Franklin Templeton Variable Insurance Products Trust N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05583

Franklin Templeton Variable Insurance Products Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway,

San Mateo, CA 94403-1906

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway,

San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant’s telephone number, including area code: (650) 312-2000

Date of fiscal year end: 12/31

Date of reporting period: 06/30/20

Item 1. Reports to Stockholders.

Internet Delivery of Shareholder Reports: Effective January 1, 2021, as permitted by regulations adopted by the SEC, you may not be receiving paper copies of the Fund’s annual or semiannual shareholder reports by mail, unless you specifically request them from the insurance company that offers your variable annuity or variable life insurance contract or your financial intermediary. Instead of delivering paper copies of the report, the insurance company may choose to make the reports available on a website, and will notify you by mail each time a shareholder report is posted and provide you with a website link to access the report. Instructions for requesting paper copies will be provided by your insurance company.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company or your financial intermediary electronically by following the instructions provided by the insurance company or by contacting your financial intermediary.

You may elect to receive all future Fund shareholder reports in paper free of charge from the insurance company. You can inform the insurance company or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions provided by the insurance company or by contacting your financial intermediary. Your election to receive reports in paper will apply to all portfolio companies available under your contract with the insurance company.

This notice is not legally a part of the shareholder report.

Franklin Templeton Variable Insurance

Products Trust Semiannual Report

Table of Contents
Important Notes to Performance Information	i
Fund Summaries
Franklin Allocation VIP Fund	FFA-1
Franklin Flex Cap Growth VIP Fund	FFC-1
Franklin Income VIP Fund	FI-1
Franklin Mutual Global Discovery VIP Fund	MGD-1
Franklin Mutual Shares VIP Fund	MS-1
Franklin Rising Dividends VIP Fund	FRD-1
Franklin Small Cap Value VIP Fund	FSV-1
Franklin Small-Mid Cap Growth VIP Fund	FSC-1
Franklin Strategic Income VIP Fund	FSI-1
Templeton Developing Markets VIP Fund	TD-1
*Prospectus Supplement	TD-7
Templeton Foreign VIP Fund	TF-1
Templeton Global Bond VIP Fund	TGB-1
Templeton Growth VIP Fund	TG-1
Index Descriptions	I-1
Shareholder Information	SI-1

*Not part of the semiannual report. Retain for your records.

Not FDIC Insured | May Lose Value | No Bank Guarantee 

MASTER CLASS – 4

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Important Notes to

Performance Information

Performance data is historical and cannot predict or guarantee future results. Principal value and investment return will fluctuate with market conditions, and you may have a gain or loss when you withdraw your money. Inception dates of the funds may have preceded the effective dates of the subaccounts, contracts or their availability in all states.

When reviewing the index comparisons, please keep in mind that indexes have a number of inherent performance differentials over the funds. First, unlike the funds, which must hold a minimum amount of cash to maintain liquidity,

indexes do not have a cash component. Second, the funds are actively managed and, thus, are subject to management fees to cover salaries of securities analysts or portfolio managers in addition to other expenses. Indexes are unmanaged and do not include any commissions or other expenses typically associated with investing in securities. Third, indexes often contain a different mix of securities than the fund to which they are compared. Additionally, please remember that indexes are simply a measure of performance and cannot be invested in directly.

Semiannual Report         i

Franklin Allocation VIP Fund

This semiannual report for Franklin Allocation VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -1.37% total return* for the six-month period ended June 30, 2020.

*On May 1, 2019, the Fund’s investment strategies changed. Performance prior to May 1, 2019, is attributable to the Fund’s performance before the strategy change. The Fund has an expense reduction contractually guaranteed through 4/30/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             FFA-1

FRANKLIN ALLOCATION VIP FUND

Fund Goal and Main Investments

The Fund seeks capital appreciation, with income as a secondary goal. Under normal market conditions, the Fund allocates approximately 60% of its assets to the equity asset class and 40% of its assets to the fixed income asset class by allocating the Fund’s assets among various sleeves (investment strategies).

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Because the Fund invests in underlying funds, and the Fund’s performance is directly related to the performance of the underlying funds held by it, the ability of the Fund to achieve its investment goals is directly related to the ability of the underlying funds to meet their investment goals. Additionally, because these underlying funds may engage in a variety of investment strategies involving certain risks, the Fund may be subject to these same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bonds are affected by changes in interest rates and the creditworthiness of their issuers. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds adjust to a rise in interest rates, the Fund’s share price may decline. Higher yielding, lower rated corporate bonds entail a greater degree of credit risk compared to investment-grade securities. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. Value securities may not increase in price as anticipated or may decline further in value. The Fund’s prospectus also includes a description of the main investment risks.

Asset Allocation*

Based on Total Net Assets as of 6/30/20

*The asset allocation is based on the Statement of Investments (SOI), which classifies each underlying fund into a broad asset class.

**Rounds to less than 0.1%.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®), posted a -3.08% total return. The Fund’s other benchmarks, the Bloomberg Barclays U.S. Aggregate Bond Index posted a +6.14% total return; the MSCI World ex USA Index-NR posted a -11.20% total return; and the Linked Allocation VIP Fund Benchmark posted a -0.81% total return.^1,2

1. Source: Morningstar.

2. Source: FactSet. The Linked Allocation VIP Fund benchmark was calculated internally and rebalanced monthly and was composed of 40% S&P 500, 40% Bloomberg Barclays U.S. Aggregate Bond Index and 20% MSCI World ex USA Index-NR.

One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

FFA-2     Semiannual Report

FRANKLIN ALLOCATION VIP FUND

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI All Country World Index (USD), posted a -5.99% total return during the six months under review.¹ Stocks fell sharply in early 2020 as countries around the world implemented lockdown measures in an effort to slow the spread of the novel coronavirus (COVID-19). Global supply chain disruptions, business and personal restrictions, and subdued consumer spending drove many investors to sell equity holdings in favor of perceived safe investments such as government bonds and cash. While global equities, notably in the U.S., rebounded in April and May amid optimism about easing lockdown restrictions, concerns about a second wave of infections hindered equities in June, as investors weighed the possibility of renewed restrictions.

In the U.S., government mandates to mitigate the COVID-19 pandemic severely impacted the economy beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April, as many businesses, particularly those involved in hospitality, retail and travel, announced mass layoffs.³ According to the National Bureau of Economic Research, the longest U.S. economic expansion in history ended in February 2020 as the country slipped into a severe recession. Nonetheless, near period-end, there were signs that a recovery was underway, as jobless claims fell considerably from their peak in early April, retail sales rose sharply in May, and the unemployment rate fell to 11.1% in June.³ Along with optimism about improved treatments and potential vaccines for COVID-19, the positive economic signals contributed to a significant equity rebound in April and May. However, an increase in COVID-19 infections in many states throughout June pressured U.S. stocks.

The U.S. Federal Reserve (Fed) made significant efforts to support the U.S. economy. In March 2020, as the pandemic began to severely impact the economy and financial markets, the Fed implemented two emergency rate cuts, lowering the federal funds target rate to a range of 0.00%–0.25%, and announced sweeping quantitative easing measures aimed at ensuring credit flow to borrowers and supporting credit markets with unlimited amounts of bond purchasing.

In the eurozone, some analysts forecasted a significant contraction in 2020, particularly in southern European countries, as the magnitude of the economic disruption

Geographic Composition

Based on Total Net Assets as of 6/30/20

caused by the pandemic became apparent. European developed market equities, as measured by the MSCI Europe Index (USD), posted a -12.43% total return for the period.¹ To stimulate growth, the European Central Bank implemented a broad bond-buying program, and many countries passed fiscal stimulus measures.

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index (USD), posted a -5.51% total return during the six-month period.¹ The onset of the pandemic brought dramatically slower economic activity in Asia, as businesses halted operations and manufacturing and export activity declined sharply in the region’s major economies. Asian markets generally advanced toward period-end, bolstered by fiscal stimulus measures and economies reopening throughout the region.

Emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -9.67% total return due primarily to the COVID-19 pandemic.¹ A sharp decrease in prices for oil and other natural resources also hurt emerging market economies reliant on these exports. In the last quarter of the reporting period, however, investor optimism led to a stock rally, particularly in emerging market countries that had successfully lowered infection rates.

3. Source: U.S. Bureau of Labor Statistics.

See www.franklintempletondatasources.com for additional data provider information.

Semiannual Report             FFA-3

FRANKLIN ALLOCATION VIP FUND

Investment Strategy

The Fund seeks to achieve its investment goals by allocating its assets among the broad asset classes of equity and fixed income investments through a variety of investment strategies or “sleeves” managed by the investment manager or its affiliates, which include Franklin U.S. Smart Beta Equity Strategy, Franklin Total Return Strategy, Franklin Growth Strategy, Templeton Foreign Strategy, Franklin International Growth Strategy, Franklin U.S. Government Securities Strategy, Franklin Rising Dividends Strategy, Franklin Investment Grade Corporate Strategy, Templeton Global Bond VIP Fund Strategy, Franklin International Core Equity Strategy, Franklin U.S. Core Equity (IU) Strategy, Franklin Emerging Market Core Equity (IU) Strategy and Franklin U.S. Core Bond Strategy. The Fund is structured as a multi-manager fund (meaning the Fund’s assets are managed by multiple sub-advisors), with the investment manager having overall responsibility for the Funds’ investments. Allocation to each sleeve will generally not exceed 20% and will vary with market conditions. However, under normal market conditions, no sleeve constitutes a majority of the Fund’s assets.

Top 10 Holdings

6/30/20

Company Sector/Industry	% of Total Net Assets
Templeton Global Bond VIP Fund		3.8	%
Diversified Financials
Microsoft Corp.		1.6	%
Software & Services
Apple Inc.		1.1	%
Technology Hardware & Equipment
Amazon.com Inc.		0.8	%
Retailing
Texas Instruments Inc.		0.6	%
Semiconductors & Semiconductor Equipment
Mastercard Inc.		0.5	%
Software & Services
Accenture PLC		0.5	%
Software & Services
NIKE Inc.		0.5	%
Consumer Durables & Apparel
Johnson & Johnson		0.5	%
Pharmaceuticals, Biotechnology & Life Sciences
Air Products and Chemicals Inc.		0.5	%
Materials

Manager’s Discussion

The Fund’s performance can be attributed largely to its allocation among the underlying sleeves and their investments in domestic and foreign equities, fixed income securities, and short-term investments and other net assets. The allocation to the sleeves did not change over the period.

During the six months under review, the Franklin Growth Strategy outperformed the S&P 500, the Franklin Rising Dividends Strategy underperformed the S&P 500, the Templeton Foreign Strategy underperformed the MSCI All Country World ex USA Index-NR, the Franklin International Growth Strategy outperformed the MSCI World ex-USA Index, the U.S. Smart Beta Equity Strategy underperformed the Russell 1000^® Index, the Franklin International Core Equity Strategy outperformed the MSCI EAFE Index, the Franklin U.S. Government Securities Strategy underperformed the Bloomberg Barclays U.S. Government Index: Intermediate Component, the Franklin Investment-Grade Corporate Strategy outperformed the Bloomberg Barclays U.S. Corporate Investment-Grade Index, the Templeton Global Bond VIP Fund outperformed the J.P. Morgan Global Government Bond Index, the Franklin U.S. Core Bond Strategy underperformed the Bloomberg Barclays U.S. Aggregate Bond Index.

Thank you for your participation in Franklin Allocation VIP Fund. We look forward to serving your Future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FFA-4     Semiannual Report

FRANKLIN ALLOCATION VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual   (actual return after expenses)		Hypothetical    (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending       Account       Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio1, 2
Class 4	$1,000	$986.30	$4.40	$1,020.44	$4.47	0.89%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

Semiannual Report             FFA-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Allocation VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period		$ 6.86			$ 6.37			$ 7.44			$ 7.13			$ 6.80			$ 7.47
Income from investment operationsa:
Net investment incomeb		0.07			0.11	c		0.23	c		0.21	c		0.21	c		0.26	c
Net realized and unrealized gains (losses)		(0.17	)		1.11			(0.89	)		0.63			0.64			(0.68	)
Total from investment operations		(0.10	)		1.22			(0.66	)		0.84			0.85			(0.42	)
Less distributions from:
Net investment income		(0.12	)		(0.27	)		(0.24	)		(0.22	)		(0.29	)		(0.24	)
Net realized gains		(1.80	)		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)
Total distributions		(1.92	)		(0.73	)		(0.41	)		(0.53	)		(0.52	)		(0.25	)
Net asset value, end of period		$ 4.84			$ 6.86			$ 6.37			$ 7.44			$ 7.13			$ 6.80
Total returnd		(1.09)%			20.04%			(9.34)%			12.17%			13.43%			(5.93)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		0.59%			0.44%			0.12%			0.12%			0.11%			0.11%
Expenses net of waiver and payments by affiliates		0.54%f			0.39%			0.10%			0.10%			0.10%			0.10%
Net investment income		2.32%			1.55%			3.13%			2.75%			3.09%			3.51%
Supplemental data
Net assets, end of period (000’s)		$804			$842			$984			$1,047			$1,025			$1,083
Portfolio turnover rate		49.61%			170.79%			2.23%			1.28%			0.10%			0.26%
Portfolio turnover rate excluding mortgage dollar rolls		42.14%	g		158.11%	g		2.23%			1.28%			0.10%			0.26%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

^gSee Note 1(f) regarding mortgage dollar rolls.

FFA-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Allocation VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period		$ 6.81			$ 6.32			$ 7.39			$ 7.08			$ 6.75			$ 7.42
Income from investment operationsa:
Net investment incomeb		0.06			0.09	c		0.21	c		0.18	c		0.19	c		0.24	c
Net realized and unrealized gains (losses)		(0.18	)		1.11			(0.89	)		0.64			0.64			(0.68	)
Total from investment operations		(0.12	)		1.20			(0.68	)		0.82			0.83			(0.44	)
Less distributions from:
Net investment income		(0.10	)		(0.25	)		(0.22	)		(0.20	)		(0.27	)		(0.22	)
Net realized gains		(1.80	)		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)
Total distributions		(1.90	)		(0.71	)		(0.39	)		(0.51	)		(0.50	)		(0.23	)
Net asset value, end of period		$ 4.79			$ 6.81			$ 6.32			$ 7.39			$ 7.08			$ 6.75
Total returnd		(1.43)%			19.86%			(9.65)%			11.98%			13.18%			(6.21)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		0.84%			0.69%			0.37%			0.37%			0.36%			0.36%
Expenses net of waiver and payments by affiliates		0.79%f			0.64%			0.35%			0.35%			0.35%			0.35%
Net investment income		2.07%			1.30%			2.88%			2.50%			2.84%			3.26%
Supplemental data
Net assets, end of period (000’s)		$371,639			$403,040			$390,300			$480,402			$474,669			$480,715
Portfolio turnover rate		49.61%			170.79%			2.23%			1.28%			0.10%			0.26%
Portfolio turnover rate excluding mortgage dollar rolls		42.14%	g		158.11%	g		2.23%			1.28%			0.10%			0.26%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

^gSee Note 1(f) regarding mortgage dollar rolls.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFA-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Allocation VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period		$ 6.97			$ 6.46			$ 7.53			$ 7.21			$ 6.87			$ 7.54
Income from investment operationsa:
Net investment incomeb		0.06			0.08	c		0.20	c		0.18	c		0.19c			0.23	c
Net realized and unrealized gains (losses)		(0.18	)		1.13			(0.89	)		0.64			0.64			(0.68	)
Total from investment operations		(0.12	)		1.21			(0.69	)		0.82			0.83			(0.45	)
Less distributions from:
Net investment income		(0.09	)		(0.24	)		(0.21	)		(0.19	)		(0.26	)		(0.21	)
Net realized gains		(1.80	)		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)
Total distributions		(1.89	)		(0.70	)		(0.38	)		(0.50	)		(0.49	)		(0.22	)
Net asset value, end of period		$ 4.96			$ 6.97			$ 6.46			$ 7.53			$ 7.21			$ 6.87
Total returnd		(1.37)%			19.56%			(9.58)%			11.78%			12.92%			(6.24)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		0.94%			0.79%			0.47%			0.47%			0.46%			0.46%
Expenses net of waiver and payments by affiliates		0.89%f			0.74%			0.45%			0.45%			0.45%			0.45%
Net investment income		1.97%			1.20%			2.78%			2.40%			2.74%			3.16%
Supplemental data
Net assets, end of period (000’s)		$378,968			$406,693			$393,385			$528,862			$530,403			$550,825
Portfolio turnover rate		49.61%			170.79%			2.23%			1.28%			0.10%			0.26%
Portfolio turnover rate excluding mortgage dollar rolls		42.14%	g		158.11%	g		2.23%			1.28%			0.10%			0.26%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

^gSee Note 1(f) regarding mortgage dollar rolls.

FFA-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Allocation VIP Fund

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests 58.5%
	Automobiles & Components 0.7%
	Aptiv PLC		United States		7,000	$	545,440
	Bayerische Motoren Werke AG		Germany		8,162		521,021
	Cie Generale des Etablissements Michelin SCA		France		8,517		887,674
a	Faurecia SE		France		3,230		126,891
a	Fiat Chrysler Automobiles NV		United Kingdom		36,368		367,942
	General Motors Co.		United States		18,814		475,994
	Gentex Corp.		United States		8,426		217,138
	Honda Motor Co. Ltd.		Japan		16,200		418,830
	Isuzu Motors Ltd.		Japan		67,200		610,669
	Lear Corp.		United States		1,868		203,649
a	Peugeot SA		France		25,032		410,467
	Toyota Industries Corp.		Japan		6,500		345,492
							5,131,207
	Banks 1.2%
	Banco de Sabadell SA		Spain		242,207		85,090
a	Bank of Ireland Group PLC		Ireland		32,153		66,246
a	FinecoBank Banca Fineco SpA		Italy		135,215		1,829,846
	Housing Development Finance Corp. Ltd.		India		27,108		629,974
	ING Groep NV		Netherlands		149,749		1,043,793
	Kasikornbank PCL, fgn		Thailand		96,700		293,867
	KB Financial Group Inc.		South Korea		29,025		823,885
	KBC Groep NV		Belgium		24,134		1,386,404
	Shinhan Financial Group Co. Ltd.		South Korea		14,863		360,143
	Shinsei Bank Ltd.		Japan		8,000		96,762
	Standard Chartered PLC		United Kingdom		211,107		1,144,321
	Sumitomo Mitsui Financial Group Inc.		Japan		30,100		849,476
	Sumitomo Mitsui Financial Group Inc., ADR		Japan		112,000		629,440
							9,239,247
	Capital Goods 5.9%
	3M Co.		United States		8,752		1,365,225
	Allegion PLC		United States		4,871		497,914
	Allison Transmission Holdings Inc.		United States		2,215		81,468
	Amada Co. Ltd.		Japan		13,500		110,536
	AMETEK Inc.		United States		4,018		359,089
a	Andritz AG		Austria		3,171		115,607
	Atlas Copco AB		Sweden		7,152		265,723
	Atlas Copco AB, A		Sweden		11,437		486,992
	BAE Systems PLC		United Kingdom		77,090		460,938
	BWX Technologies Inc.		United States		8,401		475,833
	CAE Inc.		Canada		15,000		243,306
	Carlisle Cos. Inc.		United States		3,400		406,878
	Caterpillar Inc.		United States		3,346		423,269
	CK Hutchison Holdings Ltd.		Hong Kong		152,000		984,283
	Cummins Inc.		United States		4,550		788,333
a	Dassault Aviation SA		France		253		232,106
	Deere & Co.		United States		3,086		484,965

Semiannual Report             FFA-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization			Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Capital Goods (continued)
	Donaldson Co. Inc.		United States			8,500	$	395,420
	Dover Corp.		United States			8,900		859,384
	Emerson Electric Co.		United States			18,102		1,122,867
	Epiroc AB, A		Sweden			9,709		121,643
	Epiroc AB, B		Sweden			17,653		216,773
	Fastenal Co.		United States			34,853		1,493,103
	Ferguson PLC		United Kingdom			15,500		1,267,330
	Fortive Corp.		United States			6,517		440,940
	Geberit AG		Switzerland			1,568		786,721
	General Dynamics Corp.		United States			8,887		1,328,251
	Graco Inc.		United States			4,752		228,048
	GrafTech International Ltd.		United States			844		6,735
	Honeywell International Inc.		United States			19,445		2,811,553
	Huntington Ingalls Industries Inc.		United States			1,176		205,200
	Illinois Tool Works Inc.		United States			10,617		1,856,382
a	Ingersoll-Rand Inc.		United States			5,626		158,203
	Johnson Controls International PLC		United States			22,400		764,736
	Kingspan Group PLC		Ireland			2,612		168,606
	Komatsu Ltd.		Japan			22,800		466,956
	Kone OYJ, B		Finland			6,442		444,261
	Kurita Water Industries Ltd.		Japan			4,000		111,272
	Lennox International Inc.		United States			502		116,961
	Lockheed Martin Corp.		United States			6,731		2,456,277
	Masco Corp.		United States			2,247		112,822
a	Mercury Systems Inc.		United States			3,640		286,322
	Mitsubishi Electric Corp.		Japan			54,100		706,614
	MSC Industrial Direct Co. Inc., A		United States			1,257		91,522
	MTU Aero Engines AG		Germany			7,900		1,375,272
	Northrop Grumman Corp.		United States	��		7,855		2,414,941
	nVent Electric PLC		United States			15,900		297,807
	Obayashi Corp.		Japan			27,400		257,600
	Otis Worldwide Corp.		United States			7,237		411,496
	PACCAR Inc.		United States			4,976		372,454
	Pentair PLC		United States			13,900		528,061
	Raytheon Technologies Corp.		United States			50,395		3,105,340
	Rockwell Automation Inc.		United States			3,621		771,273
	Roper Technologies Inc.		United States			8,700		3,377,862
	Schneider Electric SE		France			6,764		752,338
	Siemens AG		Germany			4,442		523,830
	Sinopec Engineering Group Co. Ltd.		China			615,000		264,064
	SKF AB, B		Sweden			15,639		292,313
	Snap-on Inc.		United States			1,016		140,726
	Stanley Black & Decker Inc.		United States			4,652		648,396
	Sumitomo Heavy Industries Ltd.		Japan			4,500		98,420
	Toro Co.		United States			3,572		236,967
	Trane Technologies PLC		United States			6,456		574,455
	W.W. Grainger Inc.		United States			3,289		1,033,272

FFA-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Capital Goods (continued)
	Watsco Inc.		United States		809	$	143,759
	Yangzijiang Shipbuilding Holdings Ltd.		Singapore		98,600		66,379
							44,494,392
	Commercial & Professional Services 1.6%
	Adecco Group AG		Switzerland		6,392		301,291
	Cintas Corp.		United States		6,084		1,620,534
a	Copart Inc.		United States		6,003		499,870
a	CoStar Group Inc.		United States		300		213,201
	Equifax Inc.		United States		3,190		548,297
	Experian PLC		United Kingdom		45,000		1,579,384
a	IAA Inc.		United States		1,139		43,931
	IHS Markit Ltd.		United States		21,309		1,608,829
	KAR Auction Services Inc.		United States		1,042		14,338
	ManpowerGroup Inc.		United States		57		3,919
	Matthews International Corp., A		United States		5,800		110,780
	Persol Holdings Co. Ltd.		Japan		6,900		95,129
	Randstad NV		Netherlands		4,940		220,873
	Recruit Holdings Co. Ltd.		Japan		11,000		378,292
	RELX PLC		United Kingdom		36,436		843,305
	Republic Services Inc.		United States		3,900		319,995
	Robert Half International Inc.		United States		4,264		225,267
	Rollins Inc.		United States		4,605		195,206
	SGS SA		Switzerland		267		654,055
	Verisk Analytics Inc.		United States		8,961		1,525,162
	Wolters Kluwer NV		Netherlands		11,387		889,311
							11,890,969
	Consumer Durables & Apparel 1.5%
a	Adidas AG		Germany		785		206,948
	Bandai Namco Holdings Inc.		Japan		1,500		78,957
	Barratt Developments PLC		United Kingdom		19,371		119,052
	The Berkeley Group Holdings PLC		United Kingdom		4,927		253,731
	Burberry Group PLC		United Kingdom		7,850		155,111
a	Capri Holdings Ltd.		United States		4,944		77,275
	Carter’s Inc.		United States		1,386		111,850
	D.R. Horton Inc.		United States		2,668		147,941
	Garmin Ltd.		United States		4,296		418,860
	Hanesbrands Inc.		United States		5,102		57,602
	Hasbro Inc.		United States		3,501		262,400
	Hermes International		France		878		737,110
	Leggett & Platt Inc.		United States		3,927		138,034
a	Lululemon Athletica Inc.		United States		3,432		1,070,818
a	Moncler SpA		Italy		5,423		208,515
	NIKE Inc., B		United States		40,408		3,962,005
a	NVR Inc		United States		112		364,980
	Pandora AS		Denmark		4,400		240,280
a	Persimmon PLC		United Kingdom		8,975		253,996

Semiannual Report             FFA-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Consumer Durables & Apparel (continued)
	PulteGroup Inc.		United States		3,970	$	135,099
	Sekisui Chemical Co. Ltd.		Japan		13,100		187,693
	Sekisui House Ltd.		Japan		25,600		488,759
	Sony Corp.		Japan		7,700		531,532
	Tapestry Inc.		United States		9,480		125,894
	Taylor Wimpey PLC		United Kingdom		87,452		154,347
	VF Corp.		United States		9,705		591,423
	Whirlpool Corp.		United States		525		68,003
							11,148,215
	Consumer Services 1.0%
	Carnival Corp.		United States		11,718		192,409
	Choice Hotels International Inc.		United States		1,034		81,583
	Darden Restaurants Inc.		United States		4,295		325,432
	Domino’s Pizza Inc.		United States		1,302		481,011
	H&R Block Inc.		United States		7,332		104,701
	Las Vegas Sands Corp.		United States		17,329		789,163
	McDonald’s Corp.		United States		13,301		2,453,635
	Six Flags Entertainment Corp.		United States		1,814		34,847
	Starbucks Corp.		United States		10,065		740,683
a	TAL Education Group, ADR		China		23,000		1,572,740
	Wyndham Destinations Inc.		United States		1,962		55,289
	Yum! Brands Inc.		United States		11,125		966,874
							7,798,367
	Diversified Financials 2.2%
	3i Group PLC		United Kingdom		40,649		418,546
	American Express Co.		United States		3,590		341,768
a	Amundi SA		France		2,687		211,215
a	Berkshire Hathaway Inc., B		United States		6,469		1,154,781
	BlackRock Inc.		United States		1,465		797,092
	Challenger Ltd.		Australia		17,538		54,303
	The Charles Schwab Corp.		United States		17,831		601,618
	Daiwa Securities Group Inc.		Japan		33,500		140,730
	Deutsche Boerse AG		Germany		9,427		1,705,916
	EXOR NV		Netherlands		3,689		211,720
	FactSet Research Systems Inc.		United States		1,114		365,916
	Flow Traders		Netherlands		10,867		388,782
	Hargreaves Lansdown PLC		United Kingdom		11,932		240,612
	Hong Kong Exchanges and Clearing Ltd.		Hong Kong		24,800		1,056,267
	Intercontinental Exchange Inc.		United States		8,255		756,158
	Intermediate Capital Group PLC		United Kingdom		74,000		1,180,534
	Invesco Ltd.		United States		7,131		76,730
	Japan Exchange Group Inc.		Japan		2,600		60,216
	Lazard Ltd., A		United States		3,513		100,577
	M&G PLC		United Kingdom		112,702		234,010
	Magellan Financial Group Ltd.		Australia		5,399		220,439
	MarketAxess Holdings Inc.		United States		1,105		553,517

FFA-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financials (continued)
	MFA Financial Inc.		United States		4,330	$	10,782
	Mitsubishi UFJ Lease & Finance Co. Ltd.		Japan		16,800		80,167
	Moody’s Corp.		United States		2,363		649,187
	Morningstar Inc.		United States		545		76,829
	MSCI Inc.		United States		2,378		793,824
	Nasdaq Inc.		United States		1,600		191,152
a	Natixis SA		France		39,782		104,917
	Nomura Holdings Inc.		Japan		46,600		209,401
	ORIX Corp.		Japan		46,500		577,402
	Partners Group Holding AG	��	Switzerland		780		710,340
	S&P Global Inc.		United States		2,099		691,579
	Santander Consumer USA Holdings Inc.		United States		3,125		57,531
	SEI Investments Co.		United States		3,055		167,964
	Singapore Exchange Ltd.		Singapore		34,000		204,608
	State Street Corp.		United States		2,700		171,585
	T. Rowe Price Group Inc.		United States		7,039		869,316
	Tradeweb Markets Inc.		United States		2,100		122,094
	UBS Group AG		Switzerland		4,941		57,064
							16,617,189
	Energy 1.3%
	Ampol Ltd.		Australia		10,004		203,815
	BP PLC		United Kingdom		168,151		644,167
	Cabot Oil & Gas Corp., A		United States		6,007		103,200
	Chevron Corp.		United States		6,700		597,841
	Cimarex Energy Co.		United States		1,926		52,946
	ConocoPhillips		United States		15,805		664,126
	Eni SpA		Italy		9,775		93,695
	EOG Resources Inc.		United States		6,000		303,960
	Equinor ASA		Norway		51,818		746,655
	Exxon Mobil Corp.		United States		28,776		1,286,863
	Galp Energia SGPS SA, B		Portugal		38,527		446,873
	HollyFrontier Corp.		United States		2,216		64,707
	Husky Energy Inc.		Canada		82,500		271,040
	Neste Oil OYJ		Finland		8,059		316,498
	ONEOK Inc.		United States		3,393		112,715
	Phillips 66		United States		10,544		758,114
	Royal Dutch Shell PLC, B		United Kingdom		45,465		689,235
	SBM Offshore NV		Netherlands		46,666		687,586
	Tenaris SA		Italy		20,416		132,664
	Total SA		France		22,632		872,577
	Valero Energy Corp.		United States		12,245		720,251
							9,769,528
	Food & Staples Retailing 1.3%
	Casey’s General Stores Inc.		United States		947		141,595
	Coles Group Ltd.		Australia		13,349		158,661
	Costco Wholesale Corp.		United States		4,887		1,481,787

Semiannual Report             FFA-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Food & Staples Retailing (continued)
a	Jeronimo Martins SGPS SA		Portugal		7,526	$	131,693
	Koninklijke Ahold Delhaize NV		Netherlands		45,170		1,230,957
	The Kroger Co.		United States		14,920		505,042
	Lawson Inc.		Japan		2,000		100,601
	Matsumotokiyoshi Holdings Co. Ltd.		Japan		15,700		570,516
	Seven & i Holdings Co. Ltd.		Japan		8,500		278,065
	Seven & I Holdings Co. Ltd., ADR		Japan		24,600		399,750
a	Sprouts Farmers Market Inc.		United States		2,539		64,973
	Sundrug Co. Ltd.		Japan		20,200		668,533
	Sysco Corp.		United States		15,175		829,466
	Walgreens Boots Alliance Inc.		United States		17,826		755,644
	Walmart Inc.		United States		20,575		2,464,474
	Welcia Holdings Co. Ltd.		Japan		1,000		80,787
							9,862,544
	Food, Beverage & Tobacco 2.4%
a	a2 Milk Co. Ltd.		New Zealand		4,168		54,558
	Altria Group Inc.		United States		30,176		1,184,408
	Anheuser-Busch InBev SA/NV		Belgium		1,207		59,495
	Brown-Forman Corp., A		United States		1,586		91,306
	Brown-Forman Corp., B		United States		10,899		693,830
	Calbee Inc.		Japan		3,300		91,211
	The Coca-Cola Co.		United States		27,892		1,246,215
	Constellation Brands Inc., A		United States		3,204		560,540
	Flowers Foods Inc.		United States		5,437		121,571
	General Mills Inc.		United States		18,181		1,120,859
	The Hershey Co.		United States		5,251		680,635
	Hormel Foods Corp.		United States		8,792		424,390
	Imperial Brands PLC		United Kingdom		35,970		684,720
	Ingredion Inc.		United States		1,870		155,210
	J M Smucker Co/The		United States		2,302		243,575
	Kellogg Co.		United States		4,386		289,739
	Kirin Holdings Co. Ltd.		Japan		39,200		826,326
	Lamb Weston Holdings Inc.		United States		3,132		200,229
	McCormick & Co. Inc.		United States		5,900		1,058,519
	Mondelez International Inc., A		United States		8,669		443,246
a	Monster Beverage Corp.		United States		25,224		1,748,528
	Nestle SA		Switzerland		3,119		345,805
	Orkla ASA		Norway		8,204		72,045
	PepsiCo Inc.		United States		23,188		3,066,845
	Philip Morris International Inc.		United States		17,946		1,257,297
	Suntory Beverage & Food Ltd.		Japan		5,300		206,797
	Tyson Foods Inc.		United States		8,574		511,953
b	WH Group Ltd., Reg S		Hong Kong		435,500		376,354
	Yamazaki Baking Co. Ltd.		Japan		6,100		104,781
							17,920,987

FFA-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Health Care Equipment & Services 3.5%
	Abbott Laboratories		United States		21,260	$	1,943,802
	Baxter International Inc.		United States		2,315		199,322
	Becton Dickinson and Co.		United States		8,200		1,962,014
	Cerner Corp.		United States		7,697		527,629
	Chemed Corp.		United States		371		167,347
	Cochlear Ltd.		Australia		10,700		1,404,588
	Coloplast AS, B		Denmark		3,667		571,512
	CVS Health Corp.		United States		7,000		454,790
	Danaher Corp.		United States		6,787		1,200,145
	Dentsply Sirona Inc.		United States		5,700		251,142
a	Edwards Lifesciences Corp.		United States		7,321		505,954
	Fisher & Paykel Healthcare Corp. Ltd.		New Zealand		11,382		262,205
	GN Store Nord AS		Denmark		25,000		1,338,128
a	Haemonetics Corp.		United States		5,724		512,642
	HCA Healthcare Inc.		United States		5,464		530,336
	Hoya Corp.		Japan		5,000		478,795
a	IDEXX Laboratories Inc.		United States		645		212,953
a	Intuitive Surgical Inc.		United States		2,822		1,608,060
a	Laboratory Corp. of America Holdings		United States		3,110		516,602
a	LivaNova PLC		United Kingdom		21,000		1,010,730
	Medipal Holdings Corp.		Japan		6,000		115,804
	Medtronic PLC		United States		17,500		1,604,750
a	Premier Inc., A		United States		636		21,802
	Quest Diagnostics Inc.		United States		5,173		589,515
	ResMed Inc.		United States		3,990		766,080
	Sinopharm Group Co. Ltd., H		China		121,600		312,626
	Stryker Corp.		United States		14,092		2,539,238
	Suzuken Co. Ltd.		Japan		2,900		108,343
	Teleflex Inc.		United States		3,284		1,195,310
	UnitedHealth Group Inc.		United States		2,600		766,870
	Universal Health Services Inc., B		United States		1,389		129,024
a	Varian Medical Systems Inc.		United States		1,904		233,278
a	Veeva Systems Inc.		United States		400		93,768
	West Pharmaceutical Services Inc.		United States		8,100		1,840,077
							25,975,181
	Household & Personal Products 1.3%
	Church & Dwight Co. Inc.		United States		7,316		565,527
	Clorox Co.		United States		4,417		968,957
	Colgate-Palmolive Co.		United States		31,604		2,315,309
a	Essity AB, B		Sweden		9,223		298,987
	Estee Lauder Cos. Inc., A		United States		7,118		1,343,024
	Kimberly-Clark Corp.		United States		7,114		1,005,564
	Nu Skin Enterprises Inc., A		United States		1,539		58,836
	The Procter & Gamble Co.		United States		21,338		2,551,385
	Unilever NV		United Kingdom		3,053		162,765

Semiannual Report             FFA-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Household & Personal Products (continued)
	Unilever PLC		United Kingdom		5,139	$	277,192
							9,547,546
	Insurance 0.5%
	Admiral Group PLC		United Kingdom		7,784		220,737
	Aflac Inc.		United States		9,100		327,873
	AIA Group Ltd.		Hong Kong		104,540		978,237
	Allianz SE		Germany		1,938		395,980
	American National Insurance Co.		United States		258		18,594
	Assured Guaranty Ltd.		United States		1,941		47,380
	Aviva PLC		United Kingdom		103,080		349,363
a	CNP Assurances		France		7,394		85,751
	Direct Line Insurance Group PLC		United Kingdom		60,093		201,487
	Erie Indemnity Co., A		United States		3,000		575,700
	Fidelity National Financial Inc.		United States		2,105		64,539
	Japan Post Insurance Co. Ltd.		Japan		9,400		123,858
	Medibank Private Ltd.		Australia		29,647		61,457
	MS&AD Insurance Group Holdings Inc.		Japan		6,400		176,248
	NN Group NV		Netherlands		1,839		61,799
	RenaissanceRe Holdings Ltd.		United States		565		96,632
							3,785,635
	Materials 3.3%
	Air Products and Chemicals Inc.		United States		15,272		3,687,577
	Albemarle Corp.		United States		15,630		1,206,792
a	ArcelorMittal SA		France		46,281		490,158
	BHP Group PLC		United Kingdom		14,994		306,811
	Celanese Corp.		United States		9,041		780,600
	Covestro AG		Germany		12,999		495,065
	Eastman Chemical Co.		United States		2,905		202,304
	Ecolab Inc.		United States		9,621		1,914,098
	EMS-Chemie Holding AG		Switzerland		344		267,255
	Evraz PLC		Russia		20,712		73,381
	Fortescue Metals Group Ltd.		Australia		61,175		594,637
	International Flavors & Fragrances Inc.		United States		2,516		308,109
	Johnson Matthey PLC		United Kingdom		11,509		299,727
	Koninklijke DSM NV		Netherlands		12,000		1,665,668
	Linde PLC		United Kingdom		14,985		3,178,468
	LyondellBasell Industries NV, A		United States		11,096		729,229
	Martin Marietta Materials Inc.		United States		2,363		488,125
	NewMarket Corp.		United States		243		97,317
	Nitto Denko Corp.		Japan		6,500		368,486
	Nucor Corp.		United States		4,370		180,962
	Packaging Corp. of America		United States		2,231		222,654
	Reliance Steel & Aluminum Co.		United States		536		50,882
	Rio Tinto Ltd.		Australia		9,594		656,840
	Rio Tinto PLC		Australia		7,923		445,861
	Royal Gold Inc.		United States		493		61,290

FFA-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Materials (continued)
	Shin-Etsu Chemical Co. Ltd.		Japan		400	$	46,945
	Sonoco Products Co.		United States		2,993		156,504
	Steel Dynamics Inc.		United States		4,132		107,804
	Sumitomo Metal Mining Co. Ltd.		Japan		24,100		678,892
	Symrise AG		Germany		14,000		1,635,708
	Taiheiyo Cement Corp.		Japan		5,000		116,171
	Tosoh Corp.		Japan		30,800		423,096
	Umicore SA		Belgium		36,000		1,699,195
	Valvoline Inc.		United States		2,681		51,824
	Wheaton Precious Metals Corp.		Canada		21,490		945,209
							24,633,644
	Media & Entertainment 2.1%
a	Alphabet Inc., A		United States		2,146		3,043,135
a	AMC Networks Inc., A		United States		1,108		25,916
	Ascential PLC		United Kingdom		324,885		1,165,435
a	Baidu Inc., ADR		China		5,625		674,381
	Cable One Inc.		United States		555		985,042
	Cinemark Holdings Inc.		United States		2,017		23,296
	Comcast Corp., A		United States		38,307		1,493,207
a	CTS Eventim AG & Co. KGaA		Germany		24,000		1,002,055
	CyberAgent Inc.		Japan		35,000		1,720,378
a	Facebook Inc., A		United States		12,128		2,753,905
	The Interpublic Group of Cos. Inc.		United States		8,214		140,952
	Kakaku.com Inc.		Japan		5,700		145,203
a	Match Group Inc.		United States		1,348		144,304
a	Match Group Inc.		United States		2,007		649,064
	Nippon Television Holdings Inc.		Japan		13,500		146,218
	Omnicom Group Inc.		United States		6,512		355,555
	Tokyo Broadcasting System Holdings Inc.		Japan		14,900		238,346
a	Ubisoft Entertainment SA		France		1,485		122,963
	The Walt Disney Co.		United States		10,412		1,161,042
							15,990,397
	Pharmaceuticals, Biotechnology & Life Sciences 5.9%
a	10X Genomics Inc., A		United States		900		80,379
	AbbVie Inc.		United States		25,727		2,525,877
	Agilent Technologies Inc.		United States		7,385		652,612
	Amgen Inc.		United States		12,284		2,897,304
	Astellas Pharma Inc.		Japan		27,800		464,248
	AstraZeneca PLC, ADR		United Kingdom		12,114		640,709
	Bayer AG		Germany		21,485		1,592,402
a	Biogen Inc.		United States		4,887		1,307,517
	Bristol-Myers Squibb Co.		United States		26,105		1,534,974
a	Bristol-Myers Squibb Co., rts., 2/01/49		United States		5,723		20,488
a	Catalent Inc.		United States		20,489		1,501,844
	Chugai Pharmaceutical Co. Ltd.		Japan		3,600		192,744
	CSL Ltd.		Australia		12,186		2,423,310

Semiannual Report             FFA-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Pharmaceuticals, Biotechnology & Life Sciences (continued)
a	Deciphera Pharmaceuticals Inc.		United States		3,500	$	209,020
	Eli Lilly and Co.		United States		7,262		1,192,275
a	Exelixis Inc.		United States		7,348		174,441
a	Galapagos NV		Belgium		1,565		308,869
a	Genmab A/S		Denmark		2,200		741,752
	Gilead Sciences Inc.		United States		21,800		1,677,292
a	GW Pharmaceuticals PLC, ADR		United Kingdom		1,326		162,727
	Hikma Pharmaceuticals PLC		United Kingdom		45,000		1,234,799
a	Illumina Inc.		United States		3,446		1,276,226
a	Iovance Biotherapeutics Inc.		United States		2,500		68,625
	Johnson & Johnson.		United States		26,655		3,748,493
	Merck & Co. Inc.		United States		22,963		1,775,729
a	Mettler-Toledo International Inc.		United States		3,480		2,803,314
a	Neurocrine Biosciences Inc.		United States		2,809		342,698
	Novartis AG		Switzerland		12,343		1,075,335
	Novo Nordisk AS, B		Denmark		15,177		988,650
	Orion OYJ		Finland		1,749		84,809
	Pfizer Inc.		United States		70,822		2,315,879
a	PTC Therapeutics Inc.		United States		2,300		116,702
a	Reata Pharmaceuticals Inc.		United States		700		109,214
a	Regeneron Pharmaceuticals Inc.		United States		1,113		694,122
	Roche Holding AG		Switzerland		8,164		2,828,414
	Sanofi		France		12,151		1,239,104
	Santen Pharmaceutical Co. Ltd.		Japan		50,000		920,473
	Sartorius Stedim Biotech		France		1,200		304,218
	Shionogi & Co. Ltd.		Japan		3,500		219,567
	Takeda Pharmaceutical Co. Ltd., ADR		Japan		69,900		1,253,307
a	Waters Corp.		United States		3,696		666,758
a	WuXi Biologics (Cayman) Inc.		China		6,500		119,311
							44,486,531
	Real Estate 1.5%
	American Tower Corp.		United States		6,129		1,584,592
a	Aroundtown SA		Germany		36,347		208,315
	CapitaLand Mall Trust		Singapore		39,200		55,624
	CK Asset Holdings Ltd.		Hong Kong		140,330		841,524
	Crown Castle International Corp.		United States		6,785		1,135,470
	Daito Trust Construction Co. Ltd.		Japan		3,000		276,484
	EPR Properties		United States		2,325		77,027
	Equinix Inc.		United States		1,198		841,355
	Gaming and Leisure Properties Inc.		United States		5,396		186,702
	Gecina SA		France		1,959		241,929
	Goodman Group		Australia		7,321		75,529
	Kerry Properties Ltd.		Hong Kong		27,500		71,434
	Kimco Realty Corp.		United States		10,578		135,822
	Link REIT		Hong Kong		11,100		91,132
	Mitsui Fudosan Co. Ltd.		Japan		32,700		580,907

FFA-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Real Estate (continued)
	National Retail Properties Inc.		United States		5,357	$	190,066
	OMEGA Healthcare Investors Inc.		United States		6,649		197,675
	Public Storage		United States		5,214		1,000,515
	Realty Income Corp.		United States		9,590		570,605
	Segro PLC		United Kingdom		39,210		433,644
	Simon Property Group Inc.		United States		7,737		529,056
	Spirit Realty Capital Inc.		United States		3,149		109,774
	STORE Capital Corp.		United States		5,795		137,979
	Sun Hung Kai Properties Ltd.		Hong Kong		23,500		300,216
	Swire Pacific Ltd., A		Hong Kong		69,500		369,374
	Ventas Inc.		United States		6,506		238,250
	VEREIT Inc.		United States		30,782		197,928
	WP Carey Inc.		United States		3,880		262,482
							10,941,410
	Retailing 3.7%
	ABC-Mart Inc.		Japan		1,300		76,262
a	Alibaba Group Holding Ltd.		China		12,600		339,994
a	Alibaba Group Holding Ltd., ADR		China		3,145		678,377
a	Amazon.com Inc.		United States		2,238		6,174,239
a	AutoZone Inc.		United States		569		641,900
	Best Buy Co. Inc.		United States		7,734		674,946
a	boohoo Group PLC		United Kingdom		290,000		1,485,006
a	Booking Holdings Inc.		United States		423		673,560
a	Burlington Stores Inc.		United States		531		104,570
	Dick’s Sporting Goods Inc.		United States		2,556		105,461
	Dollar General Corp.		United States		6,650		1,266,892
	Expedia Group Inc.		United States		2,151		176,812
	Foot Locker Inc.		United States		4,357		127,050
	The Gap Inc.		United States		8,417		106,223
	Genuine Parts Co.		United States		4,377		380,624
	Hennes & Mauritz AB, B		Sweden		20,642		301,261
	The Home Depot Inc.		United States		6,699		1,678,166
	Industria de Diseno Textil SA		Spain		25,457		675,402
	Kohl’s Corp.		United States		6,012		124,869
	L Brands Inc.		United States		7,713		115,464
	Lowe’s Cos. Inc.		United States		8,700		1,175,544
	Macy’s Inc.		United States		10,257		70,568
a	MercadoLibre Inc.		Argentina		1,500		1,478,655
	Next PLC		United Kingdom		5,466		330,925
	Nitori Holdings Co. Ltd.		Japan		300		58,821
	Nordstrom Inc.		United States		3,773		58,444
a	O’Reilly Automotive Inc.		United States		2,453		1,034,357
	Penske Automotive Group Inc.		United States		782		30,271
	Pool Corp.		United States		1,094		297,426
	Ross Stores Inc.		United States		24,749		2,109,605
	Seria Co. Ltd.		Japan		9,400		335,267

Semiannual Report             FFA-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Retailing (continued)
	Target Corp.		United States		22,141	$	2,655,370
	The TJX Cos. Inc.		United States		24,414		1,234,372
	Tractor Supply Co.		United States		3,801		500,934
a	Ulta Beauty Inc.		United States		1,843		374,903
a	Urban Outfitters Inc.		United States		2,374		36,132
	Williams-Sonoma Inc.		United States		2,842		233,072
a	Zalando SE		Germany		2,247		159,389
	Zozo Inc.		Japan		4,300		95,856
							28,176,989
	Semiconductors & Semiconductor Equipment 3.1%
	Advantest Corp.		Japan		2,900		165,504
	Analog Devices Inc.		United States		16,200		1,986,768
	Applied Materials Inc.		United States		25,796		1,559,368
	ASML Holding NV		Netherlands		5,200		1,902,058
	ASML Holding NV, N.Y. shs		Netherlands		4,022		1,480,217
	Intel Corp.		United States		25,458		1,523,152
	KLA Corp.		United States		4,502		875,549
	Lam Research Corp.		United States		4,069		1,316,159
	Maxim Integrated Products Inc.		United States		8,003		485,062
	Monolithic Power Systems		United States		2,700		639,900
	NVIDIA Corp.		United States		3,187		1,210,773
	NXP Semiconductors NV		Netherlands		11,677		1,331,645
	QUALCOMM Inc.		United States		10,224		932,531
	Skyworks Solutions Inc.		United States		6,004		767,672
	Taiwan Semiconductor Manufacturing Co. Ltd.		Taiwan		84,000		899,686
	Texas Instruments Inc.		United States		36,020		4,573,459
	Tokyo Electron Ltd.		Japan		3,200		789,580
	Xilinx Inc.		United States		7,578		745,600
							23,184,683
	Software & Services 7.7%
	Accenture PLC, A		United States		18,612		3,996,369
a	Adobe Inc.		United States		1,077		468,829
a	Adyen NV		Netherlands		1,568		2,282,012
	Amdocs Ltd.		United States		4,288		261,053
a	Aspen Technology Inc.		United States		1,336		138,423
a	Atlassian Corp. PLC		United States		1,000		180,270
a	Autodesk Inc.		United States		5,142		1,229,915
	Automatic Data Processing Inc.		United States		12,915		1,922,914
a	Avalara Inc.		United States		2,280		303,445
	AVEVA Group PLC		United Kingdom		28,000		1,419,633
a	Bill.Com Holdings Inc.		United States		4,300		387,903
	Booz Allen Hamilton Holding Corp.		United States		1,899		147,723
	Broadridge Financial Solutions Inc.		United States		3,665		462,486
a	Cadence Design Systems Inc.		United States		4,030		386,719
a	Check Point Software Technologies Ltd.		Israel		4,600		494,178
	Citrix Systems Inc.		United States		1,868		276,296

FFA-20     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights			Value
	Common Stocks and Other Equity Interests (continued)
	Software & Services (continued)
	Cognizant Technology Solutions Corp., A		United States		11,809		$	670,987
a	CyberArk Software Ltd.		Israel		15,000			1,489,050
	Fujitsu Ltd.		Japan		7,800			913,250
	International Business Machines Corp.		United States		11,026			1,331,610
	Intuit Inc.		United States		11,888			3,521,107
	Jack Henry & Associates Inc.		United States		2,322			427,318
	Keywords Studios PLC		Ireland		74,000	��		1,661,417
	Mastercard Inc., A		United States		13,525			3,999,343
	Microsoft Corp.		United States		59,398			12,088,087
	NEC Corp.		Japan		3,500			168,160
a	Nice Ltd.		Israel		669			126,104
	Nomura Research Institute Ltd.		Japan		13,300			363,259
a	Okta Inc., A		United States		400			80,092
	Oracle Corp. Japan		Japan		1,500			177,919
	Otsuka Corp.		Japan		4,200			221,826
	Paychex Inc.		United States		10,879			824,084
a	PayPal Holdings Inc.		United States		3,600			627,228
a	PTC Inc.		United States		7,221			561,722
	The Sage Group PLC		United Kingdom		198,153			1,644,788
a	salesforce.com Inc.		United States		3,353			628,118
	SAP SE		Germany		12,172			1,701,366
a	ServiceNow Inc.		United States		6,255			2,533,650
a	Shopify Inc., A		Canada		1,550			1,471,260
a	Synopsys Inc.		United States		2,700			526,500
	Trend Micro Inc.		Japan		2,100			117,357
a	Twilio Inc., A		United States		2,562			562,154
a	Tyler Technologies Inc.		United States		1,196			414,869
a	VeriSign Inc.		United States		2,984			617,181
	Visa Inc., A.		United States		14,984			2,894,459
a	Workday Inc., A		United States		4,520			846,867
								57,569,300
	Technology Hardware & Equipment 2.2%
	Amphenol Corp., A		United States		8,633			827,128
	Apple Inc.		United States		23,012			8,394,778
	Avnet Inc.		United States		8,800			245,388
	Cisco Systems Inc.		United States		32,765			1,528,160
	Cognex Corp.		United States		2,387			142,552
a	F5 Networks Inc.		United States		2,000			278,960
	Hitachi Ltd.		Japan		31,300			994,865
	HP Inc.		United States		50,192			874,846
a	Keysight Technologies Inc.		United States		4,262			429,524
	Motorola Solutions Inc.		United States		4,497		��	630,165
	NetApp Inc.		United States		6,842			303,579
	Samsung Electronics Co. Ltd.		South Korea		28,228			1,252,930
	TE Connectivity Ltd.		United States		10,949			892,891

Semiannual Report             FFA-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Technology Hardware & Equipment (continued)
	Ubiquiti Inc.		United States		323	$	56,383
							16,852,149
	Telecommunication Services 0.9%
	AT&T Inc.		United States		39,921		1,206,812
	Deutsche Telekom AG		Germany		46,352		777,682
	KDDI Corp.		Japan		32,100		957,772
	Nippon Telegraph & Telephone Corp.		Japan		19,700		458,999
	NTT DOCOMO Inc.		Japan		39,100		1,038,027
	Proximus SADP		Belgium		6,611		134,701
	Softbank Corp.		Japan		15,200		193,743
	Swisscom AG		Switzerland		432		226,541
a	Telefonica SA		Spain		1,055		5,033
	Telefonica SA		Spain		25,330		121,137
a	Telefonica SA, rts., 7/01/20		Spain		10		2
	Verizon Communications Inc.		United States		24,629		1,357,797
	Vodafone Group PLC.		United Kingdom		381,269		606,101
							7,084,347
	Transportation 1.9%
	Alaska Air Group Inc.		United States		3,923		142,248
	AP Moeller-Maersk A/S, B		Denmark		354		414,850
	C.H. Robinson Worldwide Inc.		United States		4,472		353,556
	Canadian National Railway Co.		Canada		5,714		506,089
	Canadian Pacific Railway Ltd.		Canada		2,972		758,870
	ComfortDelGro Corp. Ltd.		Singapore		105,100		110,454
	Delta Air Lines Inc.		United States		17,452		489,529
a	Deutsche Lufthansa AG		Germany		6,653		66,740
	DSV Panalpina A/S		Denmark		13,500		1,658,109
	Expeditors International of Washington Inc.		United States		5,057		384,534
	Japan Airlines Co. Ltd.		Japan		4,700		84,814
	JB Hunt Transport Services Inc.		United States		5,526		664,999
	Kamigumi Co. Ltd.		Japan		4,300		84,566
	Kansas City Southern		United States		4,295		641,201
a	Kuehne + Nagel International AG		Switzerland		2,278		379,443
	Landstar System Inc.		United States		1,110		124,664
	Norfolk Southern Corp.		United States		4,400		772,508
	Old Dominion Freight Line Inc.		United States		776		131,602
	Southwest Airlines Co.		United States		14,883		508,701
a	Uber Technologies Inc.		United States		5,938		184,553
	Union Pacific Corp.		United States		20,596		3,482,166
	United Parcel Service Inc., B		United States		18,127		2,015,360
							13,959,556
	Utilities 1.8%
	AGL Energy Ltd.		Australia		28,153		333,006
	Alliant Energy Corp.		United States		6,338		303,210
	Ameren Corp.		United States		4,398		309,443

FFA-22     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Shares/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Utilities (continued)
	American Electric Power Co. Inc.		United States		3,773	$	300,482
	American Water Works Co. Inc.		United States		4,219		542,817
	Atmos Energy Corp.		United States		3,092		307,901
	Centrica PLC		United Kingdom		184,452		87,639
	Consolidated Edison Inc.		United States		8,867		637,803
	Dominion Energy Inc.		United States		11,218		910,677
	DTE Energy Co.		United States		5,418		582,435
	E.ON SE		Germany		68,411		772,133
	Endesa SA		Spain		13,312		330,191
	Evergy Inc.		United States		4,253		252,160
	Eversource Energy		United States		7,824		651,504
	Exelon Corp.		United States		26,169		949,673
	Hawaiian Electric Industries Inc.		United States		3,031		109,298
	NextEra Energy Inc.		United States		9,508		2,283,536
	OGE Energy Corp.		United States		5,530		167,891
	PPL Corp.		United States		13,989		361,476
	Public Service Enterprise Group Inc.		United States		15,856		779,481
	Red Electrica Corp. SA		Spain		12,336		230,780
	Sempra Energy		United States		2,118		248,293
	The Southern Co.		United States		19,795		1,026,371
	Toho Gas Co. Ltd.		Japan		1,500		74,974
	Tokyo Gas Co. Ltd.		Japan		15,300		366,352
	Veolia Environnement SA		France		14,635		330,446
	Xcel Energy Inc.		United States		3,971		248,188
							13,498,160
	Total Common Stocks and Other Equity Interests (Cost $408,190,714)						439,558,173
	Management Investment Companies (Cost $34,937,947) 3.8%
	Diversified Financials 3.8%
c	Templeton Global Bond VIP Fund, Class 1		United States		1,981,831		28,696,911
	Preferred Stocks (Cost $116,835) 0.0%†
	Materials 0.0%†
d	Fuchs Petrolub SE, 2.711%, pfd		Germany		3,045		122,379
					Principal  Amount*
	Corporate Bonds 14.6%
	Automobiles & Components 0.0%†
e	Adient U.S. LLC, senior secured note, 144A, 7.00%, 5/15/26		United States		100,000		103,664
e	Allison Transmission Inc., senior bond, 144A, 5.875%, 6/01/29		United States		100,000		104,290
							207,954

Semiannual Report             FFA-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Banks 2.5%
e	Akbank T.A.S., senior note, 144A, 5.125%, 3/31/25		Turkey		200,000	$	189,199
	Bancolombia SA, senior note, 3.00%, 1/29/25		Colombia		650,000		637,676
	Bank of America Corp.,
	sub. bond, 4.183%, 11/25/27		United States		1,810,000		2,066,924
	sub. note, 4.20%, 8/26/24		United States		400,000		444,115
b	BDO Unibank Inc., senior note, Reg S, 2.95%, 3/06/23		Philippines		200,000		204,978
e	BNP Paribas SA,
	senior bond, 144A, 3.052% to 1/13/30, FRN thereafter, 1/13/31		France		200,000		210,650
	senior note, 144A, 2.219% to 6/09/25, FRN thereafter, 6/09/26		France		200,000		204,567
e	BPCE SA,
	senior note, 144A, 5.70%, 10/22/23		France		400,000		447,738
	sub. note, 144A, 5.15%, 7/21/24		France		800,000		893,776
	sub. note, 144A, 4.875%, 4/01/26		France		500,000		567,548
	Citigroup Inc.,
	senior note, 2.572% to 6/30/30, FRN thereafter, 6/03/31		United States		200,000		206,967
	senior note, 3.352% to 4/24/24, FRN thereafter, 4/24/25		United States		1,700,000		1,837,771
f	Comerica Inc., junior sub. bond, 5.625% to 10/01/25, FRN thereafter, Perpetual		United States		100,000		101,730
	Credit Suisse Group Funding Guernsey Ltd.,
	senior note, 3.80%, 9/15/22		Switzerland		1,200,000		1,275,232
	senior note, 3.80%, 6/09/23		Switzerland		400,000		431,082
	HSBC Holdings PLC, senior bond, 2.848% to 6/04/30, FRN thereafter, 6/04/31		United Kingdom		300,000		307,443
	JPMorgan Chase & Co.,
	senior bond, 3.54% to 5/01/27, FRN thereafter, 5/01/28		United States		1,350,000		1,508,302
	senior bond, 4.493% to 3/23/30, FRN thereafter, 3/24/31		United States		400,000		489,650
	sub. note, 3.875%, 9/10/24		United States		400,000		443,748
	Lloyds Banking Group PLC,
	senior note, 4.05%, 8/16/23		United Kingdom		400,000		435,339
	senior note, 3.87%, 7/09/25		United Kingdom		200,000		217,832
	PNC Bank NA, senior bond, 3.10%, 10/25/27		United States		400,000		448,879
e	Standard Chartered PLC, senior note, 144A, 4.05%, 4/12/26		United Kingdom		970,000		1,056,757
	SVB Financial Group, senior note, 3.125%, 6/05/30		United States		100,000		107,311
	Truist Bank, sub. Bond, 2.25%, 3/11/30		United States		400,000		404,486
	Truist Financial Corp., sub. bond, 3.875%, 3/19/29		United States		1,660,000		1,884,069
	US Bancorp., sub. bond, 3.00%, 7/30/29		United States		300,000		325,992
	Wells Fargo & Co., senior note, 2.393% to 6/02/27, FRN thereafter, 6/02/28		United States		200,000		206,803
g	Wells Fargo Bank NA, senior note, FRN, 2.082%, 9/09/22		United States		1,100,000		1,118,009
							18,674,573
	Capital Goods 0.4%
e	Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		100,000		89,517
e	Carrier Global Corp., senior note, 144A, 3.577%, 4/05/50		United States		430,000		421,447
	Caterpillar Inc.,
	senior bond, 3.25%, 4/09/50		United States		200,000		224,454
	senior note, 2.60%, 4/09/30		United States		500,000		544,382

