** 210,057 ** ** 200,055 35 105,420 ** ** 330,840 ** ** 315,086
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 105,135 105,447 105,759 5,135 5,447 5,759 2 12,159 110,045 110,981 111,954 10,045 10,981 11,954 3 18,699 114,840 116,717 118,745 14,840 16,717 18,745 4 25,565 119,538 122,681 126,213 19,538 22,681 26,213 5 32,775 124,155 128,897 134,441 24,155 28,897 34,441 6 40,345 128,671 135,356 143,486 28,671 35,356 43,486 7 48,294 133,087 142,067 153,434 33,087 42,067 53,434 8 50,709 132,149 143,471 158,489 32,149 43,471 58,489 9 53,244 131,220 144,933 164,064 31,220 44,933 64,064 10 55,906 130,300 146,454 170,211 30,300 46,454 70,211 11 58,702 129,429 148,125 177,149 29,429 48,125 77,149 12 61,637 128,522 149,826 184,774 28,522 49,826 84,774 13 64,718 127,567 151,547 193,149 27,567 51,547 93,149 14 67,954 126,571 153,294 202,359 26,571 53,294 102,359 15 71,352 125,536 155,071 212,494 25,536 55,071 112,494 16 74,920 124,466 156,883 223,658 24,466 56,883 123,658 17 78,666 123,333 158,701 235,928 23,333 58,701 135,928 18 82,599 122,130 160,518 249,416 22,130 60,518 149,416 19 86,729 120,852 162,329 264,243 20,852 62,329 164,243 20 91,065 119,489 164,122 280,541 19,489 64,122 180,541 25 95,619 112,374 174,462 394,221 12,374 74,462 294,221 30 100,400 102,208 183,713 580,148 2,208 83,713 480,148 35 105,420 ** 189,077 884,191 ** 89,077 784,191
------------------------- *The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 104,332 104,610 104,888 4,332 4,610 4,888 2 12,159 108,552 109,372 110,227 8,552 9,372 10,227 3 18,699 112,657 114,291 116,059 12,657 14,291 16,059 4 25,565 116,648 119,370 122,433 16,648 19,370 22,433 5 32,775 120,522 124,611 129,395 20,522 24,611 29,395 6 40,345 124,279 130,017 137,003 24,279 30,017 37,003 7 48,294 127,910 135,586 145,312 27,910 35,586 45,312 8 50,709 126,450 136,058 148,828 26,450 36,058 48,828 9 53,244 124,942 136,473 152,618 24,942 36,473 52,618 10 55,906 123,376 136,818 156,697 23,376 36,818 56,697 11 58,702 121,746 137,083 161,089 21,746 37,083 61,089 12 61,637 120,046 137,257 165,816 20,046 37,257 65,816 13 64,718 118,273 137,333 170,908 18,273 37,333 70,908 14 67,954 116,422 137,298 176,393 16,422 37,298 76,393 15 71,352 114,485 137,139 182,304 14,485 37,139 82,304 16 74,920 112,451 136,839 188,667 12,451 36,839 88,667 17 78,666 110,306 136,374 195,513 10,306 36,374 95,513 18 82,599 108,033 135,720 202,870 8,033 35,720 102,870 19 86,729 105,612 134,844 210,764 5,612 34,844 110,764 20 91,065 103,024 133,716 219,227 3,024 33,716 119,227 25 95,619 ** 123,210 271,524 ** 23,210 171,524 30 100,400 ** 100,294 344,362 ** 294 244,362 35 105,420 ** ** 442,277 ** ** 342,277
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- -------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- -------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------- --------- 1 5,931 100,000 100,000 100,000 5,135 5,447 5,759 2 12,159 100,000 100,000 100,000 10,060 10,998 11,972 3 18,699 100,000 100,000 100,000 14,884 16,768 18,803 4 25,565 100,000 100,000 100,000 19,626 22,785 26,335 5 32,775 100,000 100,000 100,000 24,299 29,074 34,658 6 40,345 100,000 100,000 105,237 28,891 35,637 43,834 7 48,294 100,000 100,000 125,695 33,406 42,488 53,907 8 50,709 100,000 100,000 133,886 32,573 44,056 59,100 9 53,244 100,000 100,617 142,722 31,748 45,696 64,817 10 55,906 100,000 101,508 152,262 30,928 47,407 71,110 11 58,702 100,000 102,697 162,909 30,167 49,300 78,205 12 61,637 100,000 103,926 174,354 29,379 51,258 85,995 13 64,718 100,000 105,185 186,638 28,555 53,280 94,539 14 67,954 100,000 106,480 199,834 27,700 55,372 103,918 15 71,352 100,000 107,829 214,041 26,813 57,539 114,216 16 74,920 100,000 109,229 229,337 25,897 59,789 125,533 17 78,666 100,000 110,669 245,776 24,929 62,111 137,937 18 82,599 100,000 112,156 263,464 23,902 64,506 151,529 19 86,729 100,000 113,699 282,515 22,811 66,977 166,420 20 91,065 100,000 115,297 303,030 21,644 69,523 182,724 25 95,619 100,000 126,805 438,937 15,563 85,218 294,984 30 100,400 100,000 140,779 641,806 6,275 103,926 473,798 35 105,420 ** 158,209 949,944 ** 125,963 756,325
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 4,353 4,632 4,912 2 12,159 100,000 100,000 100,000 8,616 9,444 10,305 3 18,699 100,000 100,000 100,000 12,790 14,444 16,234 4 25,565 100,000 100,000 100,000 16,878 19,644 22,757 5 32,775 100,000 100,000 100,000 20,880 25,054 29,940 6 40,345 100,000 100,000 100,000 24,799 30,687 37,860 7 48,294 100,000 100,000 108,527 28,633 36,554 46,544 8 50,709 100,000 100,000 114,363 27,383 37,367 50,483 9 53,244 100,000 100,000 120,547 26,089 38,173 54,747 10 55,906 100,000 100,000 127,099 24,744 38,965 59,359 11 58,702 100,000 100,000 134,038 23,340 39,742 64,345 12 61,637 100,000 100,000 141,385 21,870 40,497 69,734 13 64,718 100,000 100,000 149,164 20,327 41,230 75,557 14 67,954 100,000 100,000 157,394 18,703 41,935 81,848 15 71,352 100,000 100,000 166,116 16,988 42,609 88,643 16 74,920 100,000 100,000 175,338 15,167 43,244 95,976 17 78,666 100,000 100,000 185,098 13,222 43,829 103,882 18 82,599 100,000 100,000 195,427 11,130 44,353 112,399 19 86,729 100,000 100,000 206,358 8,863 44,800 121,559 20 91,065 100,000 100,000 217,915 6,393 45,156 131,401 25 95,619 ** 100,000 286,511 ** 44,957 192,547 30 100,400 ** 100,000 377,194 ** 38,382 278,454 35 105,420 ** 100,000 496,886 ** 14,144 395,610
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS COULD BE NEGATIVE. 9 4. Information in the prospectuses about how certain policy charges work will change effective March 1, 2002. In particular, the subsection entitled "Effect of premium payment pattern" beginning on page 34 of the prospectuses is deleted, and the following inserted in its place: Effect of premium payment pattern You may structure the timing and amount of premium payments to minimize the sales 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 sales 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 sales charges of $5,100. If you paid $20,000 (i.e., two times the Target Premium amount) in every other policy year up to the tenth policy year, you would pay total sales charges of only $2,550. However, delaying the payment of Target Premiums to later policy years could increase the risk that the guaranteed death benefit feature will lapse and the account value will be insufficient to pay monthly policy charges as they come due. As a result, the policy or any Additional Sum Insured 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, with adverse tax consequences to you upon receipt of policy distributions. (See "Tax considerations" beginning on page 36 or 37 of your prospectus.) 5. The section entitled "How we market the policies" beginning on page 35 of the prospectuses is deleted, and the following inserted in its place: HOW WE MARKET THE POLICIES Signator Investors, Inc. ("Signator") acts as the principal distributor of the policies sold through this prospectus. Signator is registered as a broker-dealer under the Securities Exchange Act of 1934, and a member of the National Association of Securities Dealers, Inc. Signator's address is 200 Clarendon Street, John Hancock Place, Boston, Massachusetts 02117. Signator is a subsidiary of John Hancock. You can purchase a policy through representatives of broker-dealers and certain financial institutions who have entered into selling agreements with Signator and us. We pay compensation to these broker-dealers for promoting, marketing and selling our products through their representatives who are authorized by applicable law to sell variable life insurance polices. In turn, the broker-dealers pay a portion of the compensation to these representatives, under their own arrangements. The most common schedule of gross commissions (inclusive of overrides and expense allowance payments paid to such broker-dealers and financial institutions and assuming no election of the optional enhanced cash value rider) is as follows: . 21.25% of first year premiums paid up to the Target Premium plus 4.55% of any excess premium payments, . 10% of all premium payments paid in each of policy years 2 through 4 up to the Target Premium plus 3% of any excess premium payments, . 3% of all premium payments paid in policy years 5 through 10, and 10 . 