FFA-24     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Capital Goods (continued)
	Lockheed Martin Corp., senior bond, 4.70%, 5/15/46		United States		200,000	$	273,458
	Northrop Grumman Corp., senior bond, 5.25%, 5/01/50		United States		200,000		288,848
	Raytheon Technologies Corp., senior bond, 4.50%, 6/01/42		United States		800,000		992,043
e	Resideo Funding Inc., senior note, 144A, 6.125%, 11/01/26		United States		200,000		196,131
e	WESCO Distribution Inc., senior note, 144A, 7.125%, 6/15/25		United States		100,000		105,720
	Westinghouse Air Brake Technologies Corp., senior note, 3.20%, 6/15/25		United States		100,000		102,201
							3,238,201
	Commercial & Professional Services 0.1%
e	Ashtead Capital Inc., secured note, second lien, 144A, 4.125%, 8/15/25		United Kingdom		575,000		587,937
e	Harsco Corp., senior note, 144A, 5.75%, 7/31/27		United States		100,000		100,503
							688,440
	Consumer Durables & Apparel 0.1%
e	Ashton Woods USA LLC/Ashton Woods Finance Co., senior note, 144A, 6.75%, 8/01/25		United States		100,000		98,615
	Mohawk Industries Inc., senior bond, 3.625%, 5/15/30		United States		290,000		316,479
	NIKE Inc.,
	senior bond, 2.375%, 11/01/26		United States		100,000		108,992
	senior bond, 3.875%, 11/01/45		United States		100,000		120,738
							644,824
	Consumer Services 0.1%
	Marriott International Inc., senior note, 3.60%, 4/15/24		United States		300,000		301,802
e	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.25%, 5/15/27		United States		100,000		86,663
							388,465
	Diversified Financials 1.2%
	Capital One Financial Corp.,
	senior note, 3.20%, 1/30/23		United States		200,000		210,786
	senior note, 3.75%, 3/09/27		United States		1,035,000		1,143,811
	DY9 Leasing LLC, secured bond, 2.372%, 3/19/27		United States		672,597		705,437
	The Goldman Sachs Group Inc.,
	senior note, 3.50%, 1/23/25		United States		1,400,000		1,525,959
	sub. note, 4.25%, 10/21/25		United States		400,000		451,116
	Goldman Sachs Group Inc., senior note, 2.60%, 2/07/30		United States		300,000		313,576
	Morgan Stanley,
	senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28		United States		1,460,000		1,644,025
	sub. bond, 4.875%, 11/01/22		United States		400,000		435,336
	Private Export Funding Corp., secured bond, 2.80%, 5/15/22		United States		1,600,000		1,668,687
	Springleaf Finance Corp., senior bond, 5.375%, 11/15/29		United States		100,000		94,620
b	TNB Global Ventures Capital Bhd., senior note, Reg S, 3.244%, 10/19/26		Malaysia		300,000		319,549
e	UBS AG London, senior note, 144A, 1.75%, 4/21/22		Switzerland		200,000		203,828
							8,716,730
	Energy 2.5%
e	Aker BP ASA,
	senior note, 144A, 4.75%, 6/15/24		Norway		200,000		201,615
	senior note, 144A, 3.75%, 1/15/30		Norway		500,000		471,358

Semiannual Report         FFA-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Energy (continued)
	Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc.,
	senior bond, 3.337%, 12/15/27		United States		400,000	$	426,383
	senior bond, 4.08%, 12/15/47		United States		735,000		765,449
	BP Capital Markets America Inc,
	senior note, 3.937%, 9/21/28		United States		100,000		114,462
	senior note, 4.234%, 11/06/28		United States		400,000		465,008
	Canadian Natural Resources Ltd.,
	senior bond, 3.90%, 2/01/25		Canada		1,010,000		1,082,876
	senior bond, 3.85%, 6/01/27		Canada		300,000		321,039
	senior note, 2.95%, 1/15/23		Canada		400,000		412,851
	Cheniere Corpus Christi Holdings LLC,
	senior secured bond, first lien, 5.125%, 6/30/27		United States		200,000		219,750
	senior secured note, first lien, 5.875%, 3/31/25		United States		200,000		224,668
	Chevron Corp., senior note, 2.355%, 12/05/22		United States		100,000		104,089
	Ecopetrol SA, senior bond, 4.125%, 1/16/25		Colombia		250,000		251,539
	Enable Midstream Partners LP, senior bond, 4.95%, 5/15/28		United States		300,000		278,813
	Energy Transfer Operating LP,
	senior bond, 4.75%, 1/15/26		United States		100,000		109,289
	senior bond, 6.05%, 6/01/41		United States		700,000		722,467
	Enterprise Products Operating LLC,
	senior bond, 3.125%, 7/31/29		United States		400,000		428,895
	senior bond, 6.125%, 10/15/39		United States		700,000		890,773
	EOG Resources Inc., senior bond, 4.375%, 4/15/30		United States		50,000		59,638
	Exxon Mobil Corp.,
	senior bond, 2.61%, 10/15/30		United States		100,000		106,845
	senior note, 3.294%, 3/19/27		United States		400,000		449,479
	Kinder Morgan Inc., senior bond, 5.55%, 6/01/45		United States		800,000		972,493
	Kinder Morgan Inc./DE, senior note, 4.30%, 3/01/28		United States		400,000		453,824
	MPLX LP,
	senior bond, 5.50%, 2/15/49		United States		425,000		482,948
	senior note, 4.875%, 12/01/24		United States		400,000		444,519
	senior note, 4.875%, 6/01/25		United States		100,000		111,690
	Occidental Petroleum Corp., senior note, 2.60%, 8/13/21		United States		400,000		391,990
	Reliance Industries Ltd., senior note, 2.06%, 1/15/26		United States		750,000		769,926
e	Schlumberger Holdings Corp., senior note, 144A, 3.75%, 5/01/24		United States		1,510,000		1,627,484
e	Schlumberger Investment SA, senior bond, 144A, 2.40%, 8/01/22		United States		400,000		410,103
	Total Capital International SA, senior note, 3.455%, 2/19/29		France		670,000		762,280
	Total Capital SA, senior note, 3.883%, 10/11/28		France		400,000		465,015
	TransCanada PipeLines Ltd, senior bond, 4.25%, 5/15/28		Canada		500,000		575,541
	TransCanada PipeLines Ltd., senior bond, 4.875%, 5/15/48		Canada		200,000		247,534
	Transcontinental Gas Pipe Line Co. LLC, senior note, 7.85%, 2/01/26		United States		400,000		521,253
	Valero Energy Corp., senior bond, 4.00%, 4/01/29		United States		935,000		1,041,086
	The Williams Cos. Inc.,
	senior bond, 4.125%, 11/15/20		United States		1,350,000		1,352,237
	senior bond, 4.85%, 3/01/48		United States		320,000		350,449
							19,087,658

FFA-26     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Food & Staples Retailing 0.5%
e	Cencosud SA, senior note, 144A, 4.375%, 7/17/27		Chile		300,000	$	306,206
e	CK Hutchison International 19 Ltd., senior note, 144A, 3.25%, 4/11/24		Hong Kong		1,035,000		1,097,138
	Costco Wholesale Corp., senior note, 1.375%, 6/20/27		United States		200,000		204,666
	The Kroger Co., senior bond, 5.40%, 1/15/49		United States		550,000		771,701
	Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24		United States		500,000		551,078
	Walmart Inc., senior note, 3.55%, 6/26/25		United States		100,000		113,434
	Wal-Mart Stores Inc., senior bond, 5.25%, 9/01/35		United States		300,000		438,352
							3,482,575
	Food, Beverage & Tobacco 0.4%
	Anheuser-Busch Cos. LLC/InBev Worldwide Inc., senior bond, 4.90%, 2/01/46		Belgium		100,000		122,692
	Anheuser-Busch InBev Worldwide Inc.,
	senior bond, 3.50%, 6/01/30		Belgium		200,000		225,300
	senior bond, 5.80%, 1/23/59		Belgium		100,000		142,643
	B&G Foods Inc., senior note, 5.25%, 9/15/27		United States		100,000		100,344
	Bunge Ltd. Finance Corp., senior note, 4.35%, 3/15/24		United States		200,000		218,554
	The Coca-Cola Co.,
	senior bond, 4.20%, 3/25/50		United States		200,000		263,283
	senior note, 1.45%, 6/01/27		United States		100,000		102,801
e	Imperial Brands Finance PLC,
	senior note, 144A, 4.25%, 7/21/25		United Kingdom		585,000		644,553
	senior note, 144A, 3.50%, 7/26/26		United Kingdom		300,000		321,209
e	JBS USA LUX SA/JBS USA Food Co./JBS USA Finance Inc., senior bond, 144A, 5.50%, 1/15/30		United States		100,000		102,669
e	Kraft Heinz Foods Co., senior note, 144A, 3.875%, 5/15/27		United States		100,000		104,634
e	Post Holdings Inc., senior bond, 144A, 4.625%, 4/15/30		United States		200,000		196,630
	Reynolds American Inc., senior bond, 5.85%, 8/15/45		United Kingdom		650,000		815,127
							3,360,439
	Health Care Equipment & Services 0.9%
	Abbott Laboratories,
	senior bond, 3.75%, 11/30/26		United States		450,000		524,002
	senior bond, 4.75%, 11/30/36		United States		200,000		269,343
	Anthem Inc.,
	senior bond, 4.65%, 1/15/43		United States		100,000		125,823
	senior bond, 5.10%, 1/15/44		United States		600,000		792,839
	senior note, 4.101%, 3/01/28		United States		400,000		468,092
	CHS/Community Health Systems Inc., senior secured note, first lien, 6.25%, 3/31/23		United States		100,000		94,391
	Cigna Corp.,
	senior note, 4.375%, 10/15/28		United States		500,000		592,125
	senior note, 2.40%, 3/15/30		United States		300,000		311,642
	e senior note, 144A, 3.05%, 10/15/27		United States		550,000		598,624
	CVS Health Corp.,
	senior bond, 4.30%, 3/25/28		United States		300,000		350,956
	senior bond, 4.78%, 3/25/38		United States		100,000		124,377
	senior bond, 5.30%, 12/05/43		United States		800,000		1,047,375

Semiannual Report         FFA-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Health Care Equipment & Services (continued)
	CVS Health Corp., (continued)
	senior bond, 5.125%, 7/20/45		United States		200,000	$	258,000
	HCA Inc.,
	senior secured bond, first lien, 4.50%, 2/15/27		United States		408,000		455,206
	senior secured bond, first lien, 4.125%, 6/15/29		United States		300,000		331,222
	Quest Diagnostics Inc., senior bond, 2.80%, 6/30/31		United States		600,000		630,297
							6,974,314
	Household & Personal Products 0.1%
	Avon Products Inc., senior bond, 7.00%, 3/15/23		United Kingdom		260,000		259,188
	The Procter & Gamble Co., senior bond, 3.55%, 3/25/40		United States		400,000		483,469
							742,657
	Insurance 0.8%
	Aflac Inc.,
	senior bond, 4.75%, 1/15/49		United States		700,000		902,890
	senior note, 3.60%, 4/01/30		United States		600,000		701,279
	The Allstate Corp., senior bond, 4.20%, 12/15/46		United States		700,000		867,845
	Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50		United States		300,000		315,363
	Marsh & McLennan Cos. Inc., senior bond, 4.375%, 3/15/29		United States		400,000		482,555
	MetLife Inc.,
	junior sub. bond, 6.40%, 12/15/66		United States		450,000		532,283
	senior bond, 5.70%, 6/15/35		United States		300,000		434,744
e	Metropolitan Life Global Funding I,
	secured note, 144A, 3.60%, 1/11/24		United States		940,000		1,028,437
	senior note, 144A, 2.95%, 4/09/30		United States		250,000		274,255
	Willis North America Inc., senior bond, 2.95%, 9/15/29		United States		100,000		106,154
							5,645,805
	Materials 0.5%
	Air Products and Chemicals Inc., senior bond, 2.70%, 5/15/40		United States		400,000		425,812
e	Alpek SAB de CV, senior note, 144A, 4.25%, 9/18/29		Mexico		200,000		197,812
	Bemis Co.Inc., senior note, 2.63%, 6/19/30		United States		100,000		102,635
e	Braskem Netherlands Finance BV, senior bond, 144A, 4.50%, 1/31/30		Brazil		300,000		275,025
e	CCL Industries Inc., senior note, 144A, 3.05%, 6/01/30		Canada		200,000		205,031
b	CNAC HK Finbridge Co. Ltd.,
	senior note, Reg S, 4.875%, 3/14/25		China		200,000		222,360
	senior note, Reg S, 3.875%, 6/19/29		China		200,000		217,267
	EI du Pont de Nemours and Co., senior note, 1.70%, 7/15/25		United States		180,000		185,975
e	Glencore Funding LLC, senior note, 144A, 4.625%, 4/29/24		Switzerland		900,000		994,147
e	Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25.		United States		100,000		90,974
e	Novelis Corp., senior bond, 144A, 4.75%, 1/30/30		United States		100,000		95,748
e	Plastipak Holdings Inc., senior note, 144A, 6.25%, 10/15/25		United States		100,000		97,312
e	Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group
	Issuer Luxembourg SA, senior note, 144A, 7.00%, 7/15/24		United States		100,000		100,515
e	SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25		United States		100,000		84,832
	Westlake Chemical Corp., senior bond, 3.375%, 6/15/30		United States		100,000		102,346
	WRKCo Inc., senior bond, 3.00%, 6/15/33		United States		235,000		245,703

FFA-28     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Materials (continued)
e	Yara International ASA, senior note, 144A, 3.148%, 6/04/30		Norway		100,000	$	104,177
							3,747,671
	Media & Entertainment 0.5%
	Charter Communications Operating LLC/Charter Communications Operating Capital,
	senior bond, 2.80%, 4/01/31		United States		200,000		203,197
	senior secured note, first lien, 4.50%, 2/01/24		United States		550,000		608,924
	Comcast Corp., senior bond, 4.049%, 11/01/52		United States		1,025,000		1,260,704
e	Diamond Sports Group LLC/Diamond Sports Finance Co., first lien, 144A, 5.375%, 8/15/26		United States		100,000		72,992
	Fox Corp., senior bond, 5.476%, 1/25/39		United States		520,000		695,914
	NBCUniversal Media LLC, senior bond, 5.95%, 4/01/41		United States		200,000		297,518
	Netflix Inc., senior bond, 4.875%, 4/15/28		United States		100,000		107,090
e	Nexstar Broadcasting Inc., senior note, 144A, 5.625%, 7/15/27		United States		100,000		100,253
e	Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		100,000		94,501
							3,441,093
	Pharmaceuticals, Biotechnology & Life Sciences 0.9%
e	AbbVie Inc.,
	senior bond, 144A, 3.80%, 3/15/25		United States		400,000		446,476
	senior bond, 144A, 4.85%, 6/15/44		United States		550,000		688,275
	senior bond, 144A, 4.25%, 11/21/49		United States		370,000		445,493
	senior note, 144A, 3.20%, 11/21/29		United States		500,000		558,276
	Amgen Inc., senior note, 2.20%, 2/21/27		United States		100,000		105,606
	AstraZeneca PLC,
	senior bond, 4.375%, 11/16/45		United Kingdom		750,000		976,723
	senior note, 3.375%, 11/16/25		United Kingdom		100,000		112,464
	Biogen Inc., senior bond, 5.20%, 9/15/45		United States		575,000		755,919
e	Bristol-Myers Squibb Co.,
	senior bond, 144A, 4.625%, 5/15/44		United States		400,000		537,037
	senior note, 144A, 2.60%, 5/16/22		United States		100,000		104,000
	Gilead Sciences Inc.,
	senior bond, 4.60%, 9/01/35		United States		200,000		261,560
	senior bond, 4.80%, 4/01/44		United States		700,000		937,208
	senior note, 3.25%, 9/01/22		United States		100,000		105,673
	Perrigo Finance Unlimited Co., senior note, 3.15%, 6/15/30		United States		100,000		101,047
	Takeda Pharmaceutical Co. Ltd.,
	h 3.175%, 7/09/50		Japan		400,000		403,477
	senior note, 5.00%, 11/26/28		Japan		300,000		370,317
							6,909,551
	Real Estate 0.1%
b	China Overseas Finance Cayman VI Ltd., senior note, Reg S, 5.95%, 5/08/24		China		200,000		228,939
	Simon Property Group LP, senior note, 3.375%, 12/01/27		United States		595,000		632,297
							861,236

Semiannual Report         FFA-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Retailing 0.4%
	Alibaba Group Holding Ltd.,
	senior bond, 4.00%, 12/06/37		China		300,000	$	348,735
	senior bond, 4.20%, 12/06/47		China		800,000		987,959
	AutoNation Inc., senior bond, 4.75%, 6/01/30		United States		100,000		108,551
	AutoZone Inc., senior note, 3.75%, 4/18/29		United States		100,000		113,786
	Dollar Tree Inc.,
	senior bond, 4.20%, 5/15/28		United States		500,000		582,237
	senior note, 4.00%, 5/15/25		United States		450,000		507,044
e	Party City Holdings Inc., senior note, 144A, 6.625%, 8/01/26		United States		200,000		45,000
	Target Corp., senior note, 2.25%, 4/15/25		United States		100,000		107,092
							2,800,404
	Semiconductors & Semiconductor Equipment 0.0%†
	Intel Corp., senior note, 3.90%, 3/25/30		United States		100,000		121,018
	Software & Services 0.4%
	Fiserv Inc., senior bond, 3.50%, 7/01/29		United States		870,000		978,793
	Microsoft Corp, senior note, 3.30%, 2/06/27		United States		100,000		114,424
	Microsoft Corp., senior note, 2.65%, 11/03/22		United States		1,720,000		1,810,875
							2,904,092
	Technology Hardware & Equipment 0.0%†
e	CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27		United States		100,000		90,371
e	Presidio Holdings Inc., senior note, 144A, 8.25%, 2/01/28		United States		100,000		100,313
							190,684
	Telecommunication Services 0.4%
e	Altice France SA/France, senior secured note, 144A, 5.50%, 1/15/28		France		300,000		303,507
	AT&T Inc.,
	senior note, 3.80%, 2/15/27		United States		920,000		1,036,888
	senior note, 2.30%, 6/01/27		United States		100,000		103,407
	Bell Canada Inc., senior bond, 4.464%, 4/01/48		Canada		200,000		253,806
	France Telecom SA, senior bond, 9.00%, 3/01/31		France		300,000		489,720
	Telefonica Emisiones SA,
	senior bond, 7.045%, 6/20/36		Spain		200,000		291,319
	senior bond, 5.52%, 3/01/49		Spain		200,000		263,349
	Time Warner Entertainment Co. LP, senior bond, 8.375%, 3/15/23		United States		100,000		117,268
	Verizon Communications Inc.,
	senior bond, 4.016%, 12/03/29		United States		100,000		119,767
	senior bond, 4.00%, 3/22/50		United States		100,000		126,477
							3,105,508
	Transportation 0.4%
	Burlington Northern Santa Fe LLC,
	senior bond, 4.90%, 4/01/44		United States		200,000		268,037
	senior bond, 4.15%, 4/01/45		United States		100,000		124,209

FFA-30     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Corporate Bonds (continued)
	Transportation (continued)
	CSX Corp., senior bond, 4.75%, 11/15/48		United States		725,000	$	963,800
	Fedex Corp., senior bond, 5.10%, 1/15/44		United States		550,000		643,368
	FedEx Corp.,
	senior bond, 4.75%, 11/15/45		United States		100,000		110,387
	senior note, 3.80%, 5/15/25		United States		400,000		445,124
e	Mexico City Airport Trust, senior secured bond, first lien, 144A, 5.50%, 7/31/47		Mexico		200,000		176,615
b,i	RZD Capital PLC, (Russian Railways), loan participation, senior bond, Reg S, 5.70%, 4/05/22		Russia		200,000		212,674
	United Parcel Service Inc., senior bond, 5.30%, 4/01/50		United States		100,000		143,488
							3,087,702
	Utilities 1.4%
e	Calpine Corp., senior note, 144A, 5.125%, 3/15/28		United States		100,000		97,962
e	Colbun SA,
	senior note, 144A, 3.95%, 10/11/27		Chile		200,000		215,471
	senior note, 144A, 3.15%, 3/06/30		Chile		200,000		202,600
	Dominion Energy Inc.,
	senior note, 4.25%, 6/01/28		United States		1,250,000		1,440,190
	senior note, 3.375%, 4/01/30		United States		100,000		110,850
	Duke Energy Corp., senior bond, 3.75%, 9/01/46		United States		200,000		226,868
	Duke Energy Florida LLC., secured bond, 6.40%, 6/15/38		United States		200,000		305,370
e	Electricite de France SA, senior note, 144A, 4.50%, 9/21/28		France		1,055,000		1,229,909
e	Enel Finance International NV, senior note, 144A, 4.25%, 9/14/23		Italy		1,200,000		1,306,734
	Exelon Corp., senior bond, 4.05%, 4/15/30		United States		400,000		462,703
	Georgia Power Co., senior bond, 4.30%, 3/15/42		United States		1,200,000		1,396,096
	MidAmerican Energy Holdings Co., senior bond, 6.125%, 4/01/36		United States		200,000		288,651
	Public Service Enterprise Group Inc., senior note, 2.875%, 6/15/24		United States		1,000,000		1,068,270
	The Southern Co., senior bond, 3.70%, 4/30/30		United States		700,000		801,872
e	State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27		China		600,000		664,434
e	Talen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27		United States		100,000		99,669
e	Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24		United States		235,000		242,692
							10,160,341
	Total Corporate Bonds (Cost $101,858,508)						109,181,935
g,j	Senior Floating Rate Interests 0.3%
	Automobiles & Components 0.0%†
	Clarios Global LP (Power Solutions), Initial Dollar Term Loan, 3.678%, (1-month USD LIBOR + 3.50%), 4/30/26		United States		29,850		28,531
	Capital Goods 0.1%
	Altra Industrial Motion Corp., Term Loan, 2.178%, (1-month USD LIBOR + 2.00%), 10/01/25		United States		27,138		25,917
k	Dynasty Acquisition Co. Inc.,
	Initial Term B-1 Loan, 3.808%, (3-month USD LIBOR + 3.50%), 4/04/26		United States		24,471		21,106
	Initial Term B-2 Loan (CAD), 3.808%, (3-month USD LIBOR + 3.50%), 4/04/26		United States		13,156		11,347

Semiannual Report         FFA-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
g,j	Senior Floating Rate Interests (continued)
	Capital Goods (continued)
	Navistar Inc., Tranche B Term Loan, 3.70%, (1-month USD LIBOR + 3.50%), 11/06/24		United States		296,962	$	282,114
							340,484
	Commercial & Professional Services 0.0%†
	Pitney Bowes Inc., Incremental Tranche Term B Loans, 5.68%, (1-month USD LIBOR + 5.50%), 1/07/25		United States		98,750		83,444
k	Ventia Pty. Ltd., Term B Loans, 5.00%, (3-month USD LIBOR + 4.00%), 5/21/26		Australia		22,500		22,050
							105,494
	Consumer Durables & Apparel 0.0%†
	Playtika Holding Corp., Term B Loans, 7.072%, (3-month USD LIBOR + 6.00%), 12/10/24		United States		19,500		19,537
	Consumer Services 0.1%
	Caesars Resort Collection LLC, Term B Loans, 2.928%, (1-month USD LIBOR + 2.75%), 12/22/24		United States		99,490		89,154
	NASCAR Holdings Inc., Initial Term Loans, 2.93%, (1-month USD LIBOR + 2.75%), 10/18/26		United States		259,179		249,590
							338,744
	Energy 0.0%†
	Buckeye Partners LP, Initial Term Loans, 2.923%, (1-month USD LIBOR + 2.75%), 11/01/26		United States		51,192		49,388
	Food & Staples Retailing 0.0%†
	Whatabrands LLC, 2020 Refinancing Term Loans, 2.925%, (1-month USD LIBOR + 2.75%), 8/02/26		United States		19,900		19,092
	Food, Beverage & Tobacco 0.0%†
	B&G Foods Inc., Tranche B-4 Term Loan, 2.678%, (1-month USD LIBOR + 2.50%), 10/10/26		United States		99,250		98,226
	JBS USA Lux SA, New Term Loans, 3.072%, (3-month USD LIBOR + 2.00%), 5/01/26		United States		43,786		41,980
							140,206
	Health Care Equipment & Services 0.0%†
	Catalent Pharma Solutions Inc., Dollar Term B-2 Loan, 3.25%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		99,496		98,501
	Inovalon Holdings Inc., Refinancing Date Term Loans, 3.188%, (1-month USD LIBOR + 3.00%), 4/02/25		United States		4,426		4,311
	Phoenix Guarantor Inc., Tranche B-1 Term Loan, 3.435%, (1-month USD LIBOR + 3.25%), 3/05/26		United States		36,806		35,540
							138,352
	Household & Personal Products 0.0%†
k,l	Coty Inc, Term Loan, TBD, 4/05/25		United States		29,924		26,894

FFA-32     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
g,j	Senior Floating Rate Interests (continued)
	Insurance 0.0%†
	Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, Initial Term Loan, 2.928%, (1-month USD LIBOR + 2.75%), 5/10/25		United States		39,797	$	37,807
	AssuredPartners Inc., 2020 February Refinancing Term Loans, 3.678%, (1-month USD LIBOR + 3.50%), 2/13/27		United States		29,850		28,619
							66,426
	Materials 0.0%†
k,l	Illuminate Buyer LLC, Term Loan, TBD, 6/15/27		United States		8,147		8,040
	Mauser Packaging Solutions Holding Co., Initial Term Loan, 4.561%, (1-month USD LIBOR + 3.25%), 4/03/24		United States		29,923		27,021
							35,061
	Media & Entertainment 0.0%†
k,l	Banijay Group U.S. Holding Inc., Facility B (USD) Loan, TBD, 2/03/25		France		20,000		19,000
	Diamond Sports Group LLC, Term Loan, 3.43%, (1-month USD LIBOR + 3.25%), 8/24/26		United States		67,755		55,474
							74,474
	Pharmaceuticals, Biotechnology & Life Sciences 0.0%†
	eResearch Technology Inc., Initial Term Loan, 5.50%, (1-month USD LIBOR + 4.50%), 2/04/27		United States		10,909		10,745
	Grifols Worldwide Operations USA Inc., Dollar Tranche B Term Loan, 2.109%, (1-week USD LIBOR + 2.00%), 11/15/27		United States		69,650		67,261
							78,006
	Retailing 0.0%†
	Bass Pro Group LLC, Initial Term Loans, 6.072%, (3-month USD LIBOR + 5.00%), 9/25/24		United States		133,890		129,405
	Harbor Freight Tools USA Inc., Refinancing Loans, 3.25%, (1-month USD LIBOR + 2.50%), 8/19/23		United States		60,332		58,236
	Staples Inc., 2019 Refinancing Term B-1 Loans, 5.687%, (3-month USD LIBOR + 5.00%), 4/12/26		United States		14,561		12,577
							200,218
	Software & Services 0.1%
	Dcert Buyer Inc., Initial Term Loans, 4.178%, (1-month USD LIBOR + 4.00%), 10/16/26		United States		49,875		48,431
	Hyland Software Inc., Term Loans, 4.00%, (1-month USD LIBOR + 3.25%), 7/01/24		United States		14,962		14,573
	LegalZoom.com Inc., 2018 Term Loans, 4.678%, (1-month USD LIBOR + 4.50%), 11/21/24		United States		39,798		39,002
	Surf Holdings LLC, Dollar Tranche Term Loan, 3.827%, (3-month USD LIBOR + 3.50%), 3/05/27		United States		30,372		29,239
	TIBCO Software Inc., Term B-3 Loans, 3.93%, (1-month USD LIBOR + 3.75%), 7/31/26		United States		30,000		28,838
k,l	The Ultimate Software Group Inc., 2020 Incremental Term Loan, TBD, 5/03/26		United States		5,253		5,202
k	Vertafore Inc., Initial Term Loans, 3.428%, (1-month USD LIBOR + 3.25%), 7/02/25		United States		9,975		9,432
	Waystar (Navicure Inc.), Initial Term Loans, 4.178%, (1-month USD LIBOR + 4.00%), 10/22/26		United States		29,925		28,952
							203,669

Semiannual Report         FFA-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*			Value
g,j	Senior Floating Rate Interests (continued)
	Technology Hardware & Equipment 0.0%†
	CommScope Inc., Initial Term Loans, 3.428%, (1-month USD LIBOR + 3.25%), 4/04/26		United States		69,649		$	66,384
	Telecommunication Services 0.0%†
	Aventiv Technologies LLC, Initial Term Loan, 5.500%, (3-month USD LIBOR + 4.50%), 11/01/24		United States		29,620			24,738
	Global Tel*Link Corp., First Lien Term Loan, 4.428%, (1-month USD LIBOR + 4.25%), 11/29/25		United States		39,474			34,428
								59,166
	Transportation 0.0%†
	Avis Budget Car Rental LLC, Tranche B Term, 2.43%, (1-month USD LIBOR + 2.25%), 8/06/27		United States		116,014			103,736
	JetBlue Airways Corporation, Term Loan, 6.25%, (3-month USD LIBOR + 5.25%), 6/16/24		United States		5,078			4,987
k	The Kenan Advantage Group Inc.,
	Initial Canadian Term Loan, 4.00%, (1-month USD LIBOR + 3.00%), 7/29/22	��	United States		5,749			5,389
	Initial U.S. Term Loans, 4.00%, (1-month USD LIBOR + 3.00%), 7/31/22		United States		24,173			22,617
								136,729
	Total Senior Floating Rate Interests (Cost $2,224,556)							2,126,855
	Foreign Government and Agency Securities 0.9%
e	The African Export-Import Bank, senior bond, 144A, 3.994%, 9/21/29		Supranationalm		200,000			197,859
e	Angolan Government International Bond, senior note, 144A, 8.25%, 5/09/28		Angola		550,000			455,288
b	Banque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24		Tunisia		350,000	EUR		362,808
e	Banque Ouest Africaine de Developpement, senior note, 144A, 5.00%, 7/27/27		Supranationalm		300,000			313,755
e	Dominican Republic, senior note, 144A, 8.90%, 2/15/23		Dominican Republic		15,700,000	DOP		251,077
e	Government of Belarus International Bond, senior note, 144A, 7.625%, 6/29/27		Belarus		200,000			206,855
	Government of Colombia,
	senior bond, 9.85%, 6/28/27		Colombia		630,000,000	COP		211,895
	senior bond, 5.00%, 6/15/45		Colombia		500,000			563,398
e	Government of Gabon, senior note, 144A, 6.625%, 2/06/31		Gabon		350,000			313,588
e	Government of Indonesia, senior bond, 144A, 4.35%, 1/08/27		Indonesia		500,000			556,575
e	Government of Iraq, 144A, 5.80%, 1/15/28		Iraq		350,000			316,295
e	Government of Kazakhstan, senior bond, 144A, 4.875%, 10/14/44		Kazakhstan		300,000			382,057
	Government of Mexico,
	senior bond, M 20, 8.50%, 5/31/29		Mexico		61,000n	MXN		314,510
	senior note, 4.15%, 3/28/27		Mexico		500,000			535,938
	Government of Peru, senior bond, 6.55%, 3/14/37		Peru		200,000			305,111
	Government of South Africa, senior bond, 7.00%, 2/28/31		South Africa		5,800,000	ZAR		275,181
e	Government of Ukraine, senior bond, 144A, 7.375%, 9/25/32		Ukraine		300,000			302,321
	Government of Uruguay,
	senior bond, 4.50%, 8/14/24		Uruguay		100,000			109,741
	senior bond, 4.375%, 1/23/31		Uruguay		150,000			175,736
	o senior bond, Index Linked, 3.70%, 6/26/37		Uruguay		10,507,408	UYU		250,169

FFA-34     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*			Value
	Foreign Government and Agency Securities (continued)
e	Panama Notas del Tesoro, senior note, 144A, 3.75%, 4/17/26		Panama		250,000		$	261,991
	Total Foreign Government and Agency Securities (Cost $6,894,290)							6,662,148
	U.S. Government and Agency Securities 5.4%
	Federal Agricultural Mortgage Corp., 2.90%, 1/03/22		United States		800,000			830,743
	FFCB,
	3.17%, 3/07/28		United States		800,000			922,163
	senior bond, 2.86%, 7/11/28		United States		800,000			903,007
	Overseas Private Investment Corp., senior note, 2.12%, 3/20/24		United States		400,000			412,615
	TVA, 5.88%, 4/01/36		United States		630,000			983,651
	U.S. Treasury Bond,
	3.125%, 2/15/42		United States		500,000			678,838
	2.50%, 2/15/46		United States		840,000			1,040,205
	2.50%, 5/15/46		United States		395,000			489,839
	2.25%, 8/15/46		United States		4,575,000			5,425,575
	2.75%, 11/15/47		United States		150,000			196,216
	p 3.00%, 2/15/49		United States		2,150,000			2,967,462
	2.25%, 8/15/49		United States		500,000			601,230
	o Index Linked, 2.00%, 1/15/26		United States		516,828			601,396
	o Index Linked, 1.75%, 1/15/28		United States		2,387,013			2,850,292
	o Index Linked, 3.625%, 4/15/28		United States		713,497			961,033
	U.S. Treasury Note,
	2.125%, 3/31/24		United States		16,100,000			17,252,785
	2.375%, 8/15/24		United States		880,000			957,619
	2.25%, 8/15/27		United States		920,000			1,033,544
	o Index Linked, 0.125%, 7/15/24		United States		864,016			903,608
	o Index Linked, 0.375%, 7/15/25		United States		648,838			693,918
	United States Treasury Note/Bond, 1.25%, 5/15/50		United States		50,000			48,016
	Total U.S. Government and Agency Securities (Cost $38,686,872)							40,753,755
	Asset-Backed Securities and Commercial Mortgage-Backed Securities 3.0%
	Diversified Financials 3.0%
e,q	Adagio CLO VIII DAC, VIII-A, B1, 144A, FRN, 1.65%, 4/15/32		Ireland		250,000	EUR		275,695
	American Express Credit Account Master Trust,
	2019-1, A, 2.87%, 10/15/24		United States		600,000			625,901
	2019-3, A, 2.00%, 4/15/25		United States		410,000			425,000
e,q	Ares European CLO VIII BV, 8A, BR, 144A, FRN, 1.60%, 4/17/32		Netherlands		250,000	EUR		271,989
e,r	Atrium XII, 12A, CR, 144A, FRN, 2.748%, (3-month USD LIBOR + 1.65%), 4/22/27		United States		1,240,000			1,185,459
e,q	Avoca CLO XVII Designated Activity Co., 17A, B1R, 144A, FRN, 1.70%, 10/15/32		Ireland		250,000	EUR		272,550
	BA Credit Card Trust, 2018-A3, A3, 3.10%, 12/15/23		United States		500,000			514,200
e,q	Blackrock European CLO IX DAC, 9A, B, 144A, FRN, 1.55%, 12/15/32		Ireland		250,000	EUR		268,141
e,q	BlueMountain CLO XXII Ltd., 2018-1A, B, 144A, FRN, 2.46%, 7/30/30		United States		900,000			845,694
e,q	BlueMountain Fuji Eur CLO V DAC, 5A, B, 144A, FRN, 1.55%, 1/15/33		Ireland		250,000	EUR		269,739

Semiannual Report         FFA-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*			Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financials (continued)
e	BWAY Mortgage Trust, 2013-1515, C, 144A, 3.454%, 3/10/33		United States		750,000		$	805,913
	Capital One Multi-Asset Execution Trust, 2015-A4, A4, 2.75%, 5/15/25		United States		380,000			398,341
e,r	Carlyle Global Market Strategies CLO Ltd., 2014-4RA, C, 144A, FRN, 4.119%, (3-month USD LIBOR + 2.90%), 7/15/30		United States		250,000			214,435
e,q	Cent CLO, 2018-28A, C, 144A, FRN, 3.894%, 11/07/30		United States		750,000			676,565
e,q	CIM Trust, 2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49		United States		437,518			452,360
q	Citibank Credit Card Issuance Trust, 2017-A7, A7, FRN, 0.545%, 8/08/24		United States		130,000			130,591
	Discover Card Execution Note Trust, 2019-A1, A1, 3.04%, 7/15/24		United States		500,000			520,604
e,r	Dryden 42 Senior Loan Fund, 2016-42A, CR, 144A, FRN, 3.269%, (3-month USD LIBOR + 2.05%), 7/15/30		United States		900,000			849,806
e,q	Euro-Galaxy III CLO BV, 2013-3A, B2ER, 144A, FRN, 1.50%, 1/17/31		Netherlands		250,000	EUR		277,062
q	FHLMC Structured Agency Credit Risk Debt Notes,
	2017-HQA1, M2, FRN, 3.735%, 8/25/29		United States		216,624			222,054
	2017-HQA3, M2, FRN, 2.535%, 4/25/30		United States		185,342			186,363
	FNMA Connecticut Avenue Securities,
	r 2013-C01, M2, FRN, 5.435%, (1-month USD LIBOR + 5.25%), 10/25/23		United States		699,575			640,916
	r 2014-C01, M2, FRN, 4.585%, (1-month USD LIBOR + 4.40%), 1/25/24		United States		862,491			771,517
	r 2014-C03, 1M2, FRN, 3.185%, (1-month USD LIBOR + 3.00%), 7/25/24		United States		1,198,077			1,059,757
	r 2014-C04, 2M2, FRN, 5.185%, (1-month USD LIBOR + 5.00%), 11/25/24		United States		913,437			945,445
	q 2016-C02, 1M2, FRN, 6.185%, 9/25/28		United States		665,104			694,876
	q 2016-C04, 1M2, FRN, 4.435%, 1/25/29		United States		824,407			860,371
	q 2016-C05, 2M2, FRN, 4.635%, 1/25/29		United States		276,926			285,245
	q 2016-C06, 1M2, FRN, 4.435%, 4/25/29		United States		167,062			176,006
	r 2017-C01, 1M2, FRN, 3.735%, (1-month USD LIBOR + 3.55%), 7/25/29		United States		877,436			899,677
	q 2017-C02, 2M2, FRN, 3.835%, 9/25/29		United States		499,604			504,189
	q 2017-C05, 1M2, FRN, 2.385%, 1/25/30		United States		862,240			851,834
e,r	LCM XXV Ltd., 25A, B2, 144A, FRN, 2.785%, (3-month USD LIBOR + 1.65%), 7/20/30		United States		1,200,000			1,158,579
e,q	Madison Park Euro Funding VIII DAC, 8A, BRN, 144A, FRN, 1.70%, 4/15/32		Ireland		300,000	EUR		325,848
e,q	Neuberger Berman CLO XVIII Ltd., 2014-18A, CR2, 144A, FRN, 4.109%, 10/21/30		United States		800,000			707,510
e,q	Octagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 2.82%, 10/24/30		United States		1,200,000			1,169,561
e,r	Octagon Investment Partners XVI Ltd., 2013-1A, CR, 144A, FRN, 2.985%, (3-month USD LIBOR + 1.85%), 7/17/30		United States		850,000			787,623
e,q	Provident Funding Mortgage Trust, 2019-1, A2, 144A, FRN, 3.00%, 12/25/49		United States		283,436			301,016
	2020-1, A3, 144A, FRN, 3.00%, 2/25/50		United States		443,152			453,491
e,q	Towd Point Mortgage Trust, 2015-5, A1B, 144A, FRN, 2.75%, 5/25/55		United States		446,881			450,993
	Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $23,924,137)							22,732,916

FFA-36     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Mortgage-Backed Securities 9.4%
	Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 2.3%
	FHLMC 15 Year, 2.00%, 7/01/35		United States		230,000	$	237,897
	FHLMC 30 Year, 3.00%, 3/01/50		United States		6,091,031		6,442,356
	FHLMC 30 Year, 3.50%, 2/01/47		United States		4,346,585		4,694,953
	FHLMC 30 Year, 4.00%, 5/01/47 - 8/01/49		United States		5,127,141		5,489,693
							16,864,899
	Federal National Mortgage Association (FNMA) Fixed Rate 3.3%
	FNMA 15 Year, 2.50%, 6/01/35		United States		795,781		834,010
	FNMA 15 Year, 3.00%, 6/01/35		United States		397,019		418,120
	FNMA 30 Year, 2.50%, 6/01/50		United States		598,706		624,098
s	FNMA 30 Year, 2.50%, 7/01/50		United States		1,050,000		1,094,256
	FNMA 30 Year, 3.00%, 1/01/50		United States		5,058,795		5,333,157
s	FNMA 30 Year, 3.00%, 6/01/50		United States		12,955,000		13,641,210
	FNMA 30 Year, 4.00%, 1/01/50		United States		1,021,243		1,082,149
	FNMA 30 Year, 4.50%, 2/01/50		United States		1,922,884		2,102,639
							25,129,639
	Government National Mortgage Association (GNMA) Fixed Rate 3.8%
	GNMA II SF 30 Year, 3.00%, 9/20/47 - 2/20/50		United States		3,908,495		4,148,312
	GNMA II SF 30 Year, 3.50%, 12/20/49		United States		1,138,335		1,203,064
	GNMA II SF 30 Year, 3.50%, 2/20/50		United States		10,816,883		11,454,365
	GNMA II SF 30 Year, 3.50%, 6/20/50		United States		3,990,000		4,238,734
	GNMA II SF 30 Year, 4.00%, 11/20/49		United States		4,612,420		4,890,698
	GNMA II SF 30 Year, 4.00%, 12/20/49		United States		2,724,831		2,890,804
							28,825,977
	Total Mortgage-Backed Securities (Cost $70,009,383)						70,820,515
	Municipal Bonds 0.9%
	Broward County Airport System Revenue, Refunding, Series C, 3.477%, 10/01/43		United States		140,000		140,078
	California Health Facilities Financing Authority Revenue,
	Senior, No Place Like Home Program, 2.934%, 6/01/32		United States		135,000		140,222
	Senior, No Place Like Home Program, 2.984%, 6/01/33		United States		115,000		119,306
	Senior, No Place Like Home Program, 3.034%, 6/01/34		United States		90,000		93,246
	California State GO, Bid Group - A, Refunding, 2.50%, 10/01/29		United States		500,000		544,850
	City of Austin Electric Utility System Revenue, Travis and Williamson Counties, Refunding, 6.262%, 11/15/32		United States		270,000		350,687
	Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, Refunding, Series A, 4.094%, 1/15/49		United States		70,000		71,989
	Gilroy USD, GO, Santa Clara County, Refunding, 3.364%, 8/01/47		United States		290,000		298,036
	Honolulu City and County Wastewater System Revenue, Second Bond Resolution, Refunding, Junior Series B, 2.585%, 7/01/28		United States		50,000		53,120
	Maricopa County UHSD No. 210 Phoenix, GO, Series C, 5.00%, 7/01/31		United States		200,000		263,908
	Massachusetts State College Building Authority Revenue, Refunding, Series C, 3.373%, 5/01/43		United States		230,000		238,443
	Metro Wastewater Reclamation District Sewer Revenue, Refunding, Series B, 3.158%, 4/01/41		United States		220,000		230,908

Semiannual Report         FFA-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Country/ Organization		Principal  Amount*		Value
	Municipal Bonds (continued)
	New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Series B, 4.131%, 6/15/42		United States		160,000	$	149,426
	New York State Dormitory Authority Revenues, Non State Supported Debt, State University of New York Dormitory Facilities, Series B, 3.142%, 7/01/43		United States		140,000		144,670
	Ohio State Hospital Facility Revenue, Cleveland Clinic Health System Obligated Group, Refunding, Series G, 3.276%, 1/01/42		United States		90,000		95,211
	Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Refunding, Series B, 3.168%, 11/15/38		United States		175,000		189,107
	Pennsylvania State Turnpike Commission Turnpike Revenue, Motor License Fund-Enhanced, Subordinate, Refunding, First Series, 3.579%, 12/01/43		United States		440,000		462,092
	Regional Transportation District Sales Tax Revenue, FasTracks Project, Refunding, Series A, 3.258%, 11/01/38		United States		140,000		152,942
	RWJ Barnabas Health Inc., 3.477%, 7/01/49		United States		120,000		126,892
	Salt Lake City Sales and Excise Tax Revenue, Refunding, Series B, 3.102%, 4/01/38		United States		125,000		127,242
	San Bernardino Community College District GO, San Bernadino and Riverside Counties, Election of 2018, Series A-1, 3.271%, 8/01/39		United States		100,000		108,995
	San Diego County Regional Transportation Commission Sales Tax Revenue, Limited Tax, Refunding, Series A, 3.248%, 4/01/48		United States		105,000		111,983
	San Francisco City and County Public Utilities Commission Water Revenue, Green Bonds, Refunding, Sub-Series A, 3.473%, 11/01/43		United States		105,000		112,534
	Sarasota County Capital Import, Revenue, 5.00%, 10/01/34		United States		500,000		649,275
	Texas State GO, Transportation Commission, Highway Improvement, Refunding, 3.211%, 4/01/44		United States		765,000		811,696
	Texas State University System Financing Revenue,
	Refunding, Series B, 2.938%, 3/15/33		United States		105,000		108,568
	Refunding, Serise B, 3.289%, 3/15/40		United States		90,000		92,664
	University of Pittsburgh of the Commonwealth System of Higher Education Revenue, Refunding, Series C, 3.005%, 9/15/41		United States		250,000		268,010
	Utah Transit Authority Sales Tax Revenue, Refunding, Series B, 3.443%, 12/15/42		United States		175,000		181,659
	Total Municipal Bonds (Cost $6,164,913)						6,437,759
	Total Investments before Short Term Investments (Cost $693,008,155)						727,093,346
				Shares
	Short Term Investments (Cost $31,820,585) 4.2%
	Money Market Funds 4.2%
c,t	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		31,820,585		31,820,585
	Total Investments (Cost $724,828,740) 101.0%						758,913,931
	Options Written (0.0)%†						(2,898	)
	Other Assets, less Liabilities (1.0)%						(7,499,753	)
	Net Assets 100.0%					$	751,411,280

FFA-38     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

		Number of Contracts		Notional Amount		Value
u	Options Written (Premiums received $4,426) (0.0)%†
	Puts - Exchange-Traded
	ManpowerGroup Inc., Put Option, Strike Price $65, Expires 7/17/20		19		1,900	$	(2,898	)

^†Rounds to less than 0.1% of net assets.

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2020, the aggregate value of these securities was $2,144,929, representing 0.3% of net assets.

^cSee Note 3(e) regarding investments in affiliated management investment companies.

^dVariable rate security. The rate shown represents the yield at period end.

^eSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $38,699,308, representing 5.1% of net assets.

^fPerpetual security with no stated maturity date

^gThe coupon rate shown represents the rate at period end.

^hSecurity purchased on a when-issued basis. See Note 1(c).

ⁱSee Note 1(e) regarding loan participation notes.

^jSee Note 1(g) regarding senior floating rate interests.

^kA portion or all of the security purchased on a delayed delivery basis. See Note 1(c).

^lA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.

^mA supranational organization is an entity formed by two or more central governments through international treaties.

ⁿPrincipal amount is stated in 100 Mexican Peso Units

^oPrincipal amount of security is adjusted for inflation. See Note 1(i).

^pA portion or all of the security has been segregated as collateral for open swap contracts. At June 30, 2020, the value of this security and/or cash pledged amounted to $370,353, representing less than 0.1% of net assets.

^qAdjustable rate security with an interest rate that is not based on a published reference index and spread. The rate is based on the structure of the agreement and current market conditions. The coupon rate shown represents the rate at period end.

^rThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.

^sSecurity purchased on a to-be-announced (TBA) basis. See Note 1(c).

^tThe rate shown is the annualized seven-day effective yield at period end.

^uSee Note 1(d) regarding written options.

Semiannual Report         FFA-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

At June 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts

Description	Type		Number of Contracts		Notional  Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Equity Contracts
S&P 500 E-Mini		Long		48		$  7,416,480		9/18/20		$  56,057
Interest Rate Contracts
Australian 3 Yr. Bond		Long		30		2,423,137		9/15/20		642
Australian 10 Yr. Bond		Long		4		410,656		9/15/20		4,214
Canada 10 Yr. Bond		Long		32		3,625,826		9/21/20		9,204
CME Ultra Long Term U.S. Treasury Bond		Long		4		872,625		9/21/20		11,369
Euro-OAT		Long		19		3,578,422		9/08/20		59,091
U.S. Treasury 2 Yr. Note		Long		32		7,066,500		9/30/20		1,335
U.S. Treasury 5 Yr. Note		Long		24		3,017,813		9/30/20		5,657
U.S. Treasury 10 Yr. Note		Short		10		1,391,719		9/21/20		(5,363	)
U.S. Treasury 10 Yr. Note		Long		54		7,515,281		9/21/20		24,370
U.S. Treasury 30 Yr. Bond		Long		7		1,249,938		9/21/20		4,146
Ultra 10 Yr. U.S. Treasury Note		Short		17		2,677,234		9/21/20		(15,806	)
						$33,829,151				$  98,859
Total Futures Contracts						$41,245,631				$154,916

*As of period end

At June 30, 2020, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts

Currency	Counterpartya		Type		Quantity		Contract Amount*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Australian Dollar		JPHQ		Buy		1,100,000		719,644		7/02/20		$    39,372		$              —
Australian Dollar		JPHQ		Sell		1,100,000		758,373		7/02/20		—		(643	)
Turkish Lira		JPHQ		Buy		1,380,000		200,305		7/14/20		300		—
Japanese Yen		CITI		Buy		182,581,700		1,700,000		7/16/20		—		(8,679	)
Japanese Yen		CITI		Sell		182,581,700		1,699,264		7/16/20		7,943		—
Australian Dollar		JPHQ		Sell		390,000		267,856		7/21/20		—		(1,305	)
Japanese Yen		JPHQ		Buy		239,900,000		2,216,760		7/22/20		5,698		—
Japanese Yen		JPHQ		Sell		134,000,000		1,255,829		7/22/20		14,440		—
Canadian Dollar		JPHQ		Sell		430,000		327,148		7/23/20		10,370		—
Danish Krone		JPHQ		Buy		7,518,245		1,097,909		7/23/20		36,088		—
Danish Krone		JPHQ		Sell		7,518,245		1,122,696		7/23/20		—		(11,302	)
Euro		JPHQ		Sell		696,577		776,366		7/23/20		—		(6,611	)
Mexican Peso		JPHQ		Buy		6,950,000		360,128		7/23/20		—		(58,641	)
Mexican Peso		JPHQ		Sell		6,950,000		306,782		7/23/20		5,296		—
Norwegian Krone		JPHQ		Buy		6,740,000		745,252		7/23/20		—		(44,768	)
Norwegian Krone		JPHQ		Sell		6,740,000		661,303		7/23/20		—		(39,180	)
Euro		JPHQ		Buy		380,000		430,742		8/05/20		—		(3,480	)
Euro		JPHQ		Sell		380,000		427,861		8/05/20		599		—

FFA-40     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Australian Dollar		JPHQ		Sell		1,480,000		894,305		8/06/20		$          —		$  (127,243	)
Japanese Yen		JPHQ		Buy		102,000,000		956,669		8/13/20		—		(11,466	)
Japanese Yen		JPHQ		Sell		102,000,000		950,196		8/13/20		4,993		—
Singapore Dollar		JPHQ		Buy		1,400,000		104,547,800		JPY    8/13/20		35,917		—
Singapore Dollar		JPHQ		Sell		3,750,000		279,675,187		JPY    8/13/20		—		(99,576	)
Chinese Yuan Renminbi		JPHQ		Buy		5,095,000		730,016		8/21/20		—		(11,470	)
Chinese Yuan Renminbi		JPHQ		Sell		5,095,000		723,660		8/21/20		5,114		—
Japanese Yen		JPHQ		Buy		70,500,000		674,444		9/14/20		—		(20,834	)
Canadian Dollar		JPHQ		Buy		830,000		588,665		9/15/20		22,849		—
Canadian Dollar		JPHQ		Sell		1,450,000		1,047,083		9/15/20		—		(21,225	)
Euro		JPHQ		Buy		350,000		397,098		9/15/20		—		(3,207	)
Euro		JPHQ		Buy		860,000		930,892		9/15/20		36,952		—
Euro		JPHQ		Sell		1,504,009		1,691,860		9/15/20		—		(753	)
Norwegian Krone		JPHQ		Buy		7,680,000		760,411		9/15/20		37,918		—
Norwegian Krone		JPHQ		Sell		7,680,000		752,941		9/15/20		—		(45,388	)
South Korean Won		JPHQ		Buy		238,000,000		194,603		9/16/20		3,909		—
South Korean Won		JPHQ		Sell		467,500,000		380,855		9/16/20		—		(9,080	)
Indonesian Rupiah		JPHQ		Buy		4,950,000,000		339,041		12/07/20		—		(8,328	)
Total Forward Exchange Contracts												$  267,758		$  (533,179	)
Net unrealized appreciation (depreciation)														$  (265,421	)

*In U.S. dollars unless otherwise indicated.

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

At June 30, 2020, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts

Description	Annual Payment Rate Received (Paid)		Payment Frequency		Counter- party		Maturity Date		Notional Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name
Avon Products Inc.		(5.00)%		Quarterly		CITI		3/20/23		$260,000		$(2,426	)		$(20,577	)		$18,151
Contracts to Sell Protectionc,d
Single Name
Government of Russia		1.00%		Quarterly		CITI		12/20/24		300,000		(212	)		2,661			(2,873	)		BBB-
Traded Index
eCitibank Bespoke Phoenix Index,
Mezzanine Tranche 5-7%		2.90%		Quarterly		CITI		12/20/21		250,000		(46,947	)		—			(46,947	)		Non- Investment Grade
Total Credit Default Swap Contracts												$(49,585	)		$(17,916	)		$(31,669	)

Semiannual Report             FFA-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

Credit Default Swap Contracts (continued)

^aFor contracts to sell protection, the notional amount is equal to the maximum potential amount of the future payments and no recourse provisions have been entered into in association with the contracts.

^bBased on Standard and Poor’s (S&P) Rating for single name swaps. Internal ratings based on mapping into equivalent ratings from external vendors.

^cPerformance triggers for settlement of contract include default, bankruptcy or restructuring for single name swaps and failure to pay or bankruptcy of the underlying securities for traded index swaps.

^dThe fund enters contracts to sell protection to create a long credit position.

^eRepresents a custom index comprised of a basket of underlying instruments.

At June 30, 2020, the Fund had the following cross-currency swap contracts outstanding. See Note 1(d).

Cross-Currency Swap Contracts

Description

Payment Frequency

Coun- terparty

Maturity Date

Notional Amount

Value/ Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Receive Floating 3-month USD LIBOR + 1.334%

Quarterly

280,000

USD

Pay Floating 3-month EUR LIBOR + 1.12%

Quarterly

CITI

7/10/21

250,000

EUR

$

389

Receive Floating 3-month USD LIBOR + 1.305%

Quarterly

387,450

USD

Pay Floating 3-month EUR LIBOR + 1.11%

Quarterly

JPHQ

8/20/21

350,000

EUR

(5,414

)

Receive Floating 3-month USD LIBOR + 1.23%

Quarterly

277,500

USD

Pay Floating 3-month EUR LIBOR + 1.07%

Quarterly

CITI

9/17/21

250,000

EUR

(3,372

)

Receive Floating 3-month USD LIBOR + 1.87%

Quarterly

275,000

USD

Pay Floating 3-month EUR LIBOR + 1.70%

Quarterly

CITI

10/15/21

250,000

EUR

(5,078

)

Receive Floating 3-month USD LIBOR + 1.318%

Quarterly

943,500

USD

Pay Floating 3-month EUR LIBOR + 1.20%

Quarterly

CITI

12/12/21

850,000

EUR

(12,185

)

Total Cross Currency Swap Contracts

$

(25,660

)

At June 30, 2020, the Fund had the following inflation index swap contracts outstanding. See Note 1(d).

Inflation Index Swap Contracts

Description	Payment Frequency		Maturity Date		Notional Amount		Value/ Unrealized Appreciaton (Depreciation)
Centrally Cleared Swap Contracts
Receive Floating		At maturity
Pay Fixed 1.913%		At maturity		1/14/29	$	700,000	$	(36,368	)
Receive variable change in USA-CPI-U		At maturity
Pay Fixed 1.943%		At maturity		1/15/29		2,500,000		(137,239	)
Total Inflation Index Swap Contracts							$	(173,607	)

See Note 8 regarding other derivative information.

See Abbreviations on page FFA-61.

FFA-42     Semiannual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Allocation VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$658,070,208
Cost - Non-controlled affiliates (Note 3e)		66,758,532
Value - Unaffiliated issuers		$698,396,435
Value - Non-controlled affiliates (Note 3e)		60,517,496
Cash		23,930
Foreign currency, at value (cost $2,900,859)		2,893,378
Receivables:
Investment securities sold		3,508,337
Capital shares sold		88,619
Dividends and interest		2,335,622
Deposits with brokers for:
OTC derivative contracts		73,606
Futures contracts		927,821
Centrally cleared swap contracts		210,325
Variation margin on centrally cleared swap contracts		5,416
OTC swap contracts (upfront payments $3,122)		2,661
Unrealized appreciation on OTC forward exchange contracts		267,758
Unrealized appreciation on OTC swap contracts		18,540
Other assets		1,947
Total assets		769,271,891
Liabilities:
Payables:
Investment securities purchased		16,278,660
Capital shares redeemed		275,245
Management fees		274,484
Distribution fees		184,060
Trustees’ fees and expenses		314
Variation margin on futures contracts		109,597
OTC swap contracts (upfront receipts $26,254)		20,577
Options written, at value (premiums received $4,426)		2,898
Unrealized depreciation on OTC forward exchange contracts		533,179
Unrealized depreciation on OTC swap contracts		75,869
Deferred tax		216
Accrued expenses and other liabilities		105,512
Total liabilities		17,860,611
Net assets, at value		$751,411,280
Net assets consist of:
Paid-in capital		$725,212,750
Total distributable earnings (losses)		26,198,530
Net assets, at value		$751,411,280

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report               FFA-43

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

June 30, 2020 (unaudited)

	Franklin Allocation VIP Fund
Class 1:
Net assets, at value		$    804,498
Shares outstanding		166,322
Net asset value and maximum offering price per share		$4.84
Class 2:
Net assets, at value		$371,639,070
Shares outstanding		77,524,145
Net asset value and maximum offering price per share		$4.79
Class 4:
Net assets, at value		$378,967,712
Shares outstanding		76,372,625
Net asset value and maximum offering price per share		$4.96

FFA-44     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Allocation VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers	$	4,260,934
Non-controlled affiliates (Note 3e)		2,531,672
Interest:(net of foreign taxes)~
Unaffiliated issuers		3,816,079
Total investment income		10,608,685
Expenses:
Management fees (Note 3a)		2,038,845
Distribution fees: (Note 3c)
Class 2		462,107
Class 4		654,011
Custodian fees (Note 4)		20,927
Reports to shareholders		42,652
Professional fees		39,957
Trustees’ fees and expenses		2,438
Other		44,986
Total expenses		3,305,923
Expense reductions (Note 4)		(14,316	)
Expenses waived/paid by affiliates (Note 3e and 3f)		(180,568	)
Net expenses		3,111,039
Net investment income		7,497,646
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(14,133,947	)
Non-controlled affiliates (Note 3e)		(1,061,746	)
Written options		68,032
Realized gain distributions from REITs		4,867
Foreign currency transactions		213,395
Forward exchange contracts		(22,661	)
Futures contracts		1,639,105
Swap contracts		(857,729	)
Net realized gain (loss)		(14,150,684	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(2,867,896	)
Non-controlled affiliates (Note 3e)		(3,493,563	)
Translation of other assets and liabilities denominated in foreign currencies		(20,849	)
Forward exchange contracts		(199,386	)
Written options		1,528
Futures contracts		365,252
Swap contracts		(149,866	)
Change in deferred taxes on unrealized appreciation		16

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFA-45

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations (continued)

for the six months ended June 30, 2020 (unaudited)

	Franklin Allocation VIP Fund
Net change in unrealized appreciation (depreciation)	$	(6,364,764	)
Net realized and unrealized gain (loss)		(20,515,448	)
Net increase (decrease) in net assets resulting from operations	$	(13,017,802	)
*Foreign taxes withheld on dividends	$	147,015
~Foreign taxes withheld on interest	$	2,318

FFA-46     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Allocation VIP Fund
	Six Months Ended
	June 30,			Year Ended December 31,
	2020
	(unaudited)			2019
Increase (decrease) in net assets:
Operations:
Net investment income		$     7,497,646			$     10,197,177
Net realized gain (loss)		(14,150,684	)		239,840,198
Net change in unrealized appreciation (depreciation)		(6,364,764	)		(103,898,058	)
Net increase (decrease) in net assets resulting from operations		(13,017,802	)		146,139,317
Distributions to shareholders:
Class 1		(227,035	)		(114,944	)
Class 2		(106,811,345	)		(41,503,915	)
Class 4		(104,689,180	)		(39,405,922	)
Total distributions to shareholders		(211,727,560	)		(81,024,781	)
Capital share transactions: (Note 2)
Class 1		202,051			(205,346	)
Class 2		82,030,559			(18,907,288	)
Class 4		83,349,005			(20,095,745	)
Total capital share transactions		165,581,615			(39,208,379	)
Net increase (decrease) in net assets		(59,163,747	)		25,906,157
Net assets:
Beginning of period		810,575,027			784,668,870
End of period		$  751,411,280			$   810,575,027

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFA-47

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Allocation VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Allocation VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2, and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities, exchange traded funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade

in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the

FFA-48     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.   Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent

value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Securities Purchased on a When-Issued or Delayed Delivery and TBA Basis

The Fund purchases securities on a when-issued or delayed delivery and to-be-announced (TBA) basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities and collateral has been pledged and/or received for open TBA trades.

d.  Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the

Semiannual Report             FFA-49

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

d.  Derivative Financial Instruments (continued)

Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the

counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to interest rate and equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or

FFA-50     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

receivable in the Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statement of Operations.

The Fund entered into OTC cross currency swap contracts primarily to manage and/or gain exposure to certain foreign currencies. A cross currency swap is an agreement between the Fund and a counterparty to exchange cash flows (determined using either a fixed or floating rate) based on the notional amounts of two different currencies. The notional amounts are typically determined based on the spot exchange rates at the opening of the contract. Cross currency swaps may require the exchange of notional amounts at the opening and/or closing of the contract. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statement of Assets and Liabilities and represent compensating factors between stated terms of the cross currency swap contract and prevailing market conditions (interest rate spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statement of Operations.

The Fund entered into inflation index swap contracts primarily to manage and/or gain exposure to inflation risk. An inflation index swap is an agreement between the Fund and a counterparty to exchange cash flows whereby one party makes payments based on the percentage change in an index that serves as a measure of inflation and the other party makes a regular payment based on a compounded fixed rate, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC inflation index swap) or may be executed on a registered exchange (centrally cleared inflation index swap). For centrally cleared inflation index swaps, required initial margins are pledged by the Fund, and the daily change in fair

value is accounted for as a variation margin payable or receivable. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Typically, an inflation index swap has payment obligations netted and exchanged upon maturity.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

The Fund entered into OTC total return swap contracts primarily to manage and/or gain exposure to credit and market risk of an underlying instrument such as a stock, bond, index or basket of securities or indices. A total return swap is an agreement between the Fund and a counterparty to exchange a return linked to an underlying instrument for a floating or fixed rate payment, both based upon a notional amount. Over the term of the contract, contractually required payments to be paid or received are accrued daily and recorded as unrealized appreciation or depreciation until the payments are made, at which time they are recognized as realized gain or loss.