0.15% of end-of-year account value less policy loans in policy year 2 and thereafter. In situations where the broker dealer provides some or all of the additional marketing services required, we may pay an additional gross first year commission of up to 20% of premiums paid up to the Target Premium. In such instances, we may also pay an additional gross renewal commission. The additional gross renewal commission would not be expected to exceed 0.10% of account value less policy loans in policy years 2 and thereafter. For limited periods of time, we may pay additional compensation to broker-dealers as part of special sales promotions. Signator also pays its branch office principals, who are also independent general agents of ours, for sales of the policies to Signator customers. In turn, the branch office principals pay a portion of their compensation to their assigned marketing representatives, under their own arrangements. The most common schedule of gross commission (inclusive of overrides and expense allowance payments paid to such branch office principals and assuming no election of the optional enhanced cash value rider) is as follows: . 20.8% of the Target Premium paid in the first policy year, 9.75% of the Target Premium paid in each of policy years 2 through 4, and 3% of the Target Premium paid in each policy year thereafter, . 4.8% of any premium paid in the first policy year in excess of the Target Premium, . 3.00% to 3.25% of any premium paid in any other policy year in excess of the Target Premium, and . 0.14% of end-of-year account value less policy loans in policy year 2 and thereafter. 11 SUPPLEMENT Dated February 8, 2002 to PROSPECTUSES dated May 1, 2001 OR LATER, AS SUPPLEMENTED -------------------------- This Supplement is intended to be distributed with the prospectuses dated May 1, 2001 or later, as supplemented, for MEDALLION EXECUTIVE VARIABLE LIFE III variable life insurance policies issued by John Hancock Life Insurance Company ("John Hancock") or John Hancock Variable Life Insurance Company ("JHVLICO"). This Supplement will be used only with Medallion Executive Variable Life III policies sold through the John Hancock and JHVLICO prospectuses, as supplemented, and through registered representatives affiliated with the M Financial Group. 1. The Premium tax charge, DAC tax charge and Premium sales charge that we currently deduct from your investment in the policy will be revised effective March 1, 2002. The description of each of these charges on pages 8 and 9 of the prospectuses is deleted and replaced with the following: . Premium tax charge - A charge to cover state premium taxes we currently expect to pay, on average. This charge is currently 0.5% of each premium. We guarantee that this charge will never exceed 2.35% of each premium. . DAC tax charge - Although we do not currently impose this charge, we may do so to cover a Federal income tax burden that may be imposed on us as a result of our receipt of premiums. If we do impose this charge, however, we guarantee that it will never exceed 1.25% of each premium. . Premium sales charge - A charge to help defray our sales costs. The current charge is a percentage of a certain portion of the premium you pay. The percentage is currently 5.1% in policy years 1 through 10 and will never exceed 7% in any of those policy years. We currently intend to stop making this charge on premiums received after the 10th policy year, but this is not guaranteed. Because policies of this type were first offered for sale in 1999, no termination of this charge has yet occurred. In no event will this charge exceed 3% after the 10th policy year. The portion of each year's premium that is currently subject to the charge is called the "Target Premium". It's determined at the time the policy is issued and will appear in the "Policy Specifications" section of the policy. We currently impose no sales charge on premiums in excess of the Target Premium. However, we reserve the right to impose a charge of up to 3% of such excess premiums paid in any policy year. 1 2. The description of the "Optional enhanced cash value rider charge" on page 9 of the prospectus for Medallion Executive Variable Life III policies issued through JHVLICO is deleted, and the following inserted in its place: . Optional enhanced cash value rider charge - a charge to cover the cost of this rider, if elected, equal to 1% of all premiums paid in the first policy year. 3. The section on page 1 of the supplement dated May 1, 2001 to prospectuses dated May 1, 2001 and distributed through registered representatives affiliated with the M Financial Group (the "M Prospectus Supplement") stating "Supplement dated May 1, 2001 to Prospectuses dated May 1, 2001" is deleted, and the following inserted in its place: SUPPLEMENT dated May 1, 2001 to Prospectuses dated May 1, 2001 OR LATER. 