See Note 8 regarding other derivative information.

e.   Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund has the right to receive from the Lender any payments of principal, interest and fees which the Lender received from

Semiannual Report             FFA-51

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

e.   Loan Participation Notes (continued)

the borrower. The Fund generally has no rights to either enforce compliance by the borrower with the terms of the loan agreement or to any collateral relating to the original loan. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. The Participations may also involve interest rate risk and liquidity risk, including the potential default or insolvency of the borrower and/or the Lender.

f.   Mortgage Dollar Rolls

The Fund enters into mortgage dollar rolls, typically on a TBA basis. Mortgage dollar rolls are agreements between the Fund and a financial institution where the Fund sells (or buys) mortgage-backed securities for delivery on a specified date and simultaneously contracts to repurchase (or sell) substantially similar (same type, coupon, and maturity) securities at a future date and at a predetermined price. Gains or losses are realized on the initial sale, and the difference between the repurchase price and the sale price is recorded as an unrealized gain or loss to the Fund upon entering into the mortgage dollar roll. In addition, the Fund may invest the cash proceeds that are received from the initial sale. During the period between the sale and repurchase, the Fund is not entitled to principal and interest paid on the mortgage backed securities. Transactions in mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund’s portfolio turnover rate. The risks of mortgage dollar roll transactions include the potential inability of the counterparty to fulfill its obligations.

g.  Senior Floating Rate Interests

The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On

July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

h.   Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Paydown gains and losses are recorded as an adjustment to interest income. Dividend

FFA-52     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

income, capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by

amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Statement of Operations.

j.   Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

k.   Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31,
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		3,998		$	25,836			12,786		$	87,589
Shares issued in reinvestment of distributions		47,596			227,035			18,101			114,944
Shares redeemed		(7,955	)		(50,820	)		(62,639	)		(407,879)
Net increase (decrease)		43,639		$	202,051			(31,752	)	$	(205,346)

Semiannual Report             FFA-53

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

2.   Shares of Beneficial Interest (continued)

	Six Months Ended June 30, 2020						Year Ended December 31,
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		1,929,143		$	12,305,662			2,057,930		$	13,832,099
Shares issued in reinvestment of distributions		22,581,680			106,811,345			6,577,483			41,503,915
Shares redeemed		(6,182,367	)		(37,086,448	)		(11,168,839	)		(74,243,302)
Net increase (decrease)		18,328,456		$	82,030,559			(2,533,426	)	$	(18,907,288)
Class 4 Shares:
Shares sold		999,707		$	6,553,397			973,482		$	6,631,528
Shares issued in reinvestment of distributions		21,365,139			104,689,180			6,099,988			39,405,922
Shares redeemed		(4,318,741	)		(27,893,572	)		(9,669,394	)		(66,133,195)
Net increase (decrease)		18,046,105		$	83,349,005			(2,595,924	)	$	(20,095,745)

3.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment Manager
Templeton Global Advisors Limited (Global Advisors)	Investment Manager
Franklin Templeton Institutional, LLC (FT Institutional)	Investment Manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.   Management Fees

The Fund pays an investment management fee to Advisers of 0.55% per year of the average daily net assets of the Fund.

Under a subadvisory agreement, Global Advisors and FT Institutional, affiliates of Advisers, provide subadvisory services to the Fund. The subadvisory fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

b.   Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

FFA-54         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)			Net Change in Unrealized Appreciation (Depreciation)			Value at End of Period			Number of Shares Held at End of Period		Dividend Income
Non-Controlled Affiliates
Franklin LibertyQ U.S. Equity ETF	$	—	$	4,446,394	$	(4,056,817	)	$	(389,577	)	$	—		$	—	a		—	$	10,093
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		21,473,752		153,839,221		(143,492,388	)		—			—			31,820,585			31,820,585		72,098
Templeton Global Bond VIP Fund, Class 1		33,013,162		4,449,481		(4,600,000	)		(672,169	)		(3,493,563	)		28,696,911			1,981,831		2,449,481
Total Affiliated Securities	$	54,486,914	$	162,735,096	$	(152,149,205	)	$	(1,061,746	)	$	(3,493,563	)	$	60,517,496				$	2,531,672

^aAs of June 30, 2020, no longer held by the fund.

f.   Waiver and Expense Reimbursements

Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the operating expenses (excluding distribution fees and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) and acquired fund fees and expenses for each class of the Fund do not exceed 0.57%, based on the average net assets of each class until April 30, 2021. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4.   Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

Semiannual Report             FFA-55

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$725,772,409
Unrealized appreciation	$  68,781,770
Unrealized depreciation	(36,002,107	)
Net unrealized appreciation (depreciation)	$  32,779,663

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of paydown losses, bond discounts and premiums and wash sales.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $365,133,226 and $412,343,542, respectively.

7.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

8.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on futures contracts		$120,028	a	Variation margin on futures contracts		$   21,169	a
	Unrealized appreciation on OTC swap contracts		389		Unrealized depreciation on OTC swap contracts		26,049
Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts		267,758		Unrealized depreciation on OTC forward exchange contracts		533,179
Credit contracts	OTC swap contracts (upfront payments)		2,661		OTC swap contracts (upfront receipts)		20,577
	Unrealized appreciation on OTC swap contracts		18,151		Unrealized depreciation on OTC swap contracts		49,820
Equity contracts	Investments in securities, at value		—		Options written, at value		2,898
	Variation margin on futures contracts		56,057	a	Variation margin on futures contracts		—

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

	Asset Derivatives		Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value	Statement of Assets and Liabilities Location	Fair Value
Inflation contracts	Variation margin on centrally cleared swap contracts	$         —	Variation margin on centrally cleared swap contracts	$ 173,607a
Totals		$465,044		$827,299

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts and centrally cleared swap contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

For the period ended June 30, 2020, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Period		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Investments		$  (149,096)	Investments		$           —
	Written options		59,737	Written options		—
	Futures contracts		1,307,952	Futures contracts		355,917
	Swap contracts		(53,983)	Swap contracts		65,600
Foreign exchange contracts	Investments		27,482	Investments		—
	Forward exchange contracts		(22,661)	Forward exchange contracts		(199,386)
Credit contracts	Written options		6,663	Written options		—
	Swap contracts		(599,207)	Swap contracts		(18,080)
Equity contracts	Written options		1,632	Written options		1,528
	Futures contracts		331,153	Futures contracts		9,335
Inflation contracts	Swap contracts		(204,539)	Swap contracts		(197,386)
Totals			$     705,133			$    17,528

For the period ended June 30, 2020, the average month end notional amount of futures contracts, swap contracts and options, and the average month end contract value for forward exchange contracts were as follows:

Futures contracts	$	53,406,412
Swap contracts	$	16,007,098
Forward exchange contracts	$	21,986,085
Options		2,657,429	shares

Semiannual Report             FFA-57

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

8.  Other Derivative Information (continued)

At June 30, 2020, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward exchange contracts		$267,758		$533,179
Swap contracts		21,201		96,446
Total		$288,959		$629,625

^aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

At June 30, 2020, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset		Financial Instruments Collateral Receiveda		Cash Collateral Received		Net Amount (Not less than zero)
Counterparty
CITI		$  29,144		$  (29,144)		$    —		$    —		$    —
JPHQ		259,815		(259,815)		—		—		—
Total		$288,959		$(288,959)		$    —		$    —		$    —

At June 30, 2020, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset		Financial Instruments Collateral Pledgeda,b			Cash Collateral Pledgeda		Net Amount (Not less than zero)
Counterparty
CITI		$  99,711		$  (29,144)		$            —			$(70,567)		$    —
JPHQ		529,914		(259,815)		(270,099	)		—		—
Total		$629,625		$(288,959)		$(270,099	)		$(70,567)		$    —

^aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

^bSee the accompanying Statement of Investments for securities pledged as collateral for derivatives.

See Note 1(d) regarding derivative financial instruments.

FFA-58         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

See Abbreviations on page FFA-61.

9.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

10.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

Semiannual Report             FFA-59

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

10. Fair Value Measurements (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

		Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Automobiles & Components		$	1,442,221	$	3,688,986	$	—	$        5,131,207
Banks			629,440		8,609,807		—	9,239,247
Capital Goods			33,917,815		10,576,577		—	44,494,392
Commercial & Professional Services			7,818,640		4,072,329		—	11,890,969
Consumer Durables & Apparel	��		7,532,184		3,616,031		—	11,148,215
Diversified Financials			37,246,911		8,067,189		—	45,314,100
Energy			4,935,763		4,833,765		—	9,769,528
Food & Staples Retailing			6,642,731		3,219,813		—	9,862,544
Food, Beverage & Tobacco			15,098,895		2,822,092		—	17,920,987
Health Care Equipment & Services			21,383,180		4,592,001		—	25,975,181
Household & Personal Products			8,808,602		738,944		—	9,547,546
Insurance			1,130,718		2,654,917		—	3,785,635
Materials			14,369,748		10,386,275		—	24,756,023
Media & Entertainment			11,449,799		4,540,598		—	15,990,397
Pharmaceuticals, Biotechnology & Life Sciences			29,748,526		14,738,005		—	44,486,531
Real Estate			7,395,298		3,546,112		—	10,941,410
Retailing			24,318,806		3,858,183		—	28,176,989
Semiconductors & Semiconductor Equipment			19,427,855		3,756,828		—	23,184,683
Software & Services			50,715,638		6,853,662		—	57,569,300
Technology Hardware & Equipment			14,604,354		2,247,795		—	16,852,149
Telecommunication Services			2,564,611		4,519,736		—	7,084,347
Transportation			11,160,580		2,798,976		—	13,959,556
Utilities			10,972,639		2,525,521		—	13,498,160
All Other Equity Investments			7,798,367		—		—	7,798,367
Corporate Bonds			—		109,181,935		—	109,181,935
Senior Floating Rate Interests			—		2,126,855		—	2,126,855
Foreign Government and Agency Securities			—		6,662,148		—	6,662,148
U.S. Government and Agency Securities			—		40,753,755		—	40,753,755
Asset-Backed Securities and Commercial Mortgage-Backed Securities			—		22,732,916		—	22,732,916
Mortgage-Backed Securities			—		70,820,515		—	70,820,515
Municipal Bonds			—		6,437,759		—	6,437,759
Short Term Investments			31,820,585		—		—	31,820,585
Total Investments in Securities		$	382,933,906	$	375,980,025	$	—	$    758,913,931
Other Financial Instruments:
Futures Contracts		$	176,085	$	—	$	—	$176,085
Forward Exchange Contracts			—		267,758		—	267,758
Swap Contracts			—		18,540		—	18,540
Total Other Financial Instruments		$	176,085	$	286,298	$	—	$           462,383

FFA-60     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

	Level 1		Level 2		Level 3		Total
Liabilities:
Other Financial Instruments:
Options Written	$	2,898	$	—	$	—	$                2,898
Futures Contracts		21,169		—		—	21,169
Forward Exchange Contracts		—		533,179		—	533,179
Swap Contracts		—		249,476		—	249,476
Total Other Financial Instruments	$	24,067	$	782,655	$	—	$            806,722

^aFor detailed categories, see the accompanying Statement of Investments.

^bIncludes common stocks and management investment companies as well as other equity investments.

11.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

12. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Counterparty		Currency		Selected Portfolio
CITI	Citigroup, Inc.	COP	Colombian Peso	ADR	American Depositary Receipt
JPHQ	JP Morgan Chase & Co.	CNY	Chinese Yuan	CLO	Collateralized Loan Obligations
		DOP	Dominican Peso	FFCB	Federal Farm Credit Bank
		DKK	Danish Krone	FRN	Floating Rate Note
		EUR	Euro	GO	General Obligation
		JPY	Japanese Yen	LIBOR	London InterBank Offered Rate
		MXN	Mexican Peso	SF	Single Family
		USD	United States Dollar	USD	United School District
		UYU	Uruguayan Peso	UHSD	Unified/Union High School District
		ZAR	South African Rand

Semiannual Report             FFA-61

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Franklin Flex Cap Growth VIP Fund

This semiannual report for Franklin Flex Cap Growth VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a +15.21% total return* for the six-month period ended June 30, 2020.

*The Fund has an expense reduction and a fee waiver associated with any investments in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             FFC-1

FRANKLIN FLEX CAP GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks capital appreciation. Under normal market conditions, the Fund invests predominantly in equity securities of companies that the investment manager believes have the potential for capital appreciation.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risk of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Smaller, midsized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger-company stocks, especially over the short term. Foreign securities involve special risks, including currency fluctuations and economic and political uncertainties. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Russell 3000^® Growth Index posted a +8.98% total return, the Russell 1000^® Growth Index posted a +9.81% total return, and the Standard and Poor’s^® 500 (S&P^® 500) posted a -3.08% total return for the same period.¹

Portfolio Composition

Based on Total Net Assets as of 6/30/20

Economic and Market Overview

U.S. equities, as measured by the S&P 500, nearly reversed earlier losses but declined modestly during the six-month period. A sharp selloff began in late February 2020 amid investor fears of a global economic slowdown due to the novel coronavirus (COVID-19) pandemic.

Government-issued restrictions to mitigate the pandemic severely curtailed U.S. economic activity beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April as many businesses, particularly in hospitality, retail and travel, announced mass layoffs.² Within just two months, the unemployment rate went from a 50-year low to an 80-year high.² The longest U.S. economic expansion in history ended in February, according to the National Bureau

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

2. Source: Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

FFC-2     Semiannual Report

FRANKLIN FLEX CAP GROWTH VIP FUND

of Economic Research, and the country slipped into a deep recession.

In an effort to buffer the sharp drop in economic activity, the Fed implemented two emergency rate cuts in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. Additionally, the Fed announced broad quantitative easing measures aimed at ensuring the flow of credit to borrowers and supporting credit markets with unlimited amounts of bond purchasing. Meanwhile, Congress passed the Coronavirus Aid, Relief and Economic Security Act to provide economic relief for individuals and businesses and additional funding for small businesses.

Benefiting from these fiscal and monetary measures, equities began to advance at the end of March 2020. As states gradually reopened, economic activity resumed, leading to declining initial jobless claims and record-high increases in job additions and existing home sales. Optimism about potential COVID-19 vaccines and treatments and rising retail sales further supported equities, which rebounded from multi-year lows to post the strongest second-quarter returns in more than 20 years. Nevertheless, surging infection rates in several states near the end of June led to concerns that economic recovery could be hindered if reopening measures are paused or rolled back.

Investment Strategy

We use fundamental, bottom-up research to seek companies meeting our criteria of growth potential, quality and valuation. In seeking sustainable growth characteristics, we look for companies we believe can produce sustainable earnings and cash flow growth, evaluating the long-term market opportunity and competitive structure of an industry to target leaders and emerging leaders. We define quality companies as those with strong and improving competitive positions in attractive markets. We also believe important attributes of quality are experienced and talented management teams as well as financial strength reflected in the capital structure, gross and operating margins, free cash flow generation and returns on capital employed. Our valuation analysis includes a range of potential outcomes based on an assessment of multiple scenarios. In assessing value, we consider whether security prices fully reflect the balance of the sustainable growth opportunities relative to business and financial risks.

Manager’s Discussion

During the six months ended June 30, 2020, a majority of sectors in the Fund’s portfolio posted positive absolute returns. Relative to the Russell 3000^® Growth Index,

Top 10 Holdings
6/30/20
Company Sector/Industry	% of Total Net Assets
Microsoft Corp. Software & Services		8.4%
Amazon.com Inc. Retailing		6.8%
ServiceNow Inc. Software & Services		6.2%
Alphabet Inc. Media & Entertainment		5.5%
salesforce.com Inc. Software & Services		4.3%
Mastercard Inc. Software & Services		3.7%
Costco Wholesale Corp. Food & Staples Retailing		3.1%
Visa Inc. Software & Services		2.9%
Facebook Inc. Media & Entertainment		2.8%
Danaher Corp. Health Care Equipment & Services		2.5%

contributors included stock selection and an overweighted position in information technology (IT), stock selection and an underweight in health care, and stock selection in consumer discretionary. Relative detractors included overweighted positions in utilities and consumer staples.

In IT, enterprise workflow management provider ServiceNow contributed to relative results. Shares rose after the company raised subscription revenue guidance in its fourth-quarter 2019 earnings report. Investors were further impressed when first-quarter 2020 earnings came in line with expectations despite many businesses reducing activity in March due to COVID-19. Graphics processing units (GPU) manufacturer NVIDIA and electronic payments company PayPal Holdings contributed as well.

In health care, cloud software provider Veeva Systems helped relative performance. Shares of the company, which focuses on the life sciences industry, rose after revenue for its April quarter beat expectations. We are concerned, however, about a lack of transparency around the number of shares owned by the CEO and his resulting voting power. Veterinary services and products company IDEXX Laboratories also contributed.

Semiannual Report             FFC-3

FRANKLIN FLEX CAP GROWTH VIP FUND

In consumer discretionary, online marketplace and web services operator Amazon.com contributed to relative results as shares of the company rose during the COVID-19 pandemic. Consumers increasingly turned to the online retailer for basic goods as they spent growing amounts of time at home, boosting sales. The company also benefited from the increase in remote working, which has made more companies reliant on technology infrastructure provided by Amazon Web Services.

Elsewhere, Singaporean-internet platform provider Sea was also a significant relative contributor.

Turning to relative detractors, in utilities, an off-benchmark position in clean energy company NextEra Energy hurt results.

In consumer staples, beauty products manufacturer Estee Lauder detracted from relative performance. Sales were hurt by the pandemic-induced closure of most of the company’s retail stores, though a growth in online sales, particularly in Asia, offset some of those losses.

Elsewhere, aerospace and defense companies Raytheon and Boeing detracted from relative results. Raytheon merged with United Technologies on April 3, 2020, to form Raytheon Technologies. The company has been hurt by the negative impact of recently declining aviation demand, and the Fund liquidated its position during the period. We also sold off our holdings in Boeing due to the collapse of international aviation travel, significantly decreased sales of the troubled 777 airliner and an uncertain rollout for the company’s new 777X airliner.

Thank you for your participation in Franklin Flex Cap Growth VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FFC-4     Semiannual Report

FRANKLIN FLEX CAP GROWTH VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share  Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,152.10	$5.67	$1,019.59	$5.32	1.06%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report             FFC-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Flex Cap Growth VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$ 8.06			$ 6.46			$ 7.46			$ 5.89			$ 7.09			$ 16.61
Income from investment operationsa:
Net investment income (loss)b		(0.01	)		(0.01	)		(0.02	)		(0.01	)		(0.03	)		(0.06	)
Net realized and unrealized gains (losses)		1.22			1.99			0.42			1.60			(0.20	)		1.00
Total from investment operations		1.21			1.98			0.40			1.59			(0.23	)		0.94
Less distributions from:
Net realized gains		(0.58	)		(0.38	)		(1.40	)		(0.02	)		(0.97	)		(10.46	)
Net asset value, end of period		$ 8.69			$ 8.06			$ 6.46			$ 7.46			$ 5.89			$ 7.09
Total returnc		15.30%			31.16%			3.14%			26.94%			(2.89	)%		4.37%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.33%			1.33%			1.30%			1.35%			1.36%			1.33%
Expenses net of waiver and payments by affiliates		0.96%e			0.96%e			0.96%e			0.96%			0.96%			0.96%
Net investment income (loss)		(0.36)%			(0.19)%			(0.20)%			(0.20)%			(0.44)%			(0.62)%
Supplemental data
Net assets, end of period (000’s)		$101,481			$97,964			$69,233			$81,084			$73,337			$82,901
Portfolio turnover rate		16.11%			26.29%			15.17%			52.12%			17.76%			88.15%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

FFC-6         Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Flex Cap Growth VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$ 7.71			$ 6.20			$ 7.21			$ 5.70			$ 6.90			$ 16.44
Income from investment operationsa:
Net investment income (loss)b		(0.02	)		(0.02	)		(0.02	)		(0.02	)		(0.03	)		(0.07	)
Net realized and unrealized gains (losses)		1.17			1.91			0.41			1.55			(0.20	)		0.99
Total from investment operations		1.15			1.89			0.39			1.53			(0.23	)		0.92
Less distributions from:
Net realized gains		(0.58	)		(0.38	)		(1.40	)		(0.02	)		(0.97	)		(10.46	)
Net asset value, end of period		$ 8.28			$ 7.71			$ 6.20			$ 7.21			$ 5.70			$ 6.90
Total returnc		15.21%			31.03%			3.10%			26.78%			(2.98	)%		4.32%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.43%			1.43%			1.40%			1.45%			1.46%			1.43%
Expenses net of waiver and payments by affiliates		1.06%e			1.06%e			1.06%e			1.06%			1.06%			1.06%
Net investment income (loss)		(0.46)%			(0.29)%			(0.30)%			(0.30)%			(0.54)%			(0.72)%
Supplemental data
Net assets, end of period (000’s)		$32,448			$31,761			$29,681			$30,112			$27,163			$34,479
Portfolio turnover rate		16.11%			26.29%			15.17%			52.12%			17.76%			88.15%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFC-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Flex Cap Growth VIP Fund
		Shares		Value
	Common Stocks 95.8%
	Automobiles & Components 0.9%
a	Tesla Inc.		1,181	$	1,275,256
	Capital Goods 1.5%
	Fortive Corp.		9,730		658,332
	Roper Technologies Inc.		3,325		1,290,964
					1,949,296
	Commercial & Professional Services 1.9%
a	CoStar Group Inc.		1,746		1,240,830
	Verisk Analytics Inc.		7,706		1,311,561
					2,552,391
	Consumer Durables & Apparel 1.3%
	NIKE Inc., B		17,213		1,687,735
	Diversified Financials 3.3%
	Intercontinental Exchange Inc.		12,679		1,161,396
	MSCI Inc.		5,901		1,969,872
	Tradeweb Markets Inc.		22,178		1,289,429
					4,420,697
	Food & Staples Retailing 3.1%
	Costco Wholesale Corp.		13,546		4,107,283
	Health Care Equipment & Services 10.5%
	Abbott Laboratories		27,566		2,520,359
	Danaher Corp.		19,354		3,422,368
a	IDEXX Laboratories Inc.		8,293		2,738,017
a	Intuitive Surgical Inc.		4,426		2,522,068
a	Veeva Systems Inc.		12,433		2,914,544
					14,117,356
	Household & Personal Products 2.5%
	Estee Lauder Cos. Inc., A		18,062		3,407,938
	Media & Entertainment 13.6%
a	Alphabet Inc., C		5,246		7,415,798
a	Charter Communications Inc., A		4,421		2,254,887
a	Facebook Inc., A		16,685		3,788,663
a	Netflix Inc.		4,693		2,135,503
a	Sea Ltd., ADR (Taiwan)		22,650		2,428,986
a	ZoomInfo Technologies Inc.		3,800		193,914
					18,217,751
	Pharmaceuticals, Biotechnology & Life Sciences 1.1%
a	10X Genomics Inc., A		369		32,955
a	Applied Molecular Transport Inc.		5,900		148,326
a	Illumina Inc.		3,403		1,260,301
a	Legend Biotech Corp., ADR		1,700		72,352
					1,513,934

FFC-8         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Real Estate 4.8%
	American Tower Corp.		9,835	$	2,542,741
	Crown Castle International Corp.		15,536		2,599,950
	Equinix Inc.		1,830		1,285,209
					6,427,900
	Retailing 9.6%
a	Alibaba Group Holding Ltd., ADR (China)		8,731		1,883,277
a	Amazon.com Inc.		3,302		9,109,623
a	Booking Holdings Inc.		221		351,907
a	MercadoLibre Inc. (Argentina)		1,505		1,483,584
a	Vroom Inc.		500		26,070
					12,854,461
	Semiconductors & Semiconductor Equipment 6.1%
	Analog Devices Inc.		11,440		1,403,002
	ASML Holding NV, N.Y. shs (Netherlands)		3,880		1,427,956
	NVIDIA Corp.		7,606		2,889,595
	Xilinx Inc.		24,545		2,414,983
					8,135,536
	Software & Services 32.7%
a	Adobe Inc.		7,606		3,310,968
a	Atlassian Corp. PLC		8,542		1,539,866
a	Bill.Com Holdings Inc.		284		25,620
a	Coupa Software Inc.		6,091		1,687,451
	Mastercard Inc., A		16,572		4,900,340
	Microsoft Corp.		55,590		11,313,121
a	PayPal Holdings Inc.		17,063		2,972,886
a	salesforce.com Inc.		30,587		5,729,863
a	ServiceNow Inc.		20,489		8,299,274
a	Shift4 Payments Inc.		2,600		92,300
	Visa Inc., A		20,224		3,906,670
					43,778,359
	Technology Hardware & Equipment 0.9%
a	Keysight Technologies Inc.		12,248		1,234,353
	Utilities 2.0%
	NextEra Energy Inc.		11,110		2,668,289
	Total Common Stocks (Cost $61,854,237)				128,348,535

Semiannual Report             FFC-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

		Shares		Value
	Short Term Investments (Cost $5,605,537) 4.2%
	Money Market Funds 4.2%
b,c	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		5,605,537	$	5,605,537
	Total Investments (Cost $67,459,774) 100.0%				133,954,072
	Other Assets, less Liabilities (0.0)%†				(25,760	)
	Net Assets 100.0%			$	133,928,312

See Abbreviations on page FFC-20.

^†Rounds to less than 0.1% of net assets.

^aNon-income producing.

^bSee Note 3(e) regarding investments in affiliated management investment companies.

^cThe rate shown is the annualized seven-day effective yield at period end.

FFC-10         Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Flex Cap Growth VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	61,854,237
Cost - Non-controlled affiliates (Note 3e)		5,605,537
Value - Unaffiliated issuers	$	128,348,535
Value - Non-controlled affiliates (Note 3e)		5,605,537
Cash		72
Receivables:
Capital shares sold		214,725
Dividends		18,521
Other assets		108
Total assets		134,187,498
Liabilities:
Payables:
Capital shares redeemed		109,016
Management fees		66,773
Distribution fees		29,579
Reports to shareholders		25,867
Professional fees		24,710
Accrued expenses and other liabilities		3,241
Total liabilities		259,186
Net assets, at value	$	133,928,312
Net assets consist of:
Paid-in capital	$	58,259,407
Total distributable earnings (losses)		75,668,905
Net assets, at value	$	133,928,312
Class 2:
Net assets, at value	$	101,480,767
Shares outstanding		11,671,510
Net asset value and maximum offering price per share		$8.69
Class 4:
Net assets, at value	$	32,447,545
Shares outstanding		3,916,935
Net asset value and maximum offering price per share		$8.28

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFC-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Flex Cap Growth VIP Fund
Investment income:
Dividends:
Unaffiliated issuers	$	359,155
Non-controlled affiliates (Note 3e)		3,120
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		318
Non-controlled affiliates (Note 3e)		10
Total investment income		362,603
Expenses:
Management fees (Note 3a)		593,671
Distribution fees: (Note 3c)
Class 2		113,408
Class 4		53,355
Custodian fees (Note 4)		1,815
Reports to shareholders		22,731
Professional fees		29,521
Trustees’ fees and expenses		386
Other		3,553
Total expenses		818,440
Expense reductions (Note 4)		(128	)
Expenses waived/paid by affiliates (Note 3e and 3f)		(222,312	)
Net expenses		596,000
Net investment income (loss)		(233,397	)
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers.		9,427,688
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers.		5,559,178
Net realized and unrealized gain (loss)		14,986,866
Net increase (decrease) in net assets resulting from operations	$	14,753,469

FFC-12         Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Flex Cap Growth VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	(233,397	)	$	(271,500	)
Net realized gain (loss)		9,427,688			8,427,290
Net change in unrealized appreciation (depreciation)		5,559,178			22,895,498
Net increase (decrease) in net assets resulting from operations		14,753,469			31,051,288
Distributions to shareholders:
Class 2		(6,270,140	)		(4,527,605	)
Class 4		(2,134,830	)		(1,613,765	)
Total distributions to shareholders		(8,404,970	)		(6,141,370	)
Capital share transactions: (Note 2)
Class 2		(583,815	)		10,720,742
Class 4		(1,561,279	)		(4,820,540	)
Total capital share transactions		(2,145,094	)		5,900,202
Net increase (decrease) in net assets		4,203,405			30,810,120
Net assets:
Beginning of period		129,724,907			98,914,787
End of period	$	133,928,312		$	129,724,907

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FFC-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Flex Cap Growth VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Flex Cap Growth VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers two classes of shares: Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

FFC-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

b.   Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At June 30, 2020, the Fund had no securities on loan.

c.   Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

d.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Semiannual Report             FFC-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

e.   Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

f.   Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust.

2.   Shares of Beneficial Interest

Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		2,904,628		$	24,148,076			3,678,687		$	27,630,014
Shares issued in reinvestment of distributions		752,718			6,270,140			606,105			4,527,605
Shares redeemed		(4,138,598	)		(31,002,031	)		(2,846,348	)		(21,436,877)
Net increase (decrease)		(481,252	)	$	(583,815	)		1,438,444		$	10,720,742
Class 4 Shares:
Shares sold		241,848		$	1,885,103			406,751		$	2,950,254
Shares issued in reinvestment of distributions		268,870			2,134,830			226,017			1,613,765
Shares redeemed		(714,042	)		(5,581,212	)		(1,300,636	)		(9,384,559)
Net increase (decrease)		(203,324	)	$	(1,561,279	)		(667,868	)	$	(4,820,540)

3.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

a. Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
1.000%	Up to and including $100 million
0.900%	Over $100 million, up to and including $250 million
0.850%	Over $250 million, up to and including $10 billion
0.800%	Over $10 billion, up to and including $12.5 billion
0.775%	Over $12.5 billion, up to and including $15 billion
0.750%	In excess of $15 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.981% of the Fund’s average daily net assets.

b.  Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of Class 2 and Class 4, respectively. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates
																Dividends
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$2,694,405		$25,240,403		$(22,329,271)		$      —		$      —		$    5,605,537		5,605,537		$3,120

Semiannual Report             FFC-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

3. Transactions with Affiliates (continued)

e. Investments in Affiliated Management Investment Companies (continued)

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates (continued)
																Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$     23,100		$  1,211,910		$ (1,235,010)		$      —		$      —		$            —		—		$     10
Total Affiliated Securities		$2,717,505		$26,452,313		$(23,564,281)		$      —		$      —		$5,605,537				$3,130

f.  Waiver and Expense Reimbursements

Advisers have contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the operating expenses (excluding distribution fees and acquired fund fees and expenses and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) for each class of the Fund does not exceed 0.71% based on the average net assets of each class until April 30, 2021. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	67,479,008
Unrealized appreciation	$	66,503,224
Unrealized depreciation		(28,160)
Net unrealized appreciation (depreciation)	$	66,475,064

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of wash sales.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $19,323,735 and $33,088,462, respectively.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

7.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

8.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

9.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

At June 30, 2020, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statement of Investments.

10.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

Semiannual Report             FFC-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

11.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Selected Portfolio
ADR	American Depositary Receipt

FFC-20         Semiannual Report

Franklin Income VIP Fund

This semiannual report for Franklin Income VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -11.40% total return* for the six-month period ended June 30, 2020.

*The Fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             FI-1

FRANKLIN INCOME VIP FUND

Fund Goal and Main Investments

The Fund seeks to maximize income, while maintaining prospects for capital appreciation. Under normal market conditions, the Fund invests in a diversified portfolio of debt and equity securities.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s portfolio includes a substantial portion of higher yielding, lower rated corporate bonds because of the relatively higher yields they offer. The Fund’s share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s primary benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a -3.08% total return.¹ The Fund’s secondary benchmark, the Blended Benchmark, posted a -5.20% total return.²

Portfolio Composition

6/30/20

% of Total
Net Assets

Equity	52.1%
Information Technology	10.4%
Health Care	7.9%
Financials	7.9%
Utilities	6.7%
Consumer Staples	3.8%
Industrials	3.7%
Energy	3.6%
Communication Services	3.4%
Materials	2.2%
Consumer Discretionary	2.2%
Real Estate	0.3%
Fixed Income*	42.1%
Health Care	13.6%
Financials	12.4%
Communication Services	5.5%
Energy	2.7%
Consumer Discretionary	2.7%
Industrials	1.3%
Consumer Staples	1.3%
Materials	1.3%
Real Estate	0.7%
Utilities	0.3%
Information Technology	0.3%
Short-Term Investments & Other Net Assets	5.8%

*Includes senior floating rate interests.

Economic and Market Overview

The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the six-month period despite significant economic disruption in the wake of the novel coronavirus (COVID-19) pandemic. In late February 2020, as more countries adopted social distancing and lockdown measures to slow the global pandemic, the U.S. bond market began pricing in the adverse impact on economic activity. Higher-quality, longer-term

1. Source: Morningstar.

2. Source: FactSet. The Fund’s Blended Benchmark was calculated internally and rebalanced monthly and was composed of 50% MSCI USA High Dividend Yield Index + 25% Bloomberg Barclays U.S. High Yield Very Liquid Index + 25% Bloomberg Barclays U.S. Aggregate Bond Index.

One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

FI-2     Semiannual Report

FRANKLIN INCOME VIP FUND

bonds rallied, while riskier, lower-rated corporate bonds declined sharply, reflecting a reversal in many investors’ risk appetite. During the last quarter of the reporting period, however, as generally slowing infection rates and phased business reopenings by states drove hopes for an economic rebound, corporate bond valuations advanced significantly. Nevertheless, an increase in infection rates toward period-end prompted concern among investors, hindering lower-rated bonds.

The U.S. Federal Reserve (Fed) enacted two emergency rate cuts in response to the COVID-19 pandemic in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. In addition, the Fed announced unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet.

U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose significantly during the reporting period. Bond purchasing by the Fed and robust demand for investments perceived as safe drove the U.S. Treasury market higher despite the widening U.S. federal budget deficit and the massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted positive returns, aided by declining Treasury rates and the Fed’s decision to purchase agency MBS.

U.S. corporate bond performance varied significantly based on credit rating, as investors became concerned about the pandemic-related economic disruption and the potential credit downgrades of many companies. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, rebounded significantly after mid-March 2020 to post positive overall returns for the reporting period. In contrast, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, declined due to investor concerns about a potential increase in credit defaults.

Investment Strategy

In analyzing debt and equity securities, we consider such factors as a company’s experience and managerial strength; responsiveness to changes in interest rates and business conditions; debt maturity schedules and borrowing requirements; changing financial condition and market recognition of the change; and a security’s relative value based on such factors as anticipated cash flow, interest or dividend coverage, asset coverage and earnings. When choosing investments for the Fund, we apply a bottom-up, value oriented, long-term approach, focusing on the market

Top Five Equity Holdings

6/30/20

Company Sector/Industry % of Total
Net Assets

JPMorgan Chase & Co. Financials	2.8%
The Southern Co. Electric Utilities	1.8%
Dominion Energy Inc. Utilities	1.8%
Verizon Communications Inc. Financials	1.6%
Procter & Gamble Co. Communication Services	1.5%

price of a company’s securities relative to the investment manager’s evaluation of the company’s long-term earnings, asset value and cash flow potential.

Manager’s Discussion

The Fund underperformed its benchmark during the six-month period due to weak performance across both equity and fixed income holdings. Asset allocation for equities was relatively stable, ending at 52.1% relative to 51.4% at the beginning of the period. The Fund’s fixed income positioning decreased as we modestly reduced our allocation to high-yield and investment-grade corporate bonds, ending at 42.1% of assets relative to 46.4% at the beginning of the period. Cash made up 5.8% of Fund assets at period-end.

On the equity side, overweightings and stock selection in the energy and financials sectors hurt relative performance. Notable detractors in energy included Weatherford International and Royal Dutch Shell, which were negatively impacted by weak commodity prices. In financials, Wells Fargo and JPMorgan Chase hurt results as lower interest rates impacted profitability and broader credit concerns increased as the economy moved into recession.

Turning to relative contributors in equity, an overweighting and stock selection in information technology helped results. Contributors in the sector included semiconductor companies Intel and Texas Instruments. S&P 500 put options also contributed and have been a regular part of our strategy over the last two years as we look to protect the Fund during significant drawdowns, as occurred in the period. Additionally, underweightings in the industrials and consumer staples sectors benefited performance relative to the benchmark.

Semiannual Report             FI-3

FRANKLIN INCOME VIP FUND

Top Five Fixed Income Holdings

and Senior Floating Rate Interests

6/30/20

Company Sector/Industry % of Total
Net Assets

CHS/Community Health Systems Inc. Health Care	5.4%
U.S. Treasury Note Financials	4.6%
GNMA II SF 30 Year Financials	3.4%
Tenet Healthcare Corp. Health Care	3.0%
Bausch Health Cos. Inc. Health Care	1.7%

Fixed income holdings benefited from the sharp decline in interest rates during the period, but were hurt when credit spread widened materially in response to the global pandemic. This was most acute in the sub-investment grade segment of the market.

Selection and an overweighting in energy sector corporate bond holdings hurt relative performance. Chesapeake Energy and HighPoint Resources were notable detractors, impacted by global commodity oversupply and weak demand as a result of the pandemic. Elsewhere, bonds of Community Health Systems hurt performance due to the pressure COVID-19 placed on hospitals, which delayed profitable elective procedures while operators focused resources toward the public health crisis.

While treasury and securitized holdings benefited performance during periods of elevated market volatility, the generally shorter duration of our positioning lagged the broader market move amid a sharp decline in longer-term interest rates.

In contrast, communication services bonds contributed to relative results, especially T-Mobile/Sprint bonds which benefitted from the consummation of their corporate combination. Strong individual contributors included intermediate and longer duration investment-grade holdings in CVS Health, Bristol Meyers Squibb, British American Tobacco, Citigroup and HSBC Holdings, which benefited from the decline in interest rates. Additionally, our underweighting in the industrials sector benefited relative results given the sector’s negative performance.

Thank you for your participation in Franklin Income VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FI-4         Semiannual Report

FRANKLIN INCOME VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201,  2	Net Annualized Expense Ratio2
Class 4	$1,000	$886.00	$3.80	$1,020.84	$4.07	0.81%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report             FI-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Income VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$16.52			$15.26			$16.72			$15.87			$14.64			$16.48
Income from investment operationsa:
Net investment incomeb		0.30			0.75			0.71			0.69			0.67			0.71
Net realized and unrealized gains (losses)		(2.15	)		1.68			(1.35	)		0.87			1.34			(1.78	)
Total from investment operations		(1.85	)		2.43			(0.64	)		1.56			2.01			(1.07	)
Less distributions from:
Net investment income		(0.90	)		(0.91	)		(0.82	)		(0.71	)		(0.78	)		(0.77	)
Net realized gains		(0.01	)		(0.26	)		—			—			—			—
Total distributions		(0.91	)		(1.17	)		(0.82	)		(0.71	)		(0.78	)		(0.77	)
Net asset value, end of period		$13.76			$16.52			$15.26			$16.72			$15.87			$14.64
Total returnc		(11.22)%			16.42%			(4.09)%			9.94%			14.33%			(6.84)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.47%			0.46%			0.47%			0.47%			0.47%			0.46%
Expenses net of waiver and payments by affiliatese		0.46%			0.45%			0.45%			0.45%			0.44%			0.46%f
Net investment income		4.08%			4.38%			4.33%			4.22%			4.47%			4.47%
Supplemental data
Net assets, end of period (000’s)		$269,045			$309,330			$612,657			$735,149			$696,227			$604,228
Portfolio turnover rate		20.53%			25.16%			43.22%			20.96%			39.03%			31.53%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

FI-6         Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016				2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$15.91			$14.74			$16.17			$15.38			$14.20				$16.00
Income from investment operationsa:
Net investment incomeb		0.28			0.64			0.65			0.63			0.61				0.65
Net realized and unrealized gains (losses)		(2.08	)		1.66			(1.30	)		0.83			1.31				(1.73	)
Total from investment operations		(1.80	)		2.30			(0.65	)		1.46			1.92				(1.08	)
Less distributions from:
Net investment income		(0.86	)		(0.87	)		(0.78	)		(0.67	)		(0.74	)			(0.72	)
Net realized gains		(0.01	)		(0.26	)		—			—			—				—
Total distributions		(0.87	)		(1.13	)		(0.78	)		(0.67	)		(0.74	)			(0.72	)
Net asset value, end of period		$13.24			$15.91			$14.74			$16.17			$15.38				$14.20
Total returnc		(11.36)%			16.06%			(4.30)%			9.67%			14.02%		��		(7.05)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.72%			0.71%			0.72%			0.72%			0.72%				0.71%
Expenses net of waiver and payments by affiliatese		0.71%			0.70%			0.70%			0.70%			0.69%				0.71%f
Net investment income		3.83%			4.13%			4.08%			3.97%			4.22%				4.22%
Supplemental data
Net assets, end of period (000’s)		$3,527,837			$4,318,156			$4,086,652			$5,041,498			$5,088,556				$4,907,599
Portfolio turnover rate		20.53%			25.16%			43.22%			20.96%			39.03%				31.53%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FI-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$16.32			$15.08			$16.53			$15.71			$14.49			$16.31
Income from investment operationsa:
Net investment incomeb		0.27			0.64			0.64			0.62			0.61			0.65
Net realized and unrealized gains (losses)		(2.12	)		1.71			(1.33	)		0.85			1.33			(1.76	)
Total from investment operations		(1.85	)		2.35			(0.69	)		1.47			1.94			(1.11	)
Less distributions from:
Net investment income		(0.85	)		(0.85	)		(0.76	)		(0.65	)		(0.72	)		(0.71	)
Net realized gains		(0.01	)		(0.26	)		—			—			—			—
Total distributions		(0.86	)		(1.11	)		(0.76	)		(0.65	)		(0.72	)		(0.71	)
Net asset value, end of period		$13.61			$16.32			$15.08			$16.53			$15.71			$14.49
Total returnc		(11.40)%			16.05%			(4.42)%			9.55%			13.87%			(7.15)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.82%			0.81%			0.82%			0.82%			0.82%			0.81%
Expenses net of waiver and payments by affiliatese		0.81%			0.80%			0.80%			0.80%			0.79%			0.81%f
Net investment income		3.73%			4.03%			3.98%			3.87%			4.12%			4.12%
Supplemental data
Net assets, end of period (000’s)		$278,008			$323,582			$294,700			$335,217			$309,935			$306,023
Portfolio turnover rate		20.53%			25.16%			43.22%			20.96%			39.03%			31.53%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

FI-8         Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Income VIP Fund

		Country		Shares		Value
	Common Stocks 36.6%
	Communication Services 2.9%
a	Alphabet Inc., A		United States		10,000	$	14,180,500
	BCE Inc.		Canada		466,000		19,435,689
	Comcast Corp., A		United States		500,000		19,490,000
	Verizon Communications Inc.		United States		1,200,000		66,156,000
							119,262,189
	Consumer Discretionary 0.6%
	General Motors Co.		United States		1,000,000		25,300,000
	Consumer Staples 3.8%
	The Coca-Cola Co.		United States		675,000		30,159,000
	PepsiCo Inc.		United States		300,000		39,678,000
	Philip Morris International Inc.		United States		350,000		24,521,000
	The Procter & Gamble Co.		United States		500,000		59,785,000
							154,143,000
	Energy 3.4%
	BP PLC,ADR		United Kingdom		850,000		19,822,000
	Chevron Corp.		United States		500,000		44,615,000
	Exxon Mobil Corp.		United States		1,000,000		44,720,000
	Royal Dutch Shell PLC, A, ADR		United Kingdom		900,000		29,421,000
a	Weatherford International PLC		United States		931,735		1,835,518
							140,413,518
	Financials 5.3%
	Bank of America Corp.		United States		365,000		8,668,750
	Barclays PLC		United Kingdom		12,500,000		17,634,270
	Citigroup Inc.		United States		200,000		10,220,000
	JPMorgan Chase & Co.		United States		600,000		56,436,000
	MetLife Inc.		United States		535,108		19,542,144
	Morgan Stanley		United States		435,000		21,010,500
	Truist Financial Corp.		United States		500,000		18,775,000
	U.S. Bancorp		United States		550,000		20,251,000
	Wells Fargo & Co.		United States		1,665,000		42,624,000
							215,161,664
	Health Care 7.3%
	AbbVie Inc.		United States		250,000		24,545,000
	AstraZeneca PLC		United Kingdom		455,000		47,351,924
	Bayer AG		Germany		311,750		23,105,946
	Bristol-Myers Squibb Co.		United States		1,000,000		58,800,000
	CVS Health Corp.		United States		520,000		33,784,400
	Johnson & Johnson		United States		300,000		42,189,000
	Merck & Co. Inc.		United States		400,000		30,932,000
	Pfizer Inc.		United States		1,100,000		35,970,000
							296,678,270
	Industrials 2.6%
	Cummins Inc.		United States		100,000		17,326,000
	Honeywell International Inc.		United States		275,000		39,762,250
	Union Pacific Corp.		United States		150,000		25,360,500

Semiannual Report             FI-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Industrials (continued)
	United Parcel Service Inc., B		United States		217,700	$	24,203,886
							106,652,636
	Information Technology 2.7%
	Analog Devices Inc.		United States		260,045		31,891,919
	Intel Corp.		United States		414,307		24,787,988
	Oracle Corp.		United States		38,400		2,122,368
	Texas Instruments Inc.		United States		400,000		50,788,000
							109,590,275
	Materials 2.2%
	Air Products and Chemicals Inc.		United States		46,700		11,276,182
	BASF SE		Germany		600,000		33,698,578
	Rio Tinto PLC, ADR		Australia		800,000		44,944,000
							89,918,760
	Real Estate 0.3%
	Host Hotels & Resorts Inc.		United States		1,000,000		10,790,000
	Utilities 5.5%
	Dominion Energy Inc.		United States		906,638		73,600,873
	DTE Energy Co.		United States		100,000		10,750,000
	Duke Energy Corp.		United States		577,500		46,136,475
	Sempra Energy		United States		275,000		32,238,250
	The Southern Co.		United States		1,200,000		62,220,000
							224,945,598
	Total Common Stocks (Cost $1,324,967,991)						1,492,855,910
b	Equity-Linked Securities 11.5%
	Communication Services 0.4%
c	Barclays Bank PLC into Comcast Corp., 9.00%, 144A		United States		408,000		16,182,873
	Consumer Discretionary 1.6%
c	JPMorgan Chase Bank NA into Target Corp., 9.00%, 144A		United States		250,000		28,653,767
c	Royal Bank of Canada into The Home Depot Inc., 8.50%, 144A		United States		151,500		34,828,237
							63,482,004
	Energy 0.2%
c	Societe Generale SA into Schlumberger Ltd., 9.00%, 144A		United States		429,000		8,893,806
	Financials 1.6%
c	Barclays Bank PLC into Bank of America Corp., 8.50%, 144A		United States		600,000		14,837,176
c	Merrill Lynch International & Co. CV into Wells Fargo &Co., 8.00%, 144A		United States		775,000		21,165,026
c	UBS AG London into MetLife Inc., 7.50%, 144A		United States		800,000		30,256,089
							66,258,291
	Health Care 0.6%
c	UBS AG London into CVS Health Corp., 8.50%, 144A		United States		400,000		25,627,569
	Industrials 0.8%
c	Societe Generale SA into Raytheon Technologies Corp., 8.00%, 144A		United States		548,000		33,642,740

FI-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Shares			Value
b	Equity-Linked Securities (continued)
	Information Technology 6.3%
c	Credit Suisse AG/London into International Business Machines Corp., 7.50%, 144A		United States		160,000		$	19,849,631
c	Credit Suisse AG/London into Cisco Systems Inc., 10.00%, 144A		United States		508,000			23,604,731
c	JPMorgan Chase Bank NA into Apple Inc., 7.00%, 144A		United States		450,000			101,792,321
c	Royal Bank of Canada into Intel Corp., 8.00%, 144A		United States		1,100,000			59,115,202
c	UBS AG London into Texas Instruments Inc., 8.50%, 144A		United States		400,000			50,958,735
								255,320,620
	Total Equity-Linked Securities (Cost $481,232,090)							469,407,903
	Convertible Preferred Stocks 3.1%
	Communication Services 0.1%
a,c	2020 Cash Mandatory Exchangeable Trust, 5.25%, cvt. pfd., 144A		United States		5,000			5,112,750
	Financials 0.4%
	Bank of America Corp., 7.25%, cvt. pfd., L		United States		4,666			6,262,705
a	FNMA, 5.375%, cvt. pfd		United States		475			11,162,500
								17,425,205
	Information Technology 1.4%
	Broadcom Inc., 8.00%, cvt. pfd., A		United States		50,000			55,717,500
	Utilities 1.2%
	NextEra Energy Inc., 5.279%, cvt. pfd		United States		400,000			16,980,000
	Sempra Energy, 6.75%, cvt. pfd., B		United States		200,000			19,652,000
	The Southern Co., 6.75%, cvt. pfd		United States		280,000			12,336,800
								48,968,800
	Total Convertible Preferred Stocks (Cost $146,617,041)							127,224,255
	Preferred Stocks (Cost $9,900,000) 0.3%
	Financials 0.3%
d	JPMorgan Chase & Co., 6.00%, pfd., EE		United States		396,000			10,850,400
					Principal Amount	*
	Convertible Bonds (Cost $7,887,235) 0.3%
	Industrials 0.3%
	Southwest Airlines Co., cvt., senior note, 1.25%, 5/01/25		United States	$	8,500,000			10,251,264
	Corporate Bonds 32.9%
	Communication Services 5.5%
	AT&T Inc., senior bond, 4.125%, 2/17/26		United States		12,000,000			13,685,241
c	CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 144A, 5.50%, 5/01/26		United States		10,000,000			10,385,950
c	Diamond Sports Group LLC/Diamond Sports Finance Co., first lien, 144A, 5.375%, 8/15/26		United States		11,000,000			8,029,120
	DISH DBS Corp.,
	senior bond, 5.875%, 7/15/22		United States		27,000,000			27,513,675
	senior bond, 5.00%, 3/15/23		United States		21,000,000			20,979,315
	senior note, 5.875%, 11/15/24		United States		9,400,000			9,360,379

Semiannual Report             FI-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds (continued)
	Communication Services (continued)
	Netflix Inc., senior bond, 4.875%, 4/15/28		United States	$	22,000,000	$	23,559,800
	Sprint Communications Inc.,
	senior bond, 11.50%, 11/15/21		United States		30,000,000		33,293,250
	senior note, 7.00%, 8/15/20		United States		7,500,000		7,542,975
	senior note, 6.00%, 11/15/22		United States		6,300,000		6,653,525
	Sprint Corp.,
	senior bond, 7.875%, 9/15/23		United States		12,500,000		14,093,687
	senior bond, 7.125%, 6/15/24		United States		8,200,000		9,273,708
	senior note, 7.625%, 3/01/26		United States		7,500,000		8,870,137
c	Univision Communications Inc.,
	senior note, 144A, 6.625%, 6/01/27		United States		8,500,000		8,149,375
	senior secured note, first lien, 144A, 5.125%, 5/15/23		United States		15,000,000		15,182,775
	senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		7,140,000		6,747,336
							223,320,248
	Consumer Discretionary 2.5%
c,e	Colt Merger Sub Inc., senior secured note, 144A, 6.25%, 7/01/25		United States		18,000,000		17,904,600
	Ford Motor Co., senior note, 4.346%, 12/08/26		United States		13,500,000		12,633,840
	Ford Motor Credit Co. LLC, senior note, 5.125%, 6/16/25		United States		20,000,000		20,095,600
	General Motors Co.,
	senior bond, 5.15%, 4/01/38		United States		16,000,000		15,348,908
	senior note, 6.125%, 10/01/25		United States		2,100,000		2,362,630
c	Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		5,000,000		3,600,000
c	Shea Homes LP/Shea Homes Funding Corp., senior bond, 144A, 6.125%, 4/01/25		United States		9,580,000		9,662,819
c	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
	senior bond, 144A, 5.50%, 3/01/25		United States		13,200,000		12,120,174
	senior bond, 144A, 5.25%, 5/15/27		United States		10,000,000		8,666,300
							102,394,871
	Consumer Staples 1.3%
	BAT Capital Corp.,
	senior note, 3.222%, 8/15/24		United Kingdom		10,000,000		10,721,391
	senior note, 3.557%, 8/15/27		United Kingdom		20,000,000		21,653,390
	Kraft Heinz Foods Co., senior bond, 4.625%, 1/30/29		United States		10,600,000		11,432,478
c	Post Holdings Inc.,
	senior bond, 144A, 5.00%, 8/15/26		United States		7,500,000		7,542,562
	senior bond, 144A, 5.625%, 1/15/28		United States		2,500,000		2,593,288
							53,943,109
	Energy 2.7%
	Calumet Specialty Products Partners LP/Calumet Finance Corp.,
	senior note, 7.625%, 1/15/22		United States		8,000,000		7,668,120
	senior note, 7.75%, 4/15/23		United States		2,000,000		1,867,290
c	senior note, 144A, 11.00%, 4/15/25		United States		30,000,000		29,174,700
	HighPoint Operating Corp.,
	senior bond, 7.00%, 10/15/22		United States		17,937,000		4,367,928
	senior note, 8.75%, 6/15/25		United States		26,600,000		6,517,000

FI-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds (continued)
	Energy (continued)
	Kinder Morgan Inc., senior bond, 7.75%, 1/15/32		United States	$	21,000,000	$	29,376,920
e	Occidental Petroleum Corp., senior note, 8.00%, 7/15/25		United States		5,000,000		5,031,250
c	Weatherford International Ltd., senior note, 144A, 11.00%, 12/01/24		United States		39,344,000		27,540,800
						111,544,008
	Financials 3.4%
	Bank of America Corp.,
	f junior sub. bond, AA, 6.10% to 3/17/25, FRN thereafter, Perpetual		United States		8,000,000		8,445,560
	f junior sub. bond, X, 6.25% to 9/05/24, FRN thereafter, Perpetual		United States		6,000,000		6,222,462
	senior bond, 3.419% to 12/20/27, FRN thereafter, 12/20/28		United States		10,000,000		11,143,800
	Capital One Financial Corp., senior sub. note, 4.20%, 10/29/25		United States		15,500,000		17,220,496
	Citigroup Inc., sub. bond, 4.125%, 7/25/28		United States		18,500,000		20,923,152
	The Goldman Sachs Group Inc., senior note, 3.272% to 9/29/24, FRN thereafter, 9/29/25		United States		15,500,000		16,719,883
	HSBC Holdings PLC, senior note, 4.292% to 9/12/25, FRN thereafter, 9/12/26		United Kingdom		18,500,000		20,603,178
f	JPMorgan Chase & Co.,
	g junior sub. bond, FRN, 4.23%, (3-month USD LIBOR + 3.47%), Perpetual		United States		19,559,000		17,842,480
	junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		3,200,000		3,234,133
f	Morgan Stanley, junior sub. bond, 5.55% to 7/15/20, FRN thereafter, Perpetual		United States		2,064,000		1,897,233
	Prudential Financial Inc., junior sub. bond, 5.70% to 9/15/28, FRN thereafter, 9/15/48		United States		5,000,000		5,620,538
f	Wells Fargo & Co., junior sub. bond, S, 5.90% to 6/15/24, FRN thereafter, Perpetual		United States		6,600,000		6,553,943
						136,426,858
	Health Care 13.6%
c	AbbVie Inc., senior bond, 144A, 3.80%, 3/15/25		United States		17,000,000		18,975,228
c	Bausch Health Cos. Inc.,
	senior bond, 144A, 6.125%, 4/15/25		United States		9,400,000		9,547,392
	senior note, 144A, 5.50%, 3/01/23		United States		11,270,000		11,243,008
	senior note, 144A, 5.875%, 5/15/23		United States		1,950,000		1,946,646
	senior note, 144A, 9.00%, 12/15/25		United States		5,000,000		5,392,050
	senior note, first lien, 144A, 7.00%, 3/15/24		United States		4,500,000		4,678,065
	senior secured note, first lien, 144A, 5.50%, 11/01/25		United States		35,000,000		35,807,100
c	Bayer U.S. Finance II LLC, senior note, 144A, 4.25%, 12/15/25		Germany		15,000,000		17,246,445
c	Bristol-Myers Squibb Co., senior bond, 144A, 3.40%, 7/26/29		United States		8,000,000		9,331,230
c	CHS/Community Health Systems Inc.,
	senior note, 144A, 9.875%, 6/30/23		United States		94,701,000		74,017,828
	senior note, 144A, 8.125%, 6/30/24		United States		49,344,000		33,214,187
	senior note, 144A, 8.00%, 12/15/27		United States		32,000,000		30,666,720
	senior note, 144A, 6.875%, 4/01/28		United States		91,000,000		34,068,125
	senior secured note, 144A, 6.625%, 2/15/25		United States		39,000,000		36,757,500
	senior secured note, 144A, 8.00%, 3/15/26		United States		12,500,000		11,827,500
	Cigna Corp., senior note, 3.75%, 7/15/23		United States		13,292,000		14,438,833
	CVS Health Corp.,
	senior bond, 4.30%, 3/25/28		United States		8,000,000		9,358,823
	senior bond, 5.05%, 3/25/48		United States		3,900,000		5,081,297
	senior note, 4.10%, 3/25/25		United States		5,100,000		5,768,787

Semiannual Report             FI-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds (continued)
	Health Care (continued)
	DaVita Inc.,
	senior bond, 5.125%, 7/15/24		United States	$	5,000,000	$	5,092,500
	senior bond, 5.00%, 5/01/25		United States		4,000,000		4,094,000
c	Endo Dac/Endo Finance LLC/Endo Finco Inc.,
	secured note, second lien, 144A, 9.50%, 7/31/27		United States		5,273,000		5,603,617
	senior note, 144A, 6.00%, 6/30/28		United States		7,094,000		4,611,100
	HCA Inc.,
	senior bond, 5.875%, 5/01/23		United States		7,500,000		8,129,850
	senior secured note, first lien, 5.00%, 3/15/24		United States		10,400,000		11,571,452
c	Mallinckrodt International Finance SA, first lien, senior note, 144A, 10.00%, 4/15/25		United States		2,500,000		2,118,750
c	Mallinckrodt International Finance SA/Mallinckrodt CB LLC,
	senior note, 144A, 5.75%, 8/01/22		United States		12,100,000		3,055,250
	senior note, 144A, 5.50%, 4/15/25		United States		7,600,000		1,277,750
	Mylan NV, senior note, 3.95%, 6/15/26		United States		10,000,000		11,189,159
c	Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27		United States		8,429,000		8,678,035
	Tenet Healthcare Corp.,
	secured note, second lien, 5.125%, 5/01/25		United States		2,500,000		2,415,525
	senior note, 8.125%, 4/01/22		United States		30,000,000		31,554,000
	senior note, 6.75%, 6/15/23		United States		58,200,000		57,821,700
	c senior note, second lien, 144A, 6.25%, 2/01/27		United States		29,000,000		28,872,980
							555,452,432
	Industrials 1.3%
c	Ashtead Capital Inc., second lien, 144A, 4.25%, 11/01/29		United Kingdom		4,500,000		4,511,250
	Raytheon Technologies Corp., senior note, 3.95%, 8/16/25		United States		15,000,000		17,138,389
	United Rentals North America Inc., senior bond, 4.875%, 1/15/28		United States		18,000,000		18,478,170
c	WESCO Distribution Inc., senior note, 144A, 7.125%, 6/15/25		United States		14,000,000		14,800,800
							54,928,609
	Information Technology 0.3%
c	CommScope Inc., senior bond, 144A, 5.50%, 6/15/24		United States		10,000,000		10,183,300
	Materials 1.3%
c	Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24		Mexico		9,665,000		9,595,509
c	Cleveland-Cliffs Inc., senior secured note, 144A, 6.75%, 3/15/26		United States		5,000,000		4,837,500
c	FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 5.125%, 5/15/24		Australia		6,700,000		6,918,453
c	Mauser Packaging Solutions Holding Co.,
	secured note, 144A, 5.50%, 4/15/24		United States		10,000,000		9,843,625
	senior note, 144A, 7.25%, 4/15/25		United States		23,000,000		20,924,020
							52,119,107
	Real Estate 0.7%
	Equinix Inc., senior bond, 5.375%, 5/15/27		United States		11,000,000		12,026,465
	Iron Mountain Inc., senior sub. bond, 5.75%, 8/15/24		United States		16,000,000		16,203,440
							28,229,905
	Utilities 0.3%
	Calpine Corp., senior note, 5.50%, 2/01/24		United States		11,375,000		11,410,433
	Total Corporate Bonds (Cost $1,392,803,100)						1,339,952,880

FI-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Principal Amount*		Value
g,h	Senior Floating Rate Interests (Cost $16,539,326) 0.2%
	Consumer Discretionary 0.2%
	Belk Inc., Term Loans, 7.75%, (3-month USD LIBOR + 6.75%), 7/31/25		United States	$	17,575,134	$	6,406,136
	U.S. Government and Agency Securities 4.5%
	U.S. Treasury Note,
	2.375%, 3/15/21		United States		75,000,000		76,168,945
	2.75%, 4/30/23		United States		25,000,000		26,817,871
	2.75%, 5/31/23		United States		50,000,000		53,742,188
	2.875%, 5/31/25		United States		25,000,000		28,154,785
	Total U.S. Government and Agency Securities (Cost $174,892,363)						184,883,789
	Mortgage-Backed Securities 4.5%
	Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 0.2%
	FHLMC 30 Year, 4.00%, 5/01/49 - 10/01/49		United States		7,169,412		7,648,238
	Federal National Mortgage Association (FNMA) Fixed Rate 0.8%
	FNMA 30 Year, 3.00%, 7/01/50		United States		4,980,000		5,251,842
	FNMA 30 Year, 4.00%, 10/01/47 - 2/01/50		United States		28,016,940		29,837,235
						35,089,077
	Government National Mortgage Association (GNMA) Fixed Rate 3.5%
	GNMA II SF 30 Year, 3.50%, 1/20/50		United States		23,888,979		25,268,036
	GNMA II SF 30 Year, 3.50%, 6/20/50		United States		66,530,000		70,677,437
	GNMA II SF 30 Year, 4.00%, 9/20/49 - 12/20/49		United States		32,169,715		34,116,030
	GNMA II SF 30 Year, 4.00%, 1/20/50		United States		11,693,863		12,415,067
						142,476,570
	Total Mortgage-Backed Securities (Cost $184,095,753)						185,213,885
				Shares
	Escrows and Litigation Trusts (Cost $62,603) 0.0%
a,i	Motors Liquidation Co., Escrow Account, cvt. pfd., C		United States		1,400,000		—
		Number of Contracts		Notional Amount#
	Options Purchased (Cost $19,402,038) 0.3%
	Puts - Exchange-Traded
	S&P 500 Index, September Strike Price $3,000.00, Expires 9/18/20		1,000		100,000		12,037,000
	Total Investments before Short Term Investments (Cost $3,758,399,540)						3,839,083,422
		Country		Shares
	Short Term Investments 6.1%
	Money Market Funds (Cost $249,194,489) 6.1%
j,k	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		249,194,489		249,194,489

Semiannual Report             FI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

		Country		Shares		Value
	Short Term Investments (continued)
l	Investments from Cash Collateral Received for Loaned Securities 0.0%†
	Money Market Funds (Cost $114,000) 0.0%†
j,k	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		114,000	$	114,000
				Principal Amount*
	Repurchase Agreements (Cost $29,677) 0.0%†
m	Joint Repurchase Agreement, 0.07%, 7/01/20 (Maturity Value $29,677)
	BNP Paribas Securities Corp.
	Collateralized by U.S. Treasury Bonds, 7.875%, 2/15/21; U.S. Treasury Notes, 0.125% - 2.875%, 12/31/20 - 1/31/24; and U.S. Treasury Strips, 8/15/20 -11/15/22 (valued at $30,271)		United States	$	29,677		29,677
	Total Investments from Cash Collateral Received for Loaned Securities (Cost $143,677)						143,677
	Total Investments (Cost $4,007,737,706) 100.3%						4,088,421,588
	Options Written (0.1)%						(3,991,000	)
	Other Assets, less Liabilities (0.2)%						(9,539,878	)
	Net Assets 100.0%					$	4,074,890,710
		Number of Contracts		Notional Amount#
n	Options Written (Premiums received $6,297,961) (0.1)%
	Puts - Exchange-Traded
	S&P 500 Index, September Strike Price $2,600.00, Expires 9/18/20		1,000		100,000		(3,991,000	)

FI-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

See Abbreviations on page FI-31.

^†Rounds to less than 0.1% of net assets.

^*The principal amount is stated in U.S. dollars unless otherwise indicated.

^#Notional amount is the number of units specified in the contract, and can include currency units, bushels, shares, pounds, barrels or other units. Currency units are stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^bSee Note 1(f) regarding equity-linked securities.

^cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $1,112,371,415, representing 27.3% of net assets.

^dA portion or all of the security is on loan at June 30, 2020. See Note 1(g).

^eSecurity purchased on a when-issued basis. See Note 1(d).

^fPerpetual security with no stated maturity date.

^gThe coupon rate shown represents the rate at period end.

^hSee Note 1(h) regarding senior floating rate interests.

ⁱFair valued using significant unobservable inputs. See Note 11 regarding fair value measurements.

jSee Note 3(e) regarding investments in affiliated management investment companies.

^kThe rate shown is the annualized seven-day effective yield at period end.

^lSee Note 1(g) regarding securities on loan.

^mSee Note 1(c) regarding joint repurchase agreement.

ⁿSee Note 1(e) regarding written options.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report               FI-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Income VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	3,758,399,540
Cost - Non-controlled affiliates (Note 3e)		249,308,489
Cost - Unaffiliated repurchase agreements		29,677
Value - Unaffiliated issuers+	$	3,839,083,422
Value - Non-controlled affiliates (Note 3e)		249,308,489
Value - Unaffiliated repurchase agreements		29,677
Cash		4,675,862
Receivables:
Investment securities sold		213,058
Capital shares sold		1,515,795
Dividends and interest		21,945,631
Other assets		3,878
Total assets		4,116,775,812
Liabilities:
Payables:
Investment securities purchased		33,547,935
Capital shares redeemed		1,425,480
Management fees		1,497,626
Distribution fees		819,511
Trustees’ fees and expenses		2,324
Options written, at value (premiums received $6,297,961)		3,991,000
Payable upon return of securities loaned		143,677
Accrued expenses and other liabilities		457,549
Total liabilities		41,885,102
Net assets, at value	$	4,074,890,710
Net assets consist of:
Paid-in capital	$	4,254,277,890
Total distributable earnings (losses)		(179,387,180	)
Net assets, at value	$	4,074,890,710
Class 1:
Net assets, at value	$	269,045,044
Shares outstanding		19,555,215
Net asset value and maximum offering price per share		$13.76
Class 2:
Net assets, at value	$	3,527,837,470
Shares outstanding		266,422,343
Net asset value and maximum offering price per share		$13.24
Class 4:
Net assets, at value	$	278,008,196
Shares outstanding		20,433,394
Net asset value and maximum offering price per share		$13.61
+Includes securities loaned	$	139,740

FI-18     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Income VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers		$   36,052,149
Non-controlled affiliates (Note 3e)		359,942
Interest:
Unaffiliated issuers		61,535,391
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		26,259
Non-controlled affiliates (Note 3e)		11,050
Total investment income		97,984,791
Expenses:
Management fees (Note 3a)		9,857,734
Distribution fees: (Note 3c)
Class 2		4,705,187
Class 4		506,943
Custodian fees (Note 4)		23,359
Reports to shareholders		218,614
Professional fees		28,283
Trustees’ fees and expenses		15,124
Other		37,961
Total expenses		15,393,205
Expense reductions (Note 4)		(34,169	)
Expenses waived/paid by affiliates (Note 3e)		(309,781	)
Net expenses		15,049,255
Net investment income		82,935,536
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(339,468,856	)
Written options		368,220
Foreign currency transactions		48,604
Net realized gain (loss)		(339,052,032	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(304,789,908	)
Translation of other assets and liabilities denominated in foreign currencies		(3,134	)
Written options		2,306,961
Net change in unrealized appreciation (depreciation)		(302,486,081	)
Net realized and unrealized gain (loss)		(641,538,113	)
Net increase (decrease) in net assets resulting from operations		$(558,602,577	)
*Foreign taxes withheld on dividends		$        732,781

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report               FI-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Statements of Changes in Net Assets

	Franklin Income VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	82,935,536		$	211,417,673
Net realized gain (loss)		(339,052,032	)		40,047,821
Net change in unrealized appreciation (depreciation)		(302,486,081	)		514,968,839
Net increase (decrease) in net assets resulting from operations		(558,602,577	)		766,434,333
Distributions to shareholders:
Class 1		(16,535,949	)		(26,604,329	)
Class 2		(219,850,517	)		(301,656,285	)
Class 4		(16,548,919	)		(21,101,452	)
Total distributions to shareholders		(252,935,385	)		(349,362,066	)
Capital share transactions: (Note 2)
Class 1		11,324,652			(360,324,820	)
Class 2		(84,014,489	)		(103,843,936	)
Class 4		8,051,378			4,153,985
Total capital share transactions		(64,638,459	)		(460,014,771	)
Net increase (decrease) in net assets		(876,176,421	)		(42,942,504	)
Net assets:
Beginning of period		4,951,067,131			4,994,009,635
End of period	$	4,074,890,710		$	4,951,067,131

FI-20     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Income VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Income VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.     Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple

exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV. Investments in repurchase agreements are valued at cost, which approximates fair value.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur

Semiannual Report               FI-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

a.  Financial Instrument Valuation (continued)

between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Joint Repurchase Agreement

The Fund enters into a joint repurchase agreement whereby its uninvested cash balance is deposited into a joint cash account with other funds managed by the investment manager or an affiliate of the investment manager and is used to invest in one or more repurchase agreements. The value and face amount of the joint repurchase agreement are allocated to the funds based on their pro-rata interest. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the funds, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Fund, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Fund may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. The joint repurchase agreement held by the Fund at period end, as indicated in the Statement of Investments, had been entered into on June 30, 2020.

FI-22     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

d.   Securities Purchased on a When-Issued Basis

The Fund purchases securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

e.   Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities.

The Fund purchased or wrote exchange traded option contracts primarily to gain exposure to equity price risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration

or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.

See Note 9 regarding other derivative information.

f.   Equity-Linked Securities

The Fund invests in equity-linked securities. Equity-linked securities are hybrid financial instruments that generally combine both debt and equity characteristics into a single note form. Income received from equity-linked securities is recorded as realized gains in the Statement of Operations and may be based on the performance of an underlying equity security, an equity index, or an option position. The risks of investing in equity-linked securities include unfavorable price movements in the underlying security and the credit risk of the issuing financial institution. There may be no guarantee of a return of principal with equity-linked securities and the appreciation potential may be limited. Equity-linked securities may be more volatile and less liquid than other investments held by the Fund.

g.   Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund, and/or a joint repurchase agreement. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

Semiannual Report               FI-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

1.   Organization and Significant Accounting

Policies (continued)

h.   Senior Floating Rate Interests

The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

i.   Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial

statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

j.   Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

k.   Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

l.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust.

Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		1,059,465		$	15,551,192			1,872,752		$	30,211,199
Shares issued in reinvestment of distributions		1,187,927			16,535,949			1,709,790			26,604,329
Shares redeemed		(1,412,137	)		(20,762,489	)		(25,004,206	)		(417,140,348	)
Net increase (decrease)		835,255		$	11,324,652			(21,421,664	)	$	(360,324,820	)
Class 2 Shares:
Shares sold		8,367,886		$	119,310,211			16,435,568		$	256,969,286
Shares issued in reinvestment of distributions		16,406,755			219,850,517			20,097,021			301,656,285
Shares redeemed		(29,700,434	)		(423,175,217	)		(42,487,994	)		(662,469,507	)
Net increase (decrease)		(4,925,793	)	$	(84,014,489	)		(5,955,405	)	$	(103,843,936	)
Class 4 Shares:
Shares sold		1,086,206		$	16,185,257			2,582,430		$	41,387,759
Shares issued in reinvestment of distributions		1,201,810			16,548,919			1,370,224			21,101,452
Shares redeemed		(1,686,095	)		(24,682,798	)		(3,658,374	)		(58,335,226	)
Net increase (decrease)		601,921		$	8,051,378			294,280		$	4,153,985

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

Semiannual Report             FI-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

3.  Transactions with Affiliates (continued)

a. Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.625%	Up to and including $100 million
0.500%	Over $100 million, up to and including $250 million
0.450%	Over $250 million, up to and including $7.5 billion
0.440%	Over $7.5 billion, up to and including $10 billion
0.430%	Over $10 billion, up to and including $12.5 billion
0.420%	Over $12.5 billion, up to and including $15 billion
0.400%	In excess of $15 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.456% of the Fund’s average daily net assets.

b.  Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates
																Dividends
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$83,971,136		$736,334,414		$ (571,111,061)		$      —		$      —		$249,194,489		249,194,489		$359,942
																Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		747,000		95,007,000		(95,640,000)		—		—		114,000		114,000		11,050
Total Affiliated Securities		$84,718,136		$831,341,414		$(666,751,061)		$      —		$      —		$249,308,489				$370,992

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	4,000,093,993
Unrealized appreciation	$	470,838,273
Unrealized depreciation		(386,501,678)
Net unrealized appreciation (depreciation)	$	84,336,595

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of equity-linked securities, foreign currency transactions and wash sales.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $852,555,912 and $1,186,554,240, respectively.

Semiannual Report             FI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

6.  Investment Transactions (continued)

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $143,677 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7.  Credit Risk

At June 30, 2020, the Fund had 24.0% of its portfolio invested in high yield, senior secured floating rate loans, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

8.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives			Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Equity contracts	Investments in securities, at value		$12,037,000a	Options written, at value		$3,991,000

^aPurchased option contracts are included in investments in securities, at value in the Statement of Assets and Liabilities.

For the period ended June 30, 2020, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Period			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Equity contracts	Investments	$	(10,604,077	)a	Investments	$	15,369,038	a
	Written options		368,220		Written options		2,306,961
Totals		$	(10,235,857	)		$	17,675,999

^aPurchased option contracts are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the period ended June 30, 2020, the average month end notional amount of options represented 307,143 shares.

See Note 1(e) regarding derivative financial instruments.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

10.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

11.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

Semiannual Report             FI-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

11.  Fair Value Measurements (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Communication Services	$	119,262,189	$	5,112,750	$	—	$	124,374,939
Financials		214,640,499		28,796,770		—		243,437,269
Health Care		226,220,400		70,457,870		—		296,678,270
Materials		56,220,182		33,698,578		—		89,918,760
All Other Equity Investments		876,521,327		��		—		876,521,327
Equity-Linked Securities		—		469,407,903		—		469,407,903
Convertible Bonds		—		10,251,264		—		10,251,264
Corporate Bonds		—		1,339,952,880		—		1,339,952,880
Senior Floating Rate Interests		—		6,406,136		—		6,406,136
U.S. Government and Agency Securities		—		184,883,789		—		184,883,789
Mortgage-Backed Securities		—		185,213,885		—		185,213,885
Escrows and Litigation Trusts		—		—		—c		—
Options Purchased		12,037,000		—		—		12,037,000
Short Term Investments		249,194,489		143,677		—		249,338,166
Total Investments in Securities	$	1,754,096,086	$	2,334,325,502	$	—	$	4,088,421,588
Liabilities:
Other Financial Instruments:
Options Written	$	3,991,000	$	—	$	—	$	3,991,000

^a For detailed categories, see the accompanying Statement of Investments.

^b Includes common, preferred and convertible preferred stocks.

^c Includes securities determined to have no value at June 30, 2020.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period.

12.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

13.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

FI-30         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

Abbreviations

Currency		Selected Portfolio
USD	United States Dollar	ADR	American Depositary Receipt
		FRN	Floating Rate Note
		LIBOR	London InterBank Offered Rate

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Franklin Mutual Global Discovery VIP Fund

This semiannual report for Franklin Mutual Global Discovery VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -21.29% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             MGD-1

FRANKLIN MUTUAL GLOBAL DISCOVERY VIP FUND

Fund Goal and Main Investments

The Fund’s investment goal is capital appreciation. Under normal market conditions, the Fund invests primarily in U.S. and foreign equity securities that we believe are available at market prices less than their intrinsic value. The equity securities in which the Fund invests are primarily common stock, with a current focus on mid- and large cap companies. To a lesser extent, the Fund also invests in merger arbitrage securities and the debt and equity of distressed companies. The Fund may invest substantially and potentially up to 100% of its assets in foreign securities, which may include sovereign debt and participations in foreign government debt.

Geographic Composition*

Based on Total Net Assets as of 6/30/20

*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Value securities may not increase in price as anticipated, or may decline further in value. The Fund’s investments in foreign securities involve more risks than U.S. securities, including political and economic developments, trading practices, availability of information, limited markets, and currency exchange fluctuations and policies. Because the Fund may invest at least a significant portion of its assets in companies in a specific region, including Europe, the Fund is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Derivatives involve costs and can create economic leverage in the Fund’s portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as gains) in an amount that exceeds the Fund’s initial investment. The Fund’s investments in companies engaged in mergers, reorganizations or liquidations also involve special risks as pending deals may not be completed on time or on favorable terms, as well as lower-rated bonds, which entail higher credit risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s benchmark, the MSCI World Index posted a -5.48% total return for the same period.¹

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

MGD-2     Semiannual Report

FRANKLIN MUTUAL GLOBAL DISCOVERY VIP FUND

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI All Country World Index, posted a -5.99% total return during the six months under review.¹ Stocks fell sharply in early 2020 as countries around the world implemented lockdown measures in an effort to slow the spread of the novel coronavirus (COVID-19). Global supply chain disruptions, business and personal restrictions, and subdued consumer spending drove many investors to sell equity holdings in favor of perceived safe investments such as government bonds and cash. While global equities, notably in the U.S., rebounded in April and May amid optimism about easing lockdown restrictions, concerns about a second wave of infections hindered equities in June, as investors weighed the possibility of renewed restrictions.

In the U.S., government mandates to mitigate the COVID-19 pandemic severely impacted the economy beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April, as many businesses, particularly those involved in hospitality, retail and travel, announced mass layoffs.² According to the National Bureau of Economic Research, the longest U.S. economic expansion in history ended in February 2020 as the country slipped into a severe recession. Nonetheless, near period-end, there were signs that a recovery was underway, as jobless claims fell considerably from their peak in early April, retail sales rose sharply in May, and the unemployment rate fell to 11.1% in June.² Along with optimism about improved treatments and potential vaccines for COVID-19, the positive economic signals contributed to a significant equity rebound in April and May. However, an increase in COVID-19 infections in many states throughout June pressured U.S. stocks.

The U.S. Federal Reserve (Fed) made significant efforts to support the U.S. economy. In March 2020, as the pandemic began to severely impact the economy and financial markets, the Fed implemented two emergency rate cuts, lowering the federal funds target rate to a range of 0.00%–0.25%, and announced sweeping quantitative easing measures aimed at ensuring credit flow to borrowers and supporting credit markets with unlimited amounts of bond purchasing.

In the eurozone, some analysts forecasted a significant contraction in 2020, particularly in southern European countries, as the magnitude of the economic disruption caused by the pandemic became apparent. European developed market equities, as measured by the MSCI

Europe Index, posted a -12.43% total return for the period.¹ To stimulate growth, the European Central Bank implemented a broad bond-buying program, and many countries passed fiscal stimulus measures.

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index, posted a -5.51% total return during the six-month period.¹ The onset of the pandemic brought dramatically slower economic activity in Asia, as businesses halted operations and manufacturing and export activity declined sharply in the region’s major economies. Asian markets generally advanced toward period-end, bolstered by fiscal stimulus measures and economies reopening throughout the region.

Emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a -9.67% total return due primarily to the COVID-19 pandemic.¹ A sharp decrease in prices for oil and other natural resources also hurt emerging market economies reliant on these exports. In the last quarter of the reporting period, however, investor optimism led to a stock rally, particularly in emerging market countries that had successfully lowered infection rates.

Investment Strategy

At Franklin Mutual Advisors, we are committed to our distinctive value approach to investing. Our major investment strategy is investing in undervalued stocks. When selecting undervalued equities, we are attracted to what we believe are fundamentally strong companies with healthy balance sheets, high-quality assets, substantial free cash flow and shareholder-oriented management teams and whose stocks are trading at discounts to our assessment of the companies’ intrinsic or business value. We also look for asset-rich companies whose shares may be trading at depressed levels due to concerns over short-term earnings disappointments, litigation, management strategy or other perceived negatives. While the vast majority of our undervalued equity investments are made in publicly traded companies globally, we may invest occasionally in privately held companies as well. Our portfolio selection process generally includes an assessment of the potential impacts of any material environmental, social and governance (ESG) factors on the long-term risk and return profile of a company.

We complement this more traditional investment strategy with two others. One is distressed investing, which is complex and can take many forms. The most common distressed investment the Fund undertakes is the purchase

2. Source: U.S. Bureau of Labor Statistics.

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of financially troubled or bankrupt companies’ debt at a substantial discount to face value. After the financially distressed company is reorganized, often in bankruptcy court, the old debt is typically replaced with new securities issued by the financially stronger company.

The other piece of our investment strategy is participating in arbitrage situations, another highly specialized field. When companies announce proposed mergers or takeovers, commonly referred to as “deals,” the target company may trade at a discount to the bid it ultimately accepts. One form of arbitrage involves purchasing the target company’s stock when it is trading below the value we believe it would receive in a deal. In keeping with our commitment to a relatively conservative investment approach, we typically focus our arbitrage efforts on announced deals, and eschew rumored deals or other situations we consider relatively risky.

In addition, it is our practice to hedge the Fund’s currency exposure when we deem it advantageous for our shareholders.

Manager’s Discussion

The novel coronavirus (COVID-19) pandemic has significantly altered our way of life, although the market indexes would suggest that it is business as usual. Stocks have rallied off the March 23 market bottom and are within range of the pre-pandemic, all-time highs achieved earlier in the year. While the economy has reopened, the recovery is likely to be uneven. The question that we wrestle with daily is what does this scenario mean for equities in general and value stocks in particular?

As markets rose sharply in April, investors moved back into the growth stocks that propelled the market to the all-time highs of January. In late May, however, there was a turn in market sentiment resulting in value briefly outperforming growth. Undervalued stocks often benefit in periods of improving economic activity or stabilization as business prospects improve. Increasing demand across the economy, especially in cyclical sectors, can provide a tailwind for these companies and drive shareholder value. This is a scenario that often occurs off an economic bottom, and we are positioning our portfolios to capitalize on this trend.

The second-quarter earnings reporting season (occurring in July and August) marks the first period with the full impact of the economic lockdowns and will provide a more complete view into the pandemic’s impact on corporate statements. Many financial officers withdrew full-year 2020 guidance, as they reported first-quarter results, due to limited revenue

Top 10 Sectors/Industries
6/30/20
	% of Total Net Assets
Pharmaceuticals		11.8%
Oil, Gas & Consumable Fuels		9.0%
Banks		7.2%
Insurance		6.8%
Technology Hardware, Storage & Peripherals		4.8%
Software		4.1%
Tobacco		3.9%
Health Care Providers & Services		3.8%
Automobiles		3.3%
Diversified Financial Services		3.2%

visibility. As a result, the path ahead for stocks is less clear. We remain cautious amid these elevated risks.

Our traditional value equity investment approach is complemented with two other strategies: distressed investing and merger arbitrage.

Within our distressed credit strategy, we targeted companies and industries directly impacted by the coronavirus pandemic. The robust government fiscal and monetary intervention have limited the number of attractive options, but we have found opportunities in the energy sector and the retail and travel industries. Although each situation is unique, these securities have strong collateral packages and covenant protections or other features that we believe make them substantially more attractive than the broad array of available distressed debt.

Within merger arbitrage, which involves trading the stocks of companies involved in a merger or acquisition (M&A), activity has slowed significantly since the onset of the pandemic. Deal terms agreed to before the virus emerged have become unbalanced and are now more favorable for sellers than they are for buyers. Not surprisingly, some of these proposals have become embroiled in litigation. Also, M&A activity has slowed as the economic realities of the coronavirus get priced into the market, and bankers are challenged to conduct due diligence remotely. As the period ended, we began to see signs that transactions activity might resume, but we would expect the second half of the year to be focused on resolving pending deals, rather than significant growth in new ones.

Fund Performance

Turning to Fund performance, investments that detracted included U.S.-based companies Wells Fargo, American

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International Group (AIG; not held at period-end) and Hartford Financial Services Group.

The shares of diversified financial services company Wells Fargo were pulled down by negative investor sentiment for financials, which have trailed the broader market rally from the March 23 bottom. Concerns about a possible dividend cut as bank earnings have come under pressure, and speculation about the Fed moving to negative interest rates—subsequently refuted by Fed Chairman Jerome Powell—contributed to the selloff. Earlier in the period, management reported year-end 2019 earnings that fell well short of consensus estimates.

Shares of insurer AIG retreated as COVID-19 concerns and a lack of clarity on forward guidance related to expenses and investment income contributed to negative investor sentiment. The stock initially rallied following the company’s first-quarter earnings call at which management revealed that the majority of its property policies—which include coverage for business interruption—contained exclusions for losses related to viruses.

Shares of insurance products provider Hartford Financial Services Group trended down on investor concerns about COVID-19 exposure within the company’s various insurance lines. Management asserted that significant losses on business interruption coverages are unlikely because of existing policy language containing virus exclusions in most policies. Nevertheless, there has been a surge in property claims attributable to the pandemic, and management acknowledged there could be higher loss costs, litigation activity and legal expenses. Share repurchases totaled $150 million in 2020’s first quarter, but like most companies, stock buybacks have been suspended pending greater clarity on earnings. There is $650 million remaining under the authorization, which expires in December. Earlier in the period, Hartford’s stock price rallied after the insurer reported fourth-quarter 2019 financial results that surpassed consensus estimates for operating earnings and revenue, driven by underwriting results in property and casualty, a lower group disability loss ratio in group benefits and improved net investment income.

During the period under review, Fund investments that contributed positively to performance included U.S.-based companies Eli Lilly, Kraft Heinz and NortonLifeLock (not held at period-end).

Shares of pharmaceutical products company Eli Lilly were volatile but climbed during the period. Investor sentiment improved as the market came to the realization that the company’s business may not be meaningfully impacted by

Top 10 Holdings
6/30/20
Company Sector/Industry, Country	% of Total Net Assets

GlaxoSmithKline PLC Pharmaceuticals, U.K.	3.4	%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea	3.1	%
Novartis AG Pharmaceuticals, Switzerland	3.0	%
Merck & Co. Inc. Pharmaceuticals, U.S.	3.0	%
Medtronic PLC Health Care Equipment & Supplies, U.S.	3.0	%
British American Tobacco PLC Tobacco, U.K.	2.9	%
Volkswagen AG Automobiles, Germany	2.6	%
NN Group NV Insurance, Netherlands	2.5	%
CVS Health Corp. Health Care Providers & Services, U.S.	2.5	%
Charter Communications Inc. Media, U.S.	2.5	%

the disruption caused by the COVID-19 pandemic. First-quarter financial results exceeded consensus sales and earnings expectations, with revenues benefiting from customers stocking up amid COVID-19, which is likely to reverse later in the year. Management raised 2020 guidance for earnings per share and reiterated the outlook for revenue and operating margin. In our view, Eli Lilly has a strong drug pipeline with several important compounds that positions the company well for continued growth over time.

Investors bid up shares of food products producer Kraft Heinz as surging demand for its products led to better-than-expected sales growth. Management raised its sales guidance in a business update early in the period, and financial results in the subsequent quarterly earnings report exceeded consensus estimates. The company reaffirmed the dividend payment, which also contributed to positive investor sentiment, and several analysts upgraded Kraft Heinz stock.

Shares of cybersecurity solutions provider NortonLifeLock outperformed during the period as work-from-home requirements attributable to the COVID-19 pandemic led to increased consumer purchases of the company’s cybersecurity subscriptions, generating solid fiscal fourth-quarter earnings that were in line with consensus

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expectations. NortonLifeLock’s stock rallied entering the year and surged after management announced in early January the payment of a one-time, $12 per share cash dividend funded by the 2019 sale of the enterprise security business to Broadcom. Symantec, the precursor to NortonLifeLock, sold the business as part of its transition to a pure-play consumer-focused cybersecurity company, and management subsequently adopted the NortonLifeLock brand.

During the period, the Fund held currency forwards and futures seeking to hedge most of the currency risk of the portfolio’s non-U.S. dollar investments. The hedges had a positive overall impact on the Fund’s performance.

Thank you for your participation in Franklin Mutual Global Discovery VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$787.10	$5.82	$1,018.35	$6.57	1.31%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Mutual Global Discovery VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$19.17			$17.47			$20.38			$20.22			$19.85			$22.61
Income from investment operationsa:
Net investment incomeb		0.31	c		0.43			0.36			0.47			0.41			0.37
Net realized and unrealized gains (losses)		(4.36	)		3.64			(2.50	)		1.29			1.92			(1.17	)
Total from investment operations		(4.05	)		4.07			(2.14	)		1.76			2.33			(0.80	)
Less distributions from:
Net investment income		—			(0.37	)		(0.52	)		(0.42	)		(0.39	)		(0.69	)
Net realized gains		—			(2.00	)		(0.25	)		(1.18	)		(1.57	)		(1.27	)
Total distributions		—			(2.37	)		(0.77	)		(1.60	)		(1.96	)		(1.96	)
Net asset value, end of period		$15.12			$19.17			$17.47			$20.38			$20.22			$19.85
Total returnd		(21.13)%			24.71%			(11.01)%			8.99%			12.32%			(3.39)%
Ratios to average net assetse
Expensesf,g		0.96%			0.94%			0.96%			1.01%			1.01%			1.02%
Expenses incurred in connection with securities sold short		0.02%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		3.92%	c		2.22%			1.81%			2.29%			2.10%			1.71%
Supplemental data
Net assets, end of period (000’s)		$3,065			$3,878			$3,282			$3,189			$3,084			$2,632
Portfolio turnover rate		19.48%			21.82%			29.84%			17.49%			17.54%			21.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.14 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 2.05%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(e).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$18.54			$16.96			$19.80			$19.69			$19.37			$22.11
Income from investment operationsa:
Net investment incomeb		0.28	c		0.37			0.30			0.41			0.35			0.32
Net realized and unrealized gains (losses)		(4.21	)		3.53			(2.42	)		1.25			1.87			(1.16	)
Total from investment operations		(3.93	)		3.90			(2.12	)		1.66			2.22			(0.84	)
Less distributions from:
Net investment income		—			(0.32	)		(0.47	)		(0.37	)		(0.33	)		(0.63	)
Net realized gains		—			(2.00	)		(0.25	)		(1.18	)		(1.57	)		(1.27	)
Total distributions		—			(2.32	)		(0.72	)		(1.55	)		(1.90	)		(1.90	)
Net asset value, end of period		$14.61			$18.54			$16.96			$19.80			$19.69			$19.37
Total returnd		(21.20)%			24.37%			(11.22)%			8.71%			12.06%			(3.65)%
Ratios to average net assetse
Expensesf,g		1.21%			1.19%			1.21%			1.26%			1.26%			1.27%
Expenses incurred in connection with securities sold short		0.02%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		3.67%	c		1.97%			1.56%			2.04%			1.85%			1.46%
Supplemental data
Net assets, end of period (000’s)		$412,641			$539,759			$500,607			$631,179			$630,397			$629,366
Portfolio turnover rate		19.48%			21.82%			29.84%			17.49%			17.54%			21.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.14 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.80%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(e).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$18.98			$17.30			$20.17			$20.02			$19.66			$22.39
Income from investment operationsa:
Net investment incomeb		0.29	c		0.36			0.29			0.40			0.34			0.30
Net realized and unrealized gains (losses)		(4.33	)		3.61			(2.47	)		1.27			1.89			(1.17	)
Total from investment operations		(4.04	)		3.97			(2.18	)		1.67			2.23			(0.87	)
Less distributions from:
Net investment income		—			(0.29	)		(0.44	)		(0.34	)		(0.30	)		(0.59	)
Net realized gains		—			(2.00	)		(0.25	)		(1.18	)		(1.57	)		(1.27	)
Total distributions		—			(2.29	)		(0.69	)		(1.52	)		(1.87	)		(1.86	)
Net asset value, end of period		$14.94			$18.98			$17.30			$20.17			$20.02			$19.66
Total returnd		(21.29)%			24.28%			(11.31)%			8.61%			11.91%			(3.74)%
Ratios to average net assetse
Expensesf,g		1.31%			1.29%			1.31%			1.36%			1.36%			1.37%
Expenses incurred in connection with securities sold short		0.02%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		3.57%	c		1.87%			1.46%			1.94%			1.75%			1.36%
Supplemental data
Net assets, end of period (000’s)		$24,116			$30,865			$30,094			$41,713			$45,262			$49,054
Portfolio turnover rate		19.48%			21.82%			29.84%			17.49%			17.54%			21.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.14 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.70%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(e).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Mutual Global Discovery VIP Fund
		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests 89.1%
	Aerospace & Defense 1.2%
	BAE Systems PLC		United Kingdom		914,196	$	5,466,177
	Auto Components 0.0%†
a,b,c	International Automotive Components Group Brazil LLC		Brazil		424,073		7,974
	Automobiles 0.7%
	General Motors Co.		United States		119,200		3,015,760
	Banks 7.2%
	Citigroup Inc.		United States		87,450		4,468,695
	First Horizon National Corp.		United States		353,473		3,520,591
	ING Groep NV		Netherlands		803,522		5,600,776
	JPMorgan Chase & Co.		United States		68,686		6,460,605
	Standard Chartered PLC		United Kingdom		892,332		4,836,953
	Wells Fargo & Co.		United States		257,820		6,600,192
							31,487,812
	Beverages 0.9%
	Heineken NV		Netherlands		41,100		3,788,853
	Building Products 2.1%
	Johnson Controls International PLC		United States		266,700		9,105,138
	Capital Markets 3.0%
	Credit Suisse Group AG		Switzerland		722,165		7,514,031
a	Deutsche Bank AG		Germany		433,542		4,135,664
	Guotai Junan Securities Co. Ltd.		China		1,275,797		1,774,230
							13,423,925
	Chemicals 2.8%
	BASF SE		Germany		130,518		7,330,452
	Covestro AG		Germany		134,621		5,127,021
							12,457,473
	Communications Equipment 1.3%
	Cisco Systems Inc.		United States		120,380		5,614,523
	Construction Materials 1.3%
a	LafargeHolcim Ltd., B		Switzerland		126,515		5,573,748
	Consumer Finance 1.1%
	Capital One Financial Corp.		United States		79,688		4,987,672
	Containers & Packaging 1.3%
	International Paper Co.		United States		160,200		5,640,642
	Diversified Financial Services 3.2%
a	Berkshire Hathaway Inc., B		United States		30,300		5,408,853
	M&G PLC		United Kingdom		998,386		2,073,009
	Voya Financial Inc.		United States		143,950		6,715,268
							14,197,130
							��
	Entertainment 2.2%
	The Walt Disney Co.		United States		85,691		9,555,403

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Food & Staples Retailing 1.0%
	Walgreens Boots Alliance Inc.		United States		102,504	$	4,345,145
	Food Products 2.1%
	The Kraft Heinz Co.		United States		292,300		9,321,447
	Health Care Equipment & Supplies 3.0%
	Medtronic PLC		United States		142,613		13,077,612
	Health Care Providers & Services 3.8%
	Anthem Inc.		United States		21,532		5,662,486
	CVS Health Corp.		United States		168,591		10,953,357
							16,615,843
	Hotels, Restaurants & Leisure 1.1%
a	Accor SA		France		180,200		4,917,513
	Industrial Conglomerates 0.8%
	General Electric Co.		United States		544,250		3,717,228
	Insurance 6.8%
	Alleghany Corp.		United States		2,730		1,335,352
	China Pacific Insurance Group Co. Ltd., H		China		1,931,308		5,190,715
	Everest Re Group Ltd.		United States		10,778		2,222,423
	The Hartford Financial Services Group Inc.		United States		259,596		10,007,426
	NN Group NV		Netherlands		333,803		11,217,375
							29,973,291
	IT Services 1.9%
	Cognizant Technology Solutions Corp., A		United States		146,460		8,321,857
	Machinery 0.9%
a	CNH Industrial NV		United Kingdom		536,078		3,765,939
	Media 2.6%
a	Charter Communications Inc., A		United States		21,286		10,856,711
a	iHeartMedia Inc., A		United States		95,199		794,912
a,b	iHeartMedia Inc., B		United States		1,606		11,399
							11,663,022
	Oil, Gas & Consumable Fuels 9.0%
	Ampol Ltd.		Australia		17,886		364,398
	BP PLC		United Kingdom		2,011,862		7,707,214
	Canadian Natural Resources Ltd.		Canada		279,600		4,850,341
	ENEOS Holdings Inc.		Japan		1,015,239		3,618,884
	Kinder Morgan Inc.		United States		441,470		6,697,100
	Royal Dutch Shell PLC, A (EUR Traded)		United Kingdom		127,534		2,087,464
	Royal Dutch Shell PLC, A (GBP Traded)		United Kingdom		226,238		3,622,210
	The Williams Cos. Inc.		United States		553,901		10,535,197
							39,482,808
	Pharmaceuticals 11.8%
a	Elanco Animal Health Inc.		United States		60,998		1,308,407
	Eli Lilly and Co.		United States		55,735		9,150,572
	GlaxoSmithKline PLC		United Kingdom		735,340		14,853,032

MGD-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Pharmaceuticals (continued)
	Merck & Co. Inc.		United States		171,045	$	13,226,910
	Novartis AG, ADR		Switzerland		153,897		13,441,364
							51,980,285
	Semiconductors & Semiconductor Equipment 1.3%
a	Renesas Electronics Corp.		Japan		1,102,140		5,665,443
	Software 4.1%
a	Avaya Holdings Corp.		United States		4		49
a	Avaya Holdings Corp., wts., 12/15/22		United States		5,179		6,474
a	Check Point Software Technologies Ltd.		Israel		100,267		10,771,684
	Oracle Corp.		United States		128,100		7,080,087
							17,858,294
	Specialty Retail 0.3%
a	Dufry AG		Switzerland		49,991		1,497,406
	Technology Hardware, Storage & Peripherals 4.8%
	Hewlett Packard Enterprise Co.		United States		125,444		1,220,570
	Samsung Electronics Co. Ltd.		South Korea		308,280		13,683,342
	Western Digital Corp.		United States		138,906		6,132,700
							21,036,612
	Textiles, Apparel & Luxury Goods 0.8%
	Cie Financiere Richemont SA		Switzerland		56,843		3,666,391
	Tobacco 3.9%
	Altria Group Inc.		United States		107,584		4,222,672
	British American Tobacco PLC		United Kingdom		252,780		9,694,430
	British American Tobacco PLC, ADR		United Kingdom		83,985		3,260,298
							17,177,400
	Wireless Telecommunication Services 0.8%
	Vodafone Group PLC		United Kingdom		2,268,154		3,605,672
	Total Common Stocks and Other Equity Interests (Cost $387,991,944)						392,011,438
	Preferred Stocks (Cost $12,585,173) 2.6%
	Automobiles 2.6%
a,d	Volkswagen AG, pfd		Germany		74,193		11,276,333
				Principal Amount
	Corporate Bonds, Notes and Senior Floating Rate Interests 1.9%
e	American Airlines Inc., senior secured note, 144A, 11.75%, 7/15/25		United States	$	4,710,000		4,438,186
e	Macy’s Inc., senior secured note, first lien, 144A, 8.375%, 6/15/25		United States		829,000		826,409
f,g,h	Mileage Plus Holdings LLC, Term Loan B, TBD, 6/25/27		United States		533,000		529,955
e,i	Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., senior secured note, first lien, 144A, 6.50%, 6/20/27		United States		2,060,000		2,070,300

Semiannual Report             MGD-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

		Country		Principal Amount		Value
	Corporate Bonds, Notes and Senior Floating Rate Interests (continued)
	Occidental Petroleum Corp.,
	senior note, 4.85%, 3/15/21		United States	$	173,000	$	172,459
h,j	senior note, FRN, 1.842%, (3-month USD LIBOR + 1.45%), 8/15/22		United States		553,000		508,972
	Total Corporate Bonds, Notes and Senior Floating Rate Interests (Cost $8,625,850)						8,546,281
	Corporate Notes in Reorganization 0.6%
k	Frontier Communications Corp.,
	senior note, 10.50%, 9/15/22		United States		3,610,000		1,258,139
	senior note, 11.00%, 9/15/25		United States		4,065,000		1,418,563
	Total Corporate Notes in Reorganization (Cost $7,152,596)						2,676,702
				Shares
	Companies in Liquidation 0.0%†
a,b,l	Tribune Media Co., Litigation Trust, Contingent Distribution		United States		57,340		—
a,b,l	Vistra Energy Corp., Litigation Trust, Contingent Distribution		United States		5,912,264		3,252
a,b,l	Walter Energy Inc., Litigation Trust, Contingent Distribution		United States		966,000		—
	Total Companies in Liquidation (Cost $185,800)						3,252
	Total Investments before Short Term Investments (Cost $416,541,363)						414,514,006
				Principal Amount
	Short Term Investments 5.3%
	U.S. Government and Agency Securities 5.3%
m	FHLB, 7/01/20		United States	$	3,700,000		3,700,000
m	U.S. Treasury Bill,
	7/02/20		United States		13,000,000		12,999,969
	n 7/23/20 - 11/27/20		United States		6,500,000		6,498,304
	Total U.S. Government and Agency Securities (Cost $23,195,830)						23,198,273
	Total Investments (Cost $439,737,193) 99.5%						437,712,279
	Other Assets, less Liabilities 0.5%						2,109,646
	Net Assets 100.0%					$	439,821,925

MGD-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

^†Rounds to less than 0.1% of net assets.

^aNon-income producing.

^bFair valued using significant unobservable inputs. See Note 13 regarding fair value measurements.

^cSee Note 10 regarding restricted securities.

^dVariable rate security. The rate shown represents the yield at period end.

^eSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $7,334,895, representing 1.7% of net assets.

^fSecurity purchased on a delayed delivery basis. See Note 1(c).

^gA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.

^hSee Note 1(g) regarding senior floating rate interests.

ⁱSecurity purchased on a when-issued basis. See Note 1(c).

^jThe coupon rate shown represents the rate at period end.

^kSee Note 7 regarding credit risk and defaulted securities.

^lContingent distributions represent the right to receive additional distributions, if any, during the reorganization of the underlying company. Shares represent total underlying principal of debt securities.

^mThe security was issued on a discount basis with no stated coupon rate.

ⁿA portion or all of the security has been segregated as collateral for open forward exchange contracts. At June 30, 2020, the aggregate value of these securities pledged amounted to $910,870, representing 0.2% of net assets.

At June 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts
Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Currency Contracts
EUR/USD		Short		167	$	23,491,681		9/14/20		$154,589
GBP/USD		Short		128		9,917,600		9/14/20		272,278
Total Futures Contracts										$426,867

* As of period end.

Semiannual Report             MGD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

At June 30, 2020, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts
Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Australian Dollar		HSBK		Buy		35,532	$	24,376		7/15/20	$	145	$	—
Australian Dollar		UBSW		Buy		73,602		51,056		7/15/20		—		(262	)
Australian Dollar		UBSW		Buy		2,986,417		2,054,149		7/15/20		6,814		—
Australian Dollar		UBSW		Sell		3,619,790		2,499,186		7/15/20		1,126		—
Euro		BOFA		Sell		665,303		736,468		7/15/20		—		(11,208	)
Euro		BONY		Sell		480,594		540,818		7/15/20		720		—
Euro		HSBK		Buy		67,940		76,216		7/15/20		136		—
Euro		HSBK		Buy		1,303,998		1,467,772		7/15/20		—		(2,321	)
Euro		HSBK		Sell		1,235,751		1,400,423		7/15/20		11,668		—
Euro		HSBK		Sell		1,498,320		1,670,080		7/15/20		—		(13,752	)
Euro		SSBT		Sell		918,276		1,018,389		7/15/20		—		(13,584	)
Euro		SSBT		Sell		961,741		1,084,091		7/15/20		3,273		—
Euro		UBSW		Sell		1,592,124		1,798,978		7/15/20		9,724		—
Euro		UBSW		Sell		29,083,618		31,880,595		7/15/20		—		(804,000	)
South Korean Won		HSBK		Buy		595,344,910		493,029		7/17/20		3,332		—
South Korean Won		HSBK		Sell		661,260,600		555,112		7/17/20		3,795		—
South Korean Won		HSBK		Sell		15,855,081,459		12,966,962		7/17/20		—		(252,006	)
South Korean Won		UBSW		Sell		356,186,851		291,264		7/17/20		—		(5,702	)
British Pound		HSBK		Buy		13,155		16,358		8/14/20		—		(54	)
British Pound		UBSW		Sell		8,878,011		11,135,645		8/14/20		132,626		—
Swiss Franc		UBSW		Sell		6,823,321		7,260,938		8/17/20		48,626		—
Total Forward Exchange Contracts											$	221,985	$	(1,102,889	)
Net unrealized appreciation (depreciation)													$	(880,904	)

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.    

See Note 11 regarding other derivative information.

See Abbreviations on page MGD-32.

MGD- 16     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Mutual Global Discovery VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	439,737,193
Value - Unaffiliated issuers	$	437,712,279
Cash		159,574
Receivables:
Investment securities sold		3,500,602
Capital shares sold		328,635
Dividends and interest		1,512,037
European Union tax reclaims		323,586
Deposits with brokers for:
Futures contracts		766,705
Unrealized appreciation on OTC forward exchange contracts		221,985
Other assets		436
Total assets		444,525,839
Liabilities:
Payables:
Investment securities purchased		2,556,590
Capital shares redeemed		376,998
Management fees		324,159
Distribution fees		93,946
Trustees’ fees and expenses		266
Variation margin on futures contracts		84,556
Unrealized depreciation on OTC forward exchange contracts		1,102,889
Accrued expenses and other liabilities		164,510
Total liabilities		4,703,914
Net assets, at value	$	439,821,925
Net assets consist of:
Paid-in capital	$	429,236,675
Total distributable earnings (losses)		10,585,250
Net assets, at value	$	439,821,925
Class 1:
Net assets, at value	$	3,065,102
Shares outstanding		202,754
Net asset value and maximum offering price per share		$15.12
Class 2:
Net assets, at value	$	412,640,974
Shares outstanding		28,252,674
Net asset value and maximum offering price per share		$14.61
Class 4:
Net assets, at value	$	24,115,849
Shares outstanding		1,614,021
Net asset value and maximum offering price per share		$14.94

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             MGD-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Mutual Global Discovery VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers	$	11,415,997
Interest:
Unaffiliated issuers		382,971
Adjustment for uncollectible interest (Note 7)		(404,250	)
Income from securities loaned:
Non-controlled affiliates (Note 3e)		1,064
Total investment income		11,395,782
Expenses:
Management fees (Note 3a)		2,048,477
Distribution fees: (Note 3c)
Class 2		549,594
Class 4		44,168
Custodian fees (Note 4)		12,054
Reports to shareholders		49,719
Professional fees		57,177
Trustees’ fees and expenses		1,691
Dividends on securities sold short		55,552
Other		15,373
Total expenses		2,833,805
Expense reductions (Note 4)		(2,438	)
Expenses waived/paid by affiliates (Note 3e)		(392	)
Net expenses		2,830,975
Net investment income		8,564,807
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(16,150,154	)
Foreign currency transactions		22,651
Forward exchange contracts		936,222
Futures contracts		219,169
Securities sold short		(293,748	)
Net realized gain (loss)		(15,265,860	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(112,740,294	)
Translation of other assets and liabilities denominated in foreign currencies		(10,093	)
Forward exchange contracts		493,454
Futures contracts		761,318
Securities sold short		374,951
Net change in unrealized appreciation (depreciation)		(111,120,664	)
Net realized and unrealized gain (loss)		(126,386,524	)
Net increase (decrease) in net assets resulting from operations	$	(117,821,717	)
*Foreign taxes withheld on dividends	$	301,515

MGD-18     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Mutual Global Discovery VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	8,564,807		$	11,110,516
Net realized gain (loss)		(15,265,860	)		10,200,575
Net change in unrealized appreciation (depreciation)		(111,120,664	)		100,899,252
Net increase (decrease) in net assets resulting from operations		(117,821,717	)		122,210,343
Distributions to shareholders:
Class 1		—			(427,555	)
Class 2		—			(61,286,007	)
Class 4		—			(3,431,154	)
Total distributions to shareholders		—			(65,144,716	)
Capital share transactions: (Note 2)
Class 1		(24,744	)		231,219
Class 2		(16,256,228	)		(14,266,368	)
Class 4		(578,181	)		(2,510,695	)
Total capital share transactions		(16,859,153	)		(16,545,844	)
Net increase (decrease) in net assets		(134,680,870	)		40,519,783
Net assets:
Beginning of period		574,502,795			533,983,012
End of period	$	439,821,925		$	574,502,795

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             MGD-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Mutual Global Discovery VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Mutual Global Discovery VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At June 30, 2020, 43.5% of the Fund’s shares were held through one insurance company. Investment activities of these insurance company separate accounts could have a material impact on the Fund. The Fund offers three classes of shares: Class 1, Class 2, and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is

determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Investments in open-end mutual funds are valued at the closing NAV. Investments in repurchase agreements are valued at cost, which approximates fair value.

Certain derivative financial instruments trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the

MGD-20   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent

value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Securities Purchased on a When-Issued or Delayed Delivery Basis

The Fund purchases securities on a when-issued or delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

d.  Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss

Semiannual Report               MGD-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

d.  Derivative Financial Instruments (continued)

and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement. At June 30, 2020, the Fund had OTC derivatives in a net liability position of $881,624 and the aggregate value of collateral pledged for such contracts was $910,870.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each

day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage exposure to certain foreign currencies. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities.

The Fund entered into OTC forward exchange contracts primarily to manage exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

See Note 11 regarding other derivative information.

e.  Securities Sold Short

The Fund is engaged in selling securities short, which obligates the Fund to replace a borrowed security with the same security at current fair value. The Fund incurs a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund realizes a gain if the price of the security declines between those dates. Gains are limited to the price at which the Fund sold the security short, while losses are potentially unlimited in size.

The Fund is required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale to the extent necessary to meet margin requirements until the short position is closed out. A deposit must also be maintained with the Fund’s custodian/counterparty broker consisting of cash and/or securities having a value equal to a specified percentage of the value of the securities sold short.

MGD-22     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

The Fund is obligated to pay fees for borrowing the securities sold short and is required to pay the counterparty any dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund. At June 30, 2020, the Fund had no securities sold short.

f.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At June 30, 2020, the Fund had no securities on loan.

g.  Senior Floating Rate Interests

The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On

July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

h.  Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

As a result of several court cases, in certain countries across the European Union, the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). These additional filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU reclaims is reflected as other income in the Statement of Operations and any related receivable, if any, is reflected as European Union tax reclaims in the Statement of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, when EU reclaims are received by the Fund and the Fund previously passed foreign tax credit on to its shareholders, the Fund must either amend historic tax reporting to shareholders or enter into a closing agreement with the Internal Revenue Service (IRS) in order to pay the associated tax liability on behalf of the Fund’s shareholders.

Semiannual Report               MGD-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

h.  Income and Deferred Taxes (continued)

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and dividends declared on securities sold short are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

j.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

k.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

MGD-24     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		18,126		$	275,922			24,462		$	464,734
Shares issued in reinvestment of distributions		—			—			24,488			427,555
Shares redeemed		(17,724	)		(300,666	)		(34,522	)		(661,070)
Net increase (decrease)		402		$	(24,744	)		14,428		$	231,219
Class 2 Shares:
Shares sold		1,459,013		$	20,082,823			753,358		$	13,863,507
Shares issued in reinvestment of distributions		—			—			3,626,391			61,286,007
Shares redeemed		(2,320,626	)		(36,339,051	)		(4,790,566	)		(89,415,882)
Net increase (decrease)		(861,613	)	$	(16,256,228	)		(410,817	)	$	(14,266,368)
Class 4 Shares:
Shares sold		131,469		$	1,791,616			22,659		$	428,560
Shares issued in reinvestment of distributions		—			—			198,332			3,431,154
Shares redeemed		(144,056	)		(2,369,797	)		(334,363	)		(6,370,409)
Net increase (decrease)		(12,587	)	$	(578,181	)		(113,372	)	$	(2,510,695)

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Mutual Advisers, LLC (Franklin Mutual)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

Semiannual Report               MGD-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

3. Transactions with Affiliates (continued)

a.  Management Fees

The Fund pays an investment management fee to Franklin Mutual based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.875%	Up to and including $4 billion
0.845%	Over $4 billion, up to and including $7 billion
0.825%	Over $7 billion, up to and including $10 billion
0.805%	Over $10 billion, up to and including $13 billion
0.785%	Over $13 billion, up to and including $16 billion
0.765%	Over $16 billion, up to and including $19 billion
0.745%	Over $19 billion, up to and including $22 billion
0.725%	Over $22 billion, up to and including $25 billion
0.705%	Over $25 billion, up to and including $28 billion
0.685%	In excess of $28 billion

b.  Administrative Fees

Under an agreement with Franklin Mutual, FT Services provides administrative services to the Fund. The fee is paid by Franklin Mutual based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

MGD-26   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$    —		$5,503,000		$(5,503,000)		$    —		$    —		$    —		—		$1,064

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	439,767,840
Unrealized appreciation	$	60,106,053
Unrealized depreciation		(62,614,923)
Net unrealized appreciation (depreciation)	$	(2,508,870)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and pass-through entity income.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities and securities sold short) for the period ended June 30, 2020, aggregated $87,351,219 and $97,603,018, respectively.

7.  Credit Risk and Defaulted Securities

The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the

Semiannual Report               MGD-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

7.  Credit Risk and Defaulted Securities (continued)

Fund. If it becomes probable that the income on debt securities, including those of distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. For the period ended June 30, 2020, the Fund recorded an adjustment for uncollectible interest of $404,250 as noted in the Statement of Operations.

At June 30, 2020, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $2,676,702, representing 0.6% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.

8.  Concentration of Risk

Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

9.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

10. Restricted Securities

The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Fund may have registration rights for restricted securities. The issuer generally incurs all registration costs.

At June 30, 2020, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares	Issuer	Acquisition Date		Cost		Value
424,073	International Automotive Components Group Brazil LLC (Value is 0.0%† of Net Assets)		4/13/06 - 12/26/08	$	281,629	$	7,974

†Rounds to less than 0.1% of net assets.

MGD-28   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

11.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Variation margin on futures contracts	$	426,867	a	Variation margin on futures contracts	$	—
	Unrealized appreciation on OTC forward exchange contracts		221,985		Unrealized depreciation on OTC forward exchange contracts		1,102,889
Totals		$	648,852			$	1,102,889

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

For the period ended June 30, 2020, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Period		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Foreign exchange contracts	Forward exchange contracts		$   936,222	Forward exchange contracts		$   493,454
	Futures contracts		219,169	Futures contracts		761,318
Totals			$1,155,391			$1,254,772

For the period ended June 30, 2020, the average month end notional amount of futures contracts represented $34,606,397. The average month end contract value of forward exchange contracts was $86,068,276.

See Note 1(d) regarding derivative financial instruments.

12.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

Semiannual Report               MGD-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

13.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

MGD-30     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1			Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Aerospace & Defense	$	—		$	5,466,177	$	—	$	5,466,177
Auto Components		—			—		7,974		7,974
Automobiles		3,015,760			11,276,333		—		14,292,093
Banks		21,050,083			10,437,729		—		31,487,812
Capital Markets		—			13,423,925		—		13,423,925
Chemicals		—			12,457,473		—		12,457,473
Construction Materials		—			5,573,748		—		5,573,748
Diversified Financial Services		12,124,121			2,073,009		—		14,197,130
Hotels, Restaurants & Leisure		—			4,917,513		—		4,917,513
Insurance		13,565,201			16,408,090		—		29,973,291
Machinery		—			3,765,939		—		3,765,939
Media		11,651,623			—		11,399		11,663,022
Oil, Gas & Consumable Fuels		22,082,638	��		17,400,170		—		39,482,808
Pharmaceuticals		37,127,253			14,853,032		—		51,980,285
Semiconductors & Semiconductor Equipment		—			5,665,443		—		5,665,443
Software		17,851,820			6,474		—		17,858,294
Specialty Retail		—			1,497,406		—		1,497,406
Technology Hardware, Storage & Peripherals		7,353,270			13,683,342		—		21,036,612
Textiles, Apparel & Luxury Goods		—			3,666,391		—		3,666,391
Tobacco		7,482,970			9,694,430		—		17,177,400
Wireless Telecommunication Services		—			3,605,672		—		3,605,672
All Other Equity Investments		94,091,363			—		—		94,091,363
Corporate Bonds, Notes and Senior Floating
Rate Interests		—			8,546,281		—		8,546,281
Corporate Notes in Reorganization		—			2,676,702		—		2,676,702
Companies in Liquidation		—			—		3,252c		3,252
Short Term Investments		19,498,273			3,700,000		—		23,198,273
Total Investments in Securities	$	266,894,375		$	170,795,279	$	22,625	$	437,712,279
Other Financial Instruments:
Futures Contracts	$	426,867		$	—	$	—	$	426,867
Forward Exchange Contracts		—			221,985		—		221,985
Total Other Financial Instruments	$	426,867		$	221,985	$	—	$	648,852
Liabilities:
Other Financial Instruments:
Forward Exchange Contracts	$	—		$	1,102,889	$	—	$	1,102,889

^aFor detailed categories, see the accompanying Statement of Investments.

^bIncludes common and preferred stocks as well as other equity interests.

^cIncludes securities determined to have no value at June 30, 2020.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and liabilities at the beginning and/or end of the period.

Semiannual Report               MGD-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

14.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

15.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Counterparty		Currency		Selected Portfolio
BOFA	Bank of America Corp.	EUR	Euro	ADR	American Depositary Receipt
BONY	Bank of New York	GBP	British Pound	FHLB	Federal Home Loan Bank
HSBK	HSBC Bank PLC	USD	United States Dollar
SSBT	State Street Bank and Trust Co., N.A.
UBSW	UBS AG

MGD-32     Semiannual Report

Franklin Mutual Shares VIP Fund

This semiannual report for Franklin Mutual Shares VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -21.22% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             MS-1

FRANKLIN MUTUAL SHARES VIP FUND

Fund Goal and Main Investments

The Fund’s principal investment goal is capital appreciation. Its secondary goal is income. Under normal market conditions, the Fund invests primarily in U.S. and foreign equity securities that we believe are available at market prices less than their intrinsic value. The equity securities in which the Fund invests are primarily common stock, with a current focus on companies with market capitalizations greater than $5 billion. To a lesser extent, the Fund also invests in merger arbitrage securities and the debt and equity of distressed companies. The Fund may invest up to 35% of its assets in foreign securities, which may include sovereign debt and participations in foreign government debt.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Value securities may not increase in price as anticipated or may decline further in value. The Fund’s investments in foreign securities involve more risks than investing in U.S. securities, including currency exchange rates and policies, country or government specific issues, less favorable trading practices regulation and greater price volatility. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Derivatives involve costs and can create economic leverage in the Fund’s portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as gains) in an amount that exceeds the Fund’s initial investment. The Fund may also invest in companies engaged in mergers, reorganizations or liquidations, which involve special risks as pending deals may not be completed on time or on favorable terms, as well as lower-rated bonds, which entail higher credit risk. To the extent that the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, the Fund may be subject to greater risks of adverse developments in such areas of focus than a fund that invests

Geographic Composition*

Based on Total Net Assets as of 6/30/20

*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.

in a wider variety of countries, regions, industries, sectors or investments. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a -3.08% total return for the period under review.¹

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI All Country World Index, posted a -5.99% total return during the six months under review.¹ Stocks fell sharply in early 2020 as countries around the world implemented lockdown measures in an effort to slow the spread of the novel coronavirus (COVID-19). Global supply chain disruptions, business and personal restrictions, and subdued consumer spending drove many investors to sell equity holdings in favor of perceived safe investments such as government bonds and cash. While global equities, notably in the U.S., rebounded in April and May amid optimism about easing lockdown restrictions, concerns about

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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a second wave of infections hindered equities in June, as investors weighed the possibility of renewed restrictions.

In the U.S., government mandates to mitigate the COVID-19 pandemic severely impacted the economy beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April, as many businesses, particularly those involved in hospitality, retail and travel, announced mass layoffs.² According to the National Bureau of Economic Research, the longest U.S. economic expansion in history ended in February 2020 as the country slipped into a severe recession. Nonetheless, near period-end, there were signs that a recovery was underway, as jobless claims fell considerably from their peak in early April, retail sales rose sharply in May, and the unemployment rate fell to 11.1% in June.² Along with optimism about improved treatments and potential vaccines for COVID-19, the positive economic signals contributed to a significant equity rebound in April and May. However, an increase in COVID-19 infections in many states throughout June pressured U.S. stocks.

The U.S. Federal Reserve (Fed) made significant efforts to support the U.S. economy. In March 2020, as the pandemic began to severely impact the economy and financial markets, the Fed implemented two emergency rate cuts, lowering the federal funds target rate to a range of 0.00%–0.25%, and announced sweeping quantitative easing measures aimed at ensuring credit flow to borrowers and supporting credit markets with unlimited amounts of bond purchasing.

In the eurozone, some analysts forecasted a significant contraction in 2020, particularly in southern European countries, as the magnitude of the economic disruption caused by the pandemic became apparent. European developed market equities, as measured by the MSCI Europe Index, posted a -12.43% total return for the period.¹ To stimulate growth, the European Central Bank implemented a broad bond-buying program, and many countries passed fiscal stimulus measures.

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index, posted a -5.51% total return during the six-month period.¹ The onset of the pandemic brought dramatically slower economic activity in Asia, as businesses halted operations and manufacturing and export activity declined sharply in the region’s major economies. Asian markets generally advanced toward period-end, bolstered by fiscal stimulus measures and economies reopening throughout the region.

Top 10 Sectors/Industries

6/30/20

	% of Total Net Assets
Pharmaceuticals	10.7%
Banks	6.7%
Media	6.2%
Oil, Gas & Consumable Fuels	5.8%
Insurance	5.4%
Technology Hardware, Storage & Peripherals	4.3%
Food Products	4.2%
Software	3.4%
Tobacco	3.3%
Food & Staples Retailing	3.3%

Emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a -9.67% total return due primarily to the COVID-19 pandemic.¹ A sharp decrease in prices for oil and other natural resources also hurt emerging market economies reliant on these exports. In the last quarter of the reporting period, however, investor optimism led to a stock rally, particularly in emerging market countries that had successfully lowered infection rates.

Investment Strategy

At Franklin Mutual Advisors, we are committed to our distinctive value approach to investing. Our major investment strategy is investing in undervalued stocks. When selecting undervalued equities, we are attracted to what we believe are fundamentally strong companies with healthy balance sheets, high-quality assets, substantial free cash flow and shareholder-oriented management teams and whose stocks are trading at discounts to our assessment of the companies’ intrinsic or business value. We also look for asset-rich companies whose shares may be trading at depressed levels due to concerns over short-term earnings disappointments, litigation, management strategy or other perceived negatives. While the vast majority of our undervalued equity investments are made in publicly traded companies globally, we may invest occasionally in privately held companies as well. Our portfolio selection process generally includes an assessment of the potential impacts of any material environmental, social and governance (ESG) factors on the long-term risk and return profile of a company.

We complement this more traditional investment strategy with two others. One is distressed investing, which is complex and can take many forms. The most common

2. Source: U.S. Bureau of Labor Statistics.

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distressed investment the Fund undertakes is the purchase of financially troubled or bankrupt companies’ debt at a substantial discount to face value. After the financially distressed company is reorganized, often in bankruptcy court, the old debt is typically replaced with new securities issued by the financially stronger company.

The other piece of our investment strategy is participating in arbitrage situations, another highly specialized field. When companies announce proposed mergers or takeovers, commonly referred to as “deals,” the target company may trade at a discount to the bid it ultimately accepts. One form of arbitrage involves purchasing the target company’s stock when it is trading below the value we believe it would receive in a deal. In keeping with our commitment to a relatively conservative investment approach, we typically focus our arbitrage efforts on announced deals, and eschew rumored deals or other situations we consider relatively risky.

In addition, it is our practice to hedge the Fund’s currency exposure when we deem it advantageous for our shareholders.

Manager’s Discussion

The novel coronavirus (COVID-19) pandemic has significantly altered our way of life, although the market indexes would suggest that it is business as usual. Stocks have rallied off the March 23 market bottom and are within range of the pre-pandemic, all-time highs achieved earlier in the year. While the economy has reopened, the recovery is likely to be uneven. The question that we wrestle with daily is what does this scenario mean for equities in general and value stocks in particular?