4. The illustrations that begin on page 23 of the prospectuses and on pages 41 through 47 in the M Prospectus Supplement do not reflect the revised charges to the Medallion Executive Variable Life III variable life insurance policies and should be disregarded. The following tables on pages 4 through 9 of this Supplement illustrate the changes in death benefit, account value and surrender value of the policy under certain hypothetical circumstances that we assume solely for this purpose. Each table separately illustrates the operation of a policy for a specified issue age, premium payment schedule and Total Sum Insured. The amounts shown are for the end of each policy year and assume that all of the account value is invested in funds that achieve investment returns at constant gross annual rates of 0%, 6% and 12% (i.e., before any fees or expenses deducted from Series Funds' assets). After the deduction of average fees and expenses at the Series Fund level (as described below) the corresponding net annual rates of return would be -0.88%, 5.07% and 11.02%. Investment return reflects investment income and all realized and unrealized capital gains and losses. The tables assume annual Planned Premiums that are paid at the beginning of each policy year, as noted on the illustrations, for an insured person who is a 45 year old male nontobacco underwriting risk when the policy is issued. Tables are provided for each of the two death benefit options. The tables headed "Current Charges" assume that the current rates for all charges deducted by us will apply in each year illustrated, including the intended waiver of the premium sales charge after the tenth policy year. The tables headed "Maximum Charges" are the same, except that the maximum permitted rates for all years are used for all charges. The tables do not reflect any charge that we reserve the right to make but are not currently making. The tables assume that no Additional Sum Insured or optional rider benefits have been elected and that no loans or withdrawals are made. With respect to fees and expenses deducted from Series Fund assets, the amounts shown in all tables reflect (1) investment management fees equivalent to an effective annual rate of .76%, and (2) an assumed average asset charge for all other Series Fund operating expenses equivalent to an effective annual rate of .12%. These rates are the arithmetic average for all funds of the Series Funds. In other words, they are based on the hypothetical assumption that policy account values are allocated equally among the variable investment options. The actual rates associated with any policy will vary depending upon the actual allocation of policy values among the 2 investment options. The charge shown above for all other Series Fund operating expenses reflects reimbursements to certain funds as described in the footnotes to the table beginning on page 10 of the prospectuses. We currently expect those reimbursement arrangements to continue indefinitely, but that is not guaranteed. Without those arrangements, the assumed average asset charge for all other operating expenses shown above would be higher. This would result in lower values than those shown in the following tables. The second column of each table shows the amount you would have at the end of each policy year if an amount equal to the assumed Planned Premiums were invested to earn interest, after taxes, at 5% compounded annually. This is not a policy value. It is included for comparison purposes only. Because your circumstances will no doubt differ from those in the illustrations that follow, values under your policy will differ, in most cases substantially. Upon request, we will furnish you with a comparable illustration reflecting your proposed insured person's issue age, sex and underwriting risk classification, and the Total Sum Insured and annual Planned Premium amount requested. 3 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE $100,000 TOTAL SUM INSURED AT ISSUE MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS* USING CURRENT CHARGES