As markets rose sharply in April, investors moved back into the growth stocks that propelled the market to the all-time highs of January. In late May, however, there was a turn in market sentiment resulting in value briefly outperforming growth. Undervalued stocks often benefit in periods of improving economic activity or stabilization as business prospects improve. Increasing demand across the economy, especially in cyclical sectors, can provide a tailwind for these companies and drive shareholder value. This is a scenario that often occurs off an economic bottom, and we are positioning our portfolios to capitalize on this trend.

The second-quarter earnings reporting season (occurring in July and August) marks the first period with the full impact of the economic lockdowns and will provide a more complete view into the pandemic’s impact on corporate statements. Many financial officers withdrew full-year 2020 guidance, as they reported first-quarter results, due to limited revenue

visibility. As a result, the path ahead for stocks is less clear. We remain cautious amid these elevated risks.

Our traditional value equity investment approach is complemented with two other strategies: distressed investing and merger arbitrage.

Within our distressed credit strategy, we targeted companies and industries directly impacted by the coronavirus pandemic. The robust government fiscal and monetary intervention have limited the number of attractive options, but we have found opportunities in the energy sector and the retail and travel industries. Although each situation is unique, these securities have strong collateral packages and covenant protections or other features that we believe make them substantially more attractive than the broad array of available distressed debt.

Within merger arbitrage, which involves trading the stocks of companies involved in a merger or acquisition (M&A), activity has slowed significantly since the onset of the pandemic. Deal terms agreed to before the virus emerged have become unbalanced and are now more favorable for sellers than they are for buyers. Not surprisingly, some of these proposals have become embroiled in litigation. Also, M&A activity has slowed as the economic realities of the coronavirus get priced into the market, and bankers are challenged to conduct due diligence remotely. As the period ended, we began to see signs that transactions activity might resume, but we would expect the second half of the year to be focused on resolving pending deals, rather than significant growth in new ones.

Fund Performance

Turning to Fund performance, investments that detracted included U.S.-based companies American International Group (AIG; not held at period-end), Wells Fargo and Citigroup.

Shares of insurer AIG retreated as COVID-19 concerns and a lack of clarity on forward guidance related to expenses and investment income contributed to negative investor sentiment. The stock initially rallied following the company’s first-quarter earnings call at which management revealed that the majority of its property policies—which include coverage for business interruption—contained exclusions for losses related to viruses.

The shares of diversified financial services company Wells Fargo were pulled down by negative investor sentiment for financials, which have trailed the broader market rally from the March 23 bottom. Concerns about a possible dividend cut as bank earnings have come under pressure, and

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speculation about the Fed moving to negative interest rates—subsequently refuted by Fed Chairman Jerome Powell—contributed to the selloff. Earlier in the period, management reported year-end 2019 earnings that fell well short of consensus estimates.

The stocks of a number of U.S. banks, including Citigroup, sold off during the period as concern about the economic effects of COVID-19 and Fed interest-rate cuts led to negative sentiment for financials. The Fed’s decision in late June to cap bank dividends and curtail stock buybacks—as part of its stress test review of large banks—also contributed to the bearish outlook. During the period, Citigroup reported a sharp drop in first-quarter profit, although earnings per share was relatively in line with expectations. A year-over-year increase in revenue was driven by strong capital markets revenue but was offset by a significant rise in loan loss provision. Earlier in the period, management reported fourth-quarter 2019 earnings that surpassed consensus forecasts.

During the period under review, Fund investments that contributed positively to performance included U.S.-based companies Eli Lilly, NortonLifeLock and Kraft Heinz.

Shares of pharmaceutical products company Eli Lilly were volatile but climbed during the period. Investor sentiment improved as the market came to the realization that the company’s business may not be meaningfully impacted by the disruption caused by the COVID-19 pandemic. First-quarter financial results exceeded consensus sales and earnings expectations, with revenues benefiting from customers stocking up amid COVID-19, which is likely to reverse later in the year. Management raised 2020 guidance for earnings per share and reiterated the outlook for revenue and operating margin. In our view, Eli Lilly has a strong drug pipeline with several important compounds that positions the company well for continued growth over time.

Shares of cybersecurity solutions provider NortonLifeLock outperformed during the period as work-from-home requirements attributable to the COVID-19 pandemic led to increased consumer purchases of the company’s cybersecurity subscriptions, generating solid fiscal fourth-quarter earnings that were in line with consensus expectations. NortonLifeLock’s stock rallied entering the year and surged after management announced in early January the payment of a one-time, $12 per share cash dividend funded by the 2019 sale of the enterprise security business to Broadcom. Symantec, the precursor to NortonLifeLock, sold the business as part of its transition to a pure-play consumer-focused cybersecurity company, and management subsequently adopted the NortonLifeLock brand.

Top 10 Holdings

6/30/20

Company Sector/Industry, Country	% of Total Net Assets
Charter Communications Inc. Media, U.S.	2.9%
Medtronic PLC Health Care Equipment & Supplies, U.S.	2.8%
Merck & Co. Inc. Pharmaceuticals, U.S.	2.6%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea	2.5%
British American Tobacco PLC Tobacco, U.K.	2.4%
GlaxoSmithKline PLC Pharmaceuticals, U.K.	2.4%
The KraftHeinz Co. Food Products, U.S.	2.3%
Novartis AG Pharmaceuticals, Switzerland	2.2%
The Kroger Co. Food & Staples Retailing, U.S.	2.2%
Oracle Corp. Software, U.S.	2.2%

Investors bid up shares of food products producer Kraft Heinz as surging demand for its products led to better-than-expected sales growth. Management raised its sales guidance in a business update early in the period, and financial results in the subsequent quarterly earnings report exceeded consensus estimates. The company reaffirmed the dividend payment, which also contributed to positive investor sentiment, and several analysts upgraded Kraft Heinz stock.

During the period, the Fund held currency forwards and futures seeking to hedge most of the currency risk of the portfolio’s non-U.S. dollar investments. The hedges had a positive overall impact on the Fund’s performance.

Thank you for your participation in Franklin Mutual Shares VIP Fund. We look forward to serving your future investment needs.

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The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual     (actual return after expenses)		Hypothetical     (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$787.80	$4.85	$1,019.44	$5.47	1.09%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

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Financial Highlights

Franklin Mutual Shares VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$19.19			$17.71			$20.71			$20.40			$19.48			$22.91
Income from investment operationsa:
Net investment incomeb		0.35c			0.46			0.36			0.49			0.50			0.44
Net realized and unrealized gains (losses)		(4.40	)		3.39			(2.04	)		1.22			2.56			(1.54	)
Total from investment operations		(4.05	)		3.85			(1.68	)		1.71			3.06			(1.10	)
Less distributions from:
Net investment income		—			(0.42	)		(0.55	)		(0.53	)		(0.46	)		(0.77	)
Net realized gains		—			(1.95	)		(0.77	)		(0.87	)		(1.68	)		(1.56	)
Total distributions		—			(2.37	)		(1.32	)		(1.40	)		(2.14	)		(2.33	)
Net asset value, end of period		$15.14			$19.19			$17.71			$20.71			$20.40			$19.48
Total returnd		(21.10)%			22.92%			(8.86)%			8.64%			16.35%			(4.69)%
Ratios to average net assetse
Expensesf,g		0.74%			0.71%			0.71%			0.72%			0.72%			0.73%
Expenses incurred in connection with securities sold short		0.03%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		4.48%c			2.35%			1.77%			2.34%			2.57%			2.00%
Supplemental data
Net assets, end of period (000’s)		$130,207			$158,431			$537,324			$653,700			$610,395			$643,438
Portfolio turnover rate		19.67%			38.50%			24.67%			18.32%			24.45%			19.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.18 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 2.23%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(f).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$18.81			$17.40			$20.36			$20.08			$19.20			$22.60
Income from investment operationsa:
Net investment incomeb		0.33c			0.40			0.31			0.43			0.45			0.38
Net realized and unrealized gains (losses)		(4.32	)		3.32			(2.00	)		1.20			2.52			(1.51	)
Total from investment operations		(3.99	)		3.72			(1.69	)		1.63			2.97			(1.13	)
Less distributions from:
Net investment income		—			(0.36	)		(0.50	)		(0.48	)		(0.41	)		(0.71	)
Net realized gains		—			(1.95	)		(0.77	)		(0.87	)		(1.68	)		(1.56	)
Total distributions		—			(2.31	)		(1.27	)		(1.35	)		(2.09	)		(2.27	)
Net asset value, end of period		$14.82			$18.81			$17.40			$20.36			$20.08			$19.20
Total returnd		(21.21)%			22.57%			(9.07)%			8.35%			16.06%			(4.94)%
Ratios to average net assetse
Expensesf,g		0.99%			0.96%			0.96%			0.97%			0.97%			0.98%
Expenses incurred in connection with securities sold short		0.03%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		4.23%c			2.10%			1.52%			2.09%			2.32%			1.75%
Supplemental data
Net assets, end of period (000’s)		$2,138,640			$2,931,753			$2,516,834			$3,476,913			$3,621,358			$3,353,505
Portfolio turnover rate		19.67%			38.50%			24.67%			18.32%			24.45%			19.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.18 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.98%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(f).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$18.99			$17.55			$20.53			$20.23			$19.32			$22.72
Income from investment operationsa:
Net investment incomeb		0.31c			0.38			0.29			0.41			0.44			0.36
Net realized and unrealized gains (losses)		(4.34	)		3.36			(2.02	)		1.21			2.53			(1.52	)
Total from investment operations		(4.03	)		3.74			(1.73	)		1.62			2.97			(1.16	)
Less distributions from:
Net investment income		—			(0.35	)		(0.48	)		(0.45	)		(0.38	)		(0.68	)
Net realized gains		—			(1.95	)		(0.77	)		(0.87	)		(1.68	)		(1.56	)
Total distributions		—			(2.30	)		(1.25	)		(1.32	)		(2.06	)		(2.24	)
Net asset value, end of period		$14.96			$18.99			$17.55			$20.53			$20.23			$19.32
Total returnd		(21.22)%			22.44%			(9.16)%			8.25%			15.94%			(5.05)%
Ratios to average net assetse
Expensesf,g		1.09%			1.06%			1.06%			1.07%			1.07%			1.08%
Expenses incurred in connection with securities sold short		0.03%			0.02%			0.01%			—%			0.01%			0.02%
Net investment income		4.13%c			2.00%			1.42%			1.99%			2.22%			1.65%
Supplemental data
Net assets, end of period (000’s)		$101,013			$120,345			$105,047			$122,942			$122,476			$130,978
Portfolio turnover rate		19.67%			38.50%			24.67%			18.32%			24.45%			19.88%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.18 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.88%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(f).

^gBenefit of waiver and payments by affiliates and expense reduction rounds to less than 0.01%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Mutual Shares VIP Fund

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests 90.2%
	Aerospace & Defense 2.4%
	BAE Systems PLC		United Kingdom		4,310,599	$	25,774,011
	Huntington Ingalls Industries Inc.		United States		175,130		30,558,434
							56,332,445
	Auto Components 0.0%†
a,b,c	International Automotive Components Group Brazil LLC		Brazil		1,730,515		32,541
	Automobiles 0.6%
	General Motors Co.		United States		514,345		13,012,928
	Banks 6.7%
	Bank of America Corp.		United States		1,045,618		24,833,428
	Citigroup Inc.		United States		861,639		44,029,753
	JPMorgan Chase & Co.		United States		458,954		43,169,214
	Synovus Financial Corp.		United States		802,733		16,480,108
	Wells Fargo & Co.		United States		1,187,539		30,400,998
							158,913,501
	Beverages 0.5%
	Heineken NV		Netherlands		129,934		11,978,122
	Building Products 1.3%
	Johnson Controls International PLC		United States		908,430		31,013,800
	Capital Markets 1.1%
	Credit Suisse Group AG		Switzerland		2,373,162		24,692,435
	Communications Equipment 1.1%
	Cisco Systems Inc.		United States		576,119		26,870,190
	Consumer Finance 1.3%
	Capital One Financial Corp.		United States		478,537		29,951,631
	Containers & Packaging 1.8%
	International Paper Co.		United States		1,235,477		43,501,145
	Diversified Financial Services 2.9%
a	Berkshire Hathaway Inc., B		United States		186,373		33,269,444
	Voya Financial Inc.		United States		758,210		35,370,497
							68,639,941
	Electric Utilities 1.0%
	Pinnacle West Capital Corp.		United States		315,200		23,101,008
	Electrical Equipment 1.7%
	a Sensata Technologies Holding PLC		United States		1,045,059		38,907,547
	Electronic Equipment, Instruments & Components 1.2%
	Corning Inc.		United States		1,133,402		29,355,112
	Energy Equipment & Services 1.1%
	Baker Hughes Co., A		United States		663,295		10,208,110
	Schlumberger Ltd.		United States		893,500		16,431,465
							26,639,575
	Entertainment 2.0%
	The Walt Disney Co.		United States		419,567		46,785,916

Semiannual Report             MS-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Equity Real Estate Investment Trusts (REITs) 1.1%
	Alexander’s Inc.		United States		31,168	$	7,508,371
	Vornado Realty Trust		United States		496,497		18,971,151
							26,479,522
	Food & Staples Retailing 3.3%
	The Kroger Co.		United States		1,566,436		53,023,859
	Walgreens Boots Alliance Inc.		United States		586,960		24,881,234
							77,905,093
	Food Products 4.2%
	Archer-Daniels-Midland Co.		United States		682,506		27,231,989
	Conagra Brands Inc.		United States		530,565		18,659,971
	The Kraft Heinz Co.		United States		1,704,590		54,359,375
							100,251,335
	Health Care Equipment & Supplies 2.8%
	Medtronic PLC		United States		720,205		66,042,798
	Health Care Providers & Services 3.2%
	Anthem Inc.		United States		107,617		28,301,119
	CVS Health Corp.		United States		723,969		47,036,266
							75,337,385
	Household Durables 2.8%
	Lennar Corp., A		United States		573,137		35,316,702
	Newell Brands Inc.		United States		1,923,718		30,548,642
							65,865,344
	Household Products 0.9%
	Energizer Holdings Inc.		United States		427,547		20,304,207
	Industrial Conglomerates 1.0%
	General Electric Co.		United States		3,340,001		22,812,207
	Insurance 5.4%
	Alleghany Corp.		United States		92,702		45,344,256
	Everest Re Group Ltd.		United States		122,329		25,224,240
	The Hartford Financial Services Group Inc.		United States		904,853		34,882,083
	MetLife Inc.		United States		624,803		22,817,806
							128,268,385
	IT Services 1.9%
	Cognizant Technology Solutions Corp., A		United States		796,201		45,240,141
	Machinery 0.7%
a	CNH Industrial NV		United Kingdom		605,230		4,251,730
a	CNH Industrial NV, special voting		United Kingdom		1,844,814		12,959,787
							17,211,517
	Media 6.2%
a	Charter Communications Inc., A		United States		136,923		69,836,207
	Comcast Corp., A		United States		1,245,578		48,552,630
a	Discovery Inc., C		United States		1,157,710		22,297,495

MS-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Media (continued)
a,d	iHeartMedia Inc., A		United States		717,645	$	5,992,336
a,b	iHeartMedia Inc., B		United States		12,783		90,727
							146,769,395
	Oil, Gas & Consumable Fuels 5.8%
	BP PLC		United Kingdom		7,407,845		28,378,611
	Kinder Morgan Inc.		United States		1,612,768		24,465,690
	Marathon Oil Corp.		United States		2,662,301		16,293,282
	Royal Dutch Shell PLC, A (EUR Traded)		United Kingdom		450,591		7,375,230
	Royal Dutch Shell PLC, A (GBP Traded)		United Kingdom		611,623		9,792,461
	The Williams Cos. Inc.		United States		2,738,781		52,091,615
							138,396,889
	Pharmaceuticals 10.7%
a	Elanco Animal Health Inc.		United States		283,578		6,082,748
	Eli Lilly and Co.		United States		317,463		52,121,075
	GlaxoSmithKline PLC		United Kingdom		2,773,828		56,028,172
	Merck & Co. Inc.		United States		783,295		60,572,202
	Novartis AG, ADR		Switzerland		607,663		53,073,287
	Perrigo Co. PLC		United States		469,260		25,936,000
							253,813,484
	Software 3.4%
a	Avaya Holdings Corp.		United States		116		1,434
a	Avaya Holdings Corp., wts., 12/15/22		United States		91,551		114,439
	NortonLifeLock Inc.		United States		1,432,555		28,407,565
	Oracle Corp.		United States		954,596		52,760,521
							81,283,959
	Specialty Retail 1.2%
	Tiffany & Co.		United States		179,400		21,876,036
a,b	TRU Kids Parent LLC		United States		2,040		6,571,584
a,b	Wayne Services Legacy Inc.		United States		2,039		—
							28,447,620
	Technology Hardware, Storage & Peripherals 4.3%
	Hewlett Packard Enterprise Co.		United States		1,292,621		12,577,202
	Samsung Electronics Co. Ltd.		South Korea		1,321,135		58,640,009
	Western Digital Corp.		United States		701,884		30,988,179
							102,205,390
	Textiles, Apparel & Luxury Goods 0.7%
	PVH Corp.		United States		363,421		17,462,379
	Tobacco 3.3%
	Altria Group Inc.		United States		571,600		22,435,300
	British American Tobacco PLC		United Kingdom		1,095,258		42,004,520
	British American Tobacco PLC, ADR		United Kingdom		372,933		14,477,259
							78,917,079

Semiannual Report             MS-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

		Country		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Wireless Telecommunication Services 0.6%
	Vodafone Group PLC		United Kingdom		8,420,931	$	13,386,708
	Total Common Stocks and Other Equity Interests (Cost $1,929,798,525)						2,136,128,674
				Principal Amount
	Corporate Bonds, Notes and Senior Floating Rate Interests 5.8%
e	American Airlines Inc., senior secured note, 144A, 11.75%, 7/15/25		United States	$	21,072,000		19,855,935
e	Banff Merger Sub Inc., senior note, 144A, 9.75%, 9/01/26		United States		18,444,000		18,601,881
e	Boxer Parent Co. Inc., senior secured note, first lien, 144A, 7.125%, 10/02/25		United States		4,027,500		4,237,635
e	Delta Air Lines Inc., senior note, first lien, 144A, 7.00%, 5/01/25		United States		1,198,000		1,237,916
e	Frontier Communications Corp., senior secured note, first lien, 144A, 8.00%, 4/01/27		United States		6,148,000		6,250,549
e	Macy’s Inc., senior secured note, first lien, 144A, 8.375%, 6/15/25		United States		4,438,000		4,424,131
f,g,h	Mileage Plus Holdings LLC, Term Loan B, TBD, 6/25/27		United States		2,866,000		2,849,624
e,i	Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., senior secured note, first lien, 144A, 6.50%, 6/20/27		United States		11,070,000		11,125,350
e	Navistar International Corp., senior secured note, 144A, 9.50%, 5/01/25		United States		4,878,200		5,247,114
	Occidental Petroleum Corp.,
	senior note, 4.85%, 3/15/21		United States		917,000		914,134
	h,j senior note, FRN, 1.842%, (3-month USD LIBOR + 1.45%), 8/15/22		United States		2,933,600		2,700,036
h	Veritas U.S. Inc., Term Loan B1, 5.50%, (3-month USD LIBOR + 4.50%), 1/27/23		United States		17,234,903		15,985,372
e	Veritas U.S. Inc./Veritas Bermuda Ltd.,
	senior note, 144A, 7.50%, 2/01/23		United States		2,856,000		2,823,570
	senior note, 144A, 10.50%, 2/01/24		United States		23,445,000		21,068,732
h	Windstream Services LLC,
	PSA Holder Revolving Commitment, 6.25%, (Prime + 3.00%), 2/20/49		United States		26,279,371		16,161,813
	PSA Holder Term Loan B6, 8.25%, (Prime + 5.00%), 3/30/21		United States		6,671,000		4,202,730
	Total Corporate Bonds, Notes and Senior Floating Rate Interests (Cost $149,686,671)						137,686,522
	Corporate Notes in Reorganization 0.7%
k	Frontier Communications Corp.,
	senior note, 10.50%, 9/15/22		United States		22,633,000		7,887,940
	senior note, 11.00%, 9/15/25		United States		25,535,000		8,910,949
	Total Corporate Notes in Reorganization (Cost $44,895,501)						16,798,889
				Shares
	Companies in Liquidation 0.0%†
a,b,l	Bosgen Liquidating Trust c/o Verdolino and Lowey P.C., Contingent Distribution		United States		347,093		—
a,b,l	Tribune Media Co., Litigation Trust, Contingent Distribution		United States		396,923		—
a,b,l	Vistra Energy Corp., Litigation Trust, Contingent Distribution		United States		90,618,405		49,840

MS-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

		Country		Shares		Value
	Companies in Liquidation (continued)
a,b,l	Walter Energy Inc., Litigation Trust, Contingent Distribution		United States		6,301,000	$	—
	Total Companies in Liquidation (Cost $2,834,275)						49,840
	Total Investments before Short Term Investments (Cost $2,127,214,972)						2,290,663,925
				Principal Amount
	Short Term Investments 3.5%
	U.S. Government and Agency Securities 3.4%
m	FHLB, 7/01/20		United States	$	14,300,000		14,300,000
m	U.S. Treasury Bill,        7/02/20		United States		40,500,000		40,499,904
	n 7/16/20 - 11/27/20		United States		27,000,000		26,995,005
	Total U.S. Government and Agency Securities (Cost $81,782,086)						81,794,909
	Investments from Cash Collateral Received for Loaned Securities 0.1%
				Shares
	Money Market Funds (Cost $1,077,000) 0.1%
o,p	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		1,077,000		1,077,000
				Principal Amount
	Repurchase Agreements (Cost $219,396) 0.0%†
q	Joint Repurchase Agreement, 0.07%, 7/01/20 (Maturity Value $219,396)
	BNP Paribas Securities Corp.
	Collateralized by U.S. Treasury Bonds, 7.875%, 2/15/21; U.S. Treasury Notes, 0.125% - 2.875%, 12/31/20 - 1/31/24; U.S. Treasury Strips, 8/15/20 - 11/15/22 (Valued at $223,784)		United States	$	219,396		219,396
	Total Investments from Cash Collateral Received for Loaned Securities (Cost $1,296,396)						1,296,396
	Total Investments (Cost $2,210,293,454) 100.2%						2,373,755,230
	Other Assets, less Liabilities (0.2)%						(3,894,943	)
	Net Assets 100.0%					$	2,369,860,287

Semiannual Report             MS-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

^†Rounds to less than 0.1% of net assets.

^aNon-income producing.

^bFair valued using significant unobservable inputs. See Note 12 regarding fair value measurements.

^cSee Note 9 regarding restricted securities.

^dA portion or all of the security is on loan at June 30, 2020. See Note 1(g).

^eSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $94,872,813, representing 4.0% of net assets.

^fSecurity purchased on a delayed delivery basis. See Note 1(d).

^gA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.

^hSee Note 1(h) regarding senior floating rate interests.

iSecurity purchased on a when-issued basis. See Note 1(d).

^jThe coupon rate shown represents the rate at period end.

^kSee Note 7 regarding credit risk and defaulted securities.

^lContingent distributions represent the right to receive additional distributions, if any, during the reorganization of the underlying company. Shares represent total underlying principal of debt securities.

^mThe security was issued on a discount basis with no stated coupon rate.

ⁿA portion or all of the security has been segregated as collateral for open forward exchange contracts. At June 30, 2020, the aggregate value of these securities pledged amounted to $779,948, representing less than 0.1% of net assets.

^oSee Note 3(e) regarding investments in affiliated management investment companies.

^pThe rate shown is the annualized seven-day effective yield at period end.

^qSee Note 1(c) regarding joint repurchase agreement.

At June 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(e).

Futures Contracts

Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Currency Contracts
EUR/USD		Short		104		$14,629,550		9/14/20		$     94,640
GBP/USD		Short		498		38,585,663		9/14/20		1,058,539
Total Futures Contracts										$1,153,179

*As of period end.

MS-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

At June 30, 2020, the Fund had the following forward exchange contracts outstanding. See Note 1(e).

Forward Exchange Contracts
Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Euro		BOFA		Sell		52,781		$       59,024		7/15/20		$             —		$        (292)
Euro		BONY		Sell		240,119		270,209		7/15/20		360		—
Euro		HSBK		Buy		117,981		132,353		7/15/20		236		—
Euro		HSBK		Sell		975,093		1,087,692		7/15/20		—		(8,134	)
Euro		HSBK		Sell		988,764		1,120,263		7/15/20		9,076		—
Euro		SSBT		Buy		368,000		414,326		7/15/20		—		(763	)
Euro		SSBT		Sell		251,842		279,091		7/15/20		—		(3,931)
Euro		SSBT		Sell		416,849		469,687		7/15/20		1,227		—
Euro		UBSW		Sell		1,073,915		1,214,198		7/15/20		7,319		—
Euro		UBSW		Sell		10,885,583		11,930,557		7/15/20		—		(302,822	)
South Korean Won		HSBK		Buy		4,117,458,251		3,385,044		7/17/20		47,832		—
South Korean Won		HSBK		Sell		2,833,834,575		2,378,935		7/17/20		16,262		—
South Korean Won		HSBK		Sell		52,977,559,922		43,329,740		7/17/20		—		(839,612	)
South Korean Won		UBSW		Sell		18,061,991,754		14,769,803		7/17/20		—		(289,148	)
British Pound		HSBK		Buy		1,060,036		1,318,112		8/14/20		—		(4,350	)
British Pound		UBSW		Sell		21,659,195		27,176,006		8/14/20		332,547		—
Swiss Franc		UBSW		Sell		22,420,635		23,858,592		8/17/20		159,781		—
Total Forward Exchange Contracts												$ 574,640		$  (1,449,052)
Net unrealized appreciation (depreciation)														$     (874,412)

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

See Note 10 regarding other derivative information.

See Abbreviations on page MS-34.

The accompanying notes are an integral part of these financial statements.    |    Semiannual Report              MS-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Mutual Shares VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	2,208,997,058
Cost - Non-controlled affiliates (Note 3e)		1,077,000
Cost - Unaffiliated repurchase agreements		219,396
Value - Unaffiliated issuers +	$	2,372,458,834
Value - Non-controlled affiliates (Note 3e)		1,077,000
Value - Unaffiliated repurchase agreements		219,396
Cash		1,082,196
Receivables:
Investment securities sold		1,873,122
Capital shares sold		2,055,434
Dividends and interest		7,354,382
European Union tax reclaims		1,585,281
Deposits with brokers for:
Futures contracts		1,681,639
Unrealized appreciation on OTC forward exchange contracts		574,640
Other assets		2,461
Total assets		2,389,964,385
Liabilities:
Payables:
Investment securities purchased		13,740,305
Capital shares redeemed		978,819
Management fees		1,340,273
Distribution fees		478,767
Trustees’ fees and expenses		1,877
Variation margin on futures contracts		332,388
Payable upon return of securities loaned		1,296,396
Unrealized depreciation on OTC forward exchange contracts		1,449,052
Accrued expenses and other liabilities		486,221
Total liabilities		20,104,098
Net assets, at value	$	2,369,860,287
Net assets consist of:
Paid-in capital	$	2,079,928,651
Total distributable earnings (losses)		289,931,636
Net assets, at value	$	2,369,860,287

⁺Includes securities loaned $ 1,228,285

MS-18     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

June 30, 2020 (unaudited)

	Franklin Mutual Shares VIP Fund
Class 1:
Net assets, at value	$	130,207,182
Shares outstanding		8,600,638
Net asset value and maximum offering price per share	$	15.14
Class 2:
Net assets, at value	$	2,138,639,758
Shares outstanding		144,299,487
Net asset value and maximum offering price per share	$	14.82
Class 4:
Net assets, at value	$	101,013,347
Shares outstanding		6,753,463
Net asset value and maximum offering price per share	$	14.96

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             MS-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Mutual Shares VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers	$	61,592,792
Interest:
Unaffiliated issuers		7,480,408
Adjustment for uncollectible interest (Note 7)		(2,537,110	)
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		23
Non-controlled affiliates (Note 3e)		3,234
Total investment income		66,539,347
Expenses:
Management fees (Note 3a)		8,624,596
Distribution fees: (Note 3c)
Class 2		2,901,106
Class 4		178,823
Custodian fees (Note 4)		22,082
Reports to shareholders		240,415
Professional fees		62,309
Trustees’ fees and expenses		9,809
Dividends on securities sold short		389,896
Other		42,199
Total expenses		12,471,235
Expense reductions (Note 4)		(12,520	)
Expenses waived/paid by affiliates (Note 3e)		(1,232	)
Net expenses		12,457,483
Net investment income		54,081,864
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(74,533,904	)
Written options		(262,792	)
Realized gain distributions from REITs		866,978
Foreign currency transactions		(168,235	)
Forward exchange contracts		2,269,806
Futures contracts		1,796,871
Securities sold short		(1,409,935	)
Net realized gain (loss)		(71,441,211	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(647,502,878	)
Translation of other assets and liabilities denominated in foreign currencies		(58,450	)
Forward exchange contracts		1,511,444
Futures contracts		1,873,446
Securities sold short		1,972,704

MS-20     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations (continued)

for the six months ended June 30, 2020 (unaudited)

	Franklin Mutual Shares VIP Fund
Net change in unrealized appreciation (depreciation)	$	(642,203,734	)
Net realized and unrealized gain (loss)		(713,644,945	)
Net increase (decrease) in net assets resulting from operations	$	(659,563,081	)

*Foreign taxes withheld on dividends $ 601,911

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             MS-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Mutual Shares VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	54,081,864		$	70,482,893
Net realized gain (loss)		(71,441,211	)		95,516,825
Net change in unrealized appreciation (depreciation)		(642,203,734	)		497,609,167
Net increase (decrease) in net assets resulting from operations		(659,563,081	)		663,608,885
Distributions to shareholders:
Class 1		—			(35,828,591	)
Class 2		—			(330,340,832	)
Class 4		—			(13,089,406	)
Total distributions to shareholders		—			(379,258,829	)
Capital share transactions: (Note 2)
Class 1		4,852,965			(436,530,771	)
Class 2		(190,863,192	)		198,182,849
Class 4		4,904,214			5,322,730
Total capital share transactions		(181,106,013	)		(233,025,192	)
Net increase (decrease) in net assets		(840,669,094	)		51,324,864
Net assets:
Beginning of period		3,210,529,381			3,159,204,517
End of period	$	2,369,860,287		$	3,210,529,381

MS-22     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Mutual Shares VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Mutual Shares VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple

exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Investments in open-end mutual funds are valued at the closing NAV. Investments in repurchase agreements are valued at cost, which approximates fair value.

Certain derivative financial instruments trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Semiannual Report             MS-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

a.  Financial Instrument Valuation (continued)

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent

value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Repurchase Agreements

The Fund enters into repurchase agreements, which are accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the Fund, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Fund, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Fund may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. All repurchase agreements held by the Fund at period end, as indicated in the Statement of Investments, had been entered into on June 30, 2020.

MS-24     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

d.  Securities Purchased on a When-Issued or Delayed Delivery Basis

The Fund purchases securities on a when-issued or delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

e.  Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an

event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement. At June 30, 2020, the Fund had OTC derivatives in a net liability position of $874,772 and the aggregate value of collateral pledged for such contracts was $779,948.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage exposure to certain foreign currencies. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities.

Semiannual Report             MS-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

e.  Derivative Financial Instruments (continued)

The Fund entered into OTC forward exchange contracts primarily to manage exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund purchased or wrote exchange traded option contracts primarily to manage and/or gain exposure to equity price risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss. The Fund did not hold any option contracts at period end.

See Note 10 regarding other derivative information.

f.  Securities Sold Short

The Fund is engaged in selling securities short, which obligates the Fund to replace a borrowed security with the same security at current fair value. The Fund incurs a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund realizes a gain if the price of the security declines between those dates. Gains are limited to the price at which the Fund sold the security short, while losses are potentially unlimited in size.

The Fund is required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale to the extent necessary to meet margin requirements until the short position is closed out. A deposit must also be maintained with the Fund’s custodian/counterparty broker consisting of cash and/or securities having a value equal to a specified percentage of the value of the securities sold short. The Fund is obligated to pay fees for borrowing the securities

sold short and is required to pay the counterparty any dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund. At June 30, 2020, the Fund had no securities sold short.

g.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund and a joint repurchase agreement. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

h.  Senior Floating Rate Interests

The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR

MS-26     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

i.  Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

As a result of several court cases, in certain countries across the European Union, the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). These additional filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU reclaims is reflected as other income in the Statement of Operations and any related receivable, if any, is reflected as European Union tax reclaims in the Statement of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, when EU reclaims are received by the Fund and the Fund previously passed foreign tax credit on to its shareholders, the Fund must either amend historic tax reporting to shareholders or enter into a closing agreement with the Internal Revenue Service (IRS) in order to pay the associated tax liability on behalf of the Fund’s shareholders.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

j.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and dividends declared on securities sold short are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Semiannual Report             MS-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

k.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

l.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust.

Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		641,139		$	9,529,737			765,653		$	14,772,259
Shares issued in reinvestment of distributions		—			—			2,031,099			35,828,591
Shares redeemed		(297,471	)		(4,676,772	)		(24,880,289	)		(487,131,621)
Net increase (decrease)		343,668		$	4,852,965			(22,083,537	)	$	(436,530,771)
Class 2 Shares:
Shares sold		9,774,365		$	135,425,822			29,854,091		$	583,466,693
Shares issued in reinvestment of distributions		—			—			19,094,846			330,340,832
Shares redeemed		(21,356,959	)		(326,289,014	)		(37,705,675	)		(715,624,676)
Net increase (decrease)		(11,582,594	)	$	(190,863,192	)		11,243,262		$	198,182,849
Class 4 Shares:
Shares sold		893,404		$	12,663,468			625,179		$	11,842,479
Shares issued in reinvestment of distributions		—			—			749,250			13,089,406
Shares redeemed		(477,331	)		(7,759,254	)		(1,022,438	)		(19,609,155)
Net increase (decrease)		416,073		$	4,904,214			351,991		$	5,322,730

MS-28     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Mutual Advisers, LLC (Franklin Mutual)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.  Management Fees

The Fund pays an investment management fee to Franklin Mutual based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.675%	Up to and including $5 billion
0.645%	Over $5 billion, up to and including $10 billion
0.625%	Over $10 billion, up to and including $15 billion
0.595%	Over $15 billion, up to and including $20 billion
0.585%	Over $20 billion, up to and including $25 billion
0.565%	Over $25 billion, up to and including $30 billion
0.555%	Over $30 billion, up to and including $35 billion
0.545%	In excess of $35 billion

b.  Administrative Fees

Under an agreement with Franklin Mutual, FT Services provides administrative services to the Fund. The fee is paid by Franklin Mutual based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

Semiannual Report             MS-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

3.  Transactions with Affiliates (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%	$	—	$	19,467,000	$	(18,390,000	)	$	—	$	—	$	1,077,000		1,077,000	$	3,234

f.  Interfund Transactions

The Fund engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. During the period ended June 30, 2020, these purchase and sale transactions aggregated $0 and $1,702,055, respectively.

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$2,238,998,309
Unrealized appreciation	$441,530,157
Unrealized depreciation	(306,492,983	)
Net unrealized appreciation (depreciation)	$135,037,174

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and wash sales.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities and securities sold short) for the period ended June 30, 2020, aggregated $485,118,984 and $484,261,996, respectively.

MS-30         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $1,296,396 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7.  Credit Risk and Defaulted Securities

The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those of distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. For the period ended June 30, 2020, the Fund recorded an adjustment for uncollectible interest of $2,537,110 as noted in the Statement of Operations.

At June 30, 2020, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $16,798,889, representing 0.7% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.

8.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9.  Restricted Securities

The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Fund may have registration rights for restricted securities. The issuer generally incurs all registration costs.

At June 30, 2020, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares	Issuer	Acquisition Date		Cost		Value
1,730,515	International Automotive Components Group Brazil LLC (Value is 0.0%† of Net Assets)		4/13/06-12/26/08	$	1,149,241	$	32,541

^†Rounds to less than 0.1% of net assets.

Semiannual Report             MS-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

10.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Variation margin on futures contracts	$	1,153,179	a	Variation margin on futures contracts	$	—
	Unrealized appreciation on OTC forward exchange contracts		574,640		Unrealized depreciation on OTC forward exchange contracts		1,449,052
Totals		$	1,727,819			$	1,449,052

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/ payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

For the period ended June 30, 2020, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Period			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Foreign exchange contracts	Forward exchange contracts	$	2,269,806		Forward exchange contracts	$1,511,444
	Futures contracts		1,796,871		Futures contracts	1,873,446
Equity contracts	Written options		(262,792	)	Written options	—
Totals		$	3,803,885			$3,384,890

For the period ended June 30, 2020, the average month end notional amount of futures contracts and options represented $64,725,121 and 1,643 shares, respectively. The average month end contract value of forward exchange contracts was $145,753,358.

See Note 1(e) regarding derivative financial instruments.

11.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

MS-32         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

12.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources

(observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Aerospace & Defense	$	30,558,434	$	25,774,011	$	—	$	56,332,445
Auto Components		—		—		32,541		32,541
Capital Markets		—		24,692,435		—		24,692,435
Machinery		—		17,211,517		—		17,211,517
Media		146,678,668		—		90,727		146,769,395
Oil, Gas & Consumable Fuels		92,850,587		45,546,302		—		138,396,889
Pharmaceuticals		197,785,312		56,028,172		—		253,813,484
Software		81,169,520		114,439		—		81,283,959
Specialty Retail		21,876,036		—		6,571,584c		28,447,620
Technology Hardware, Storage & Peripherals		43,565,381		58,640,009		—		102,205,390
Tobacco		36,912,559		42,004,520		—		78,917,079
Wireless Telecommunication Services		—		13,386,708		—		13,386,708
All Other Equity Investments		1,194,639,212		—		—		1,194,639,212
Corporate Bonds, Notes and Senior Floating Rate Interests		—		137,686,522		—		137,686,522
Corporate Notes in Reorganization		—		16,798,889		—		16,798,889
Companies in Liquidation		—		—		49,840c		49,840
Short Term Investments		68,571,909		14,519,396		—		83,091,305
Total Investments in Securities	$	1,914,607,618	$	452,402,920	$	6,744,692	$	2,373,755,230
Other Financial Instruments:
Futures Contracts	$	1,153,179	$	—	$	—	$	1,153,179
Forward Exchange Contracts		—		574,640		—		574,640
Total Other Financial Instruments	$	1,153,179	$	574,640	$	—	$	1,727,819

Semiannual Report             MS-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

12.  Fair Value Measurements (continued)

	Level 1		Level 2		Level 3		Total
Liabilities:
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	1,449,052	$	—	$	1,449,052

^aFor detailed categories, see the accompanying Statement of Investments.

^bIncludes common stocks as well as other equity interests.

^cIncludes securities determined to have no value at June 30, 2020.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and liabilities at the beginning and/or end of the period.

13.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

14.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Counterparty		Currency		Selected Portfolio
BOFA	Bank of America Corp.	EUR	Euro	ADR	American Depositary Receipt
BONY	Bank of New York	GBP	British Pound	FHLB	Federal Home Loan Bank
HSBK	HSBC Bank PLC	USD	United States Dollar	LIBOR	London InterBank Offered Rate
SSBT	State Street Bank and Trust Co., N.A.
UBSW	UBS AG

MS-34         Semiannual Report

Franklin Rising Dividends VIP Fund

This semiannual report for Franklin Rising Dividends VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -4.93% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             FRD-1

FRANKLIN RISING DIVIDENDS VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital appreciation, with preservation of capital as an important consideration. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of financially sound companies that have paid consistently rising dividends.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Value securities may not increase in price as anticipated or may decline further in value. For stocks paying dividends, dividends are not guaranteed, and can increase, decrease or be totally eliminated without notice. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered relatively more speculative. To the extent that the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, the Fund may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a -3.08% total return for the same period.¹ Please note the Fund employs a bottom-up stock selection process, and the managers invest in securities without regard to benchmark comparisons.

Economic and Market Overview

U.S. equities, as measured by the S&P 500, nearly reversed earlier losses but declined modestly during the six-month period. A sharp selloff began in late February 2020 amid investor fears of a global economic slowdown due to the novel coronavirus (COVID-19) pandemic.

Government-issued restrictions to mitigate the pandemic severely curtailed U.S. economic activity beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April as many businesses, particularly in hospitality, retail and travel, announced mass layoffs.² Within just two months, the unemployment rate went from a 50-year low to an 80-year high.² The longest U.S. economic expansion in history ended in February, according to the National Bureau of Economic Research, and the country slipped into a deep recession.

In an effort to buffer the sharp drop in economic activity, the Fed implemented two emergency rate cuts in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. Additionally, the Fed announced broad quantitative easing measures aimed at ensuring the flow of credit to borrowers and supporting credit markets with unlimited amounts of bond purchasing. Meanwhile, Congress passed the Coronavirus Aid, Relief and Economic Security Act to provide economic relief for individuals and businesses and additional funding for small businesses.

Benefiting from these fiscal and monetary measures, equities began to advance at the end of March 2020. As states gradually reopened, economic activity resumed, leading to declining initial jobless claims and record-high increases in job additions and existing home sales. Optimism about potential COVID-19 vaccines and treatments and rising retail sales further supported equities, which rebounded from multi-year lows to post the strongest second-quarter returns in more than 20 years. Nevertheless, surging infection rates in several states near the end of June led to concerns that economic recovery could be hindered if reopening measures are paused or rolled back.

Investment Strategy

We are a research-driven, fundamental investment adviser, pursuing a disciplined value-oriented strategy. As bottom-up

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

2. Source: Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

FRD-2     Semiannual Report

FRANKLIN RISING DIVIDENDS VIP FUND

investors concentrating primarily on individual securities, we seek fundamentally sound companies that we believe meet our screening criteria, which include consistent, substantial dividend increases; reinvested earnings; and strong balance sheets. We attempt to acquire such stocks at attractive prices, often when they are out of favor with other investors. In following these criteria, we do not necessarily focus on companies whose securities pay a high dividend but rather on companies that consistently raise their dividends.

Manager’s Discussion

During the six-month period ended June 30, 2020, some companies that contributed to absolute performance included Microsoft, West Pharmaceutical Services and Lowe’s.

Enterprise software firm Microsoft boosted performance following a strong earnings report and based on investor optimism its cloud-based services could realize additional benefits as more people work from home going forward. Its workflow collaboration product, Teams, has seen excellent results. The company has seen strength in its commercial cloud services and in sales of Windows as customers migrated away from Windows 7 in recent quarters. We believe that the trends of helping business customers move to the cloud and providing workers with productivity tools could support attractive growth over the medium to longer term.

West Pharmaceutical Services, which makes packaging for pharmaceuticals and health care products, supported fund performance after reporting robust quarterly financial results due to continued strong demand for its products. The company is also marketing products for COVID-19 diagnostics and anti-viral therapies and vaccines that could provide an additional lift to growth over the coming quarters.

Home improvement retailer Lowe’s contributed following a strong first-quarter financial report which highlighted excellent demand for its products. During the pandemic, with people spending more time at home, consumers have looked to complete more do-it-yourself home renovation projects. Lowe’s is also seeing benefits from changes aimed at improving its operational performance through increased sales productivity, new technology systems and supply chain improvements. We see significant opportunity for Lowe’s to improve sales in stores and online while increasing its operating margin.

In contrast, some companies that detracted from absolute performance included Raytheon Technologies, Honeywell International and Occidental Petroleum.

Portfolio Composition

Based on Total Net Assets as of 6/30/20

In industrials, aerospace and defense companies United Technologies and Raytheon merged in April to create Raytheon Technologies. These businesses detracted due to concerns about the weakness in the commercial aviation market following the global lockdowns aimed at stemming the spread of COVID-19. We continue to like the prospects for Raytheon, particularly for its leading defense business.

Honeywell International curbed performance as cyclical stocks struggled amid the global economic downturn and based on concerns about its exposure to aerospace and oil and gas markets that could remain weak over the next few quarters. We recognize that some of these markets may take time to recover, but we continue to believe Honeywell is a quality company with strong positions in attractive markets.

Semiannual Report                 FRD-3

FRANKLIN RISING DIVIDENDS VIP FUND

Top 10 Holdings

6/30/20

Company Sector/Industry	% of Total Net Assets
Microsoft Corp. Software & Services		8.7	%
Roper Technologies Inc. Industrial Conglomerates		5.3	%
Accenture PLC Software & Services		3.8	%
Linde PLC (United Kingdom) Materials		3.5	%
Stryker Corp. Health Care Equipment & Services		3.4	%
Air Products and Chemicals Inc. Materials		3.3	%
Becton Dickinson and Co. Health Care Equipment & Services		3.2	%
Texas Instruments Inc. Semiconductors & Semiconductor Equipment		3.1	%
Analog Devices Inc. Semiconductors & Semiconductor Equipment		3.1	%
West Pharmaceutical Services Inc. Health Care Equipment & Services		2.8	%

Steps taken to cut costs and realign its business should also be helpful.

Energy company Occidental Petroleum weighed on Fund performance due to falling oil prices. The company significantly increased its debt to finance its recent purchase of Anadarko Petroleum, which has led to investor concerns about its ability to meet its debt obligations. We exited the position during the review period.

Thank you for your participation in Franklin Rising Dividends VIP Fund. We look forward to continuing to serve your investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FRD-4     Semiannual Report

FRANKLIN RISING DIVIDENDS VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$950.70	$4.90	$1,019.84	$5.07	1.01%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report             FRD-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Rising Dividends VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$27.90			$25.75			$29.21			$25.51			$25.26			$29.63
Income from investment operationsa:
Net investment incomeb		0.16			0.37			0.39			0.40			0.42			0.45
Net realized and unrealized gains (losses)		(1.52	)		6.77			(1.65	)		4.76			3.45			(1.33	)
Total from investment operations		(1.36	)		7.14			(1.26	)		5.16			3.87			(0.88	)
Less distributions from:
Net investment income		(0.41	)		(0.45	)		(0.44	)		(0.48	)		(0.44	)		(0.48	)
Net realized gains		(1.41	)		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)
Total distributions		(1.82	)		(4.99	)		(2.20	)		(1.46	)		(3.62	)		(3.49	)
Net asset value, end of period		$24.72			$27.90			$25.75			$29.21			$25.51			$25.26
Total returnc		(4.77)%			29.58%			(4.84)%			20.85%			16.33%			(3.42)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.66%			0.63%			0.62%			0.62%			0.63%			0.63%
Expenses net of waiver and payments by affiliates		0.66%e,f			0.63%e,f			0.62%e,f			0.62%e,f			0.62%e			0.63%f
Net investment income		1.30%			1.34%			1.38%			1.49%			1.67%			1.65%
Supplemental data
Net assets, end of period (000’s)		$136,120			$150,864			$157,838			$216,015			$181,072			$143,376
Portfolio turnover rate		9.21%			7.26%g			3.09%g			3.36%			6.66%			4.74%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^gExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 9.

FRD-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$26.99			$25.04			$28.46			$24.89			$24.72			$29.06
Income from investment operationsa:
Net investment incomeb		0.13			0.29			0.31			0.33			0.35			0.37
Net realized and unrealized gains (losses)		(1.47	)		6.57			(1.61	)		4.63			3.37			(1.29	)
Total from investment operations		(1.34	)		6.86			(1.30	)		4.96			3.72			(0.92	)
Less distributions from:
Net investment income		(0.33	)		(0.37	)		(0.36	)		(0.41	)		(0.37	)		(0.41	)
Net realized gains		(1.41	)		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)
Total distributions		(1.74	)		(4.91	)		(2.12	)		(1.39	)		(3.55	)		(3.42	)
Net asset value, end of period		$23.91			$26.99			$25.04			$28.46			$24.89			$24.72
Total returnc		(4.84)%			29.23%			(5.07)%			20.56%			16.04%			(3.65)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.91%			0.88%			0.87%			0.87%			0.88%			0.88%
Expenses net of waiver and payments by affiliates		0.91%e,f			0.88%e,f			0.87%e,f			0.87%e,f			0.87%e			0.88%f
Net investment income		1.05%			1.09%			1.13%			1.24%			1.42%			1.40%
Supplemental data
Net assets, end of period (000’s)		$1,174,601			$1,387,688			$1,106,334			$1,640,883			$1,530,374			$1,310,783
Portfolio turnover rate		9.21%			7.26%g			3.09%g			3.36%			6.66%			4.74%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^gExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 9.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FRD-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$27.08			$25.11			$28.54			$24.98			$24.81			$29.19
Income from investment operationsa:
Net investment incomeb		0.12			0.26			0.29			0.30			0.32			0.35
Net realized and unrealized gains (losses)		(1.49	)		6.60			(1.62	)		4.65			3.39			(1.31	)
Total from investment operations		(1.37	)		6.86			(1.33	)		4.95			3.71			(0.96	)
Less distributions from:
Net investment income		(0.32	)		(0.35	)		(0.34	)		(0.41	)		(0.36	)		(0.41	)
Net realized gains		(1.41	)		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)
Total distributions		(1.73	)		(4.89	)		(2.10	)		(1.39	)		(3.54	)		(3.42	)
Net asset value, end of period		$23.98			$27.08			$25.11			$28.54			$24.98			$24.81
Total returnc		(4.93)%			29.16%			(5.16)%			20.40%			15.93%			(3.75)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.01%			0.98%			0.97%			0.97%			0.98%			0.98%
Expenses net of waiver and payments by affiliates		1.01%e,f			0.98%e,f			0.97%e,f			0.97%e,f			0.97%e			0.98%f
Net investment income		0.95%			0.99%			1.03%			1.14%			1.32%			1.30%
Supplemental data
Net assets, end of period (000’s)		$42,892			$46,539			$32,825			$36,407			$28,579			$20,453
Portfolio turnover rate		9.21%			7.26%g			3.09%g			3.36%			6.66%			4.74%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^gExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 9.

FRD-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Rising Dividends VIP Fund

	Shares		Value
Common Stocks 96.0%
Aerospace & Defense 3.5%
General Dynamics Corp.		139,852	$	20,902,280
Raytheon Technologies Corp.		428,746		26,419,329
				47,321,609
Building Products 1.2%
Johnson Controls International PLC		486,910		16,623,107
Commercial & Professional Services 1.8%
Cintas Corp.		84,272		22,446,690
Matthews International Corp., A		124,917		2,385,915
				24,832,605
Consumer Durables & Apparel 2.0%
NIKE Inc., B		280,384		27,491,651
Consumer Services 1.7%
McDonald’s Corp.		125,099		23,077,013
Diversified Financials 0.7%
Nasdaq Inc.		45,140		5,392,876
State Street Corp.		57,541		3,656,730
				9,049,606
Electrical Equipment 0.5%
nVent Electric PLC		346,626		6,492,305
Energy 1.9%
Chevron Corp.		141,294		12,607,664
EOG Resources Inc.		142,861		7,237,338
Exxon Mobil Corp.		143,861		6,433,464
				26,278,466
Food & Staples Retailing 1.6%
Walmart Inc.		176,908		21,190,040
Food, Beverage & Tobacco 3.5%
McCormick & Co. Inc.		124,447		22,327,036
PepsiCo Inc.		186,030		24,604,328
				46,931,364
Health Care Equipment & Services 16.5%
Abbott Laboratories		278,695		25,481,084
Becton Dickinson and Co.		181,815		43,502,875
CVS Health Corp.		160,793		10,446,721
Dentsply Sirona Inc.		124,192		5,471,899
Medtronic PLC		399,554		36,639,102
Stryker Corp.		256,745		46,262,882
UnitedHealth Group Inc.		59,400		17,520,030
West Pharmaceutical Services Inc.		166,901		37,914,900
				223,239,493

Semiannual Report             FRD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Household & Personal Products 3.1%
Colgate-Palmolive Co.		248,540	$	18,208,040
The Procter & Gamble Co.		202,094		24,164,380
				42,372,420
Industrial Conglomerates 8.6%
Carlisle Cos. Inc.		74,202		8,879,753
Honeywell International Inc.		248,075		35,869,164
Roper Technologies Inc.		183,883		71,394,414
				116,143,331
Insurance 1.4%
Aflac Inc.		192,904		6,950,331
Erie Indemnity Co., A		62,670		12,026,373
				18,976,704
Machinery 3.3%
Donaldson Co. Inc.		190,497		8,861,921
Dover Corp.		191,888		18,528,705
Otis Worldwide Corp.		98,553		5,603,723
Pentair PLC		308,694		11,727,285
				44,721,634
Materials 10.6%
Air Products and Chemicals Inc.		188,467		45,507,242
Albemarle Corp.		345,610		26,684,548
Ecolab Inc.		120,309		23,935,476
Linde PLC (United Kingdom)		222,432		47,180,051
				143,307,317
Pharmaceuticals, Biotechnology & Life Sciences 4.5%
AbbVie Inc.		152,236		14,946,530
Johnson & Johnson		195,929		27,553,495
Perrigo Co. PLC		108,863		6,016,858
Pfizer Inc.		379,815		12,419,951
				60,936,834
Retailing 5.4%
Lowe’s Cos. Inc.		195,372		26,398,665
Ross Stores Inc.		234,930		20,025,433
Target Corp.		223,737		26,832,778
				73,256,876
Semiconductors & Semiconductor Equipment 6.2%
Analog Devices Inc.		338,519		41,515,970
Texas Instruments Inc.		332,168		42,175,371
				83,691,341

FRD-10     Semiannual Report       

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Software & Services 14.4%
	Accenture PLC, A		243,078	$	52,193,708
	Microsoft Corp.		576,928		117,410,617
	Visa Inc., A		134,562		25,993,342
					195,597,667
	Trading Companies & Distributors 1.0%
	W.W. Grainger Inc.		40,993		12,878,361
	Transportation 2.6%
	Norfolk Southern Corp.		95,647		16,792,744
	United Parcel Service Inc., B		161,367		17,940,783
					34,733,527
	Total Common Stocks (Cost $643,793,684)				1,299,143,271
	Short Term Investments (Cost $52,452,937) 3.9%
	Money Market Funds 3.9%
a,b	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		52,452,937		52,452,937
	Total Investments (Cost $696,246,621) 99.9%				1,351,596,208
	Other Assets, less Liabilities 0.1%				2,017,259
	Net Assets 100.0%			$	1,353,613,467

^aSee Note 3(e) regarding investments in affiliated management investment companies.

^bThe rate shown is the annualized seven-day effective yield at period end.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FRD-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Rising Dividends VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	643,793,684
Cost - Non-controlled affiliates (Note 3e)		52,452,937
Value - Unaffiliated issuers	$	1,299,143,271
Value - Non-controlled affiliates (Note 3e)		52,452,937
Receivables:
Investment securities sold		22,915
Capital shares sold		2,289,977
Dividends		1,048,381
Other assets		1,245
Total assets		1,354,958,726
Liabilities:
Payables:
Capital shares redeemed		251,866
Management fees		680,573
Distribution fees		247,101
Trustees’ fees and expenses		540
Reports to shareholders		115,164
Accrued expenses and other liabilities		50,015
Total liabilities		1,345,259
Net assets, at value	$	1,353,613,467
Net assets consist of:
Paid-in capital		$ 654,522,169
Total distributable earnings (losses)		699,091,298
Net assets, at value	$	1,353,613,467
Class 1:
Net assets, at value	$	136,120,264
Shares outstanding		5,505,798
Net asset value and maximum offering price per share	$	24.72
Class 2:
Net assets, at value	$	1,174,600,707
Shares outstanding		49,131,938
Net asset value and maximum offering price per share	$	23.91
Class 4:
Net assets, at value	$	42,892,496
Shares outstanding		1,788,598
Net asset value and maximum offering price per share		$      23.98

FRD-12     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Rising Dividends VIP Fund
Investment income:
Dividends:
Unaffiliated issuers	$	12,933,421
Non-controlled affiliates (Note 3e)		38,590
Total investment income		12,972,011
Expenses:
Management fees (Note 3a)		4,258,919
Distribution fees: (Note 3c)
Class 2		1,445,175
Class 4		73,767
Custodian fees (Note 4)		5,353
Reports to shareholders		80,050
Professional fees		32,063
Trustees’ fees and expenses		4,541
Other		17,054
Total expenses		5,916,922
Expense reductions (Note 4)		(2,984	)
Expenses waived/paid by affiliates (Note 3e)		(32,299	)
Net expenses		5,881,639
Net investment income		7,090,372
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		39,470,417
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(149,518,047	)
Net realized and unrealized gain (loss)		(110,047,630	)
Net increase (decrease) in net assets resulting from operations	$	(102,957,258	)

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FRD-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Rising Dividends VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	7,090,372		$	17,322,041
Net realized gain (loss)		39,470,417			82,812,044
Net change in unrealized appreciation (depreciation)		(149,518,047	)		279,796,675
Net increase (decrease) in net assets resulting from operations		(102,957,258	)		379,930,760
Distributions to shareholders:
Class 1		(9,363,148	)		(28,799,833	)
Class 2		(76,921,978	)		(227,983,493	)
Class 4		(2,888,655	)		(6,300,776	)
Total distributions to shareholders		(89,173,781	)		(263,084,102	)
Capital share transactions: (Note 2)
Class 1		1,777,365			(21,678,109	)
Class 2		(42,629,500	)		182,626,753
Class 4		1,505,341			10,299,225
Total capital share transactions		(39,346,794	)		171,247,869
Net increase (decrease) in net assets		(231,477,833	)		288,094,527
Net assets:
Beginning of period		1,585,091,300			1,296,996,773
End of period	$	1,353,613,467		$	1,585,091,300

FRD-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Rising Dividends VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Rising Dividends VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m Eastern time.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

Semiannual Report             FRD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

b. Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c. Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

d. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of

FRD-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

e. Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

f. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended						Year Ended
	June 30, 2020						December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		91,477		$	2,138,662			238,379		$	6,420,546
Shares issued in reinvestment of distributions		386,747			9,363,148			1,132,514			28,799,833
Shares redeemed		(380,059	)		(9,724,445	)		(2,092,688	)		(56,898,488)
Net increase (decrease)		98,165		$	1,777,365			(721,795	)	$	(21,678,109)
Class 2 Shares:
Shares sold		5,031,301		$	123,392,526			7,298,801		$	200,248,939
Shares issued in reinvestment of distributions		3,284,457			76,921,978			9,252,577			227,983,493
Shares redeemed in-kind (Note 9)		—			—			(897,175	)		(22,646,135)
Shares redeemed		(10,591,496	)		(242,944,004	)		(8,430,854	)		(222,959,544)
Net increase (decrease)		(2,275,738	)	$	(42,629,500	)		7,223,349		$	182,626,753
Class 4 Shares:
Shares sold		144,348		$	3,435,582			415,831		$	10,934,186
Shares issued in reinvestment of distributions		122,974			2,888,655			254,783			6,300,776
Shares redeemed		(197,420	)		(4,818,896	)		(258,933	)		(6,935,737)
Net increase (decrease)		69,902		$	1,505,341			411,681		$	10,299,225

Semiannual Report             FRD-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

3. Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a. Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.750%	Up to and including $500 million
0.625%	Over $500 million, up to and including $1 billion
0.500%	Over $1 billion, up to and including $5 billion
0.490%	In excess of $5 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.641% of the Fund’s average daily net assets.

b. Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c. Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d. Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

FRD-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Dividend Income
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$17,735,928		$166,499,752		$(131,782,743)		$         —		$         —		$52,452,937		52,452,937		$38,590

4. Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5. Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	699,061,403
Unrealized appreciation	$	686,228,892
Unrealized depreciation		(33,694,087)
Net unrealized appreciation (depreciation)	$	652,534,805

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of gains realized on in-kind shareholder redemptions.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $122,274,094 and $276,995,819, respectively.

7. Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

Semiannual Report             FRD-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

8. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

9. Redemption In-Kind

During the year ended December 31, 2019, the Fund realized $10,655,992 of net gains resulting from redemptions in-kind in which a shareholder redeemed fund shares for cash and securities held by the Fund. Because such gains are not taxable to the Fund and are not distributed to remaining shareholders, they are reclassified from accumulated net realized gains to paid-in capital.

10. Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

At June 30, 2020, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statement of Investments.

11. New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

FRD-20     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

12. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Semiannual Report             FRD-21

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Franklin Small Cap Value VIP Fund

This semiannual report for Franklin Small Cap Value VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -18.43% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             FSV-1

FRANKLIN SMALL CAP VALUE VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term total return. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of small capitalization companies. For this Fund, small capitalization companies are those with market capitalizations not exceeding either the highest market capitalization in the Russell 2000^® Index or the 12-month average of the highest market capitalization in the Russell 2000^® Index, whichever is greater, at the time of purchase. The Fund generally invests in equity securities of companies that the manager believes are undervalued at the time of purchase and have the potential for capital appreciation.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s investments in smaller company stocks carry special risks as such stocks have historically exhibited greater price volatility than large-company stocks, particularly over the short term. Additionally, smaller companies often have relatively small revenues, limited product lines and a small market share. Value securities may not increase in price as anticipated, or may decline further in value. In addition, the Fund may invest up to 25% of its total assets in foreign securities, which involve special risks, including currency fluctuations and economic and political uncertainty. The Fund also may invest in equity real estate investment trusts (REITs). The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Russell 2000^® Value Index posted a -23.50% total return for the same period.¹ Please note the Fund employs a bottom-up stock

selection process, and the managers invest in securities without regard to benchmark comparisons.

Economic and Market Overview

U.S. equities, as measured by the Standard & Poor’s^® 500 Index, nearly reversed earlier losses but declined modestly during the six-month period. A sharp selloff began in late February 2020 amid investor fears of a global economic slowdown due to the novel coronavirus (COVID-19) pandemic.

Government-issued restrictions to mitigate the pandemic severely curtailed U.S. economic activity beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April as many businesses, particularly in hospitality, retail and travel, announced mass layoffs.² Within just two months, the unemployment rate went from a 50-year low to an 80-year high.² The longest U.S. economic expansion in history ended in February, according to the National Bureau of Economic Research, and the country slipped into a deep recession.

In an effort to buffer the sharp drop in economic activity, the Fed implemented two emergency rate cuts in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. Additionally, the Fed announced broad quantitative easing measures aimed at ensuring the flow of credit to borrowers and supporting credit markets with unlimited amounts of bond purchasing. Meanwhile, Congress passed the Coronavirus Aid, Relief and Economic Security Act to provide economic relief for individuals and businesses and additional funding for small businesses.

Benefiting from these fiscal and monetary measures, equities began to advance at the end of March 2020. As states gradually reopened, economic activity resumed, leading to declining initial jobless claims and record-high increases in job additions and existing home sales. Optimism about potential COVID-19 vaccines and treatments and rising retail sales further supported equities, which rebounded from multi-year lows to post the strongest second-quarter returns in more than 20 years. Nevertheless, surging infection rates in several states near the end of June led to concerns that economic recovery could be hindered if reopening measures are paused or rolled back.

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

2. Source: Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

FSV-2     Semiannual Report

FRANKLIN SMALL CAP VALUE VIP FUND

Investment Strategy

Our strategy is to invest in small-cap companies that we believe are undervalued at the time of purchase and have the potential for capital appreciation. A stock is undervalued, or is a “value,” when it trades at less than the price at which the investment manager believes it would trade if the market reflected all factors relating to the company’s worth.

Following this strategy, the Fund invests in companies that the investment manager believes have, for example: stock prices that are low relative to current, or historical or future earnings, book value, cash flow or sales; recent sharp price declines but the potential for good long-term earnings prospects; and valuable intangibles not reflected in the stock price. The Fund also may invest in equity real estate investment trusts (REITs).

The Fund may invest up to 25% of its total assets in foreign securities.

Manager’s Discussion

For the six months ended June 30, 2020, detractors from performance included Retail Properties of America, First Horizon National and Toll Brothers.

Retail Properties of America, a shopping center operator, underperformed as stay-at-home and closure guidelines issued to prevent the spread of COVID-19 exacerbated a challenging environment for the company’s brick-and-mortar retail tenants. During the first-quarter 2020 earnings call, management reported that it had collected just 52% of April rent as many non-essential retailers were shuttered. Although mandatory closure orders were being rescinded at period-end, some watch-list tenants were not expected to reopen. Also, previously stable sectors, such as fitness and casual dining, may face new pressures as consumer behavior shifts in response to new social distancing and spacing regulations. We exited the position.

Shares of First Horizon, a regional bank with a southeastern U.S. footprint, retreated as expectations for lower spread income and rising credit losses, attributable to the economic effect of the spread of COVID-19, contributed to negative sentiment. Rate cuts by the Fed to mitigate economic uncertainty could lead to a decline in spread income, the difference between interest received from interest-earning assets and interest paid on interest-bearing liabilities. Also, many sectors of the economy appear challenged to us, which may result in higher credit losses.

Shares of Toll Brothers, a builder of luxury homes, declined as the spread of COVID-19 contributed to a deterioration in the near-term outlook for the housing market. Unemployment

Portfolio Composition

Based on Total Net Assets as of 6/30/20

increased as businesses quickly responded to lockdown and social distancing directives. We believe that housing demand may shift toward single family homes in lower density markets because of these directives and the potential longer-lasting shift to working from home versus commuting. Consequently, Toll Brothers, which is a luxury builder with longer construction timelines and an urban infill segment focused on multifamily housing, may be less favorably positioned relative to peers. We exited our position before period-end.

Semiannual Report             FSV-3

FRANKLIN SMALL CAP VALUE VIP FUND

Top 10 Holdings

6/30/20    

Company Sector/Industry	% of Total Net Assets
Old Republic International Corp. Insurance		3.3%
The Hanover Insurance Group Inc. Insurance		3.2%
Regal Beloit Corp. Electrical Equipment		3.2%
Horace Mann Educators Corp. Insurance		3.0%
First Horizon National Corp. Banks		2.9%
Rexnord Corp. Machinery		2.7%
Jack in the Box Inc. Consumer Services		2.6%
Columbia Banking System Inc. Banks		2.5%
Oshkosh Corp. Machinery		2.4%
Carter’s Inc. Consumer Durables & Apparel		2.4%

Contributors to Fund performance included BJ’s Wholesale Club, Thor Industries and II-IV.

BJ’s Wholesale Club, a warehouse club retailer, benefited from accelerated purchases of consumer staples as the economy shut down in response to the COVID-19 pandemic. Longer term, we believe the company’s membership model may provide it with a longer benefit and an earnings advantage, if shoppers continue to sign up.

Shares of Thor Industries, a manufacturer of recreational vehicles, were bid up on investor expectations of increased consumer spending on domestic travel. International tourism has declined significantly as countries have closed borders to limit the spread of COVID-19. Thor also benefited from an anticipated acceleration in consumer discretionary spending tied to Congress passing the fiscal stimulus package.

Shares of II-VI, a provider of engineered materials and optoelectronic components, rose during the period, due to stronger-than-expected quarterly earnings in its fiscal third quarter in May and an improved outlook for the subsequent period. Results were driven by strong revenue growth in all end markets and the benefit of synergies from an acquisition occurring ahead of schedule. Furthermore, the company recorded a record backlog of orders, and its facility in

Sherman, TX, was qualified by a customer as an authorized provider of compound semiconductors.

Thank you for your participation in Franklin Small Cap Value VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FSV-4     Semiannual Report

FRANKLIN SMALL CAP VALUE VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
			Fund-Level		Fund-Level
			Expenses		Expenses	Net
	Beginning	Ending	Paid During	Ending	Paid During	Annualized
Share	Account	Account	Period	Account	Period	Expense
Class	Value 1/1/20	Value 6/30/20	1/1/20–6/30/201, 2	Value 6/30/20	1/1/20–6/30/201, 2	Ratio2
Class 4	$1,000	$815.70	$4.65	$1,019.74	$5.17	1.03%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report         FSV-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Small Cap Value VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$15.73			$15.14			$20.43			$19.93			$18.12			$22.81
Income from investment operationsa:
Net investment incomeb		0.10			0.24	c		0.21			0.21	d		0.15			0.21
Net realized and unrealized gains (losses)		(3.01	)		3.35			(2.29	)		1.82			4.79			(1.53	)
Total from investment operations		(2.91	)		3.59			(2.08	)		2.03			4.94			(1.32	)
Less distributions from:
Net investment income		(0.23	)		(0.22	)		(0.23	)		(0.15	)		(0.21	)		(0.20	)
Net realized gains		(0.81	)		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions		(1.04	)		(3.00	)		(3.21	)		(1.53	)		(3.13	)		(3.37	)
Net asset value, end of period		$11.78			$15.73			$15.14			$20.43			$19.93			$18.12
Total returne		(18.31)%			26.72%			(12.69)%			10.92%			30.54%			(7.18)%
Ratios to average net assetsf
Expenses before waiver and payments by affiliates and expense reduction		0.68%			0.67%			0.66%			0.66%			0.66%			0.65%
Expenses net of waiver and payments by affiliates and expense reductiong		0.68%	h		0.67%	h		0.65%			0.65%			0.64%			0.64%
Net investment income		1.50%			1.58%	c		1.13%			1.06%	d		0.84%			1.04%
Supplemental data
Net assets, end of period (000’s)		$38,887			$46,980			$40,644			$51,245			$47,831			$45,897
Portfolio turnover rate		33.77%			54.36%			47.82%			33.36%			34.60%			27.05%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.23%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.75%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^fRatios are annualized for periods less than one year.

^gBenefit of expense reduction rounds to less than 0.01%.

^hBenefit of waiver and payments by affiliates rounds to less than 0.01%.

FSV-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small Cap Value VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$15.05			$14.60			$19.80			$19.36			$17.68			$22.32
Income from investment operationsa:
Net investment incomeb		0.08			0.20	c		0.16			0.15	d		0.10			0.16
Net realized and unrealized gains (losses)		(2.88	)		3.20			(2.20	)		1.77			4.66			(1.49	)
Total from investment operations		(2.80	)		3.40			(2.04	)		1.92			4.76			(1.33	)
Less distributions from:
Net investment income		(0.19	)		(0.17	)		(0.18	)		(0.10	)		(0.16	)		(0.14	)
Net realized gains		(0.81	)		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions		(1.00	)		(2.95	)		(3.16	)		(1.48	)		(3.08	)		(3.31	)
Net asset value, end of period		$11.25			$15.05			$14.60			$19.80			$19.36			$17.68
Total returne		(18.39)%			26.35%			(12.88)%			10.65%			30.19%			(7.39)%
Ratios to average net assetsf
Expenses before waiver and payments by affiliates and expense reduction		0.93%			0.92%			0.91%			0.91%			0.91%			0.90%
Expenses net of waiver and payments by affiliates and expense reductiong		0.93%	h		0.92%	h		0.90%			0.90%			0.89%			0.89%
Net investment income		1.25%			1.33%	c		0.88%			0.81%	d		0.59%			0.79%
Supplemental data
Net assets, end of period (000’s)		$904,935			$1,123,093			$978,675			$1,302,055			$1,366,807			$1,172,173
Portfolio turnover rate		33.77%			54.36%			47.82%			33.36%			34.60%			27.05%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.98%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.50%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^fRatios are annualized for periods less than one year.

^gBenefit of expense reduction rounds to less than 0.01%.

^hBenefit of waiver and payments by affiliates rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FSV-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small Cap Value VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$15.51			$14.96			$20.22			$19.74			$17.96			$22.63
Income from investment operationsa:
Net investment incomeb		0.07			0.19	c		0.15			0.14	d		0.09			0.14
Net realized and unrealized gains (losses)		(2.96	)		3.30			(2.28	)		1.81			4.75			(1.52	)
Total from investment operations		(2.89	)		3.49			(2.13	)		1.95			4.84			(1.38	)
Less distributions from:
Net investment income		(0.18	)		(0.16	)		(0.15	)		(0.09	)		(0.14	)		(0.12	)
Net realized gains		(0.81	)		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions		(0.99	)		(2.94	)		(3.13	)		(1.47	)		(3.06	)		(3.29	)
Net asset value, end of period		$11.63			$15.51			$14.96			$20.22			$19.74			$17.96
Total returne		(18.43)%			26.23%			(13.01)%			10.56%			30.12%			(7.52)%
Ratios to average net assetsf
Expenses before waiver and payments by affiliates and expense reduction		1.03%			1.02%			1.01%			1.01%			1.01%			1.00%
Expenses net of waiver and payments by affiliates and expense reductiong		1.03%	h		1.02%	h		1.00%			1.00%			0.99%			0.99%
Net investment income		1.15%			1.23%	c		0.78%			0.71%	d		0.49%			0.69%
Supplemental data
Net assets, end of period (000’s)		$24,866			$29,238			$24,592			$32,053			$32,751			$26,128
Portfolio turnover rate		33.77%			54.36%			47.82%			33.36%			34.60%			27.05%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.88%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.40%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^fRatios are annualized for periods less than one year.

^gBenefit of expense reduction rounds to less than 0.01%.

^hBenefit of waiver and payments by affiliates rounds to less than 0.01%.

FSV-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Small Cap Value VIP Fund

		Shares		Value
	Common Stocks 98.9%
	Automobiles & Components 2.6%
	Gentex Corp.		36,000	$	927,720
	LCI Industries		17,908		2,059,062
	Thor Industries Inc.		205,121		21,851,540
					24,838,322
	Banks 15.3%
	Atlantic Union Bankshares Corp.		309,748		7,173,764
	Bryn Mawr Bank Corp.		484,783		13,409,098
	Columbia Banking System Inc.		858,758		24,341,496
	First Horizon National Corp.		2,777,349		27,662,396
	First of Long Island Corp.		614,355		10,038,561
	German American Bancorp Inc.		196,123		6,099,425
	Glacier Bancorp Inc.		162,950		5,750,506
	Lakeland Financial Corp.		438,031		20,407,864
	Peoples Bancorp Inc.		289,712		6,165,071
	South State Corp.		254,073		12,109,119
	TCF Financial Corp.		29,642		872,068
	TriCo. Bancshares		53,403		1,626,121
	TrustCo. Bank Corp. NY		782,700		4,954,491
	Washington Trust Bancorp Inc.		221,091		7,240,730
					147,850,710
	Building Products 5.3%
	Fortune Brands Home & Security Inc.		63,010		4,028,229
a	Gibraltar Industries Inc.		277,522		13,323,831
	Insteel Industries Inc.		390,746		7,451,526
a	Masonite International Corp.		100,048		7,781,734
	UFP Industries Inc.		389,687		19,293,403
					51,878,723
	Commercial & Professional Services 1.7%
a	Huron Consulting Group Inc.		34,036		1,506,093
	McGrath RentCorp.		277,667		14,996,795
					16,502,888
	Consumer Durables & Apparel 6.4%
	BRP Inc.		87,879		3,748,071
	Brunswick Corp.		327,234		20,946,248
	Callaway Golf Co.		358,465		6,276,722
	Carter’s Inc.		287,654		23,213,678
a	M/I Homes Inc.		173,900		5,989,116
a	Unifi Inc.		171,800		2,212,784
					62,386,619
	Consumer Services 4.9%
	Jack in the Box Inc.		337,791		25,026,935
	Wyndham Hotels and Resorts Inc.		518,769		22,109,935
					47,136,870

Semiannual Report             FSV-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Diversified Financials 1.6%
	Houlihan Lokey Inc.		276,700	$	15,395,588
	Electrical Equipment 3.5%
	Encore Wire Corp.		75,262		3,674,291
	Regal Beloit Corp.		350,500		30,605,660
					34,279,951
	Energy 1.3%
	Crescent Point Energy Corp. (Canada)		5,117,200		8,292,763
	Hunting PLC (United Kingdom)		1,227,096		3,210,134
a	Natural Gas Services Group Inc.		173,987		1,090,898
					12,593,795
	Food & Staples Retailing 1.9%
a	BJ’s Wholesale Club Holdings Inc.		487,266		18,160,404
	Food, Beverage & Tobacco 2.2%
	Glanbia PLC (Ireland)		1,420,461		16,140,483
	Maple Leaf Foods Inc. (Canada)		237,357		4,984,751
					21,125,234
	Health Care Equipment & Services 2.6%
	Envista Holdings Corp.		684,217		14,430,137
a	Integer Holdings Corp.		148,924		10,878,898
					25,309,035
	Insurance 13.1%
	CNO Financial Group Inc.		1,471,114		22,905,245
	The Hanover Insurance Group Inc.		306,850		31,093,111
	Horace Mann Educators Corp.		786,717		28,896,115
	Old Republic International Corp.		1,964,216		32,036,363
	Selective Insurance Group Inc.		235,011		12,394,480
					127,325,314
	Machinery 14.2%
	Astec Industries Inc.		235,808		10,920,269
	Columbus McKinnon Corp.		211,441		7,072,701
	Federal Signal Corp.		55,397		1,646,953
	The Greenbrier Cos. Inc.		396,647		9,023,719
	Hillenbrand Inc.		250,434		6,779,248
	John Bean Technologies Corp.		52,500		4,516,050
	Mueller Industries Inc.		266,662		7,087,876
	Mueller Water Products Inc., A		2,103,549		19,836,467
	Oshkosh Corp.		326,000		23,348,120
	Rexnord Corp.		914,800		26,666,420
a	SPX Flow Inc.		367,522		13,760,024
	Wabash National Corp.		617,341		6,556,161
					137,214,008

FSV-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Materials 11.5%
	Cabot Corp.		311,530	$	11,542,186
	Carpenter Technology Corp.		57,324		1,391,827
	Eagle Materials Inc.		144,100		10,118,702
a	Livent Corp. (Argentina)		139,604		859,961
	Louisiana-Pacific Corp.		320,477		8,220,235
	Minerals Technologies Inc.		370,641		17,394,182
a	OceanaGold Corp. (Australia)		5,901,906		13,738,001
	P H Glatfelter Co.		943,594		15,144,684
	PolyOne Corp.		706,207		18,523,809
	Reliance Steel & Aluminum Co.		151,900		14,419,867
					111,353,454
	Real Estate 2.5%
	Healthcare Realty Trust Inc.		284,773		8,341,001
	Highwoods Properties Inc.		307,215		11,468,336
	Sunstone Hotel Investors Inc.		532,949		4,343,534
					24,152,871
	Retailing 1.3%
a	Boot Barn Holdings Inc.		293,875		6,335,945
	Group 1 Automotive Inc.		97,679		6,443,884
					12,779,829
	Semiconductors & Semiconductor Equipment 1.3%
a	Advanced Energy Industries Inc.		111,064		7,529,029
	MKS Instruments Inc.		22,414		2,538,161
a	Synaptics Inc.		42,067		2,529,068
					12,596,258
	Technology Hardware & Equipment 3.3%
a	Coherent Inc.		5,067		663,676
a	FARO Technologies Inc.		3,667		196,551
a	II-VI Inc.		72,442		3,420,711
a	NetScout Systems Inc.		565,600		14,456,736
a	Plexus Corp.		186,573		13,164,591
					31,902,265
	Transportation 0.1%
	Heartland Express Inc.		30,600		637,092
	Utilities 2.3%
	Black Hills Corp.		152,161		8,621,442
	IDACORP Inc.		130,145		11,370,769
	Spire Inc.		39,355		2,586,017
					22,578,228
	Total Common Stocks (Cost $941,805,010)				957,997,458

Semiannual Report     FSV-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

		Principal Amount		Value
	Corporate Bonds (Cost $2,378,000) 0.2%
	Machinery 0.2%
	Mueller Industries Inc., sub. bond, 6.00%, 3/01/27	$	2,378,000	$	2,332,961
	Total Investments before Short Term Investments (Cost $944,183,010)				960,330,419
		Shares
	Short Term Investments (Cost $10,387,607) 1.1%
	Money Market Funds 1.1%
b,c	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		10,387,607		10,387,607
	Total Investments (Cost $954,570,617) 100.2%				970,718,026
	Other Assets, less Liabilities (0.2)%				(2,030,223	)
	Net Assets 100.0%			$	968,687,803

^aNon-income producing.

^bSee Note 3(e) regarding investments in affiliated management investment companies.

^cThe rate shown is the annualized seven-day effective yield at period end.

FSV-12     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Small Cap Value VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	944,183,010
Cost - Non-controlled affiliates (Note 3e)		10,387,607
Value - Unaffiliated issuers	$	960,330,419
Value - Non-controlled affiliates (Note 3e)		10,387,607
Receivables:
Capital shares sold		27,255
Dividends and interest		1,037,160
Other assets		906
Total assets		971,783,347
Liabilities:
Payables:
Investment securities purchased		1,674,124
Capital shares redeemed		494,359
Management fees		512,287
Distribution fees		193,714
Trustees’ fees and expenses		148
Reports to shareholders		168,665
Accrued expenses and other liabilities		52,247
Total liabilities		3,095,544
Net assets, at value	$	968,687,803
Net assets consist of:
Paid-in capital	$	981,796,626
Total distributable earnings (losses)		(13,108,823	)
Net assets, at value	$	968,687,803
Class 1:
Net assets, at value	$	38,886,656
Shares outstanding		3,300,848
Net asset value and maximum offering price per share		$11.78
Class 2:
Net assets, at value	$	904,935,168
Shares outstanding		80,432,315
Net asset value and maximum offering price per share		$11.25
Class 4:
Net assets, at value	$	24,865,979
Shares outstanding		2,137,335
Net asset value and maximum offering price per share		$11.63

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report     FSV-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Small Cap Value VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$	10,379,635
Non-controlled affiliates (Note 3e)		53,323
Interest:
Unaffiliated issuers		71,340
Total investment income		10,504,298
Expenses:
Management fees (Note 3a)		3,131,539
Distribution fees: (Note 3c)
Class 2		1,130,350
Class 4		42,561
Custodian fees (Note 4)		6,533
Reports to shareholders		120,955
Professional fees		31,308
Trustees’ fees and expenses		3,081
Other		12,150
Total expenses		4,478,477
Expense reductions (Note 4)		(879	)
Expenses waived/paid by affiliates (Note 3e)		(29,040	)
Net expenses		4,448,558
Net investment income		6,055,740
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(31,006,545	)
Realized gain distributions from REITs		237,639
Foreign currency transactions		(14,667	)
Net realized gain (loss)		(30,783,573	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(187,775,796	)
Translation of other assets and liabilities denominated in foreign currencies		(192	)
Net change in unrealized appreciation (depreciation)		(187,775,988	)
Net realized and unrealized gain (loss)		(218,559,561	)
Net increase (decrease) in net assets resulting from operations	$	(212,503,821	)
*Foreign taxes withheld on dividends	$	15,244

FSV-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Small Cap Value VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	6,055,740			$     15,229,928
Net realized gain (loss)		(30,783,573	)		61,068,326
Net change in unrealized appreciation (depreciation)		(187,775,988	)		187,554,772
Net increase (decrease) in net assets resulting from operations		(212,503,821	)		263,853,026
Distributions to shareholders:
Class 1		(3,163,057	)		(7,896,338	)
Class 2		(74,826,607	)		(189,976,242	)
Class 4		(1,993,247	)		(4,683,798	)
Total distributions to shareholders		(79,982,911	)		(202,556,378	)
Capital share transactions: (Note 2)
Class 1		3,506,280			3,898,876
Class 2		55,901,879			87,139,038
Class 4		2,454,945			3,066,346
Total capital share transactions		61,863,104			94,104,260
Net increase (decrease) in net assets		(230,623,628	)		155,400,908
Net assets:
Beginning of period		1,199,311,431			1,043,910,523
End of period	$	968,687,803			$1,199,311,431

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report     FSV-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Small Cap Value VIP Fund

1. Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Small Cap Value VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at

FSV-16   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net

unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c. Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

d.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to

Semiannual Report     FSV-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

d.  Security Transactions, Investment Income, Expenses and Distributions (continued)

shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of

net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

e.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

f.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		232,220		$	2,871,963			262,210		$	4,085,267
Shares issued in reinvestment of distributions		275,768			3,163,057			578,063			7,896,338
Shares redeemed		(194,542	)		(2,528,740	)		(537,480	)		(8,082,729)
Net increase (decrease)		313,446		$	3,506,280			302,793		$	3,898,876
Class 2 Shares:
Shares sold		6,101,838		$	66,834,784			5,696,678		$	84,262,242
Shares issued in reinvestment of distributions		6,827,245			74,826,607			14,513,082			189,976,242
Shares redeemed		(7,116,902	)		(85,759,512	)		(12,637,486	)		(187,099,446)
Net increase (decrease)		5,812,181		$	55,901,879			7,572,274		$	87,139,038

FSV-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 4 Shares:
Shares sold		324,826		$	3,527,819			279,692		$	4,200,102
Shares issued in reinvestment of distributions		175,926			1,993,247			346,948			4,683,798
Shares redeemed		(248,204	)		(3,066,121	)		(385,667	)		(5,817,554)
Net increase (decrease)		252,548		$	2,454,945			240,973		$	3,066,346

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Mutual Advisers, LLC (Franklin Mutual)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.  Management Fees

The Fund pays an investment management fee to Franklin Mutual based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.750%	Up to and including $200 million
0.635%	Over $200 million, up to and including $700 million
0.600%	Over $700 million, up to and including $1.2 billion
0.575%	Over $1.2 billion, up to and including $1.3 billion
0.475%	In excess of $1.3 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.650% of the Fund’s average daily net assets.

b.  Administrative Fees

Under an agreement with Franklin Mutual, FT Services provides administrative services to the Fund. The fee is paid by Franklin Mutual based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

3. Transactions with Affiliates (continued)

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Dividend Income
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$24,977,897	$	121,447,762	$	(136,038,052	)		$    —		$    —	$	10,387,607		10,387,607	$	53,323

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	958,675,749
Unrealized appreciation	$	110,184,176
Unrealized depreciation		(98,141,899)
Net unrealized appreciation (depreciation)	$	12,042,277

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of wash sales.

6.  Investment Transactions

Purchases and sales (excluding short term securities) for the period ended June 30, 2020, aggregated $333,217,768 and $327,659,566, respectively.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

7.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

8.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

9.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

9. Fair Value Measurements (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:
Energy	$	9,383,661	$	3,210,134	$	—	$	12,593,795
Food, Beverage & Tobacco		4,984,751		16,140,483		—		21,125,234
All Other Equity Investments		924,278,429		—		—		924,278,429
Corporate Bonds		—		2,332,961		—		2,332,961
Short Term Investments		10,387,607		—		—		10,387,607
Total Investments in Securities	$	949,034,448	$	21,683,578	$	—	$	970,718,026

^aFor detailed categories, see the accompanying Statement of Investments.

10.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

11.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

FSV-22         Semiannual Report

Franklin Small-Mid Cap Growth VIP Fund

This semiannual report for Franklin Small-Mid Cap Growth VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a +16.86% total return* for the six-month period ended June 30, 2020.

*The Fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of small-capitalization and mid-capitalization companies. For this Fund, small-cap companies are those within the market capitalization range of companies in the Russell 2500^TM Index at the time of purchase, and midcap companies are those within the market capitalization range of companies in the Russell Midcap^® Index at the time of purchase.¹

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. Smaller, midsized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger-company stocks, especially over the short term. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risk of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. From time to time, the trading market for a particular security or type of security in which the Fund invests may become less liquid or even illiquid. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Portfolio Composition

Based on Total Net Assets as of 6/30/20

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s narrow benchmark, the Russell Midcap Growth^® Index, posted a +4.16% total return, and its broad benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a -3.08% total return for the same period.²

Economic and Market Overview

U.S. equities, as measured by the S&P 500, nearly reversed earlier losses but declined modestly during the six-month period. A sharp selloff began in late February 2020 amid investor fears of a global economic slowdown due to the novel coronavirus (COVID-19) pandemic.

Government-issued restrictions to mitigate the pandemic severely curtailed U.S. economic activity beginning in March 2020. As a result, the unemployment rate surged to 14.7% in

1. Please see Index Descriptions following the Fund Summaries.

2. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

April as many businesses, particularly in hospitality, retail and travel, announced mass layoffs.³ Within just two months, the unemployment rate went from a 50-year low to an 80-year high.³ The longest U.S. economic expansion in history ended in February, according to the National Bureau of Economic Research, and the country slipped into a deep recession.

In an effort to buffer the sharp drop in economic activity, the Fed implemented two emergency rate cuts in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. Additionally, the Fed announced broad quantitative easing measures aimed at ensuring the flow of credit to borrowers and supporting credit markets with unlimited amounts of bond purchasing. Meanwhile, Congress passed the Coronavirus Aid, Relief and Economic Security Act to provide economic relief for individuals and businesses and additional funding for small businesses.

Benefiting from these fiscal and monetary measures, equities began to advance at the end of March 2020. As states gradually reopened, economic activity resumed, leading to declining initial jobless claims and record-high increases in job additions and existing home sales. Optimism about potential COVID-19 vaccines and treatments and rising retail sales further supported equities, which rebounded from multi-year lows to post the strongest second-quarter returns in more than 20 years. Nevertheless, surging infection rates in several states near the end of June led to concerns that economic recovery could be hindered if reopening measures are paused or rolled back.

Investment Strategy

We use fundamental, bottom-up research to seek companies meeting our criteria of growth potential, quality and valuation. In seeking sustainable growth characteristics, we look for companies we believe can produce sustainable earnings and cash flow growth, evaluating the long-term market opportunity and competitive structure of an industry to target leaders and emerging leaders. We define quality companies as those with strong and improving competitive positions in attractive markets. We also believe important attributes of quality are experienced and talented management teams as well as financial strength reflected in the capital structure, gross and operating margins, free cash flow generation and returns on capital employed. In assessing value, we consider whether security prices fully reflect the balance of the sustainable growth opportunities relative to business and financial risks.

Top 10 Holdings
6/30/20
Company Sector/Industry	% of Total Net Assets
DocuSign Inc. Information Technology		2.7%
Twilio Inc. Information Technology		2.5%
CoStar Group Inc. Industrials		2.3%
Synopsys Inc. Information Technology		2.1%
SBA Communications Corp. Real Estate		2.1%
Verisk Analytics Inc. Industrials		2.0%
DexCom Inc. Health Care		1.8%
MarketAxess Holdings Inc. Financials		1.7%
DraftKings Inc. Consumer Discretionary		1.8%
IDEXX Laboratories Inc. Health Care		1.7%

Manager’s Discussion

During the period under review, nearly all sectors represented in the portfolio contributed to the Fund’s absolute returns. Relative to the Russell Midcap^® Growth Index, the Fund outperformed. Contributors included stock selection in the information technology (IT), consumer discretionary and industrials sectors. In contrast, relative detractors included materials, the only sector to significantly hurt Fund performance.

In IT, cloud-based electronic signature solutions provider DocuSign contributed to relative results. The company’s revenue and earnings were boosted by broadened product offerings after introducing the DocuSign Agreement Cloud last year and maintaining strong growth from its eSignature products. DocuSign has also benefited from the increase in work-from-home arrangements brought on by COVID-19. Cloud communications services provider Twilio also helped performance. Shares of the company rose after first-quarter earnings and guidance came in above expectations. COVID-19 related increases in its use by call centers and telehealth providers offset declines in ride-share activity. Website design platform Wix.com contributed as well.

3. Source: Bureau of Labor Statistics.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

In consumer discretionary, digital sports entertainment and gaming company DraftKings contributed to relative results. DraftKings has generated revenue from online gambling and has created new products such as simulated sports events, though the company’s operations have been impacted by the suspension, postponement or cancelation of sports seasons and events due to the novel coronavirus (COVID-19) pandemic. Exercise equipment and media company Peloton Interactive and fast-casual restaurant operator Wingstop also boosted performance.

In industrials, an underweighted position in poorly performing defense contractor L3Harris Technologies contributed to relative results.

In materials, specialty chemicals manufacturer Ingevity and building materials provider Martin Marietta detracted from relative performance.

Elsewhere, satellite communications operator ViaSat hurt relative results as the company was negatively affected by emerging competition and the economic impact associated with the COVID-19 pandemic. Advanced materials company Hexcel detracted from performance as well. The company provides materials to the aerospace industry and has been hit hard by the collapse in air travel caused by COVID-19, which resulted in airplane production cuts at Airbus (one of its clients) and the calling off of a merger with aerospace systems company Woodward. Oil exploration and production company Diamondback Energy also hurt results due to the collapse of oil prices brought on by the global economic shutdown and Russia-Saudi price war. We liquidated our position due to uncertainty about when oil prices will recover to the level needed for the company to be profitable.

Thank you for your participation in Franklin Small-Mid Cap Growth VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,168.60	$6.42	$1,018.95	$5.97	1.19%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Small-Mid Cap Growth VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$19.74			$17.04			$19.71			$17.77			$19.09			$24.95
Income from investment operationsa:
Net investment income (loss)b		(0.03	)		(0.04	)		(0.05	)		(0.04	)		(0.03	)		—	c,d
Net realized and unrealized gains (losses)		3.24			5.31			(0.70	)		3.74			0.77			(0.03	)
Total from investment operations		3.21			5.27			(0.75	)		3.70			0.74			(0.03	)
Less distributions from:
Net realized gains		(2.64	)		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of period		$20.31			$19.74			$17.04			$19.71			$17.77			$19.09
Total returne		17.03%			31.80%			(5.15)%			21.75%			4.40%			(2.44)%
Ratios to average net assetsf
Expenses before waiver and payments by affiliates		0.85%			0.84%			0.86%			0.85%			0.84%			0.81%
Expenses net of waiver and payments by affiliates		0.84%	g		0.83%	g		0.85%	g		0.84%	g		0.82%	g		0.81%	h
Net investment income (loss)		(0.26)%			(0.19)%			(0.24)%			(0.24)%			(0.16)%			0.01%	d
Supplemental data
Net assets, end of period (000’s)		$48,490			$43,169			$33,518			$36,864			$31,756			$87,866
Portfolio turnover rate		21.12%			59.07%			44.78%			40.49%			32.23%	i		37.85%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.24)%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^fRatios are annualized for periods less than one year.

^gBenefit of expense reduction rounds to less than 0.01%.

^hBenefit of waiver and payments by affiliates rounds to less than 0.01%.

ⁱExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

FSC-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$17.29			$15.22			$17.83			$16.27			$17.69			$23.56
Income from investment operationsa:
Net investment income (loss)b		(0.04	)		(0.08	)		(0.09	)		(0.08	)		(0.07	)		(0.05	)c
Net realized and unrealized gains (losses)		2.80			4.72			(0.60	)		3.40			0.71			0.01
Total from investment operations		2.76			4.64			(0.69	)		3.32			0.64			(0.04	)
Less distributions from:
Net realized gains		(2.64	)		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of period		$17.41			$17.29			$15.22			$17.83			$16.27			$17.69
Total returnd		16.84%			31.44%			(5.37)%			21.40%			4.17%			(2.66)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		1.10%			1.09%			1.11%			1.10%			1.09%			1.06%
Expenses net of waiver and payments by affiliates		1.09%	f		1.08%	f		1.10%	f		1.09%	f		1.07%	f		1.06%	g
Net investment income (loss)		(0.51)%			(0.44)%			(0.49)%			(0.49)%			(0.41)%			(0.24)%	c
Supplemental data
Net assets, end of period (000’s)		$405,193			$372,442			$310,300			$390,094			$392,777			$478,649
Portfolio turnover rate		21.12%			59.07%			44.78%			40.49%			32.23%	h		37.85%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.49)%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

^gBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^hExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FSC-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$18.04			$15.81			$18.47			$16.81			$18.23			$24.14
Income from investment operationsa:
Net investment income (loss)b		(0.05	)		(0.10	)		(0.11	)		(0.10	)		(0.09	)		(0.07	)c
Net realized and unrealized gains (losses)		2.94			4.90			(0.63	)		3.52			0.73			(0.01	)
Total from investment operations		2.89			4.80			(0.74	)		3.42			0.64			(0.08	)
Less distributions from:
Net realized gains		(2.64	)		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of period		$18.29			$18.04			$15.81			$18.47			$16.81			$18.23
Total returnd		16.86%			31.26%			(5.46)%			21.30%			4.04%			(2.77)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		1.20%			1.19%			1.21%			1.20%			1.19%			1.16%
Expenses net of waiver and payments by affiliates		1.19%	f		1.18%	f		1.20%	f		1.19%	f		1.17%	f		1.16%	g
Net investment income (loss)		(0.61)%			(0.54)%			(0.59)%			(0.59)%			(0.51)%			(0.34)%	c
Supplemental data
Net assets, end of period (000’s)		$18,816			$17,662			$13,759			$15,829			$13,825			$15,105
Portfolio turnover rate		21.12%			59.07%			44.78%			40.49%			32.23%	h		37.85%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.59)%.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

^gBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^hExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

FSC-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Franklin Small-Mid Cap Growth VIP Fund

		Shares		Value
	Common Stocks 98.4%
	Communication Services 4.7%
a	Match Group Inc.		17,200	$	5,562,480
a	Pinterest Inc., A		181,300		4,019,421
a	Roku Inc.		26,856		3,129,530
a	Spotify Technology SA		20,000		5,163,800
a	ZoomInfo Technologies Inc.		13,500		688,905
a	Zynga Inc.		367,500		3,505,950
					22,070,086
	Consumer Discretionary 14.8%
	Aptiv PLC		29,227		2,277,368
a	Burlington Stores Inc.		29,400		5,789,742
a	Chipotle Mexican Grill Inc.		6,530		6,871,911
	Domino’s Pizza Inc.		10,750		3,971,480
a	DraftKings Inc., A		22,900		761,654
a,b,c	DraftKings Inc., A		251,933		7,432,562
a	Five Below Inc.		31,650		3,383,702
	Levi Strauss & Co., A		175,000		2,345,000
	Marriott International Inc., A		18,050		1,547,427
a	NVR Inc.		1,282		4,177,717
a	O’Reilly Automotive Inc.		12,157		5,126,242
a	Peloton Interactive Inc., A		64,250		3,711,722
a	RH		14,300		3,559,270
	Tractor Supply Co.		37,737		4,973,359
a	Ulta Beauty Inc.		18,400		3,742,928
	Vail Resorts Inc.		24,400		4,444,460
	VF Corp.		19,900		1,212,706
	Wingstop Inc.		33,700		4,683,289
					70,012,539
	Consumer Staples 1.6%
a	BellRing Brands Inc., A		94,100		1,876,354
	Church & Dwight Co. Inc.		53,500		4,135,550
a	Grocery Outlet Holding Corp.		38,200		1,558,560
					7,570,464
	Financials 5.8%
	Ares Management Corp., A		82,000		3,255,400
	MarketAxess Holdings Inc.		16,600		8,315,272
	MSCI Inc.		18,900		6,309,198
a,c	Selectquote Inc.		10,900		276,097
	TCF Financial Corp.		63,500		1,868,170
	Tradeweb Markets Inc.		92,200		5,360,508
	Western Alliance Bancorp		52,500		1,988,175
					27,372,820
	Health Care 16.5%
a	10X Genomics Inc., A		24,100		2,152,371
a	Argenx SE, ADR (Netherlands)		9,000		2,027,070
	Bio-Techne Corp.		13,340		3,522,694

Semiannual Report             FSC-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Health Care (continued)
a	Centene Corp.		56,250	$	3,574,687
a	Deciphera Pharmaceuticals Inc.		18,000		1,074,960
a	DexCom Inc.		20,688		8,386,915
a	Global Blood Therapeutics Inc.		18,000		1,136,340
a	Guardant Health Inc.		44,100		3,577,833
a	GW Pharmaceuticals PLC, ADR (United Kingdom)		23,300		2,859,376
a	HealthEquity Inc.		41,200		2,417,204
a	Heron Therapeutics Inc.		143,900		2,116,769
a	Horizon Therapeutics PLC		51,000		2,834,580
a	IDEXX Laboratories Inc.		24,750		8,171,460
a	Inari Medical Inc.		10,100		489,244
a	Iovance Biotherapeutics Inc.		65,000		1,784,250
a	iRhythm Technologies Inc.		17,450		2,022,281
a	Legend Biotech Corp., ADR		9,300		395,808
a	Livongo Health Inc.		36,900		2,774,511
a	Mettler-Toledo International Inc.		9,780		7,878,279
a	Penumbra Inc.		22,900		4,094,978
a	PTC Therapeutics Inc.		44,500		2,257,930
a	Reata Pharmaceuticals Inc.		18,300		2,855,166
a	Revance Therapeutics Inc.		74,001		1,807,104
a	Veeva Systems Inc.		32,700		7,665,534
					77,877,344
	Industrials 14.3%
a	Axon Enterprise Inc.		12,300		1,206,999
a	CoStar Group Inc.		15,135		10,755,990
	Fastenal Co.		83,100		3,560,004
	Fortive Corp.		74,400		5,033,904
	IDEX Corp.		32,650		5,160,006
	Kansas City Southern		13,200		1,970,628
a	Kratos Defence & Security Solutions Inc.		48,600		759,618
a	Lyft Inc., A		18,500		610,685
a	Mercury Systems Inc.		43,700		3,437,442
	Old Dominion Freight Line Inc.		17,850		3,027,182
	Republic Services Inc.		63,100		5,177,355
	Roper Technologies Inc.		17,593		6,830,658
	Southwest Airlines Co.		50,500		1,726,090
	Stanley Black & Decker Inc.		29,346		4,090,246
	TransUnion		57,300		4,987,392
	Verisk Analytics Inc.		54,961		9,354,362
					67,688,561
	Information Technology 36.1%
a	Adyen NV (Netherlands)		2,350		3,420,107
a	Agora Inc., ADR (China)		6,600		291,522
a	Alteryx Inc.		35,500		5,831,940
	Amphenol Corp., A		54,700		5,240,807
a	ANSYS Inc.		22,500		6,563,925

FSC-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

		Shares		Value
	Common Stocks (continued)
	Information Technology (continued)
a	Atlassian Corp. PLC		36,150	$	6,516,760
a	Bill.Com Holdings Inc.		62,048		5,597,350
a	Black Knight Inc.		104,000		7,546,240
	Booz Allen Hamilton Holding Corp.		14,800		1,151,292
a	CloudFlare Inc., A		127,300		4,576,435
a	DocuSign Inc.		73,700		12,691,877
	Entegris Inc.		13,500		797,175
a	EPAM Systems Inc.		19,500		4,914,195
a	GoDaddy Inc., A		81,617		5,984,975
	Jack Henry & Associates Inc.		19,350		3,560,981
a	Keysight Technologies Inc.		48,800		4,918,064
	KLA Corp.		35,737		6,950,132
a	Lattice Semiconductor Corp.		152,555		4,331,036
	Microchip Technology Inc.		28,927		3,046,302
	Monolithic Power Systems		19,750		4,680,750
	NXP Semiconductors NV (Netherlands)		22,600		2,577,304
a	Okta Inc., A		31,000		6,207,130
a	Paylocity Holding Corp.		42,450		6,193,031
a	Q2 Holdings Inc.		38,496		3,302,572
a	Semtech Corp.		43,000		2,245,460
a	Shift4 Payments Inc.		16,500		585,750
a	SiTime Corp.		60,000		2,844,600
a	Square Inc., A		46,100		4,837,734
a	Synopsys Inc.		51,750		10,091,250
a	Twilio Inc., A		54,775		12,018,730
a	WEX Inc.		16,300		2,689,663
a	Wix.com Ltd. (Israel)		20,600		5,278,132
a	Workday Inc., A		20,650		3,868,984
	Xilinx Inc.		41,600		4,093,024
a	Yeahka Ltd. (China)		14,200		31,513
a	Zendesk Inc.		55,200		4,886,856
					170,363,598
	Materials 2.4%
	Ball Corp.		69,700		4,843,453
a	Ingevity Corp.		43,841		2,304,721
	Martin Marietta Materials Inc.		20,200		4,172,714
					11,320,888
	Real Estate 2.2%
	SBA Communications Corp., A		32,957		9,818,550
	Terreno Realty Corp.		15,550		818,552
					10,637,102
	Total Common Stocks (Cost $291,738,732)				464,913,402

Semiannual Report             FSC-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

		Shares		Value
	Short Term Investments 2.7%
	Money Market Funds (Cost $11,705,249) 2.5%
d,e	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		11,705,249	$	11,705,249
f	Investments from Cash Collateral Received for Loaned Securities 0.2%
	Money Market Funds (Cost $1,011,025) 0.2%
d,e	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		1,011,025		1,011,025
	Total Investments (Cost $304,455,006) 101.1%				477,629,676
	Other Assets, less Liabilities (1.1)%				(5,131,154	)
	Net Assets 100.0%			$	472,498,522

See Abbreviations on page FSC-23.

^aNon-income producing.

^bFair valued using significant unobservable inputs. See regarding fair value measurements.

^cA portion or all of the security is on loan at June 30, 2020. See Note 1(c).

^dSee Note 3(e) regarding investments in affiliated management investment companies.

^eThe rate shown is the annualized seven-day effective yield at period end.

^fSee Note 1(c) regarding securities on loan.

FSC-12     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities    

June 30, 2020 (unaudited)    

	Franklin Small-Mid Cap Growth VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$291,738,732
Cost - Non-controlled affiliates (Note 3e)		12,716,274
Value - Unaffiliated issuers+		$464,913,402
Value - Non-controlled affiliates (Note 3e)		12,716,274
Receivables:
Capital shares sold		743,853
Dividends and interest		67,119
Other assets		350
Total assets		478,440,998
Liabilities:
Payables:
Investment securities purchased		4,155,466
Capital shares redeemed.		275,143
Management fees		299,962
Distribution fees		87,512
Trustees’ fees and expenses		137
Payable upon return of securities loaned		1,011,025
Accrued expenses and other liabilities		113,231
Total liabilities.		5,942,476
Net assets, at value		$472,498,522
Net assets consist of:
Paid-in capital		$298,120,667
Total distributable earnings (losses)		174,377,855
Net assets, at value		$472,498,522
Class 1:
Net assets, at value		$  48,489,500
Shares outstanding		2,387,538
Net asset value and maximum offering price per share		$20.31
Class 2:
Net assets, at value		$405,192,999
Shares outstanding		23,268,683
Net asset value and maximum offering price per share		$17.41
Class 4:
Net assets, at value		$  18,816,023
Shares outstanding		1,028,965
Net asset value and maximum offering price per share		$18.29

⁺Includes securities loaned         $         982,641

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FSC-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Franklin Small-Mid Cap Growth VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$     974,338
Non-controlled affiliates (Note 3e)		32,720
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		180,670
Non-controlled affiliates (Note 3e)		11,432
Total investment income		1,199,160
Expenses:
Management fees (Note 3a)		1,653,044
Distribution fees: (Note 3c)
Class 2		444,423
Class 4		29,584
Custodian fees (Note 4)		1,635
Reports to shareholders		65,461
Professional fees		29,928
Trustees’ fees and expenses		1,282
Other		8,804
Total expenses		2,234,161
Expense reductions (Note 4)		(8	)
Expenses waived/paid by affiliates (Note 3e)		(21,747	)
Net expenses		2,212,406
Net investment income (loss)		(1,013,246	)
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		2,537,546
Foreign currency transactions		(4,129	)
Net realized gain (loss)		2,533,417
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		61,958,609
Net realized and unrealized gain (loss)		64,492,026
Net increase (decrease) in net assets resulting from operations		$63,478,780

*Foreign taxes withheld on dividends $            1,522

FSC-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets    

	Franklin Small-Mid Cap Growth VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income (loss)		$  (1,013,246	)		$   (1,784,697	)
Net realized gain (loss)		2,533,417			63,675,302
Net change in unrealized appreciation (depreciation)		61,958,609			48,782,330
Net increase (decrease) in net assets resulting from operations		63,478,780			110,672,935
Distributions to shareholders:
Class 1		(5,568,768	)		(5,113,428	)
Class 2		(53,710,860	)		(51,808,967	)
Class 4		(2,461,041	)		(2,209,122	)
Total distributions to shareholders		(61,740,669	)		(59,131,517	)
Capital share transactions: (Note 2)
Class 1		4,189,299			4,136,766
Class 2		32,464,137			18,159,781
Class 4		834,466			1,857,466
Total capital share transactions		37,487,902			24,154,013
Net increase (decrease) in net assets		39,226,013			75,695,431
Net assets:
Beginning of period		433,272,509			357,577,078
End of period		$472,498,522			$433,272,509

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             FSC-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Small-Mid Cap Growth VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Small-Mid Cap Growth VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At June 30, 2020, 42.5% of the Fund’s shares were held through one insurance company. Investment activities of these insurance company separate accounts could have a material impact on the Fund. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter

(OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

FSC-16   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed

by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

d.  Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

Semiannual Report             FSC-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

e.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

f.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

g.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		171,421		$	3,540,721			318,754		$	6,251,939
Shares issued in reinvestment of distributions		289,889			5,568,768			273,885			5,113,428
Shares redeemed		(260,895	)		(4,920,190	)		(372,027	)		(7,228,601)
Net increase (decrease)		200,415		$	4,189,299			220,612		$	4,136,766

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		1,620,427		$	29,073,424			1,911,894		$	33,367,659
Shares issued in reinvestment of distributions		3,261,133			53,710,860			3,162,941			51,808,967
Shares redeemed		(3,154,393	)		(50,320,147	)		(3,921,307	)		(67,016,845)
Net increase (decrease)		1,727,167		$	32,464,137			1,153,528		$	18,159,781
Class 4 Shares:
Shares sold		112,014		$	2,007,443			191,080		$	3,405,783
Shares issued in reinvestment of distributions		142,257			2,461,041			129,188			2,209,122
Shares redeemed		(204,168	)		(3,634,018	)		(211,768	)		(3,757,439)
Net increase (decrease)		50,103		$	834,466			108,500		$	1,857,466

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.  Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.800%	Up to and including $500 million
0.700%	Over $500 million, up to and including $1 billion
0.650%	Over $1 billion, up to and including $1.5 billion
0.600%	Over $1.5 billion, up to and including $6.5 billion
0.575%	Over $6.5 billion, up to and including $11.5 billion
0.550%	Over $11.5 billion, up to and including $16.5 billion
0.540%	Over $16.5 billion, up to and including $19 billion
0.530%	Over $19 billion, up to and including $21.5 billion
0.520%	In excess of $21.5 billion

b.  Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

3.  Transactions with Affiliates (continued)

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$10,406,987		$48,735,867		$(47,437,605)			$    —		$    —		$11,705,249		11,705,249		$32,720
																	Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		4,879,541		23,457,988		(27,326,504	)		—		—		1,011,025		1,011,025		11,432
Total Affiliated Securities		$15,286,528		$72,193,855		$(74,764,109)			$    —		$    —		$12,716,274				$44,152

f.  Interfund Transactions

The Fund engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. During the period ended June 30, 2020, these purchase and sale transactions aggregated $380,765 and $0, respectively.

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

5.  Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	304,769,327
Unrealized appreciation	$	179,898,996
Unrealized depreciation		(7,038,647)
Net unrealized appreciation (depreciation)	$	172,860,349

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of wash sales.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $86,528,253 and $109,489,566, respectively.

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $1,011,025 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7. Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

8. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

9. Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:
Consumer Discretionary	$	62,579,977	$	—	$	7,432,562	$	70,012,539
All Other Equity Investments		394,900,863		—		—		394,900,863
Short Term Investments		12,716,274		—		—		12,716,274
Total Investments in Securities	$	470,197,114	$	—	$	7,432,562	$	477,629,676

^aFor detailed categories, see the accompanying Statement of Investments.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period. At June 30, 2020, the reconciliation is as follows:

	Balance at Beginning of Period		Purchases		Sales			Transfer Into Level 3		Transfer Out of Level 3a			Cost Basis Adjustments		Net Realized Gain (Loss)		Net Unrealized Appreciation (Depreciation)		Balance at End of Period		Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Period End
Assets:
Investments in Securities:
Equity Investments:
Consumer Discretionary		$2,241,958		$—		$(494,299	)		$—		$—			$—		$378,558		$5,306,345		$7,432,562		$5,304,762
Information Technology		1,763,456		—		—			—		(3,099,287	)		—		—		1,335,831		—		—
Total		$4,005,414		$—		$(494,299	)		$—		$(3,099,287	)		$—		$378,558		$6,642,176		$7,432,562		$5,304,762

^aThe investment was transferred out of Level 3 as a result of the availability of a quoted price in an active market for identical securities.    

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

Significant unobservable valuation inputs for material Level 3 assets and/or liabilities and impact to fair value as a result of changes in unobservable valuation inputs as of June 30, 2020, are as follows:

Description	Fair Value at End of Period		Valuation Technique		Unobservable Inputs		Amount		Impact to Fair Value if Input Increasesa
Assets:
Investments in Securities:
Common Stocks
Consumer Discretionary		$7,432,562		Market comparables		Discount for lack of marketability		11.3%		Decreaseb
All Other Investments		—
Total		$7,432,562

^aRepresents the directional change in the fair value that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.

^bRepresents a significant impact to fair value but not net assets.

10.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

11.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Selected Portfolio

ADR     American Depositary Receipt

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Franklin Strategic Income VIP Fund

This semiannual report for Franklin Strategic Income VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -2.96% total return* for the six-month period ended June 30, 2020.

*The Fund has a fee waiver associated with any investment in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

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FRANKLIN STRATEGIC INCOME VIP FUND

Fund Goal and Main Investments

The Fund seeks a high level of current income, with capital appreciation over the long term as a secondary goal. Under normal market conditions, the Fund invests primarily to predominantly in U.S. and foreign debt securities, including those in emerging markets.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. High yields reflect the higher credit risks associated with certain lower rated securities held in the portfolio. Floating rate loans and high yield corporate bonds are rated below investment grade and are subject to greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. The risks of foreign securities include currency fluctuations and political uncertainty. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. For comparison, the Fund’s benchmark, the Bloomberg Barclays U.S. Aggregate Bond

Index, posted a +6.14% total return for the period under review.¹ The Fund’s peers, as measured by the Lipper Multi-Sector Income Funds Classification Average, posted a -1.26% return.²

Economic and Market Overview

The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the six-month period despite significant economic disruption in the wake of the novel coronavirus (COVID-19) pandemic. In late February 2020, as more countries adopted social distancing and lockdown measures to slow the global pandemic, the U.S. bond market began pricing in the adverse impact on economic activity. Higher-quality, longer-term bonds rallied, while riskier, lower-rated corporate bonds declined sharply, reflecting a reversal in many investors’ risk appetite. During the last quarter of the reporting period, however, as generally slowing infection rates and phased business reopenings by states drove hopes for an economic rebound, corporate bond valuations advanced significantly. Nevertheless, an increase in infection rates toward period-end prompted concern among investors, hindering lower-rated bonds.

The U.S. Federal Reserve (Fed) enacted two emergency rate cuts in response to the COVID-19 pandemic in March 2020, lowering the federal funds target rate to a range of 0.00%–0.25%. In addition, the Fed announced unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet.

U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose significantly during the reporting period. Bond purchasing by the Fed and robust demand for investments perceived as safe drove the U.S. Treasury market higher despite the widening U.S. federal budget deficit and the massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted positive returns, aided by declining Treasury rates and the Fed’s decision to purchase agency MBS.

U.S. corporate bond performance varied significantly based on credit rating, as investors became concerned about the

1. Source: Morningstar.

2. Source: Lipper, a Thomson Reuters Company.

One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries. See.www.franklintempletondatasources.com for additional data provider information.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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pandemic-related economic disruption and the potential credit downgrades of many companies. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, rebounded significantly after mid-March 2020 to post positive overall returns for the reporting period. In contrast, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, declined due to investor concerns about a potential increase in credit defaults.

Investment Strategy

We allocate our investments among the various types of debt available based on our assessment of changing economic, global market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, seeking to take advantage of varying sector reactions to economic events. For example, we may evaluate business cycles, yield curves, country risk, and the relative interest rates among currencies, and values between and within markets. In selecting debt securities, we generally conduct our own analysis of the security’s intrinsic value rather than simply relying on the coupon rate or rating. We may also enter into various transactions involving certain currency-, interest rate- or credit-related derivative instruments.

Manager’s Discussion

The Fund allocated assets across the broad fixed income markets with an emphasis on spread sectors, both corporate and securitized. From an investment standpoint, we continued to focus on fundamentals and maintaining sufficient liquidity in the portfolio. At period end, our largest allocations were in investment-grade corporate bonds, high-yield corporate credit, non-local currency emerging market bonds and non-agency residential mortgage-backed securities (RMBS), with smaller exposures to agency mortgage-backed securities and senior secured floating-rate loans. After the significant market volatility in March 2020, we had been seeing opportunities in higher-quality sectors and added to investment-grade corporate credit, while we pared exposure to collateralized loan obligations (CLOs) and senior secured floating-rate loans. In our RMBS exposure we remain allocated to the seasoned credit risk transfer (CRTs) and have continued to stress test the portfolio under various scenarios including multiples of the global financial crisis. While the macroeconomic environment remains uncertain, we continue to believe the sector offers value. Our foreign-currency exposure was held through a basket of shorts with major positions in the Australian dollar, Singapore dollar, euro and Canadian dollar versus a basket of longs

Portfolio Composition*
Based on Consolidated Net Assets
	6/30/20
Investment-Grade Corporate Bonds		21.85%
High-Yield Corporate Bonds		18.81%
Interest-Rate Derivatives		18.45%
Non-Local Currency Emerging Market Bonds		14.04%
Residential Mortgage-Backed Securities		12.22%
Agency Mortgage-Backed Securities		7.72%
Floating-Rate Loans		7.52%
Collateralized Loan Obligations		6.72%
Treasury Inflation-Protected Securities		5.93%
Municipal Bonds		3.55%
Non-U.S. Developed Bonds		2.94%
Local Currency Emerging Market Bonds		2.36%
Other		1.82%
Marketplace Loans		1.55%
U.S. Treasuries		0.96%
Asset-Backed Securities		0.38%
Covered Bonds		0.14%
Commercial Mortgage-Backed Securities		0.08%
Short-Term Investments & Other Net Assets		-0.07%
Currency Derivatives		-0.45%

*Notional exposure figures are intended to estimate the portfolio’s exposure, including any hedged or increased exposure through certain derivatives held in the portfolio (or their underlying reference assets). Portfolio breakdown percentages may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors. Interest-rate derivatives sector consists of Treasury, interest-rate and other derivatives that are primarily used for duration management.

with major positions in the Japanese yen. Over the period, we closed out our short New Zealand dollar and long Norwegian krona positions, reduced our euro short, added to our Singapore dollar short and long Japanese yen positions.

Allocation to investment-grade corporate credit was the most significant contributor to returns. Additionally, commercial mortgage-backed securities and asset-backed securities also benefitted performance. In contrast, the Fund’s exposure to high-yield corporate credit, sovereign emerging market securities and senior secured floating-rate loans as well as RMBS and foreign currencies detracted from performance. Foreign currency gains mainly from our short New Zealand and Canadian dollar exposures were more than offset by negative returns from long Norwegian krona, South African rand and short Australian dollar positions.

The Fund utilized derivatives, including credit default swaps, currency forwards and government bond futures, primarily as a tool for efficient portfolio management and to manage

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FRANKLIN STRATEGIC INCOME VIP FUND

overall portfolio risk. These derivative transactions may provide the same, or similar, net long or short exposure to select currencies, interest rates, countries, duration or credit risks compared to holding securities.

Thank you for your participation in Franklin Strategic Income VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$970.40	$5.10	$1,019.69	$5.22	1.04%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

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Consolidated Financial Highlights

Franklin Strategic Income VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.93			$10.65			$11.15			$11.01			$10.55			$11.90
Income from investment operationsa:
Net investment incomeb		0.17			0.45			0.47			0.45			0.48			0.53
Net realized and unrealized gains (losses)		(0.48	)		0.43			(0.65	)		0.04			0.37			(0.91	)
Total from investment operations		(0.31	)		0.88			(0.18	)		0.49			0.85			(0.38	)
Less distributions from:
Net investment income and net foreign currency gains		(0.54	)		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.77	)
Net realized gains		—			—			—			—			—			(0.20	)
Total distributions		(0.54	)		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.97	)
Net asset value, end of period		$10.08			$10.93			$10.65			$11.15			$11.01			$10.55
Total returnc		(2.80)%			8.41%			(1.65)%			4.46%			8.25%			(3.62)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.71%			0.71%			0.67%			0.68%			0.67%			0.63%
Expenses net of waiver and payments by affiliatese		0.69%			0.68%			0.63%			0.63%			0.60%			0.62%
Net investment income		3.32%			4.09%			4.28%			4.00%			4.42%			4.71%
Supplemental data
Net assets, end of period (000’s)		$259,057			$285,437			$302,610			$361,465			$396,170			$441,658
Portfolio turnover rate		58.44%			114.89%	f		107.90%	g		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsh		42.77%			72.45%	f		40.38%	g		48.11%			77.93%			51.47%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio activity as a result of in-kind transactions.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

^hSee Note 1(g) regarding mortgage dollar rolls.

FSI-6     Semiannual Report   |    The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin Strategic Income VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.55			$10.28			$10.76			$10.64			$10.21			$11.55
Income from investment operationsa:
Net investment incomeb		0.15			0.40			0.42			0.40			0.43			0.49
Net realized and unrealized gains (losses)		(0.45	)		0.42			(0.61	)		0.04			0.36			(0.89	)
Total from investment operations		(0.30	)		0.82			(0.19	)		0.44			0.79			(0.40	)
Less distributions from:
Net investment income and net foreign currency gains		(0.52	)		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.74	)
Net realized gains		—			—			—			—			—			(0.20	)
Total distributions		(0.52	)		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.94	)
Net asset value, end of period		$ 9.73			$10.55			$10.28			$10.76			$10.64			$10.21
Total returnc		(2.86)%			8.05%			(1.77)%			4.17%			7.94%			(3.87)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.96%			0.96%			0.92%			0.93%			0.92%			0.88%
Expenses net of waiver and payments by affiliatese		0.94%			0.93%			0.88%			0.88%			0.85%			0.87%
Net investment income		3.07%			3.84%			4.03%			3.75%			4.17%			4.46%
Supplemental data
Net assets, end of period (000’s)		$92,857			$94,928			$89,264			$214,271			$203,418			$202,192
Portfolio turnover rate		58.44%			114.89%	f		107.90%	g		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsh		42.77%			72.45%	f		40.38%	g		48.11%			77.93%			51.47%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales

and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance

Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio activity as a result of in-kind transactions.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

^hSee Note 1(g) regarding mortgage dollar rolls.

The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report             FSI-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin Strategic Income VIP Fund(continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.83			$10.56			$11.04			$10.90			$10.44			$11.78
Income from investment operationsa:
Net investment incomeb		0.15			0.41			0.43			0.40			0.43			0.49
Net realized and unrealized gains (losses)		(0.47	)		0.42			(0.64	)		0.04			0.38			(0.91	)
Total from investment operations		(0.32	)		0.83			(0.21	)		0.44			0.81			(0.42	)
Less distributions from:
Net investment income and net foreign currency gains		(0.50	)		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.72	)
Net realized gains		—			—			—			—			—			(0.20	)
Total distributions		(0.50	)		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.92	)
Net asset value, end of period		$10.01			$10.83			$10.56			$11.04			$10.90			$10.44
Total returnc		(2.96)%			7.93%			(1.88)%			4.08%			7.86%			(3.98)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.06%			1.06%			1.02%			1.03%			1.02%			0.98%
Expenses net of waiver and payments by affiliatese		1.04%			1.03%			0.98%			0.98%			0.95%			0.97%
Net investment income		2.97%			3.74%			3.93%			3.65%			4.07%			4.36%
Supplemental data
Net assets, end of period (000’s)		$48,237			$54,485			$60,763			$74,013			$80,175			$92,965
Portfolio turnover rate		58.44%			114.89%	f		107.90%	g		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsh		42.77%			72.45%	f		40.38%	g		48.11%			77.93%			51.47%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales ^and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio activity as a result of in-kind transactions.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

^hSee Note 1(g) regarding mortgage dollar rolls.