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 5,135 5,446 5,758 2 12,159 100,000 100,000 100,000 10,059 10,996 11,970 3 18,699 100,000 100,000 100,000 14,881 16,764 18,799 4 25,565 100,000 100,000 100,000 19,621 22,779 26,329 5 32,775 100,000 100,000 100,000 20,506 25,052 30,407 6 40,345 100,000 100,000 100,000 19,872 25,837 33,236 7 48,294 100,000 100,000 100,000 19,220 26,634 36,343 8 50,709 100,000 100,000 100,000 18,546 27,441 39,758 9 53,244 100,000 100,000 100,000 17,877 28,285 43,538 10 55,906 100,000 100,000 100,000 17,210 29,165 47,719 11 58,702 100,000 100,000 100,000 16,562 30,135 52,462 12 61,637 100,000 100,000 100,000 15,879 31,121 57,706 13 64,718 100,000 100,000 100,000 15,153 32,117 63,509 14 67,954 100,000 100,000 100,000 14,387 33,128 69,941 15 71,352 100,000 100,000 100,202 13,581 34,157 77,079 16 74,920 100,000 100,000 108,777 12,740 35,209 84,982 17 78,666 100,000 100,000 118,062 11,836 36,266 93,700 18 82,599 100,000 100,000 128,113 10,863 37,326 103,317 19 86,729 100,000 100,000 138,993 9,813 38,389 113,929 20 91,065 100,000 100,000 150,765 8,675 39,446 125,638 25 95,619 100,000 100,000 239,152 2,434 46,091 207,959 30 100,400 ** 100,000 361,739 ** 53,066 344,513 35 105,420 ** 100,000 600,854 ** 59,927 572,242
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefits Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 4,353 4,632 4,911 2 12,159 100,000 100,000 100,000 8,615 9,442 10,304 3 18,699 100,000 100,000 100,000 12,788 14,441 16,231 4 25,565 100,000 100,000 100,000 16,874 19,639 22,751 5 32,775 100,000 100,000 100,000 17,285 21,242 25,912 6 40,345 100,000 100,000 100,000 16,247 21,394 27,801 7 48,294 100,000 100,000 100,000 15,171 21,506 29,849 8 50,709 100,000 100,000 100,000 14,050 21,569 32,069 9 53,244 100,000 100,000 100,000 12,875 21,576 34,479 10 55,906 100,000 100,000 100,000 11,636 21,513 37,095 11 58,702 100,000 100,000 100,000 10,326 21,373 39,941 12 61,637 100,000 100,000 100,000 8,936 21,145 43,044 13 64,718 100,000 100,000 100,000 7,460 20,821 46,436 14 67,954 100,000 100,000 100,000 5,888 20,388 50,154 15 71,352 100,000 100,000 100,000 4,209 19,833 54,240 16 74,920 100,000 100,000 100,000 2,408 19,136 58,742 17 78,666 100,000 100,000 100,000 464 18,275 63,714 18 82,599 ** 100,000 100,000 ** 17,220 69,222 19 86,729 ** 100,000 100,000 ** 15,935 75,345 20 91,065 ** 100,000 100,000 ** 14,384 82,176 25 95,619 ** 100,000 146,866 ** 931 127,710 30 100,400 ** ** 209,381 ** ** 199,411 35 105,420 ** ** 329,622 ** ** 313,926
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 105,135 105,446 105,758 5,135 5,446 5,758 2 12,159 110,043 110,979 111,952 10,043 10,979 11,952 3 18,699 114,837 116,713 118,742 14,837 16,713 18,742 4 25,565 119,533 122,675 126,207 19,533 22,675 26,207 5 32,775 124,148 128,888 134,431 24,148 28,888 34,431 6 40,345 128,660 135,343 143,471 28,660 35,343 43,471 7 48,294 133,074 142,050 153,412 33,074 42,050 53,412 8 50,709 132,132 143,449 158,460 32,132 43,449 58,460 9 53,244 131,201 144,906 164,026 31,201 44,906 64,026 10 55,906 130,278 146,421 170,163 30,278 46,421 70,163 11 58,702 129,404 148,086 177,089 29,404 48,086 77,089 12 61,637 128,494 149,780 184,700 28,494 49,780 84,700 13 64,718 127,537 151,494 193,058 27,537 51,494 93,058 14 67,954 126,539 153,234 202,250 26,539 53,234 102,250 15 71,352 125,501 155,002 212,363 25,501 55,002 112,363 16 74,920 124,430 156,805 223,501 24,430 56,805 123,501 17 78,666 123,294 158,614 235,742 23,294 58,614 135,742 18 82,599 122,089 160,422 249,196 22,089 60,422 149,196 19 86,729 120,810 162,222 263,986 20,810 62,222 163,986 20 91,065 119,446 164,003 280,240 19,446 64,003 180,240 25 95,619 112,325 174,274 393,583 12,325 74,274 293,583 30 100,400 102,158 183,432 578,859 2,158 83,432 478,859 35 105,420 ** 188,673 881,674 ** 88,673 781,674