FSI-8     Semiannual Report   |    The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Consolidated Statement of Investments, June 30, 2020 (unaudited)

Franklin Strategic Income VIP Fund

		Country/ Organization		Shares/ Warrants		Value
	Common Stocks and Other Equity Interests 0.2%
	Capital Goods 0.0%
a,aa,b	Onsite Rental Group Operations Pty. Ltd.		Australia		143,820	$	—
	Commercial & Professional Services 0.0%†
a	Remington Outdoor Co. Inc.		United States		74,576		37,288
	Consumer Services 0.0%†
a,aa,c	Turtle Bay Resort		United States		1,901,449		41,832
	Energy 0.1%
	Amplify Energy Corp.		United States		431		530
a,aa	Battalion Oil Corp., wts., A, 10/08/22		United States		879		2,331
a,aa	Battalion Oil Corp., wts., B, 10/08/22		United States		1,098		2,643
a,aa	Battalion Oil Corp., wts., C, 10/08/22		United States		1,412		2,987
a,aa	Birch Permian Holdings Inc.		United States		4,478		21,271
a,aa	Birch Permian Holdings Inc.		United States		34,907		161,445
	Riviera Resources Inc.		United States		6,620		11,883
a	Weatherford International PLC		United States		13,794		27,174
							230,264
	Materials 0.1%
a,aa,b	Appvion Operations Inc.		United States		18,684		353,175
	Verso Corp., A		United States		5,620		67,215
a	Verso Corp., wts., 7/25/23		United States		592		607
							420,997
	Media & Entertainment 0.0%†
a	Clear Channel Outdoor Holdings Inc.		United States		20,804		21,636
a	iHeartMedia Inc., A		United States		8,384		70,006
a,aa	iHeartMedia Inc., B		United States		142		1,008
							92,650
	Retailing 0.0%
a,aa,b	K2016470219 South Africa Ltd., A		South Africa		14,792,309		—
a,aa,b	K2016470219 South Africa Ltd., B		South Africa		1,472,041		—
							—
	Total Common Stocks and Other Equity Interests (Cost $4,648,529)						823,031
	Management Investment Companies (Cost $11,072,145) 2.0%
	Diversified Financials 2.0%
d	Franklin Floating Rate Income Fund		United States		1,118,951		8,067,640
				Principal   Amount*
	Convertible Bonds (Cost $4,770) 0.0%†
	Telecommunication Services 0.0%†
e,f	Digicel Group 0.5 Ltd., cvt., sub. bond, 144A, PIK, 7.00%, 10/01/68		Jamaica		25,758		2,189

.       Semiannual Report             FSI-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*			Value
	Corporate Bonds 44.0%
	Automobiles & Components 0.4%
e	Allison Transmission Inc., senior bond, 144A, 5.875%, 6/01/29		United States		800,000		$	834,324
	Dana Inc., senior note, 5.625%, 6/15/28		United States		700,000			696,633
								1,530,957
	Banks 4.8%
e	Akbank T.A.S., senior note, 144A, 5.125%, 3/31/25		Turkey		1,200,000			1,135,195
	Bank of America Corp.,
	senior bond, 3.248%, 10/21/27		United States		647,000			713,969
	senior note, 3.50%, 4/19/26		United States		2,480,000			2,793,821
g	BDO Unibank Inc., senior note, Reg S, 2.95%, 3/06/23		Philippines		200,000			204,978
e	BNP Paribas SA, senior note, 144A, 2.219% to 6/09/25, FRN
	thereafter, 6/09/26		France		500,000			511,417
g	China Construction Bank Corp., sub. note, Reg S, 4.25% to 2/26/24, FRN thereafter, 2/27/29		China		800,000			855,361
	Citigroup Inc., senior note, 3.30%, 4/27/25		United States		243,000			267,038
	senior note, 3.40%, 5/01/26		United States		1,106,000			1,227,321
h	Comerica Inc., junior sub. bond, 5.625% to 10/01/25, FRN thereafter, Perpetual		United States		300,000			305,190
	Fifth Third Bancorp, senior note, 2.55%, 5/05/27		United States		500,000			535,360
	HSBC Holdings PLC, senior bond, 2.848% to 6/04/30, FRN thereafter, 6/04/31		United Kingdom		800,000			819,847
	Industrial & Commercial Bank of China Ltd., senior note, 3.538%, 11/08/27		China		900,000			991,582
	JPMorgan Chase & Co.,
	hjunior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		213,000			215,272
	senior bond, 3.20%, 6/15/26		United States		1,213,000			1,347,437
	senior bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31		United States		1,000,000			1,058,410
	sub. note, 3.375%, 5/01/23		United States		809,000			865,855
	sub. note, 3.875%, 9/10/24		United States		809,000			897,481
	Lloyds Banking Group PLC, senior note, 3.87%, 7/09/25		United Kingdom		200,000			217,832
	Regions Financial Corp., senior note, 2.25%, 5/18/25		United States		500,000			523,630
	SVB Financial Group, senior note, 3.125%, 6/05/30		United States		300,000			321,935
g	Turkiye Vakiflar Bankasi TAO, secured note, Reg S, 2.375%, 11/04/22		Turkey		500,000	EUR		557,294
	Wells Fargo & Co.,
	senior note, 3.00%, 4/22/26		United States		2,021,000			2,208,711
	senior note, 2.188% to 4/30/25, FRN thereafter, 4/30/26		United States		700,000			724,606
								19,299,542
	Capital Goods 1.8%
e	Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		1,094,000			979,316
	CNH Industrial NV, senior bond, 3.85%, 11/15/27		United Kingdom		566,000			598,277
	Emerson Electric Co., senior bond, 2.75%, 10/15/50		United States		200,000			200,617
e	Herc Holdings Inc., senior note, 144A, 5.50%, 7/15/27		United States		1,000,000			1,004,680
	Honeywell International Inc., senior bond, 1.95%, 6/01/30		United States		700,000			732,342
e	Navistar International Corp., senior secured note, 144A, 9.50%, 5/01/25		United States		400,000			430,250

FSI-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Capital Goods (continued)
e	NCI Building Systems Inc., senior secured note, 144A, 8.00%, 4/15/26		United States		800,000	$	808,524
aa,b,f	Onsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%,
	10/26/23		Australia		262,519		213,088
e	Resideo Funding Inc., senior note, 144A, 6.125%, 11/01/26		United States		800,000		784,524
e	Rutas 2 and 7 Finance Ltd., senior secured bond, first lien, 144A, zero cpn., 9/30/36		United States		200,000		131,000
e,i	Vertical U.S. Newco Inc., senior note, 144A, 5.25%, 7/15/27		United States		400,000		400,000
e	WESCO Distribution Inc.,
	senior note, 144A, 7.125%, 6/15/25		United States		300,000		317,160
	senior note, 144A, 7.25%, 6/15/28		United States		200,000		211,414
	Westinghouse Air Brake Technologies Corp., senior note, 3.20%, 6/15/25		United States		200,000		204,403
							7,015,595
	Consumer Durables & Apparel 1.0%
e	Hanesbrands Inc., senior bond, 144A, 4.875%, 5/15/26		United States		1,382,000		1,395,564
	KB Home, senior note, 7.00%, 12/15/21		United States		570,000		598,030
	Mohawk Industries Inc., senior bond, 3.625%, 5/15/30		United States		1,300,000		1,418,699
	Toll Brothers Finance Corp., senior bond, 5.625%, 1/15/24		United States		689,000		739,742
							4,152,035
	Consumer Services 1.2%
e	1011778 BC ULC/New Red Finance Inc., secured note, second lien, 144A, 5.00%, 10/15/25		Canada		970,000		966,794
e,i	Colt Merger Sub Inc.,
	senior note, 144A, 5.75%, 7/01/25		United States		200,000		201,500
	senior secured note, 144A, 6.25%, 7/01/25		United States		400,000		397,880
e	Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		1,132,000		815,040
e	International Game Technology PLC, senior secured note, first lien, 144A, 5.25%, 1/15/29		United States		700,000		684,250
e	KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC, senior note, 144A, 5.00%, 6/01/24		United States		728,000		743,546
e	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
	senior bond, 144A, 5.50%, 3/01/25		United States		670,000		615,191
	senior bond, 144A, 5.25%, 5/15/27		United States		200,000		173,326
							4,597,527
	Diversified Financials 2.7%
	Capital One Financial Corp., senior note, 3.20%, 2/05/25		United States		1,617,000		1,732,506
	The Goldman Sachs Group Inc.,
	senior note, 3.50%, 1/23/25		United States		1,725,000		1,880,200
	senior note, 3.75%, 2/25/26		United States		1,213,000		1,353,859
	Morgan Stanley,
	senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28		United States		809,000		910,970
	senior note, 3.875%, 1/27/26		United States		2,395,000		2,711,294

Semiannual Report             FSI-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Diversified Financials (continued)
e	MSCI Inc., senior bond, 144A, 4.00%, 11/15/29		United States		700,000	$	715,183
	Springleaf Finance Corp., senior note, 6.625%, 1/15/28		United States		1,000,000		991,690
g	TNB Global Ventures Capital Bhd., senior note, Reg S, 3.244%, 10/19/26		Malaysia		400,000		426,065
							10,721,767
	Energy 2.5%
e	Aker BP ASA, senior note, 144A, 4.75%, 6/15/24		Norway		600,000		604,845
	Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., senior note, 4.486%, 5/01/30		United States		50,000		57,616
	Canadian Natural Resources Ltd., senior bond, 2.95%, 7/15/30		Canada		450,000		447,460
	Cheniere Energy Partners LP, senior secured note, first lien, 5.25%, 10/01/25		United States		970,000		967,769
	Comstock Resources Inc., senior note, 9.75%, 8/15/26		United States		200,000		187,250
	CONSOL Energy Inc., senior note, 5.875%, 4/15/22		United States		167,000		164,599
	Ecopetrol SA, senior bond, 4.125%, 1/16/25		Colombia		800,000		804,924
	Energy Transfer Operating LP, senior bond, 4.05%, 3/15/25		United States		200,000		212,975
	EnLink Midstream LLC, senior bond, 5.375%, 6/01/29		United States		300,000		225,871
e,f,g	EnQuest PLC, senior note, 144A, Reg S, PIK, 7.00%, 10/15/23		United Kingdom		849,275		510,737
	Enterprise Products Operating LLC, senior bond, 4.80%, 2/01/49		United States		150,000		178,162
	EOG Resources Inc., senior bond, 4.375%, 4/15/30		United States		100,000		119,276
	Equinor ASA, senior note, 2.375%, 5/22/30		Norway		700,000		728,506
	Exxon Mobil Corp., senior bond, 2.61%, 10/15/30		United States		500,000		534,227
	Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 2/15/21		United States		1,617,000		1,218,612
e	Nabors Industries Ltd., senior note, 144A, 7.25%, 1/15/26		United States		800,000		494,000
	Occidental Petroleum Corp.,
	i senior bond, 8.875%, 7/15/30		United States		400,000		400,500
	senior bond, 6.45%, 9/15/36		United States		500,000		430,540
e	Schlumberger Holdings Corp., senior note, 144A, 3.90%, 5/17/28		United States		400,000		431,895
	Sunoco LP/Sunoco Finance Corp.,
	senior note, 4.875%, 1/15/23		United States		485,000		479,493
	senior note, 6.00%, 4/15/27		United States		500,000		496,140
e	Weatherford International Ltd., senior note, 144A, 11.00%, 12/01/24		United States		417,000		291,900
	The Williams Cos Inc., senior bond, 3.50%, 11/15/30		United States		200,000		210,832
							10,198,129
	Food & Staples Retailing 0.9%
e	Cencosud SA, senior note, 144A, 4.375%, 7/17/27		Chile		800,000		816,550
	Costco Wholesale Corp., senior bond, 1.75%, 4/20/32		United States		100,000		101,889
	The Kroger Co., senior bond, 4.45%, 2/01/47		United States		150,000		182,278
	Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24		United States		2,087,000		2,300,202
							3,400,919
	Food, Beverage & Tobacco 1.9%
	Altria Group Inc., senior note, 3.40%, 5/06/30		United States		1,200,000		1,293,492
	Anheuser-Busch InBev Worldwide Inc., senior bond, 3.50%, 6/01/30		Belgium		1,300,000		1,464,448
	B&G Foods Inc., senior note, 5.25%, 9/15/27		United States		900,000		903,096

FSI-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Food, Beverage & Tobacco (continued)
	BAT Capital Corp.,
	senior bond, 4.54%, 8/15/47		United Kingdom		50,000	$	54,512
	senior note, 3.557%, 8/15/27		United Kingdom		300,000		324,801
	Bunge Ltd. Finance Corp., senior note, 3.25%, 8/15/26		United States		200,000		206,665
	Diageo Capital PLC., senior note, 2.00%, 4/29/30		United Kingdom		800,000		828,819
e	Kraft Heinz Foods Co., senior note, 144A, 3.875%, 5/15/27		United States		800,000		837,071
e	MHP Lux SA, senior note, 144A, 6.95%, 4/03/26		Ukraine		800,000		815,410
e	Post Holdings Inc., senior bond, 144A, 4.625%, 4/15/30		United States		700,000		688,205
	Reynolds American Inc., senior note, 4.45%, 6/12/25		United Kingdom		200,000		225,464
							7,641,983
	Health Care Equipment & Services 1.9%
	Abbott Laboratories, senior bond, 4.75%, 11/30/36		United States		1,000,000		1,346,716
	Anthem Inc.,
	senior bond, 2.25%, 5/15/30		United States		400,000		412,054
	senior bond, 3.70%, 9/15/49		United States		150,000		171,043
	Centene Corp.,
	senior bond, 4.625%, 12/15/29		United States		200,000		212,254
	senior bond, 3.375%, 2/15/30		United States		600,000		606,765
	senior note, 4.75%, 5/15/22		United States		400,000		406,406
	senior note, 4.25%, 12/15/27		United States		300,000		310,267
e	senior note, 144A, 5.375%, 6/01/26		United States		324,000		337,195
	CHS/Community Health Systems Inc., senior secured note, first lien, 6.25%, 3/31/23		United States		805,000		759,848
	Cigna Corp., senior bond, 4.90%, 12/15/48		United States		150,000		198,603
	DaVita Inc.,
	senior bond, 5.125%, 7/15/24		United States		305,000		310,642
	senior bond, 5.00%, 5/01/25		United States		728,000		745,108
	HCA Inc., senior note, 5.375%, 9/01/26		United States		713,000		778,026
e	MPH Acquisition Holdings LLC, senior note, 144A, 7.125%, 6/01/24		United States		300,000		280,120
	Quest Diagnostics Inc., senior bond, 2.80%, 6/30/31		United States		200,000		210,099
	Stryker Corp., senior bond, 3.50%, 3/15/26		United States		405,000		456,170
							7,541,316
	Household & Personal Products 0.1%
e,i	Kimberly-Clark de Mexico SAB de CV, senior bond, 144A, 2.431%, 7/01/31		Mexico		300,000		302,475
e	Spectrum Brands Inc., senior bond, 144A, 5.50%, 7/15/30		United States		200,000		200,750
							503,225
	Insurance 1.5%
	Aflac Inc., senior note, 3.60%, 4/01/30		United States		1,300,000		1,519,439
	Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50		United States		1,000,000		1,051,210
e	Five Corners Funding Trust II, senior note, 144A, 2.85%, 5/15/30		United States		900,000		929,213
	Manulife Financial Corp., senior note, 2.484%, 5/19/27		Canada		800,000		838,406
	Marsh & McLennan Cos Inc., senior bond, 2.25%, 11/15/30		United States		1,200,000		1,249,561
	Willis North America Inc., senior bond, 2.95%, 9/15/29		United States		400,000		424,616
							6,012,445

Semiannual Report             FSI-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal Amount*		Value
	Corporate Bonds (continued)
	Materials 5.4%
	Air Products and Chemicals Inc., senior bond, 2.05%, 5/15/30		United States		400,000	$	420,873
e	Alpek SAB de CV, senior note, 144A, 4.25%, 9/18/29		Mexico		1,600,000		1,582,496
e	Ardagh Packaging Finance PLC/Ardagh Holdings USA Inc.,
	senior note, 144A, 6.00%, 2/15/25		Luxembourg		248,000		254,138
	senior note, 144A, 5.25%, 8/15/27		Luxembourg		300,000		294,993
	Bemis Co Inc., senior note, 2.63%, 6/19/30		United States		200,000		205,270
e	Braskem Netherlands Finance BV, senior bond, 144A, 4.50%, 1/31/30		Brazil		1,100,000		1,008,425
e	CCL Industries Inc., senior note, 144A, 3.05%, 6/01/30		Canada		500,000		512,577
e	Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24		Mexico		299,000		296,850
e	Cemex SAB de CV, senior secured bond, first lien, 144A, 5.70%, 1/11/25		Mexico		1,013,000		993,358
g	CNAC HK Finbridge Co. Ltd., senior note, Reg S, 4.875%, 3/14/25		China		800,000		889,441
	Crown Americas LLC/Crown Americas Capital Corp. VI, senior note, 4.75%, 2/01/26		United States		1,066,000		1,090,081
	EI du Pont de Nemours and Co., senior bond, 2.30%, 7/15/30		United States		1,300,000		1,354,025
e	FMG Resources (August 2006) Pty. Ltd.,
	senior note, 144A, 5.125%, 3/15/23		Australia		324,000		333,919
	senior note, 144A, 5.125%, 5/15/24		Australia		647,000		668,095
e	Gates Global LLC / Gates Corp., senior note, 144A, 6.25%, 1/15/26		United States		700,000		694,456
e	Glencore Funding LLC,
	senior note, 144A, 4.125%, 5/30/23		Switzerland		485,000		518,908
	senior note, 144A, 4.625%, 4/29/24		Switzerland		250,000		276,152
	LYB International Finance BV, senior note, 4.00%, 7/15/23		United States		1,698,000		1,842,820
e	Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		1,278,000		1,162,648
e	Novelis Corp., senior bond, 144A, 5.875%, 9/30/26		United States		1,059,000		1,060,239
	Olin Corp., senior note, 5.125%, 9/15/27		United States		400,000		375,162
e	Owens-Brockway Glass Container Inc.,
	senior note, 144A, 5.00%, 1/15/22		United States		120,000		120,267
	senior note, 144A, 5.875%, 8/15/23		United States		566,000		585,869
	senior note, 144A, 6.625%, 5/13/27		United States		100,000		104,188
e	Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA,
	senior note, 144A, 7.00%, 7/15/24		United States		105,000		105,541
	senior secured note, first lien, 144A, 5.125%, 7/15/23		United States		566,000		573,468
e	SABIC Capital II BV, senior note, 144A, 4.50%, 10/10/28		Saudi Arabia		600,000		680,730
e	Sealed Air Corp.,
	senior bond, 144A, 5.125%, 12/01/24		United States		809,000		866,136
	senior bond, 144A, 5.50%, 9/15/25		United States		124,000		133,752
	senior note, 144A, 4.875%, 12/01/22		United States		85,000		87,636
e	SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25		United States		1,100,000		933,146
e	TPC Group Inc., secured note, 144A, 10.50%, 8/01/24		United States		900,000		807,282
	Westlake Chemical Corp., senior bond, 3.375%, 6/15/30		United States		200,000		204,691
	WRKCo Inc., senior bond, 3.00%, 6/15/33		United States		400,000		418,219

FSI-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Materials (continued)
e	Yara International ASA, senior note, 144A, 3.148%, 6/04/30		Norway		100,000	$	104,177
							21,560,028
	Media & Entertainment 3.3%
e	Altice Financing SA, secured bond, 144A, 7.50%, 5/15/26		Luxembourg		600,000		631,515
	AMC Entertainment Holdings Inc., senior sub. bond, 5.75%, 6/15/25		United States		800,000		258,000
e	CCO Holdings LLC/CCO Holdings Capital Corp.,
	senior bond, 144A, 5.375%, 5/01/25		United States		728,000		748,096
	senior bond, 144A, 4.50%, 8/15/30		United States		300,000		307,247
	Charter Communications Operating LLC/Charter Communications Operating Capital, senior bond, 2.80%, 4/01/31		United States		300,000		304,796
	Clear Channel Worldwide Holdings Inc.,
	senior note, 9.25%, 2/15/24		United States		256,000		238,140
e	senior secured note, first lien, 144A, 5.125%, 8/15/27		United States		600,000		577,056
e	CSC Holdings LLC, senior secured note, first lien, 144A, 5.50%, 5/15/26		United States		1,378,000		1,418,341
e	Diamond Sports Group LLC/Diamond Sports Finance Co.,
	first lien, 144A, 5.375%, 8/15/26		United States		400,000		291,968
	senior note, 144A, 6.625%, 8/15/27		United States		300,000		161,559
	DISH DBS Corp.,
	senior bond, 6.75%, 6/01/21		United States		5,000		5,102
	senior note, 5.875%, 11/15/24		United States		570,000		567,597
e,i	DISH Network Corp., senior note, 144A, 7.375%, 7/01/28		United States		300,000		299,625
	Fox Corp, senior bond, 3.50%, 4/08/30		United States		400,000		447,486
	iHeartCommunications Inc., senior note, 8.375%, 5/01/27		United States		87,378		80,229
e	Live Nation Entertainment Inc., senior note, 144A, 4.75%, 10/15/27		United States		800,000		690,084
	Netflix Inc.,
	senior bond, 5.875%, 2/15/25		United States		1,000,000		1,114,795
	senior bond, 4.375%, 11/15/26		United States		300,000		312,744
e	Nexstar Broadcasting Inc., senior note, 144A, 5.625%, 8/01/24		United States		1,417,000		1,431,319
	RELX Capital Inc., senior note, 3.00%, 5/22/30		United Kingdom		100,000		108,423
e	Tencent Holdings Ltd., senior note, 144A, 2.39%, 6/03/30		China		1,100,000		1,102,555
	The Walt Disney Co., senior note, 2.20%, 1/13/28		United States		400,000		418,197
e	Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		1,321,000		1,248,352
e	Virgin Media Secured Finance PLC, senior secured bond, 144A, 4.50%, 8/15/30		United Kingdom		600,000		601,875
							13,365,101
	Pharmaceuticals, Biotechnology & Life Sciences 1.8%
e	AbbVie Inc.,
	senior bond, 144A, 3.80%, 3/15/25		United States		1,778,000		1,984,586
	senior note, 144A, 2.95%, 11/21/26		United States		600,000		657,093
	senior note, 144A, 3.20%, 11/21/29		United States		700,000		781,587
e	Bausch Health Cos. Inc.,
	senior bond, 144A, 6.125%, 4/15/25		United States		243,000		246,810
	senior note, 144A, 8.50%, 1/31/27		United States		809,000		860,149

Semiannual Report             FSI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Pharmaceuticals, Biotechnology & Life Sciences (continued)
e	Bayer U.S. Finance II LLC, senior bond, 144A, 4.375%, 12/15/28		Germany		889,000	$	1,039,460
	Biogen Inc., senior bond, 2.25%, 5/01/30		United States		300,000		303,395
e	Endo Dac/Endo Finance LLC/Endo Finco Inc.,
	secured note, second lien, 144A, 9.50%, 7/31/27		United States		452,000		480,340
	senior note, 144A, 6.00%, 6/30/28		United States		659,000		428,350
e	Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27		United States		184,000		189,436
	Perrigo Finance Unlimited Co., senior note, 3.15%, 6/15/30		United States		400,000		404,187
							7,375,393
	Real Estate 1.3%
	AvalonBay Communities Inc., senior bond, 2.45%, 1/15/31		United States		500,000		533,740
	g China Overseas Finance Cayman VI Ltd., senior note, Reg S, 5.95%, 5/08/24		China		700,000		801,287
	Equinix Inc., senior bond, 5.875%, 1/15/26		United States		100,000		105,471
e	Five Point Operating Co. LP/Five Point Capital Corp., senior note, 144A, 7.875%, 11/15/25		United States		800,000		758,492
	MPT Operating Partnership LP/MPT Finance Corp.,
	senior bond, 5.25%, 8/01/26		United States		247,000		256,980
	senior bond, 5.00%, 10/15/27		United States		889,000		916,252
e	SBA Communications Corp., senior note, 144A, 3.875%, 2/15/27		United States		600,000		598,323
e	VICI Properties LP/VICI Note Co. Inc., senior note, 144A, 3.75%, 2/15/27		United States		1,400,000		1,318,408
							5,288,953
	Retailing 0.2%
	AutoNation Inc., senior bond, 4.75%, 6/01/30		United States		200,000		217,101
	Dollar Tree Inc., senior bond, 4.20%, 5/15/28		United States		300,000		349,343
aa,e,f	K2016470219 South Africa Ltd., senior secured note, 144A, PIK, 3.00%, 12/31/22		South Africa		976,441		—
aa,e,f	K2016470260 South Africa Ltd., senior secured note, 144A, PIK, 25.00%, 12/31/22		South Africa		352,537		1,763
e	Party City Holdings Inc., senior note, 144A, 6.625%, 8/01/26		United States		1,085,000		244,125
							812,332
	Semiconductors & Semiconductor Equipment 0.0%†
	Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23		United States		100,000		103,937
	Software & Services 0.5%
	Fiserv Inc., senior bond, 2.65%, 6/01/30		United States		600,000		634,325
e	Gartner Inc., senior note, 144A, 4.50%, 7/01/28		United States		200,000		202,840
e	NortonLifeLock Inc., senior note, 144A, 5.00%, 4/15/25		United States		978,000		997,560
							1,834,725
	Technology Hardware & Equipment 0.8%
e	Blackboard Inc., secured note, second lien, 144A, 10.375%, 11/15/24		United States		200,000		195,625
e	CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27		United States		1,374,000		1,241,697
	Flex Ltd., senior note, 3.75%, 2/01/26		United States		1,100,000		1,167,133
e	Presidio Holdings Inc., senior secured note, 144A, 4.875%, 2/01/27		United States		700,000		685,454
							3,289,909

FSI-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Telecommunication Services 2.2%
e	Altice France Holding SA, senior note, 144A, 6.00%, 2/15/28		Luxembourg		700,000	$	665,879
e	Altice France SA/France, senior secured note, 144A, 5.50%, 1/15/28		France		200,000		202,338
	AT&T Inc.,
	senior Bond, 4.30%, 2/15/30		United States		1,300,000		1,519,998
	senior note, 2.30%, 6/01/27		United States		300,000		310,220
	Bell Canada Inc., senior bond, 4.464%, 4/01/48		Canada		150,000		190,354
e,f	Digicel Group 0.5 Ltd., senior note, 144A, PIK, 8.00%, 4/01/25		Jamaica		155,520		42,768
	Hughes Satellite Systems Corp., senior bond, 6.625%, 8/01/26		United States		800,000		833,152
	Sprint Communications Inc., senior note, 6.00%, 11/15/22		United States		405,000		427,727
	Sprint Corp., senior bond, 7.875%, 9/15/23		United States		405,000		456,635
	Telefonica Emisiones SA,
	senior bond, 4.895%, 3/06/48		Spain		150,000		182,633
	senior note, 4.103%, 3/08/27		Spain		500,000		571,202
	TELUS Corp., senior bond, 4.60%, 11/16/48		Canada		150,000		183,481
	T-Mobile USA Inc.,
	senior bond, 6.50%, 1/15/24		United States		405,000		415,050
	senior bond, 6.375%, 3/01/25		United States		1,051,000		1,080,953
	senior note, 6.00%, 4/15/24		United States		200,000		204,963
e	senior secured bond, 144A, 3.875%, 4/15/30		United States		1,300,000		1,451,378
							8,738,731
	Transportation 3.0%
	Burlington Northern Santa Fe LLC, senior bond, 4.15%, 4/01/45		United States		400,000		496,835
	CSX Corp., senior bond, 4.10%, 3/15/44		United States		150,000		183,459
e	DAE Funding LLC, senior note, 144A, 5.00%, 8/01/24		United Arab Emirates		1,294,000		1,217,156
	FedEx Corp.,
	senior bond, 4.05%, 2/15/48		United States		150,000		154,352
	senior note, 3.80%, 5/15/25		United States		1,400,000		1,557,935
g	ICTSI Treasury BV, senior note, Reg S, 4.625%, 1/16/23		Philippines		1,200,000		1,244,718
e	Kazakhstan Temir Zholy Finance BV, senior bond, 144A, 6.95%, 7/10/42		Kazakhstan		1,700,000		2,265,590
e	Mexico City Airport Trust, senior secured bond, first lien, 144A, 5.50%, 7/31/47		Mexico		1,200,000		1,059,690
g,j	RZD Capital PLC, (Russian Railways), loan participation, senior bond, Reg S, 5.70%, 4/05/22		Russia		1,700,000		1,807,734
	United Parcel Service Inc., senior bond, 5.30%, 4/01/50		United States		1,300,000		1,865,342
							11,852,811
	Utilities 4.8%
	Calpine Corp.,
	senior bond, 5.75%, 1/15/25		United States		1,170,000		1,185,110
	e senior note, 144A, 5.125%, 3/15/28		United States		200,000		195,925
g	CGNPC International Ltd., senior note, Reg S, 3.75%, 12/11/27		China		300,000		330,569
	Clearway Energy Operating LLC, senior note, 5.75%, 10/15/25		United States		1,132,000		1,178,418
e	Colbun SA,
	senior note, 144A, 3.95%, 10/11/27		Chile		800,000		861,884
	senior note, 144A, 3.15%, 3/06/30		Chile		300,000		303,900

Semiannual Report             FSI-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Corporate Bonds (continued)
	Utilities (continued)
	Dominion Energy Inc., senior note, 3.375%, 4/01/30		United States		1,300,000	$	1,441,050
	Duke Energy Corp., senior note, 2.45%, 6/01/30		United States		400,000		422,354
e,h	EDF SA, junior sub. note, 144A, 5.25% to 1/29/23, FRN thereafter, Perpetual		France		2,425,000		2,480,751
	Exelon Corp., senior bond, 4.05%, 4/15/30		United States		1,300,000		1,503,785
e	InterGen NV, secured bond, 144A, 7.00%, 6/30/23		Netherlands		700,000		675,500
e	Israel Electric Corp. Ltd., secured bond, 144A, 4.25%, 8/14/28		Israel		1,000,000		1,134,400
	Piedmont Natural Gas Co. Inc., senior bond, 3.35%, 6/01/50		United States		300,000		328,783
	The Southern Co., senior bond, 3.25%, 7/01/26		United States		2,410,000		2,672,847
e	State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27		China		1,651,000		1,828,301
e	Talen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27		United States		1,300,000		1,295,697
e	Three Gorges Finance I Cayman Islands Ltd., senior note, 144A, 3.15%, 6/02/26		China		1,051,000		1,137,844
	Virginia Electric and Power Co., senior bond, 6.35%, 11/30/37		United States		85,000		123,799
							19,100,917
	Total Corporate Bonds (Cost $176,493,968)						175,938,277
k,l	Senior Floating Rate Interests 5.2%
	Automobiles & Components 0.6%
	Adient US LLC,
	Initial Term Loans, 4.178%, (1-month USD LIBOR + 4.00%), 5/06/24		United States		865,800		835,930
	Initial Term Loans, 4.474%, (3-month USD LIBOR + 4.00%), 5/06/24		United States		292,500		282,409
	Thor Industries Inc., Initial USD Term Loans, 3.94%, (1-month USD LIBOR + 3.75%), 2/01/26		United States		1,238,727		1,219,179
							2,337,518
	Capital Goods 0.1%
	f Alloy Finco Ltd., Term Loan B, PIK, 14.00%, 3/06/25		United States		162,595		70,729
	Altra Industrial Motion Corp., Term Loan, 2.178%, (1-month USD LIBOR + 2.00%), 10/01/25		United States		272,770		260,496
aa	Onsite Rental Group Operations Pty. Ltd., Term B Loan, 5.50%, (1-month USD LIBOR + 4.50%), 10/25/22		Australia		192,010		161,048
							492,273
	Commercial & Professional Services 0.1%
	Prime Security Services Borrower, LLC,
	Term B-1 Facility, 4.25%, (1-month USD LIBOR + 3.25%), 9/12/26		United States		43,677		42,094
	Term B-1 Facility, 4.25%, (1-year USD LIBOR + 3.25%), 9/12/26		United States		40,193		38,736
	Term B-1 Facility, 4.25%, (3-month USD LIBOR + 3.25%), 9/12/26		United States		20,096		19,367
	Term B-1 Facility, 4.25%, (6-month USD LIBOR + 3.25%), 9/12/26		United States		20,096		19,367

FSI-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
k,l	Senior Floating Rate Interests (continued)
	Commercial & Professional Services (continued)
	Harsco Corp., Term Loan B-2, 3.25%, (1-month USD LIBOR + 2.25%), 12/10/24		United States		110,062	$	108,136
	Pitney Bowes Inc., Incremental Tranche Term B Loans, 5.68%, (1-month USD LIBOR + 5.50%), 1/07/25		United States		227,125		191,921
m	Ventia Pty. Ltd., Term B Loans, 5.00%, (3-month USD LIBOR + 4.00%), 5/21/26		Australia		157,500		154,350
							573,971
	Consumer Durables & Apparel 0.0%†
	Playtika Holding Corp., Term B Loans, 7.072%, (3-month USD LIBOR + 6.00%), 12/10/24		United States		78,000		78,146
	Consumer Services 0.5%
	Aristocrat Technologies Inc., Term B-3 Loans, 2.859%, (3-month USD LIBOR + 1.75%), 10/19/24		United States		775,372		739,511
	Caesars Resort Collection LLC,
	Term B Loans, 2.928%, (1-month USD LIBOR + 2.75%), 12/22/24		United States		348,214		312,039
	m,n Term Loan, TBD, 6/19/25		United States		23,499		21,992
	Eldorado Resorts Inc., Initial Term Loan, 3.25%, (3-month USD LIBOR + 2.25%), 4/17/24		United States		176,290		175,602
	NASCAR Holdings Inc., Initial Term Loans, 2.93%, (1-month USD LIBOR + 2.75%), 10/18/26		United States		598,411		576,269
							1,825,413
	Diversified Financials 0.2%
	Russell Investments U.S. Institutional Holdco Inc., Term Loan B, 3.822%, (3-month USD LIBOR + 2.75%), 6/01/23		United States		1,036,127		1,009,792
	Energy 0.2%
o	Fieldwood Energy LLC, Closing Date Loans, 6.25%, (3-month USD LIBOR + 5.25%), 4/11/22		United States		2,507,941		509,947
	Utex Industries Inc.,
	Initial Term Loan (First Lien), 5.311%, (3-month USD LIBOR + 4.00%), 5/21/21		United States		514,307		147,863
	Second Lien Initial Term Loan, 8.561%, (3-month USD LIBOR + 7.25%), 5/20/22		United States		53,878		7,364
							665,174
	Food, Beverage & Tobacco 0.2%
	B&G Foods Inc., Tranche B-4 Term Loan, 2.678%, (1-month USD LIBOR + 2.50%), 10/10/26		United States		289,479		286,494
	CSM Bakery Supplies LLC, 2nd Lien Term, 11.00%, (3-month USD LIBOR + 10.00%), 2/04/22		United States		478,111		390,856
	JBS USA Lux SA, New Term Loans, 3.072%, (3-month USD LIBOR + 2.00%), 5/01/26		United States		207,984		199,404
							876,754
	Health Care Equipment & Services 0.1%
	Catalent Pharma Solutions Inc., Dollar Term B-2 Loan, 3.25%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		596,977		591,008

Semiannual Report             FSI-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal Amount*		Value
k,l	Senior Floating Rate Interests (continued)
	Household & Personal Products 0.6%
aa	FGI Operating Co. LLC (Freedom Group),
f	Term Loan, PIK, 12.00%, (3-month USD LIBOR + 10.00%), 5/15/22		United States		851,786	$	658,178
	Term Loan FILO, 9.50%, (3-month USD LIBOR + 7.50%), 5/15/21		United States		1,616,351		1,615,501
							2,273,679
	Insurance 0.1%
	Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, Initial Term Loan, 2.928%, (1-month USD LIBOR + 2.75%), 5/10/25		United States		274,131		260,424
	Materials 0.2%
	Appvion Operations Inc., Term Loan, 7.00%, (3-month USD LIBOR + 6.00%), 6/15/26		United States		272,000		266,560
	Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 2.058%, (3-month USD LIBOR + 1.75%), 6/01/24		United States		233,140		224,299
	Mauser Packaging Solutions Holding Co., Initial Term Loan, 4.561%, (1-month USD LIBOR + 3.25%), 4/03/24		United States		149,614		135,102
							625,961
	Media & Entertainment 1.0%
	Charter Communications Operating LLC, Term A-2 Loan, 1.68%, (1-month USD LIBOR + 1.50%), 3/31/23		United States		821,994		813,774
	CSC Holdings LLC, March 2017 Incremental Term Loans, 2.435%, (1-month USD LIBOR + 2.25%), 7/17/25		United States		1,197,173		1,138,512
	Diamond Sports Group LLC, Term Loan, 3.43%, (1-month USD LIBOR + 3.25%), 8/24/26		United States		451,700		369,830
	Gray Television Inc.,
	Term B-2 Loan, 2.423%, (1-month USD LIBOR + 2.25%), 2/07/24		United States		843,033		815,634
	Term C Loan, 2.673%, (1-month USD LIBOR + 2.50%), 1/02/26		United States		536,353		520,262
	Mediacom Illinois LLC, Tranche N Term Loan, 1.86%, (1-week USD LIBOR + 1.75%), 2/15/24		United States		303,696		297,622
							3,955,634
	Pharmaceuticals, Biotechnology & Life Sciences 0.0%†
e	Research Technology Inc., Initial Term Loan, 5.50%, (1-month USD LIBOR + 4.50%), 2/04/27		United States		58,182		57,309
	Real Estate 0.0%†
	Cushman & Wakefield U.S. Borrower LLC, Replacement Term Loan, 2.928%, (1-month USD LIBOR + 2.75%), 8/21/25		United States		99,497		94,149
	Retailing 0.1%
o	General Nutrition Centers Inc., Tranche B-2 Term Loans, 9.50%, (2-month USD LIBOR + 8.75%), 3/04/21		United States		512,850		374,381
	Harbor Freight Tools USA Inc., Refinancing Loans, 3.25%, (1-month USD LIBOR + 2.50%), 8/19/23		United States		198,979		192,064
							566,445
	Semiconductors & Semiconductor Equipment 0.3%
	ON Semiconductor Corp., 2019 Replacement Term B-4 Loans, 2.178%, (1-month USD LIBOR + 2.00%), 9/18/26		United States		1,131,407		1,089,451

FSI-20     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*			Value
k,l	Senior Floating Rate Interests (continued)
	Software & Services 0.2%
m,n	Cardtronics USA Inc., Initial Term Loan, TBD, 6/29/27		United Kingdom		120,924		$	119,714
	WEX Inc., Term B-3 Loan, 2.428%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		636,903			611,427
								731,141
	Telecommunication Services 0.3%
	Aventiv Technologies LLC,
	Initial Term Loan, 5.50%, (3-month USD LIBOR + 4.50%), 11/01/24		United States		246,835			206,146
	Second Lien Initial Loan, 9.25%, (3-month USD LIBOR + 8.25%), 11/01/25		United States		597,127			373,205
	Global Tel*Link Corp.,
	First Lien Term Loan, 4.428%, (1-month USD LIBOR + 4.25%), 11/29/25		United States		394,735			344,283
	Second Lien Term Loan, 8.428%, (1-month USD LIBOR + 8.25%), 11/29/26		United States		183,038			140,481
								1,064,115
	Transportation 0.2%
	Avis Budget Car Rental LLC, Tranche B Term, 2.43%, (1-month USD LIBOR + 2.25%), 8/06/27		United States		720,159			643,942
	JetBlue Airways Corporation, Term Loan, 6.25%, (3-month USD LIBOR + 5.25%), 6/16/24		United States		35,548			34,911
								678,853
	Utilities 0.2%
	EFS Cogen Holdings I LLC (Linden),
	Term B Advance, 4.25%, (1-month USD LIBOR + 3.25%), 6/28/23		United States		261,216			253,706
	Term B Advance, 4.25%, (3-month USD LIBOR + 3.25%), 6/28/23		United States		615,499			597,803
								851,509
	Total Senior Floating Rate Interests (Cost $24,844,980)							20,698,719
	Marketplace Loans (Cost $1,062,845) 0.2%
	Diversified Financials 0.2%
aa,p	Lending Club, 6.46% - 25.65%, 8/22/22 - 2/28/25		United States		1,104,592			964,121
	Foreign Government and Agency Securities 12.4%
e	The African Export-Import Bank, senior bond, 144A, 3.994%, 9/21/29		Supranationalq		1,600,000			1,582,872
e	Angolan Government International Bond, senior note, 144A, 8.25%, 5/09/28		Angola		2,900,000			2,400,611
g	Banque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24		Tunisia		2,400,000	EUR		2,487,828
e	Banque Ouest Africaine de Developpement, senior note, 144A, 5.00%, 7/27/27		Supranationalq		1,600,000			1,673,360
e	Dominican Republic, senior note, 144A, 8.90%, 2/15/23		Dominican Republic		81,500,000	DOP		1,303,363
e	The Export-Import Bank of India, senior note, 144A, 3.875%, 2/01/28		India		1,655,000			1,721,727

Semiannual Report             FSI-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization	Principal Amount*				Value
	Foreign Government and Agency Securities (continued)
e	Government of Belarus International Bond,
	senior bond, 144A, 6.20%, 2/28/30	Belarus		1,200,000			$	1,150,584
	senior note, 144A, 7.625%, 6/29/27	Belarus		1,200,000				1,241,130
	Government of Colombia,
	senior bond, 3.875%, 4/25/27	Colombia		1,400,000				1,481,998
	senior bond, 9.85%, 6/28/27	Colombia		5,315,000,000		COP		1,787,653
	senior bond, 4.50%, 3/15/29	Colombia		500,000				550,060
	senior bond, 5.00%, 6/15/45	Colombia		1,900,000				2,140,910
e	Government of Gabon,
	144A, 6.375%, 12/12/24	Gabon		1,037,538				988,748
	senior note, 144A, 6.625%, 2/06/31	Gabon		1,600,000				1,433,546
	Government of Indonesia,
e	senior bond, 144A, 4.35%, 1/08/27	Indonesia		900,000				1,001,835
	senior bond, FR64, 6.125%, 5/15/28	Indonesia		26,500,000,000		IDR		1,745,783
	senior bond, FR70, 8.375%, 3/15/24	Indonesia		19,648,000,000		IDR		1,468,604
e	Government of Iraq, 144A, 5.80%, 1/15/28	Iraq		2,700,000				2,439,990
e	Government of Kazakhstan, senior bond, 144A, 4.875%, 10/14/44	Kazakhstan		1,800,000				2,292,343
	Government of Mexico,
	senior bond, M, 6.50%, 6/10/21	Mexico		293,000	r	MXN		1,295,915
	senior note, 4.15%, 3/28/27	Mexico		3,200,000				3,430,000
	Government of Peru, senior bond, 6.55%, 3/14/37	Peru		1,000,000				1,525,555
	Government of Russia,
g	Reg S, 4.75%, 5/27/26	Russia		1,200,000				1,369,502
	e senior note, 144A, 4.875%, 9/16/23	Russia		800,000				889,500
	Government of South Africa, senior bond, 7.00%, 2/28/31	South Africa		36,100,000		ZAR		1,712,765
	e Government of Ukraine,
	144A, 7.75%, 9/01/22	Ukraine		200,000				208,901
	144A, 7.75%, 9/01/23	Ukraine		369,000				387,975
	144A, 7.75%, 9/01/24	Ukraine		369,000				386,048
	a,s 144A, VRI, GDP Linked Security, 5/31/40	Ukraine		978,000				908,051
	senior bond, 144A, 7.375%, 9/25/32	Ukraine		500,000				503,868
	Government of Uruguay,
	senior bond, 4.375%, 1/23/31	Uruguay		800,000				937,260
	t senior bond, Index Linked, 4.375%, 12/15/28	Uruguay		5,036,655		UYU		126,470
	t senior bond, Index Linked, 3.70%, 6/26/37	Uruguay		84,059,266		UYU		2,001,356
e	Indonesia Government International Bond, senior note, 144A, 3.85%, 7/18/27	Indonesia		2,200,000				2,387,458
e	Panama Notas del Tesoro, senior note, 144A, 3.75%, 4/17/26	Panama		800,000				838,372
	Total Foreign Government and Agency Securities (Cost $51,874,540)							49,801,941

FSI-22     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*				Value
	U.S. Government and Agency Securities 3.2%
	U.S. Treasury Bond, 7.875%, 2/15/21		United States		728,000			$	762,907
	U.S. Treasury Note,
	1.50%, 11/30/21		United States		3,000,000				3,056,777
	t Index Linked, 0.125%, 7/15/24		United States		3,872,739				4,050,199
	t Index Linked, 0.375%, 7/15/25		United States		4,541,869				4,857,423
	Total U.S. Government and Agency Securities (Cost $12,130,746)								12,727,306
	Asset-Backed Securities and Commercial Mortgage-Backed Securities 20.6%
	Banks 0.2%
u	Commercial Mortgage Trust, 2006-GG7, AJ, FRN, 5.807%, 7/10/38		United States		392,168				323,538
u	CWABS Asset-Backed Certificates Trust, 2005-11, AF4, FRN, 5.21%, 3/25/34		United States		384,392				387,442
v	Merrill Lynch Mortgage Investors Trust, 2005-A6, 2A3, FRN, 0.565%, (1-month USD LIBOR + 0.38%), 8/25/35		United States		35,563				35,479
									746,459
	Diversified Financials 20.4%
e,v	AMMC CLO XI Ltd., 2012-11A, BR2, 144A, FRN, 2.36%, (3-month USD LIBOR + 1.60%), 4/30/31		United States		350,000				332,473
e,v	Antares CLO Ltd., 2018-1A, B, 144A, FRN, 2.785%, (3-month USD LIBOR + 1.65%), 4/20/31		United States		1,455,000				1,414,803
e,u	ARES L CLO Ltd., 2018-50A, B, 144A, FRN, 2.919%, 1/15/32		United States		500,000				486,026
e,u	ARES LII CLO Ltd., 2019-52A, A2, 144A, FRN, 2.748%, 4/22/31		United States		250,000				245,236
e,u	BCC Middle Market CLO LLC, 2018-1A, A2, 144A, FRN, 3.285%, 10/20/30		United States		700,000				649,617
e,u	BlueMountain CLO Ltd.,
	2012-2A, BR2, 144A, FRN, 1.827%, 11/20/28		United States		510,000				487,367
	2012-2A, CR2, 144A, FRN, 2.377%, 11/20/28		United States		270,000				253,574
	2018-1A, D, 144A, FRN, 3.81%, 7/30/30		United States		1,000,000				873,371
e,u	Bluemountain Fuji Eur CLO V DAC, 5A, A, 144A, FRN, 0.91%, 1/15/33		Ireland		1,900,000		EUR		2,073,866
e,u	BlueMountain Fuji Eur CLO V DAC, 5A, B, 144A, FRN, 1.55%, 1/15/33		Ireland		600,000		EUR		647,373
e	BRAVO Residential Funding Trust,
	2019-1, A1C, 144A, 3.50%, 3/25/58		United States		782,519				808,620
	u2019-2, A3, 144A, FRN, 3.50%, 10/25/44		United States		922,424				969,776
e,u	Burnham Park CLO Ltd., 2016-1A, BR, 144A, FRN, 2.635%, 10/20/29		United States		460,000				443,782
e,u	Buttermilk Park CLO Ltd., 2018-1A, C, 144A, FRN, 3.319%, 10/15/31		United States		1,408,860				1,348,736
e,v	Carlyle Global Market Strategies CLO Ltd., 2014-4RA, C, 144A, FRN, 4.119%, (3-month USD LIBOR + 2.90%), 7/15/30		United States		300,000				257,322
e,u	Carlyle GMS Finance MM CLO LLC, 2015-1A, A2R, 144A, FRN, 3.419%, 10/15/31		United States		1,213,000	��			1,116,654
e,v	Catamaran CLO Ltd., 2014-2A, BR, 144A, FRN, 4.085%, (3-month
	USD LIBOR + 2.95%), 10/18/26		United States		1,253,000				1,248,059
e,u	CIM Trust,
	2019-INV1, A1, 144A, FRN, 3.845%, 2/25/49		United States		930,220				961,163
	2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49		United States		1,336,203				1,381,531

Semiannual Report             FSI-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financials (continued)
u	Citibank Credit Card Issuance Trust, 2017-A7, A7, FRN, 0.545%, 8/08/24		United States		1,494,000	$	1,500,793
e,u	Cole Park CLO Ltd., 2015-1A, BR, 144A, FRN, 2.735%, 10/20/28		United States		270,000		263,073
e,u	Consumer Loan Underlying Bond CLUB Certificate Issuer Trust I,
	2019-51, PT, 144A, FRN, 13.176%, 1/15/45		United States		889,554		741,353
	2019-52, PT, 144A, FRN, 13.61%, 1/15/45		United States		930,846		785,772
	2019-S8, PT, 144A, FRN, 7.955%, 1/15/45		United States		666,198		553,860
	2020-2, PT, 144A, FRN, 13.87%, 3/15/45		United States		907,272		773,108
	2020-7, PT, 144A, FRN, 14.48%, 4/17/45		United States		547,371		472,981
e,u	Dryden 38 Senior Loan Fund, 2015-38A, CR, 144A, FRN, 3.219%, 7/15/30		United States		863,000		818,102
e,v	Dryden 55 CLO Ltd., 2018-55A, D, 144A, FRN, 4.069%, (3-month USD LIBOR + 2.85%), 4/15/31		United States		300,000		265,058
e,u	Eaton Vance CLO Ltd., 2014-1RA, C, 144A, FRN, 3.319%, 7/15/30		United States		315,610		302,459
	FHLMC Structured Agency Credit Risk Debt Notes,
	v 2013-DN2, M2, FRN, 4.435%, (1-month USD LIBOR + 4.25%), 11/25/23		United States		1,581,221		1,284,192
	v 2014-DN1, M2, FRN, 2.385%, (1-month USD LIBOR + 2.20%), 2/25/24		United States		380,272		381,574
	v 2014-DN2, M3, FRN, 3.785%, (1-month USD LIBOR + 3.60%), 4/25/24		United States		2,290,000		2,039,950
	v 2014-DN3, M3, FRN, 4.185%, (1-month USD LIBOR + 4.00%), 8/25/24		United States		136,225		139,350
	v 2014-DN4, M3, FRN, 4.735%, (1-month USD LIBOR + 4.55%), 10/25/24		United States		999,309		1,027,105
	v 2014-HQ1, M3, FRN, 4.285%, (1-month USD LIBOR + 4.10%), 8/25/24		United States		233,594		237,586
	v 2014-HQ2, M2, FRN, 2.385%, (1-month USD LIBOR + 2.20%), 9/25/24		United States		293,488		296,393
	v 2014-HQ3, M3, FRN, 4.935%, (1-month USD LIBOR + 4.75%), 10/25/24		United States		456,423		471,002
	v 2015-DNA1, M3, FRN, 3.485%, (1-month USD LIBOR + 3.30%), 10/25/27		United States		250,000		255,949
	v 2015-DNA3, M3, FRN, 4.885%, (1-month USD LIBOR + 4.70%), 4/25/28		United States		1,819,000		1,909,844
	v 2015-HQ1, M3, FRN, 3.985%, (1-month USD LIBOR + 3.80%), 3/25/25		United States		399,927		407,200
	v 2015-HQA1, M3, FRN, 4.885%, (1-month USD LIBOR + 4.70%), 3/25/28		United States		1,492,671		1,555,122
	v 2016-DNA2, M3, FRN, 4.835%, (1-month USD LIBOR + 4.65%), 10/25/28		United States		1,266,774		1,330,054
	u 2017-DNA1, M2, FRN, 3.435%, 7/25/29		United States		990,000		1,007,733
	u 2017-DNA2, M2, FRN, 3.635%, 10/25/29		United States		1,340,000		1,371,652
	v 2017-DNA3, M2, FRN, 2.685%, (1-month USD LIBOR + 2.50%), 3/25/30		United States		2,920,000		2,961,351
	u 2017-HQA1, M2, FRN, 3.735%, 8/25/29		United States		1,022,463		1,048,093
	u 2017-HQA2, M2, FRN, 2.835%, 12/25/29		United States		245,443		245,285

FSI-24     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financials (continued)
	FNMA Connecticut Avenue Securities,
	v 2013-C01, M2, FRN, 5.435%, (1-month USD LIBOR + 5.25%), 10/25/23		United States		272,267	$	249,438
	v 2014-C01, M2, FRN, 4.585%, (1-month USD LIBOR + 4.40%), 1/25/24		United States		429,521		384,216
	v 2014-C02, 1M2, FRN, 2.785%, (1-month USD LIBOR + 2.60%), 5/25/24		United States		1,186,370		1,047,868
	v 2014-C02, 2M2, FRN, 2.785%, (1-month USD LIBOR + 2.60%), 5/25/24		United States		570,859		508,500
	v 2014-C03, 1M2, FRN, 3.185%, (1-month USD LIBOR + 3.00%), 7/25/24		United States		2,375,501		2,101,246
	v 2014-C03, 2M2, FRN, 3.085%, (1-month USD LIBOR + 2.90%), 7/25/24		United States		110,707		102,451
	v 2015-C01, 1M2, FRN, 4.485%, (1-month USD LIBOR + 4.30%), 2/25/25		United States		710,113		721,856
	v 2015-C01, 2M2, FRN, 4.735%, (1-month USD LIBOR + 4.55%), 2/25/25		United States		498,720		501,998
	v 2015-C02, 1M2, FRN, 4.185%, (1-month USD LIBOR + 4.00%), 5/25/25		United States		1,579,840		1,608,524
	v 2015-C02, 2M2, FRN, 4.185%, (1-month USD LIBOR + 4.00%), 5/25/25		United States		626,895		637,418
	v 2015-C03, 1M2, FRN, 5.185%, (1-month USD LIBOR + 5.00%), 7/25/25		United States		2,328,457		2,396,308
	v 2015-C03, 2M2, FRN, 5.185%, (1-month USD LIBOR + 5.00%), 7/25/25		United States		930,116		957,071
	u 2016-C02, 1M2, FRN, 6.185%, 9/25/28		United States		611,895		639,286
	u 2016-C04, 1M2, FRN, 4.435%, 1/25/29		United States		1,310,808		1,367,990
	u 2016-C05, 2M2, FRN, 4.635%, 1/25/29		United States		1,180,230		1,215,686
	u 2016-C06, 1M2, FRN, 4.435%, 4/25/29		United States		408,374		430,236
	u 2016-C07, 2M2, FRN, 4.535%, 5/25/29		United States		776,023		809,565
	v 2017-C01, 1M2, FRN, 3.735%, (1-month USD LIBOR + 3.55%), 7/25/29		United States		1,630,277		1,671,600
	u 2017-C03, 1M2, FRN, 3.185%, 10/25/29		United States		2,720,000		2,761,566
	u 2017-C03, 2M2, FRN, 3.035%, 11/25/29		United States		602,760		597,786
	u 2017-C05, 1M2, FRN, 2.385%, 1/25/30		United States		1,871,060		1,848,479
e,v	Galaxy XVIII CLO Ltd., 2018-28A, C, 144A, FRN, 3.169%, (3-month USD LIBOR + 1.95%), 7/15/31		United States		250,000		233,532
e,v	Galaxy XXVII CLO Ltd., 2018-27A, C, 144A, FRN, 2.186%, (3-month USD LIBOR + 1.80%), 5/16/31		United States		400,000		382,912
e,v	LCM 26 Ltd., 26A, B, 144A, FRN, 2.535%, (3-month USD LIBOR + 1.40%), 1/20/31		United States		250,000		232,229
e,u	LCM XVI LP, 2016A, BR2, 144A, FRN, 2.969%, 10/15/31		United States		351,320		331,219
e,u	LCM XVII LP,
	2017A, BRR, 144A, FRN, 2.819%, 10/15/31		United States		350,000		326,133
	2017A, CRR, 144A, FRN, 3.319%, 10/15/31		United States		320,000		302,355

Semiannual Report             FSI-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*			Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financials (continued)
e,v	LCM XVIII LP, 2018A, DR, 144A, FRN, 3.935%, (3-month USD LIBOR + 2.80%), 4/20/31		United States		770,000		$	643,538
e,u	Madison Park Euro Funding VIII DAC, 8A, BRN, 144A, FRN, 1.70%, 4/15/32		Ireland		400,000	EUR		434,465
e,u	Madison Park Euro Funding XIV DAC, 2014A, A1N, 144A, FRN, 1.12%, 7/15/32		Ireland		1,000,000	EUR		1,112,975
e,v	Madison Park Funding XXIII Ltd., 2017-23A, B, 144A, FRN, 2.691%, (3-month USD LIBOR + 1.70%), 7/27/30		United States		400,000			391,551
e,u	Mill City Mortgage Loan Trust, 2018-4, A1B, 144A, FRN, 3.50%, 4/25/66		United States		1,423,832			1,515,161
v	MortgageIT Trust, 2004-1, A2, FRN, 1.085%, (1-month USD LIBOR + 0.90%), 11/25/34		United States		102,475			101,309
e,u	Mountain View Funding CLO XIV Ltd., 2019-1A, C, 144A, FRN, 4.119%, 4/15/29		United States		500,000			494,009
e,v	NZCG Funding Ltd., 2015-1A, A2R, 144A, FRN, 1.91%, (3-month USD LIBOR + 1.55%), 2/26/31		United States		2,182,000			2,086,762
e,u	Octagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 2.82%, 10/24/30		United States		250,000			243,658
e,v	Octagon Investment Partners 36 Ltd., 2018-1A, A1, 144A, FRN, 2.189%, (3-month USD LIBOR + 0.97%), 4/15/31		United States		500,000			487,213
e,v	Octagon Investment Partners 37 Ltd., 2018-2A, C, 144A, FRN, 3.841%, (3-month USD LIBOR + 2.85%), 7/25/30		United States		400,000			352,427
e,u	Octagon Investment Partners 38 Ltd., 2018-1A, C, 144A, FRN, 4.085%, 7/20/30		United States		1,000,000			886,795
e,v	Octagon Investment Partners XVI Ltd., 2013-1A, DR, 144A, FRN, 4.135%, (3-month USD LIBOR + 3.00%), 7/17/30		United States		400,000			356,262
e,v	Octagon Investment Partners XXIII Ltd., 2015-1A, BR, 144A, FRN, 2.419%, (3-month USD LIBOR + 1.20%), 7/15/27		United States		400,000			383,985
v	Opteum Mortgage Acceptance Corp. Trust, 2005-4, 1APT, FRN, 0.495%, (1-month USD LIBOR + 0.31%), 11/25/35		United States		106,516			106,144
e,u	Prosper Pass-Thru Trust III,
	2020-PT1, A, 144A, FRN, 8.796%, 3/15/26		United States		594,499			583,696
	2020-PT2, A, 144A, FRN, 9.444%, 4/15/26		United States		631,131			625,756
	2020-PT3, A, 144A, FRN, 7.183%, 5/15/26		United States		173,509			179,787
e,u	Provident Funding Mortgage Trust,
	2019-1, A2, 144A, FRN, 3.00%, 12/25/49		United States		859,166			912,455
	2020-1, A3, 144A, FRN, 3.00%, 2/25/50		United States		921,757			943,262
e,u	Strata CLO I Ltd., 2018-1A, B, 144A, FRN, 3.419%, 1/15/31		United States		1,300,000			1,114,423
v	Structured Asset Securities Corp., 2005-2XS, 2A2, FRN, 1.673%, (1-month USD LIBOR + 1.50%), 2/25/35		United States		116,548			114,619
u	Thornburg Mortgage Securities Trust, 2005-1, A3, FRN, 3.647%, 4/25/45		United States		80,436			76,613
e,u	Upgrade Master Pass-Thru Trust, 2019-PT2, A, 144A, FRN, 7.727%, 2/15/26		United States		513,336			490,176

FSI-26     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financials (continued)
e	Voya CLO Ltd.,
	v 2013-2A, BR, 144A, FRN, 2.841%, (3-month USD LIBOR + 1.85%), 4/25/31		United States		780,000	$	723,794
	v 2014-1A, CR2, 144A, FRN, 3.935%, (3-month USD LIBOR + 2.80%), 4/18/31		United States		1,000,000		878,162
	u 2015-2A, BR, 144A, FRN, 2.543%, 7/23/27		United States		820,000		797,981
							81,849,789
	Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $88,322,543)						82,596,248
	Mortgage-Backed Securities 7.7%
w	Federal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 0.0%†
	FHLMC, 3.848%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/33		United States		5,359		5,383
	Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 0.1%
	FHLMC Gold 30 Year, 5.00%, 4/01/34 - 8/01/35		United States		181,865		208,161
	FHLMC Gold 30 Year, 5.50%, 3/01/33 - 1/01/35		United States		109,112		122,682
	FHLMC Gold 30 Year, 6.00%, 4/01/33 - 2/01/36		United States		80,364		91,728
	FHLMC Gold 30 Year, 6.50%, 11/01/27 - 7/01/32		United States		14,542		16,254
	FHLMC Gold 30 Year, 7.00%, 9/01/21 - 4/01/30		United States		3,804		4,081
	FHLMC Gold 30 Year, 7.50%, 8/01/30		United States		161		193
							443,099
w	Federal National Mortgage Association (FNMA) Adjustable Rate 0.0%†
	FNMA, 4.042%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34		United States		58,079		59,738
	Federal National Mortgage Association (FNMA) Fixed Rate 7.5%
	FNMA 15 Year, 2.50%, 7/01/22		United States		4,967		5,206
x	FNMA 30 Year, 2.50%, 7/01/50		United States		4,000,000		4,168,594
	FNMA 30 Year, 3.00%, 9/01/48		United States		2,940,583		3,112,446
	FNMA 30 Year, 3.00%, 11/01/48		United States		1,099,909		1,165,078
x	FNMA 30 Year, 3.00%, 6/01/50		United States		16,019,000		16,867,506
	FNMA 30 Year, 4.50%, 5/01/48		United States		4,123,196		4,514,182
	FNMA 30 Year, 5.00%, 4/01/30		United States		36,269		40,694
	FNMA 30 Year, 6.50%, 6/01/28 - 10/01/37		United States		99,561		114,968
							29,988,674
	Government National Mortgage Association (GNMA) Fixed Rate 0.1%
	GNMA I SF 30 Year, 5.00%, 11/15/33 - 7/15/34		United States		158,805		181,588
	GNMA I SF 30 Year, 7.00%, 10/15/28 - 6/15/32		United States		12,825		12,958
	GNMA I SF 30 Year, 7.50%, 9/15/30		United States		1,089		1,292
	GNMA II SF 30 Year, 5.00%, 9/20/33 - 11/20/33		United States		41,826		47,383
	GNMA II SF 30 Year, 6.00%, 11/20/34		United States		58,354		67,756
	GNMA II SF 30 Year, 6.50%, 4/20/31 - 2/20/34		United States		28,377		33,190

Semiannual Report             FSI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Mortgage-Backed Securities (continued)
Government National Mortgage Association (GNMA) Fixed Rate (continued)
GNMA II SF 30 Year, 7.50%, 1/20/28 - 4/20/32		United States		7,934	$	9,244
						353,411
Total Mortgage-Backed Securities (Cost $30,173,094)						30,850,305
Municipal Bonds 3.0%
Broward County Airport System Revenue, Refunding, Series C, 3.477%, 10/01/43		United States		310,000		310,175
California Health Facilities Financing Authority Revenue,
Senior, No Place Like Home Program, 2.934%, 6/01/32		United States		295,000		306,411
Senior, No Place Like Home Program, 2.984%, 6/01/33		United States		250,000		259,360
Senior, No Place Like Home Program, 3.034%, 6/01/34		United States		190,000		196,853
City of Austin Electric Utility System Revenue, Travis and Williamson Counties, Refunding, 6.262%, 11/15/32		United States		580,000		753,327
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, Refunding, Series A, 4.094%, 1/15/49		United States		150,000		154,263
Gilroy USD, GO, Santa Clara County, Refunding, 3.364%, 8/01/47		United States		630,000		647,457
Greenville City School District GO, County of Darke, School Improvement, Refunding, 3.541%, 1/01/51		United States		715,000		721,864
Honolulu City and County Wastewater System Revenue, Second Bond Resolution, Refunding, Junior Series B, 2.585%, 7/01/28		United States		115,000		122,176
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Subordinated, Refunding, Series B, 3.395%, 10/15/40		United States		285,000		291,147
Metro Wastewater Reclamation District Sewer Revenue, Refunding, Series B, 3.158%, 4/01/41		United States		475,000		498,550
Metropolitan St. Louis Sewer District Wastewater System Revenue, Refunding, Series C, 3.259%, 5/01/45		United States		1,375,000		1,416,910
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Series B, 4.131%, 6/15/42		United States		345,000		322,199
New York State Dormitory Authority Revenues, Non State Supported Debt, State University of New York Dormitory Facilities, Series B, 3.142%, 7/01/43		United States		305,000		315,175
Ohio State Hospital Facility Revenue, Cleveland Clinic Health System Obligated Group, Refunding, Series G, 3.276%, 1/01/42		United States		190,000		201,001
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Refunding, Series B, 3.168%, 11/15/38		United States		380,000		410,632
Orlando Health Obligated Group, 3.777%, 10/01/28		United States		330,000		371,209
Pennsylvania State Turnpike Commission Turnpike Revenue, Motor License Fund-Enhanced, Subordinate, Refunding, First Series, 3.579%, 12/01/43		United States		955,000		1,002,951
Salt Lake City Sales and Excise Tax Revenue, Refunding, Series B, 3.102%, 4/01/38		United States		270,000		274,844
San Bernardino Community College District GO, San Bernadino and Riverside Counties, Election of 2018, Series A-1, 3.271%, 8/01/39		United States		210,000		228,890
San Diego County Regional Transportation Commission Sales Tax Revenue, Limited Tax, Refunding, Series A, 3.248%, 4/01/48		United States		230,000		245,297
San Francisco City and County Public Utilities Commission Water Revenue, Green Bonds, Refunding, Sub-Series A, 3.473%, 11/01/43		United States		230,000		246,503

FSI-28     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

		Country/ Organization		Principal   Amount*		Value
	Municipal Bonds (continued)
	San Jose RDA Successor Agency Tax Allocation, Senior, Refunding, Series A-T, 3.25%, 8/01/29		United States		440,000	$	486,182
	Texas State GO, Transportation Commission, Highway Improvement, Refunding, 3.211%, 4/01/44		United States		575,000		610,098
	Texas State University System Financing Revenue,
	Refunding, Series B, 2.938%, 3/15/33		United States		225,000		232,646
	Refunding, Serise B, 3.289%, 3/15/40		United States		190,000		195,624
	University of Pittsburgh of the Commonwealth System of Higher Education Revenue, Refunding, Series C, 3.005%, 9/15/41		United States		535,000		573,541
	Utah Transit Authority Sales Tax Revenue, Refunding, Series B, 3.443%, 12/15/42		United States		380,000		394,459
	Total Municipal Bonds (Cost $11,262,373)						11,789,744
				Shares/ Units
	Escrows and Litigation Trusts 0.0%†
o	Mesquite Energy Inc., Escrow Account		United States		243,000		1,215
a,aa	Millennium Corporate Claim Trust, Escrow Account		United States		950,432		—
a,aa	Millennium Lender Claim Trust, Escrow Account		United States		950,432		—
a,aa,b	Remington Outdoor Co. Inc., Litigation Units		United States		7,021		—
a	Vistra Energy Corp., Escrow Account		United States		3,000,000		6,000
	Total Escrows and Litigation Trusts (Cost $325,648)						7,215
	Total Investments before Short Term Investments (Cost $412,216,181)						394,266,736
				Principal   Amount*
	Short Term Investments 3.7%
k,l	Senior Floating Rate Interests (Cost $53,393) 0.0%†
	Retailing 0.0%†
y	General Nutrition Centers Inc., 14.00%, (3-month USD LIBOR + 13.00%), 12/30/20		United States		59,184		60,072
	Total Investments before Money Market Funds (Cost $412,269,574)						394,326,808
				Shares
	Money Market Funds (Cost $14,480,530) 3.7%
d,z	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		14,480,530		14,480,530
	Total Investments (Cost $426,750,104) 102.2%						408,807,338
	Other Assets, less Liabilities (2.2)%						(8,656,727	)
	Net Assets 100.0%					$	400,150,611

Semiannual Report             FSI-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

^†Rounds to less than 0.1% of net assets.