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 104,332 104,609 104,887 4,332 4,609 4,887 2 12,159 108,550 109,371 110,225 8,550 9,371 10,225 3 18,699 112,654 114,288 116,056 12,654 14,288 16,056 4 25,565 116,644 119,365 122,427 16,644 19,365 22,427 5 32,775 120,516 124,603 129,386 20,516 24,603 29,386 6 40,345 124,270 130,006 136,990 24,270 30,006 36,990 7 48,294 127,899 135,571 145,294 27,899 35,571 45,294 8 50,709 126,436 136,040 148,804 26,436 36,040 48,804 9 53,244 124,926 136,450 152,585 24,926 36,450 52,585 10 55,906 123,357 136,790 156,656 23,357 36,790 56,656 11 58,702 121,726 137,051 161,038 21,726 37,051 61,038 12 61,637 120,024 137,220 165,754 20,024 37,220 65,754 13 64,718 118,250 137,291 170,834 18,250 37,291 70,834 14 67,954 116,397 137,250 176,305 16,397 37,250 76,305 15 71,352 114,459 137,086 182,199 14,459 37,086 82,199 16 74,920 112,424 136,780 188,544 12,424 36,780 88,544 17 78,666 110,279 136,309 195,369 10,279 36,309 95,369 18 82,599 108,005 135,649 202,702 8,005 35,649 102,702 19 86,729 105,584 134,767 210,569 5,584 34,767 110,569 20 91,065 102,996 133,632 219,001 2,996 33,632 119,001 25 95,619 ** 123,092 271,078 ** 23,092 171,078 30 100,400 ** 100,142 343,526 ** 142 243,526 35 105,420 ** ** 440,763 ** ** 340,763
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years unless the Planned Premiums are otherwise reduced due to the Guideline Premium Limit. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- -------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- -------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------- --------- 1 5,931 100,000 100,000 100,000 5,135 5,446 5,758 2 12,159 100,000 100,000 100,000 10,059 10,996 11,970 3 18,699 100,000 100,000 100,000 14,881 16,764 18,799 4 25,565 100,000 100,000 100,000 19,621 22,779 26,329 5 32,775 100,000 100,000 100,000 24,292 29,066 34,648 6 40,345 100,000 100,000 105,201 28,881 35,624 43,819 7 48,294 100,000 100,000 125,645 33,392 42,471 53,885 8 50,709 100,000 100,000 133,820 32,557 44,034 59,071 9 53,244 100,000 100,557 142,639 31,728 45,668 64,780 10 55,906 100,000 101,438 152,159 30,905 47,374 71,063 11 58,702 100,000 102,616 162,784 30,141 49,261 78,145 12 61,637 100,000 103,834 174,205 29,350 51,213 85,921 13 64,718 100,000 105,081 186,461 28,524 53,227 94,449 14 67,954 100,000 106,365 199,626 27,667 55,312 103,810 15 71,352 100,000 107,701 213,799 26,777 57,471 114,087 16 74,920 100,000 109,089 229,056 25,859 59,712 125,380 17 78,666 100,000 110,516 245,454 24,888 62,025 137,756 18 82,599 100,000 111,990 263,093 23,859 64,410 151,316 19 86,729 100,000 113,520 282,092 22,765 66,871 166,171 20 91,065 100,000 115,104 302,549 21,597 69,406 182,434 25 95,619 100,000 126,531 438,042 15,505 85,035 294,383 30 100,400 100,000 140,408 640,208 6,209 103,653 472,618 35 105,420 ** 157,717 947,151 ** 125,571 754,101
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made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
Death Benefit Surrender Value ------------------------- ------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at ------------------------- ------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% ------ ------------------ ------- ------- ------- ------ ------ --------- 1 5,931 100,000 100,000 100,000 4,353 4,632 4,911 2 12,159 100,000 100,000 100,000 8,615 9,442 10,304 3 18,699 100,000 100,000 100,000 12,788 14,441 16,231 4 25,565 100,000 100,000 100,000 16,874 19,639 22,751 5 32,775 100,000 100,000 100,000 20,874 25,046 29,932 6 40,345 100,000 100,000 100,000 24,790 30,676 37,847 7 48,294 100,000 100,000 108,484 28,621 36,539 46,526 8 50,709 100,000 100,000 114,307 27,368 37,348 50,458 9 53,244 100,000 100,000 120,477 26,072 38,149 54,715 10 55,906 100,000 100,000 127,013 24,724 38,936 59,319 11 58,702 100,000 100,000 133,935 23,319 39,707 64,296 12 61,637 100,000 100,000 141,264 21,846 40,457 69,674 13 64,718 100,000 100,000 149,022 20,302 41,183 75,485 14 67,954 100,000 100,000 157,229 18,676 41,882 81,762 15 71,352 100,000 100,000 165,927 16,959 42,549 88,542 16 74,920 100,000 100,000 175,122 15,136 43,176 95,857 17 78,666 100,000 100,000 184,853 13,190 43,753 103,745 18 82,599 100,000 100,000 195,151 11,097 44,268 112,239 19 86,729 100,000 100,000 206,046 8,829 44,705 121,375 20 91,065 100,000 100,000 217,566 6,357 45,050 131,190 25 95,619 ** 100,000 285,919 ** 44,780 192,150 30 100,400 ** 100,000 376,243 ** 38,078 277,752 35 105,420 ** 100,000 495,405 ** 13,568 394,430
------------------------- * The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each of the first seven Policy Years. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if an Additional Sum Insured or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS COULD BE NEGATIVE. 9 5. Information in the prospectuses about how certain policy charges work will change, effective March 1, 2002. In particular, the subsection entitled "Effect of premium payment pattern" beginning on page 34 of the prospectuses is deleted, and the following inserted in its place: Effect of premium payment pattern You may structure the timing and amount of premium payments to minimize the sales 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 sales 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 sales charges of $5,100. If you paid $20,000 (i.e., two times the Target Premium amount) in every other policy year up to the tenth policy year, you would pay total sales charges of only $2,550. However, delaying the payment of Target Premiums to later policy years could increase the risk that the guaranteed death benefit feature will lapse and the account value will be insufficient to pay monthly policy charges as they come due. As a result, the policy or any Additional Sum Insured 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, with adverse tax consequences to you upon receipt of policy distributions. (See "Tax considerations" beginning on page 36 or 37 of your prospectus.) 6. The section entitled "How we market the policies" beginning on page 35 of the prospectuses is deleted, and the following inserted in its place: HOW WE MARKET THE POLICIES Signator Investors, Inc. ("Signator") acts as the principal distributor of the policies sold through this prospectus. Signator is registered as a broker-dealer under the Securities Exchange Act of 1934, and a member of the National Association of Securities Dealers, Inc. Signator's address is 200 Clarendon Street, John Hancock Place, Boston, Massachusetts 02117. Signator is a subsidiary of John Hancock. You can purchase a policy through representatives of broker-dealers and certain financial institutions who have entered into selling agreements with Signator and us. We pay compensation to these broker-dealers for promoting, marketing and selling our products through their representatives who are authorized by applicable law to sell variable life insurance polices. In turn, the broker-dealers pay a portion of the compensation to these representatives, under their own arrangements. The most common schedule of gross commissions (inclusive of overrides and expense allowance payments paid to such broker-dealers and financial institutions and assuming no election of the optional enhanced cash value rider) is as follows: . 21.25% of first year premiums paid up to the Target Premium plus 4.55% of any excess premium payments, . 10% of all premium payments paid in each of policy years 2 through 4 up to the Target Premium plus 3% of any excess premium payments, . 3% of all premium payments paid in policy years 5 through 10, and 10 . 0.15% of end-of-year account value less policy loans in policy year 2 and thereafter. In situations where the broker dealer provides some or all of the additional marketing services required, we may pay an additional gross first year commission of up to 20% of premiums paid up to the Target Premium. In such instances, we may also pay an additional gross renewal commission. The additional gross renewal commission would not be expected to exceed 0.10% of account value less policy loans in policy years 2 and thereafter. For limited periods of time, we may pay additional compensation to broker-dealers as part of special sales promotions. Signator also pays its branch office principals, who are also independent general agents of ours, for sales of the policies to Signator customers. In turn, the branch office principals pay a portion of their compensation to their assigned marketing representatives, under their own arrangements. The most common schedule of gross commission (inclusive of overrides and expense allowance payments paid to such branch office principals and assuming no election of the optional enhanced cash value rider) is as follows: . 20.8% of the Target Premium paid in the first policy year, 9.75% of the Target Premium paid in each of policy years 2 through 4, and 3% of the Target Premium paid in each policy year thereafter, . 4.8% of any premium paid in the first policy year in excess of the Target Premium, . 3.00% to 3.25% of any premium paid in any other policy year in excess of the Target Premium, and . 0.14% of end-of-year account value less policy loans in policy year 2 and thereafter. 11