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^aaFair valued using significant unobservable inputs. See Note 13 regarding fair value measurements.

^bSee Note 9 regarding restricted securities.

^cThe security is owned by FT Holdings Corporation III, a wholly-owned subsidiary of the Fund. See Note 1(f).

^dSee Note 3(e) regarding investments in affiliated management investment companies.

^eSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $140,960,840, representing 35.2% of net assets.

^fIncome may be received in additional securities and/or cash.

^gSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2020, the aggregate value of these securities was $11,485,514, representing 2.9% of net assets.

^hPerpetual security with no stated maturity date.

ⁱSecurity purchased on a when-issued basis. See Note 1(c).

^jSee Note 1(e) regarding loan participation notes.

^kThe coupon rate shown represents the rate at period end.

^lSee Note 1(h) regarding senior floating rate interests.

^mSecurity purchased on a delayed delivery basis. See Note 1(c).

ⁿA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.

^oSee Note 7 regarding defaulted securities.

^pSee Note 1(i) regarding Marketplace lending.

^qA supranational organization is an entity formed by two or more central governments through international treaties.

^rPrincipal amount is stated in 100 Mexican Peso Units.

^sThe principal represents the notional amount. See Note 1(d) regarding value recovery instruments.

^tPrincipal amount of security is adjusted for inflation. See Note 1(k).

^uAdjustable rate security with an interest rate that is not based on a published reference index and spread. The rate is based on the structure of the agreement and current market conditions. The coupon rate shown represents the rate at period end.

^vThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.

^wAdjustable Rate Mortgage-Backed Security (ARM); the rate shown is the effective rate at period end. ARM rates are not based on a published reference rate and spread, but instead pass-through weighted average interest income inclusive of any caps or floors, if applicable, from the underlying mortgage loans in which the majority of mortgages pay interest based on the index shown at their designated reset dates plus a spread, less the applicable servicing and guaranty fee (MBS margin).

^xSecurity purchased on a to-be-announced (TBA) basis. See Note 1(c).

^ySee Note 10 regarding unfunded loan commitments.

^zThe rate shown is the annualized seven-day effective yield at period end.

FSI-30     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

At June 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts

Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Interest Rate Contracts
Australian 3 Yr. Bond		Long		114	$	9,207,922		9/15/20	$	2,440
Australian 10 Yr. Bond		Long		66		6,775,822		9/15/20		69,527
Canada 10 Yr. Bond		Long		54		6,118,581		9/21/20		15,531
Euro-OAT		Long		86		16,197,069		9/08/20		267,467
U.S. Treasury 5 Yr. Note		Long		100		12,574,219		9/30/20		26,435
U.S. Treasury 10 Yr. Note		Long		165		22,963,359		9/21/20		92,352
Total Futures Contracts									$	473,752

*As of period end.

At June 30, 2020, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts

Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Turkish Lira		JPHQ		Buy		5,800,000	$	841,861		7/14/20	$	1,261	$	—
Canadian Dollar		JPHQ		Sell		3,500,000		2,506,113		7/15/20		—		(72,224	)
Japanese Yen		CITI		Buy		558,485,200		5,200,000		7/16/20		—		(26,547	)
Euro		JPHQ		Buy		2,381,059		2,585,580		7/23/20		90,816		—
Euro		JPHQ		Buy		3,207,561		3,634,809		7/23/20		—		(29,395	)
Euro		JPHQ		Sell		5,588,621		6,217,843		7/23/20		—		(63,967	)
Norwegian Krone		JPHQ		Buy		26,200,000		2,896,972		7/23/20		—		(174,025	)
Norwegian Krone		JPHQ		Sell		26,200,000		2,570,644		7/23/20		—		(152,304	)
Australian Dollar		JPHQ		Sell		8,610,000		5,408,205		7/27/20		—		(534,431	)
Mexican Peso		JPHQ		Sell		400,000		16,136		7/27/20		—		(1,206	)
Canadian Dollar		JPHQ		Sell		2,100,000		1,479,618		7/28/20		—		(67,469	)
Euro		JPHQ		Buy		2,500,000		2,833,830		8/05/20		—		(22,894	)
Euro		JPHQ		Sell		2,500,000		2,814,875		8/05/20		3,939		—
Australian Dollar		JPHQ		Sell		2,900,000		1,752,354		8/06/20		—		(249,327	)
Australian Dollar		JPHQ		Sell		1,350,000		871,844		8/10/20		—		(59,982	)
Japanese Yen		JPHQ		Buy		1,043,000,000		9,977,375		8/13/20		—		(312,217	)
Japanese Yen		JPHQ		Sell		90,000,000		842,849		8/13/20		8,847		—
Singapore Dollar		JPHQ		Sell		11,700,000		8,390,254		8/13/20		—		(6,414	)
South African Rand		JPHQ		Buy		19,600,000		1,057,288		8/17/20		65,817		—
Chinese Yuan Renminbi		JPHQ		Buy		18,050,000		2,586,219		8/21/20		—		(40,634	)
Chinese Yuan Renminbi		JPHQ		Sell		18,050,000		2,563,702		8/21/20		18,116		—
Japanese Yen		JPHQ		Buy		430,000,000		4,113,632		9/14/20		—		(127,071	)
Canadian Dollar		JPHQ		Sell		300,000		216,638		9/15/20		—		(4,391	)
Euro		DBAB		Buy		650,000		737,022		9/15/20		—		(5,511	)
Euro		DBAB		Sell		650,000		731,341		9/15/20		—		(170	)
Euro		JPHQ		Buy		650,000		737,467		9/15/20		—		(5,957	)

Semiannual Report             FSI-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Euro		JPHQ		Sell		12,100,082	$	13,611,383		9/15/20	$	—	$	(6,060	)
Norwegian Krone		JPHQ		Buy		39,200,000		3,881,265		9/15/20		193,540		—
Norwegian Krone		JPHQ		Sell		39,200,000		3,843,137		9/15/20		—		(231,668	)
Indonesian Rupiah		JPHQ		Sell		7,200,000,000		468,658		11/30/20		—		(12,985	)
Total Forward Exchange Contracts											$	382,336	$	(2,206,849	)
Net unrealized appreciation (depreciation)													$	(1,824,513	)

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

At June 30, 2020, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts

Description	Annual Payment Rate Received (Paid)			Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
Centrally Cleared Swap Contracts
Contracts to Sell Protectionc,d
Traded Index
CDX.EM.31		1.00	%		Quarterly				6/20/24	$	4,230,000	$	(122,442	)	$	(88,005	)	$	(34,437	)		Investment
																						Grade
CDX.EM.32		1.00	%		Quarterly				12/20/24		3,766,500		(134,407	)		(138,744	)		4,337			Non- Investment Grade
CDX.NA.IG.33		1.00	%		Quarterly				12/20/24		4,400,000		53,914			61,415			(7,501	)		Investment Grade
Total Centrally Cleared Swap Contracts												$	(202,935	)	$	(165,334	)	$	(37,601	)
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name
Ally Financial Inc.		(5.00	)%		Quarterly		JPHQ		12/20/24	$	1,810,000	$	(290,273	)	$	(302,696	)	$	12,423
Government of Italy		(1.00	)%		Quarterly		BZWS		6/20/23		1,500,000		(346	)		9,709			(10,055	)
Contracts to Sell Protectionc,d
Single Name
Government of Italy		1.00	%		Quarterly		BZWS		6/20/23		1,500,000		(15,705	)		(42,576	)		26,871			BBB
Traded Index
eBNP Paribas Bespoke Rodez2
Index, Mezzanine Tranche 5-7%		3.20	%		Quarterly		BNDP		12/20/20		300,000		(25,680	)		—			(25,680	)		Investment Grade
eCitibank Bespoke Palma Index,
Mezzanine Tranche 5-7%		2.30	%		Quarterly		CITI		6/20/21		620,000		(63,234	)		—			(63,234	)		Non- Investment Grade

FSI-32     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

Credit Default Swap Contracts (continued)

Description	Annual Payment Rate Received (Paid)			Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Sell Protectionc,d (continued)
Traded Index (continued)
MCDX.NA.31		1.00	%		Quarterly		CITI		12/20/23	$	2,270,000	$	(10,271	)	$	15,965		$	(26,236	)		Investment
																						Grade
eMorganStanley Bespoke   Pecan Index,   MezzanineTranche 5-10%		3.98	%		Quarterly		MSCO		12/20/21		850,000		(353,802	)		—			(353,802	)		Non- Investment Grade
eMorganStanley Bespoke   Pecan Index,   MezzanineTranche 5-10%		4.10	%		Quarterly		MSCO		12/20/21		850,000		(296,266	)		—			(296,266	)		Non- Investment Grade
Total OTC Swap Contracts												$	(1,055,577	)	$	(319,598	)	$	(735,979	)
Total Credit Default Swap Contracts												$	(1,258,512	)	$	(484,932	)	$	(773,580	)

^aFor contracts to sell protection, the notional amount is equal to the maximum potential amount of the future payments and no recourse provisions have been entered into in association with the contracts.

^bBased on Standard and Poor’s (S&P) Rating for single name swaps and internal ratings for index swaps. Internal ratings based on mapping into equivalent ratings from external vendors.

^cPerformance triggers for settlement of contract include default, bankruptcy or restructuring for single name swaps. and failure to pay or bankruptcy of the underlying securities for traded index swaps.

^dThe fund enters contracts to sell protection to create a long credit position.

^eRepresents a custom index comprised of a basket of underlying instruments.

At June 30, 2020, the Fund had the following cross-currency swap contracts outstanding. See Note 1(d).

Cross-Currency Swap Contracts

Description	Payment Frequency		Coun- terparty		Maturity Date		Notional Amount			Value/ Unrealized Appreciation (Depreciation)
OTC Swap Contracts
Receive Floating 3-month USD LIBOR + 2.87%		Quarterly						464,800	USD
Pay Fixed 2.50%		Annual		CITI		5/04/21		400,000	EUR		$15,980
Receive Floating 3-month USD LIBOR + 1.334%		Quarterly						1,120,000	USD
Pay Floating 3-month EUR LIBOR + 1.12%		Quarterly		CITI		7/10/21		1,000,000	EUR		1,555
Total Cross Currency Swap Contracts											$17,535

Semiannual Report             FSI-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

At June 30, 2020, the Fund had the following inflation index swap contracts outstanding. See Note 1(d).

Inflation Index Swap Contracts

Description	Payment Frequency		Maturity Date		Notional Amount		Value/ Unrealized Appreciaton (Depreciation)
Centrally Cleared Swap Contracts
Receive variable change in USA-CPI-U		At maturity
Pay Fixed 1.943%		At maturity		1/15/29	$	13,600,000	$	(746,230	)
Total Inflation Index Swap Contracts							$	(746,230	)

At June 30, 2020, the Fund had the following total return swap contracts outstanding. See Note 1(d).

Total Return Swap Contracts

Underlying Instruments

Financing Rate

Payment Frequency

Counter- party

Maturity Date

Notional Value

Value/ Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Longa

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

GSCO

9/20/20

$

1,300,000

$

(86,648

)

^aThe Fund receives the total return on the underlying instrument and pays a variable financing rate.

See Note 11 regarding other derivative information.

See Abbreviations on page FSI-56.

FSI-34     Semiannual Report   |    The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Franklin Strategic Income VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	401,197,429
Cost - Non-controlled affiliates (Note 3e)		25,552,675
Value - Unaffiliated issuers	$	386,259,168
Value - Non-controlled affiliates (Note 3e)		22,548,170
Cash		6,264,935
Receivables:
Investment securities sold		2,058,553
Capital shares sold		120,417
Dividends and interest		3,438,260
Deposits with brokers for:
OTC derivative contracts		2,720,000
Futures contracts		1,015,215
Centrally cleared swap contracts		2,373,536
Variation margin on centrally cleared swap contracts		68,529
OTC swap contracts (upfront payments $38,802)		25,674
Unrealized appreciation on OTC forward exchange contracts		382,336
Unrealized appreciation on OTC swap contracts		56,829
Unrealized appreciation on unfunded loan commitments (Note 10)		16,008
FT Subsidiary deferred tax benefit (Note 1f)		137,222
Other assets		612
Total assets		427,485,464
Liabilities:
Payables:
Investment securities purchased		23,349,880
Capital shares redeemed		106,918
Management fees		198,860
Distribution fees		32,917
Trustees’ fees and expenses		145
Variation margin on futures contracts		36,693
OTC swap contracts (upfront receipts $425,743)		345,272
Unrealized depreciation on OTC forward exchange contracts		2,206,849
Unrealized depreciation on OTC swap contracts		861,921
Deferred tax		23,178
Accrued expenses and other liabilities		172,220
Total liabilities		27,334,853
Net assets, at value	$	400,150,611
Net assets consist of:
Paid-in capital	$	462,616,382
Total distributable earnings (losses)		(62,465,771	)
Net assets, at value	$	400,150,611

The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report             FSI-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities (continued)

June 30, 2020 (unaudited)

	Franklin Strategic Income VIP Fund
Class 1:
Net assets, at value	$	259,057,000
Shares outstanding		25,691,546
Net asset value and maximum offering price per share		$10.08
Class 2:
Net assets, at value	$	92,856,876
Shares outstanding		9,545,697
Net asset value and maximum offering price per share		$9.73
Class 4:
Net assets, at value	$	48,236,735
Shares outstanding		4,816,459
Net asset value and maximum offering price per share		$10.01

FSI-36     Semiannual Report   |    The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Operations

for the six months ended June 30, 2020 (unaudited)

Franklin Strategic
Income VIP Fund

Investment income:
Dividends:
Non-controlled affiliates (Note 3e)	$	245,699
Interest: (net of foreign taxes)~
Unaffiliated issuers		7,918,259
Total investment income		8,163,958
Expenses:
Management fees (Note 3a)		1,272,884
Distribution fees: (Note 3c)
Class 2		114,671
Class 4		89,045
Custodian fees (Note 4)		5,724
Reports to shareholders		69,917
Professional fees		49,333
Trustees’ fees and expenses		1,329
Marketplace lending fees (Note 1i)		108
Other		46,905
Total expenses		1,649,916
Expense reductions (Note 4)		(7,559	)
Expenses waived/paid by affiliates (Note 3e)		(40,441	)
Net expenses		1,601,916
Net investment income		6,562,042
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(4,084,766	)
Written options		(523,154	)
Foreign currency transactions		(41,166	)
Forward exchange contracts		(203,042	)
Futures contracts		(1,146,064	)
Swap contracts		(2,557,934	)
Net realized gain (loss)		(8,556,126	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(8,253,355	)
Non-controlled affiliates (Note 3e)		(1,197,278	)
Translation of other assets and liabilities denominated in foreign currencies		(19,965	)
Forward exchange contracts		(1,044,217	)
Futures contracts		637,011
Swap contracts		(1,676,219	)
Change in deferred taxes on unrealized appreciation		3,022
Net change in unrealized appreciation (depreciation)		(11,551,001	)
Net realized and unrealized gain (loss)		(20,107,127	)
Net increase (decrease) in net assets resulting from operations	$	(13,545,085	)
~Foreign taxes withheld on interest	$	35,603

The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report             FSI-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Net Assets

for the six months ended June 30, 2020 (unaudited)

	Franklin Strategic Income VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income		$    6,562,042		$	17,904,759
Net realized gain (loss)		(8,556,126	)		(907,193	)
Net change in unrealized appreciation (depreciation)		(11,551,001	)		18,715,962
Net increase (decrease) in net assets resulting from operations		(13,545,085	)		35,713,528
Distributions to shareholders:
Class 1		(13,266,506	)		(16,055,733	)
Class 2		(4,661,916	)		(4,608,498	)
Class 4		(2,304,505	)		(2,951,572	)
Total distributions to shareholders		(20,232,927	)		(23,615,803	)
Capital share transactions: (Note 2)
Class 1		(4,445,733	)		(25,284,669	)
Class 2		5,529,772			3,227,556
Class 4		(2,005,542	)		(7,826,645	)
Total capital share transactions		(921,503	)		(29,883,758	)
Net increase (decrease) in net assets		(34,699,515	)		(17,786,033	)
Net assets:
Beginning of period		434,850,126			452,636,159
End of period		$400,150,611		$	434,850,126

FSI-38     Semiannual Report   |    The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Consolidated Financial Statements (unaudited)

Franklin Strategic Income VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Strategic Income VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At June 30, 2020, 77.3% of the Fund’s shares were held through one insurance company. Investment activities of these insurance company separate accounts could have a material impact on the Fund. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is

determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the

Semiannual Report             FSI-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (continued)

investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally,

events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Consolidated Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Securities Purchased on a When-Issued or Delayed Delivery and TBA Basis

The Fund purchases securities on a when-issued or delayed delivery and to-be-announced (TBA) basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities and collateral has been pledged and/or received for open TBA trades.

d.  Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or

FSI-40     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Consolidated Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Consolidated Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC

derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to interest rate risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event

Semiannual Report             FSI-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

d. Derivative Financial Instruments (continued)

of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Consolidated Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Consolidated Statement of Operations.

The Fund entered into OTC cross currency swap contracts primarily to manage and/or gain exposure to certain foreign currencies. A cross currency swap is an agreement between the Fund and a counterparty to exchange cash flows (determined using either a fixed or floating rate) based on the notional amounts of two different currencies. The notional amounts are typically determined based on the spot exchange rates at the opening of the contract. Cross currency swaps may require the exchange of notional amounts at the opening and/or closing of the contract. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Consolidated Statement of Assets and Liabilities and represent compensating factors between stated terms of the cross currency swap contract and prevailing market conditions (interest rate spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Consolidated Statement of Operations.

The Fund entered into inflation index swap contracts primarily to manage and/or gain exposure to inflation risk. An inflation index swap is an agreement between the Fund and a counterparty to exchange cash flows whereby one party makes payments based on the percentage change in an index that serves as a measure of inflation and the other party makes a regular payment based on a compounded fixed rate, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC inflation index swap) or may be executed on a registered exchange (centrally cleared inflation index swap).

For centrally cleared inflation index swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Typically, an inflation index swap has payment obligations netted and exchanged upon maturity.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. The Fund did not hold any interest rate swap contracts at period end.

The Fund entered into OTC total return swap contracts primarily to manage and/or gain exposure to credit and other market risks of an underlying instrument such as a stock, bond, index or basket of securities or indices. A total return swap is an agreement between the Fund and a counterparty to exchange a return linked to an underlying instrument for a floating or fixed rate payment, both based upon a notional amount. Over the term of the contract, contractually required payments to be paid or received are accrued daily and recorded as unrealized appreciation or depreciation until the payments are made, at which time they are recognized as realized gain or loss.

The Fund purchased or wrote OTC option contracts primarily to manage and/or gain exposure to interest rate and credit risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or

FSI-42     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss. The Fund did not hold any option contracts at period end.

The Fund invests in value recovery instruments (VRI) primarily to gain exposure to economic growth. Periodic payments from VRI are dependent on established benchmarks for underlying variables. VRI has a notional amount, which is used to calculate amounts of payments to holders. Payments are recorded upon receipt as realized gains in the Consolidated Statement of Operations. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.

See Note 11 regarding other derivative information.

e.  Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund has the right to receive from the Lender any payments of principal, interest and fees which the Lender received from the borrower. The Fund generally has no rights to either enforce compliance by the borrower with the terms of the loan agreement or to any collateral relating to the original loan. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. The Participations may also involve interest rate risk and liquidity risk, including the potential default or insolvency of the borrower and/or the Lender.

f.  Investments in FT Holdings Corporation III (FT Subsidiary)

The Fund invests in certain financial instruments through its investment in FT Subsidiary. FT Subsidiary is a Delaware Corporation, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments consistent with the investment objective of the Fund. At June 30, 2020, FT Subsidiary’s investment, Turtle Bay Resort, as well as any

other assets and liabilities of FT Subsidiary are reflected in the Fund’s Consolidated Statement of Investments and Consolidated Statement of Assets and Liabilities.

At June 30, 2020, FT Subsidiary, which is a tax paying entity, recognized an unrealized loss on its Turtle Bay investment. An estimated deferred tax asset based on such unrealized loss is reflected as FT Subsidiary deferred tax benefit in the Consolidated Statement of Assets and Liabilities. The estimated benefit was calculated using a federal rate of 21%. When the Turtle Bay investment liquidates, the FT Subsidiary will recognize a capital loss. This loss may be carried back to offset prior year capital gains, subject to carryback limitation rules. If there are no limitations, the carryback will result in a tax refund which will relieve the deferred tax asset.

The financial statements have been consolidated and include the accounts of the Fund and FT Subsidiary. All intercompany transactions and balances have been eliminated. At June 30, 2020, the net assets of FT Subsidiary were $6,347,180, representing 1.6% of the Fund’s consolidated net assets. The Fund’s investment in FT Subsidiary is limited to 25% of consolidated assets.

g.  Mortgage Dollar Rolls

The Fund enters into mortgage dollar rolls, typically on a TBA basis. Mortgage dollar rolls are agreements between the Fund and a financial institution where the Fund sells (or buys) mortgage-backed securities for delivery on a specified date and simultaneously contracts to repurchase (or sell) substantially similar (same type, coupon, and maturity) securities at a future date and at a predetermined price. Gains or losses are realized on the initial sale, and the difference between the repurchase price and the sale price is recorded as an unrealized gain or loss to the Fund upon entering into the mortgage dollar roll. In addition, the Fund may invest the cash proceeds that are received from the initial sale. During the period between the sale and repurchase, the Fund is not entitled to principal and interest paid on the mortgage backed securities. Transactions in mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund’s portfolio turnover rate. The risks of mortgage dollar roll transactions include the potential inability of the counterparty to fulfill its obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

h.  Senior Floating Rate Interests

The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

i.  Marketplace Lending

The Fund invests in loans obtained through marketplace lending. Marketplace lending, sometimes referred to as peer-to-peer lending, is a method of financing in which a platform facilitates the borrowing and lending of money. It is considered an alternative to more traditional forms of debt financing. Prospective borrowers are required to provide certain financial information to the platform, including, but not limited to, the intended purpose of the loan, income, employment information, credit score, debt-to-income ratio, credit history (including defaults and delinquencies) and home ownership status. Based on this and other information, the platform assigns its own credit rating to the borrower and sets the interest rate for the requested loan. The platform then posts the borrowing requests online, giving investors the opportunity to purchase the loans based on factors such as the interest rates and expected yields of the loans, the borrower background data, and the credit rating assigned by the platform.

When the Fund invests in these loans, it usually purchase all rights, title and interest in the loans pursuant to a loan purchase agreement directly from the platform. The platform or a third-party servicer typically continues to service the loans, collecting payments and distributing them to the Fund,

less any servicing fees assessed. The servicer is typically responsible for taking actions against a borrower in the event of a default on the loan. Servicing fees, along with other administration fees, are included in marketplace lending fees in the Consolidated Statement of Operations. The Fund, as an investor in a loan, would be entitled to receive payment only from the borrower and would not be able to recover any deficiency from the platform, except under very narrow circumstances. The loans in which the Fund may invest are unsecured.

j.  Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

k.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

premium and accretion of discount on debt securities are included in interest income. Paydown gains and losses are recorded as an adjustment to interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Consolidated Statement of Operations.

l.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

m. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		837,599		$	9,025,672			671,682		$	7,349,679
Shares issued in reinvestment of distributions		1,318,738			13,266,506			1,499,135			16,055,733
Shares redeemed		(2,581,967	)		(26,737,911	)		(4,454,817	)		(48,690,081)
Net increase (decrease)		(425,630	)	$	(4,445,733	)		(2,284,000	)	$	(25,284,669)

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

2.  Shares of Beneficial Interest (continued)

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		1,476,226		$	14,944,694			1,948,126		$	20,598,257
Shares issued in reinvestment of distributions		480,115			4,661,916			445,266			4,608,498
Shares redeemed		(1,408,509	)		(14,076,838	)		(2,080,736	)		(21,979,199)
Net increase (decrease)		547,832		$	5,529,772			312,656		$	3,227,556
Class 4 Shares:
Shares sold		259,830		$	2,824,937			332,522		$	3,653,954
Shares issued in reinvestment of distributions		230,681			2,304,505			277,403			2,951,572
Shares redeemed		(703,841	)		(7,134,984	)		(1,334,939	)		(14,432,171)
Net increase (decrease)		(213,330	)	$	(2,005,542	)		(725,014	)	$	(7,826,645)

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.  Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.625%	Up to and including $500 million
0.525%	Over $500 million, up to and including $1 billion
0.480%	Over $1 billion, up to and including $1.5 billion
0.435%	Over $1.5 billion, up to and including $6.5 billion
0.415%	Over $6.5 billion, up to and including $11.5 billion
0.400%	Over $11.5 billion, up to and including $16.5 billion
0.390%	Over $16.5 billion, up to and including $19 billion
0.380%	Over $19 billion, up to and including $21.5 billion
0.370%	In excess of $21.5 billion

b.  Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

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Franklin Strategic Income VIP Fund (continued)

c. Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.25% and 0.35% per year of its average daily net assets of Class 2 and Class 4, respectively. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Consolidated Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales		Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Dividend Income
Non-Controlled Affiliates
Franklin Floating Rate Income Fund	$	9,264,918	$	—	$	—		$    —	$	(1,197,278)	$	8,067,640		1,118,951	$	216,312
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		11,463,714		102,930,148		(99,913,332)		—		—		14,480,530		14,480,530		29,387
Total Affiliated Securities	$	20,728,632	$	102,930,148	$	(99,913,332)		$    —	$	(1,197,278)	$	22,548,170			$	245,699

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Consolidated Statement of Operations.

5.  Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	271,803
Long term		44,135,035
Total capital loss carryforwards	$	44,406,838a

^aSubject to certain limitations under Internal Revenue Code Section 382.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

5. Income Taxes (continued)

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	427,600,415
Unrealized appreciation	$	12,448,801
Unrealized depreciation		(34,674,613)
Net unrealized appreciation (depreciation)	$	(22,225,812)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions, paydown losses, bond discounts and premiums and swaps.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $239,526,193 and $253,945,343, respectively.

7.  Credit Risk and Defaulted Securities

At June 30, 2020, the Fund had 31.4% of its portfolio invested in high yield, senior secured floating rate loans, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At June 30, 2020, the aggregate value of these securities was $885,543, representing 0.2% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The securities have been identified in the accompanying Consolidated Statement of Investments.

8.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9.  Restricted Securities

The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Fund may have registration rights for restricted securities. The issuer generally incurs all registration costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

At June 30, 2020, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Principal Amount/ Shares/ Units	Issuer	Acquisition Date		Cost		Value
18,684	a Appvion Operations Inc.		4/12/19	$	252,711	$	353,175
14,792,309	b K2016470219 South Africa Ltd., A		2/08/13 - 2/01/17		114,768		—
1,472,041	b K2016470219 South Africa Ltd., B		2/01/17		1,093		—
143,820	c Onsite Rental Group Operations Pty. Ltd.		5/20/20		—		—
262,519	c Onsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23		4/12/19		238,236		213,088
7,021	d Remington Outdoor Co. Inc., Litigation Units		4/12/19		—		—
	Total Restricted Securities (Value is 0.1% of Net Assets)			$	606,808	$	566,263

^aThe Fund also invests in unrestricted securities of the issuer, valued at $266,560 as of June 30, 2020.

^bThe Fund also invests in unrestricted securities of the issuer, valued at $0 as of June 30, 2020.

^cThe Fund also invests in unrestricted securities of the issuer, valued at $161,048 as of June 30, 2020.

^dThe Fund also invests in unrestricted securities of the issuer, valued at $37,288 as of June 30, 2020.

10.  Unfunded Loan Commitments

The Fund enters into certain credit agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these loan commitments at the borrowers’ discretion. Unfunded loan commitments and funded portions of credit agreements are marked to market daily and any unrealized appreciation or depreciation is included in the Consolidated Statement of Assets and Liabilities and the Consolidated Statement of Operations. Funded portions of credit agreements are presented in the Consolidated Statement of Investments.

At June 30, 2020, unfunded commitments were as follows:

Borrower	Unfunded Commitment
General Nutrition Centers, Inc., DIP	$	138,096

11.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Consolidated Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Assets and Liabilities Location	Fair Value			Consolidated Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on futures contracts	$	473,752	a	Variation margin on futures contracts	$	—
	Unrealized appreciation on OTC swap contracts		17,535		Unrealized depreciation on OTC swap contracts		—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

11.  Other Derivative Information (continued)

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Assets and Liabilities Location	Fair Value			Consolidated Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts	$	382,336		Unrealized depreciation on OTC forward exchange contracts	$	2,206,849
Credit contracts	Variation margin on centrally cleared swap contracts		4,337	a	Variation margin on centrally cleared swap contracts		41,938	a
	OTC swap contracts (upfront payments)		25,674		OTC swap contracts (upfront receipts)		345,272
	Unrealized appreciation on OTC swap contracts		39,294		Unrealized depreciation on OTC swap contracts		861,921
Inflation contracts	Variation margin on centrally cleared swap contracts		—		Variation margin on centrally cleared swap contracts		746,230
Value recovery instruments	Investments in securities, at value		908,051	b
Totals		$	1,850,979			$	4,202,210

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts and centrally cleared swap contracts as reported in the Consolidated Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Consolidated Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

^bVRI are included in investments in securities, at value in the Consolidated Statement of Assets and Liabilities.

For the period ended June 30, 2020, the effect of derivative contracts in the Consolidated Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Operations Location	Net Realized Gain (Loss) for the Period			Consolidated Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Investments	$	(474,306)	a	Investments	$	—
	Written options		190,296		Written options		—
	Futures contracts		(1,146,064)		Futures contracts		637,011
	Swap contracts		158,151		Swap contracts		55,296
Foreign exchange contracts	Investments		86,372	a	Investments		—
	Forward exchange contracts		(203,042)		Forward exchange contracts		(1,044,217)
Credit contracts	Written options		(713,450)		Written options		—
	Swap contracts		(2,343,797)		Swap contracts		(985,285)
Inflation contracts	Swap contracts		(372,288)		Swap contracts		(746,230)
Value recovery instruments	Investments		—		Investments		(29,606)	a
Totals		$	(4,818,128)			$	(2,113,031)

^aPurchased option contracts and VRI are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Consolidated Statement of Operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

For the period ended June 30, 2020, the average month end notional amount of futures contracts, swap contracts and options, and the average month end contract value for forward exchange contracts, and average month end fair value of VRI, were as follows:

Futures Contracts	$	108,113,720
Swap contracts	$	55,934,361
Forward exchange contracts	$	90,676,322
VRI	$	868,671
Options.	$	7,214,286

	Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward exchange contracts		$382,336		$2,206,849
Swap contracts		82,503		1,207,193
Total		$464,839		$3,414,042

^aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities.

At June 30, 2020, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

		Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset		Financial Instruments Collateral Received	Cash Collateral Received	Net Amount (Not less than zero)
Counterparty
BNDP	$          —		$           —		$    —	$    —	$    —
BZWS	36,580		(36,580	)	—	—	—
CITI	33,500		(33,500	)	—	—	—
DBAB	—		—		—	—	—
GSCO	—		—		—	—	—
JPHQ	394,759		(394,759	)	—	—	—
MSCO	—		—		—	—	—
Total	$464,839		$(464,839	)	$    —	$    —	$    —

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

11.  Other Derivative Information (continued)

At June 30, 2020, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

		Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset		Financial Instruments Collateral Pledged		Cash Collateral Pledgeda		Net Amount (Not less than zero)
Counterparty
BNDP	$ 25,680		$          —		$    —		$ (25,680	)	$          —
BZWS	52,631		(36,580	)	—		—		16,051
CITI	116,017		(33,500	)	—		(82,517	)	—
DBAB	5,681		—		—		—		5,681
GSCO	86,648		—		—	��	(70,000	)	16,648
JPHQ	2,477,317		(394,759	)	—		(1,850,000	)	232,558
MSCO	650,068		—		—		(590,000	)	60,068
Total	$3,414,042		$(464,839	)	$    —		$(2,618,197	)	$331,006

^aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit the collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

See Note 1(d) regarding derivative financial instruments.

See Abbreviations on page FSI-56.

12.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Consolidated Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

13.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Commercial & Professional Services	$	—	$	37,288	$	—	$	37,288
Consumer Services		—		—		41,832		41,832
Energy		39,587		—		190,677		230,264
Materials		67,822		—		353,175		420,997
Media & Entertainment		91,642		—		1,008		92,650
All Other Equity Investments		8,067,640		—		—c		8,067,640
Convertible Bonds		—		2,189		—		2,189
Corporate Bonds:
Capital Goods		—		6,802,507		213,088		7,015,595
Retailing		—		810,569		1,763c		812,332
All Other Corporate Bonds		—		168,110,350		—		168,110,350
Senior Floating Rate Interests:
Capital Goods		—		331,225		161,048		492,273
Household & Personal Products		—		—		2,273,679		2,273,679
All Other Senior Floating Rate Interests		—		17,932,767		—		17,932,767
Marketplace Loans		—		—		964,121		964,121
Foreign Government and Agency Securities		—		49,801,941		—		49,801,941
U.S. Government and Agency Securities		—		12,727,306		—		12,727,306
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		82,596,248		—		82,596,248
Mortgage-Backed Securities		—		30,850,305		—		30,850,305
Municipal Bonds		—		11,789,744		—		11,789,744
Escrows and Litigation Trusts		—		7,215		—c		7,215
Short Term Investments		14,480,530		60,072		—		14,540,602
Total Investments in Securities	$	22,747,221	$	381,859,726	$	4,200,391	$	408,807,338
Other Financial Instruments:
Futures Contracts	$	473,752	$	—	$	—	$	473,752
Forward Exchange Contracts		—		382,336		—		382,336
Swap Contracts		—		61,166		—		61,166
Unfunded Loan Commitments		—		16,008		—		16,008
Total Other Financial Instruments	$	473,752	$	459,510	$	—	$	933,262

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

13. Fair Value Measurements (continued)

	Level 1		Level 2		Level 3		Total
Liabilities:
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	2,206,849	$	—	$	2,206,849
Swap Contracts.		—		1,650,089		—		1,650,089
Total Other Financial Instruments	$	—	$	3,856,938	$	—	$	3,856,938

^aFor detailed categories, see the accompanying Consolidated Statement of Investments.

^bIncludes common stocks and management investment companies as well as other equity interests.

^cIncludes securities determined to have no value at June 30, 2020.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period. At June 30, 2020, the reconciliation is as follows:

	Balance at Beginning of Period		Purchases		Sales		Transfer Into Level 3a		Transfer Out of Level 3b			Cost Basis Adjustmentsc			Net Realized Gain (Loss)		Net Unrealized Appreciation (Depreciation)			Balance at End of Period		Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Period End
Assets:
Investments in Securities:
Equity Investments:d
Commercial & Professional Services	$	46,610		$          —		$—		$          —	$	(37,288	)		$          —			$—	$	(9,322	)	$	—	$	—
Consumer Services		41,832		—		—		—		—			—			—		—			41,832		—
Energy		2,073e		—		—		182,716		—			—			—		5,888			190,677		5,888
Materials		254,512		—		—		—		—			—			—		98,663			353,175		98,663
Media & Entertainment		2,040		—		—		—		—			—			—		(1,032	)		1,008		(1,032	)
Retailing		11,614		—		—		—		—			—			—		(11,614	)		— e		(11,614	)
Corporate Bonds:
Capital Goods		—		—		—		219,039		—			—			—		(5,951	)		213,088		(5,951	)
Retailing		2,769		196		—		—		—			(69,796	)		—		68,594			1,763e		68,594
Senior Floating Rate Interests:
Capital Goods		—		—		—		161,048		—			—			—		—			161,048		—
Household & Personal Products		2,416,190		—		—		—		—			8,318			—		(150,829	)		2,273,679		(150,829	)
Marketplace Loans		—		1,149,952		—		—		—			—			—		(185,831	)		964,121		(185,831	)
Escrows and Litigation Trusts		—e		—		—		—		—			—			—		—			—e		—
Total Investments in Securities	$	2,777,640	$	1,150,148		$—	$	562,803	$	(37,288	)	$	(61,478	)		$—	$	(191,434	)	$	4,200,391	$	(182,112	)

^aTransferred into Level 3 as a result of the unavailability of a quoted market price in an active market for identical securities or as a result of the unreliability of the foreign exchange rate and other significant observable valuation inputs.

^bTransferred out Level 3 as a result of the availability of a quoted price in an active market for identical securities and other significant observable valuation inputs.

^cMay include accretion, amortization, partnership adjustments, and/or other cost basis adjustments.

^dIncludes common stocks as well as other equity interests.

^eIncludes securities determined to have no value.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

Significant unobservable valuation inputs for material Level 3 assets and/or liabilities and impact to fair value as a result of changes in unobservable valuation inputs as of June 30, 2020, are as follows:

Description	Fair Value at End of Period		Valuation Technique		Unobservable Inputs		Amount/ Range (Weighted Averagea)	Impact to Fair Value if Input Increasesb
Assets:
Investments in Securities:
Senior Floating Rate Interests
Household & Personal Products		$2,273,679		Discounted cash flow		Discount rate	9.7% - 30.3% (15.7%)		Decreasec
						Free cash flow	$1.0 - $1.8 mil ($1.6 mil)		Increased
Marketplace Loans – Lending Club		964,121		Discounted cash flow		Loss-Adjusted Discount rate	8.7%		Decreasec
						Projected Loss rate	21.1%		Decreasec
All other Investmentse		962,591f
Total		$4,200,391

^aWeighted based on the relative fair value of the financial instruments.

^bRepresents the directional change in the fair value that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.

^cRepresents a significant impact to fair value but not net assets.

^dRepresents a significant impact to fair value and net assets.

^eIncludes fair value of immaterial assets and/or liabilities developed using various valuation techniques and unobservable inputs. May also include values derived using private transaction prices or non-public third party pricing information which is unobservable.

^fIncludes securities determined to have no value at June 30, 2020.

14.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

15.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the consolidated financial statements and determined that no events have occurred that require disclosure.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

Abbreviations

Counterparty		Currency		Selected Portfolio
BNDP	BNP Paribas SA	COP	Colombian Peso	ARM	Adjustable Rate Mortgage
BZWS	Barclays Bank PLC	DOP	Dominican Peso	CLO	Collateralized Loan Obligation
CITI	Citigroup, Inc.	EUR	Euro	CMT	1 year Constant Maturity Treasury Index
DBAB	Deutsche Bank AG	IDR	Indonesian Rupiah	FHLMC	Federal Home Loan Mortgage Corp.
GSCO	The Goldman Sachs Group, Inc.	MXN	Mexican Peso	FNMA	Federal National Mortgage Association
JPHQ	JP Morgan Chase & Co.	USD	United States Dollar	FRN	Floating Rate Note
MSCO	Morgan Stanley	UYU	Uruguayan peso	GDP	Gross Domestic Product
		ZAR	South African rand	GNMA	Government National Mortgage Association
				GO	General Obligation
				LIBOR	London InterBank Offered Rate
				MBS	Mortgage-Backed Security
				OAT	Obligation Assumable by the Treasurer
				PIK	Payment-In-Kind
				RDA	Redevelopment Agency/Authority
				SF	Single Family
				T-Note	Treasury Note
				USD	United School District

Index Abbreviation
CDX.EM.Series number	CDX Emerging Markets Index
MCDX.NA.Series number	MCDX North America Index
CDX.NA.IG.Series number	CDX North America Investment Grade Index

FSI-56     Semiannual Report

Templeton Developing Markets VIP Fund

This semiannual report for Templeton Developing Markets VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -11.04% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

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TEMPLETON DEVELOPING MARKETS VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in emerging market investments.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with developing markets are magnified in frontier markets. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the MSCI Emerging Markets (EM) Index posted a -9.67% total return, for the same period.¹ Please note, index performance numbers are for reference and we do not attempt to track an index but rather undertake investments on the basis of fundamental research.

Economic and Market Overview

The novel coronavirus (COVID-19) pandemic and resulting lockdown measures caused many emerging market

Geographic Composition

Based on Total Net Assets as of 6/30/20

economies to slow significantly in 2020’s first quarter, as the virus outbreak compounded already weak global economic activity hobbled by U.S.-China trade tensions. In response, many emerging market central banks adopted more accommodative monetary policies. Emerging market equities fell during the period, though losses were limited by a second-quarter rebound as some countries began reopening their economies.

Regarding individual countries, China’s gross domestic product contracted in 2020’s first quarter for the first time on record, reflecting the significant disruption caused by the pandemic after the government shut down nonessential businesses for nearly two months. Taiwan’s year-on-year growth rate slowed as the country’s export-dependent economy was hit by decreased global demand. South Korea’s year-on-year growth rate moderated due largely to slowing services sector activity. India’s year-on-year growth rate moderated to its lowest point since the data became available in 2004, with contractions seen in gross fixed capital formation, exports and manufacturing. Russia’s year-on-year growth rate also moderated in the first quarter, while Brazil’s year-on-year growth rate contracted as the services sector and industrial output shrank.

Turning to monetary policies, the People’s Bank of China (PBOC) cut the benchmark loan prime rate once. Taiwan’s central bank lowered its benchmark interest rate for the first time in four years, while South Korea’s central bank cut its

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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benchmark rate twice, ending at an all-time low. India’s central bank also cut its benchmark interest rate twice. The central banks of Russia and Brazil both cut their benchmark rates multiple times to record lows.

In this environment, emerging market stocks, as measured by the MSCI EM Index, posted a -9.67% total return for the six months ended June 30, 2020.1 Chinese equities rose during the period, as investors were reassured by the government’s aggressive actions to contain the pandemic and encouraging second-quarter economic data. Equities in export-oriented Taiwan declined slightly, with losses limited by stimulus measures and low rates of COVID-19 infections. Russian equities fell as a price war with Saudi Arabia led to a collapse in oil prices, which weighed heavily on Russia’s energy export-dependent economy. Brazilian equities fell significantly due largely to the country’s emergence as the epicenter of the pandemic in Latin America as well as the Brazilian real’s depreciation against the U.S. dollar.

Investment Strategy

We employ a fundamental research, value-oriented, long-term investment approach. We focus on the market price of a company’s securities relative to our evaluation of its long-term earnings, asset value and cash flow potential. This includes an assessment of the potential impacts of material environmental, social and governance factors on the long-term risk and return profile of a company. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price of the company’s securities. Our analysis considers the company’s position in its sector, the economic framework and political environment.

Manager’s Discussion

Key stock contributors to absolute performance during the reporting period were Tencent Holdings, Naver and Naspers.

Tencent is one of the largest internet services companies in China. The company provides online gaming, social network, financial technology, cloud and other entertainment-related services. Expectations that COVID-19 would have a short-term negative impact on Tencent’s advertising, payments and cloud services as a result of a decline in business activities led shares to reach a period-low in March. Shares subsequently rose, however, on expectations of solid growth in the mobile gaming and financial technology businesses. Tencent reported above-consensus first-quarter corporate results, with double-digit revenue and earnings growth driven by an increase in online gaming and better-than-expected performances in its online advertising

Top 10 Countries
6/30/20
	% of Total Net Assets
China		30.4%
South Korea		19.2%
Taiwan		11.4%
Russia		8.5%
Brazil		5.5%
India		5.4%
South Africa		4.8%
U.K.		3.0%
U.S.		1.9%
Thailand		1.5%

and financial technology operations. Expectations of continued growth in online gaming and improved monetization of its social application WeChat further supported sentiment in the stock.

Naver is South Korea’s largest search engine and a major e-commerce company. The company also provides services including LINE messenger, the largest messenger app in Japan, image messaging and multimedia mobile application Snow, digital comics platform Naver Webtoon and group social media platform Naver Band. Concerns in March that COVID-19 would negatively impact Naver’s advertising business in the short term weighed on shares, but the company’s earnings rose due to increased online shopping on its platform amid the pandemic. Investors also remained confident of Naver’s penetration into e-commerce and businesses in other areas such as digital content and financial services, which could contribute to its longer-term growth.

Naspers is a global internet and entertainment group and a majority shareholder in Prosus, which holds stakes in major internet companies globally in areas such as online gaming, social media, food delivery, online classifieds and electronic payments. Shares in Naspers benefited from the strong performance of Prosus’ largest underlying investment, Tencent. Naspers reported double-digit revenue and earnings growth for the fiscal year ended March 2020, driven by e-commerce operations and growth at Tencent. While lockdowns across key markets in early 2020 weighed on Naspers’ interests in the classified segment, investors expect market consolidation to help reduce losses and allow companies to focus on monetization as economies reopen. Management’s commitment to reducing Nasper’s share price discount to net asset value was also viewed positively by investors.

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TEMPLETON DEVELOPING MARKETS VIP FUND

In contrast, key performance detractors included ICICI Bank, Banco Bradesco and Itau Unibanco Holding. Banking stocks around the world faced selling pressure, as expectations for a global economic slowdown weakened the outlook for loan growth, net interest margins and asset quality.

ICICI Bank is one of the largest private-sector banks in India. Investors were concerned about the interim impact of economic disruptions caused by COVID-19 on the bank’s loans and margins. Indian financials stocks were broadly hurt by a crisis at a notable private-sector bank, which resulted in a bailout. Investors also reacted negatively when the Indian central bank extended loan repayment relief while not allowing a one-time restructuring of loans, which sparked fears about bad debts in the banking system. Although ICICI Bank reported a double-digit increase in its March quarter profits, higher-than-expected COVID-19-related costs weighed on profitability. Investors did support the bank’s stake sale of its insurance subsidiaries to raise capital to strengthen its balance sheet, but the bank’s plan to raise money via the issuance of new shares raised concerns of dilution.

Expectations that the Brazilian economy would fall into a recession as a result of COVID-19-related lockdowns weighed on sentiment in leading commercial banks such as Banco Bradesco and Itau Unibanco. Shares in the two banks declined significantly due to market expectations of a decline in asset quality and revenue generation. Both banks reported weak first-quarter corporate results largely due to higher-than-expected costs related to COVID-19 and suspended guidance for 2020. Shares did rebound off their lows as investors used the market correction as a buying opportunity in view of the banks’ sound fundamentals, attractive valuations and dominant market share, which in our view makes them well-positioned to recover once the COVID-19 outbreak is contained and domestic economic activity improves.

We used the market correction as an opportunity to add to our existing high-conviction holdings. Existing positions were increased in Samsung Life Insurance, one of the largest insurance companies in South Korea; Bajaj Holdings & Investment, which owns significant stakes in Indian auto and financial services companies; and the aforementioned Itau Unibanco and Prosus.

The Fund reduced its investments in China, Taiwan and the U.S. to raise funds for redemptions received during the reporting period. Sectors which experienced the largest sales were information technology, financials, health care and consumer discretionary. Key reductions included Cognizant Technology Solutions, a global information

Top 10 Holdings
6/30/20
Company Sector/Industry, Country	% of Total Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan		9.3	%
Tencent Holdings Ltd. Interactive Media & Services, China		9.1	%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals,     South Korea		8.6	%
Alibaba Group Holding Ltd. Internet & Direct Marketing Retail, China		7.6	%
Naver Corp. Interactive Media & Services, South Korea		4.6	%
Naspers Ltd. Internet & Direct Marketing Retail, South Africa		4.5	%
Unilever PLC Personal Products, U.K.		3.0	%
ICICI Bank Ltd. Banks, India		2.8	%
Brilliance China Automotive Holdings Ltd. Automobiles, China		2.7	%
LUKOIL PJSC Oil, Gas & Consumable Fuels, Russia		2.6	%

technology services company, and Glenmark Pharmaceuticals, a mid-size Indian pharmaceutical company. The Fund liquidated its positions in Chinese commercial bank China Construction Bank, Indian biopharmaceutical company Biocon, and Macau resort and casino operator Sands China.

It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. For the six months ended June 30, 2020, the U.S. dollar rose in value relative to most currencies. As a result, the Fund’s performance was negatively affected by the portfolio’s predominantly in securities with non-U.S. currency exposure.

Thank you for your participation in Templeton Developing Markets VIP Fund. We look forward to serving your future investment needs.

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TEMPLETON DEVELOPING MARKETS VIP FUND

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Semiannual Report             TD-5

TEMPLETON DEVELOPING MARKETS VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if

Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid  During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$889.60	$7.14	$1,017.30	$7.62	1.52%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

TD-6   Semiannual Report

TD P1 P2 P4 05/20

SUPPLEMENT DATED MAY 15, 2020

TO THE PROSPECTUSES DATED MAY 1, 2020

OF

TEMPLETON DEVELOPING MARKETS VIP FUND

(A series of Franklin Templeton Variable Insurance Products Trust)

The Prospectus is amended as follows:

I.The Board ofTrustees of Franklin Templeton Variable Insurance Products Trust (Board) recently approved, subject to shareholder approval, a change in the classification of the Templeton Developing Markets VIP Fund (Fund) under the Investment Company Act of 1940 from a “diversified” fund to a “non-diversified” fund. It is anticipated that in July 2020 shareholders of the Fund will receivea proxy statement requesting their votes on such proposal and other matters. If such proposals are approved by the Fund’s shareholders, it is expected that such changes will be effective in early 2021.

The Fund reserves the right to change the above at any time.

Please keep this supplement with your prospectus for future reference.

TD-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.80			$ 8.62			$10.31			$ 7.42			$ 6.37			$ 9.27
Income from investment operationsa:
Net investment incomeb		0.01			0.18			0.09			0.08			0.05			0.06
Net realized and unrealized gains (losses)		(1.19	)		2.12			(1.67	)		2.92			1.08			(1.63	)
Total from investment operations		(1.18	)		2.30			(1.58	)		3.00			1.13			(1.57	)
Less distributions from:
Net investment income		(0.45	)		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(0.20	)
Net realized gains		(0.26	)		—			—			—			—			(1.13	)
Total distributions		(0.71	)		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(1.33	)
Net asset value, end of period		$ 8.91			$10.80			$ 8.62			$10.31			$ 7.42			$ 6.37
Total returnc		(10.83	)%		26.92%			(15.44)%			40.65%			17.79%			(19.42)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.17%			1.15%			1.24%			1.36%			1.38%			1.33%
Expenses net of waiver and payments by affiliates		1.17%	e		1.15%	e		1.24%	e		1.35%	f		1.36%			1.32%
Net investment income		0.28%			1.83%			0.99%			0.86%			0.79%			0.74%
Supplemental data
Net assets, end of period (000’s)		$71,752			$97,271			$85,397			$105,493			$82,596			$77,000
Portfolio turnover rate		2.41%			18.04%			9.22%			10.76%			26.78%			71.69%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

TD-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.71			$ 8.54			$10.23			$ 7.36			$ 6.32			$ 9.20
Income from investment operationsa:
Net investment incomeb		—	c		0.15			0.07			0.05			0.04			0.04
Net realized and unrealized gains (losses)		(1.18	)		2.11			(1.68	)		2.91			1.06			(1.61	)
Total from investment operations		(1.18	)		2.26			(1.61	)		2.96			1.10			(1.57	)
Less distributions from:
Net investment income		(0.42	)		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(0.18	)
Net realized gains		(0.26	)		—			—			—			—			(1.13	)
Total distributions		(0.68	)		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(1.31	)
Net asset value, end of period		$ 8.85			$10.71			$ 8.54			$10.23			$ 7.36			$ 6.32
Total returnd		(11.00	)%		26.70%			(15.79)%			40.41%			17.44%			(19.60)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		1.42%			1.40%			1.49%			1.61%			1.63%			1.58%
Expenses net of waiver and payments by affiliates		1.42%	f		1.40%	f		1.49%	f		1.60%	g		1.61%			1.57%
Net investment income		0.03%			1.58%			0.74%			0.61%			0.54%			0.49%
Supplemental data
Net assets, end of period (000’s)		$189,208			$231,645			$195,305			$270,433			$205,151			$192,120
Portfolio turnover rate		2.41%			18.04%			9.22%			10.76%			26.78%			71.69%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^gBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report               TD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.77			$ 8.59			$10.28			$ 7.39			$ 6.34			$ 9.22
Income from investment operationsa:
Net investment incomeb		—	c		0.15			0.06			0.05			0.03			0.03
Net realized and unrealized gains (losses)		(1.20	)		2.11			(1.68	)		2.92			1.06			(1.62	)
Total from investment operations		(1.20	)		2.26			(1.62	)		2.97			1.09			(1.59	)
Less distributions from:
Net investment income		(0.41	)		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(0.16	)
Net realized gains		(0.26	)		—			—			—			—			(1.13	)
Total distributions		(0.67	)		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(1.29	)
Net asset value, end of period		$ 8.90			$10.77			$ 8.59			$10.28			$ 7.39			$ 6.34
Total returnd		(11.04	)%		26.49%			(15.81)%			40.30%			17.32%			(19.70)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates		1.52%			1.50%			1.59%			1.71%			1.73%			1.68%
Expenses net of waiver and payments by affiliates		1.52%	f		1.50%	f		1.59%	f		1.70%	g		1.71%			1.67%
Net investment income (loss)		(0.07)%			1.48%			0.64%			0.51%			0.44%			0.39%
Supplemental data
Net assets, end of period (000’s)		$4,593			$5,590			$5,203			$7,199			$6,377			$7,109
Portfolio turnover rate		2.41%			18.04%			9.22%			10.76%			26.78%			71.69%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^gBenefit of expense reduction rounds to less than 0.01%.

TD-10     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Templeton Developing Markets VIP Fund

		Industry		Shares		Value
	Common Stocks 93.9%
	Brazil 2.5%
a	B2W Cia Digital		Internet & Direct Marketing Retail		76,800	$	1,512,184
	B3 SA - Brasil Bolsa Balcao		Capital Markets		61,400		622,154
	Lojas Americanas SA		Multiline Retail		170,860		857,003
	M Dias Branco SA		Food Products		106,200		793,257
	Vale SA		Metals & Mining		278,500		2,864,501
							6,649,099
	Cambodia 0.7%
	NagaCorp Ltd.		Hotels, Restaurants & Leisure		1,525,400		1,779,444
	China 30.4%
a	Alibaba Group Holding Ltd., ADR		Internet & Direct Marketing Retail		93,210		20,105,397
	BAIC Motor Corp. Ltd., H		Automobiles		1,686,100		737,882
a	Baidu Inc., ADR		Interactive Media & Services		9,411		1,128,285
	Brilliance China Automotive Holdings Ltd.		Automobiles		7,970,600		7,214,024
	China Merchants Bank Co. Ltd., A		Banks		392,600		1,881,855
	China Merchants Bank Co. Ltd., H		Banks		507,700		2,352,738
	China Mobile Ltd.		Wireless Telecommunication Services		447,000		3,018,149
	China Resources Cement Holdings Ltd.		Construction Materials		2,429,000		2,995,722
	CNOOC Ltd.		Oil, Gas & Consumable Fuels		2,008,500		2,254,180
	COSCO SHIPPING Ports Ltd.		Transportation Infrastructure		433,196		233,665
b	Health & Happiness H&H International Holdings Ltd.		Food Products		418,400		1,901,710
b	MGM China Holdings Ltd.		Hotels, Restaurants & Leisure		254,400		330,620
	NetEase Inc., ADR		Entertainment		4,253		1,826,153
	Ping An Bank Co. Ltd., A		Banks		802,600		1,459,736
	Ping An Insurance Group Co. of China Ltd., A		Insurance		202,225		2,049,211
a	Prosus NV		Internet & Direct Marketing Retail		32,057		2,979,702
	Sunny Optical Technology Group Co. Ltd.		Electronic Equipment, Instruments & Components		161,000		2,591,195
	Tencent Holdings Ltd.		Interactive Media & Services		376,700		24,137,977
	Uni-President China Holdings Ltd.		Food Products		940,300		940,581
	Weifu High-Technology Co. Ltd., B		Auto Components		306,139		522,443
							80,661,225
	Czech Republic 0.3%
	Moneta Money Bank AS		Banks		390,403		883,994
	Hungary 1.0%
	Richter Gedeon Nyrt		Pharmaceuticals		131,650		2,730,392
	India 5.4%
	Bajaj Holdings & Investment Ltd.		Diversified Financial Services		60,776		2,048,194
	Coal India Ltd.		Oil, Gas & Consumable Fuels		442,535		781,335
	Glenmark Pharmaceuticals Ltd		Pharmaceuticals		18,613		111,027
	ICICI Bank Ltd.		Banks		1,630,254		7,596,332
	Infosys Ltd.		IT Services		306,365		2,976,458
	Tata Chemicals Ltd.		Chemicals		165,900		683,455
							14,196,801
	Indonesia 0.9%
	Astra International Tbk PT		Automobiles		7,340,300		2,487,990

Semiannual Report             TD-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

		Industry		Shares		Value
	Common Stocks (continued)
	Kenya 0.2%
a	Equity Group Holdings PLC		Banks		1,528,708	$	494,983
	Mexico 1.5%
	Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santander, ADR		Banks		949,761		3,428,637
	Nemak SAB de CV		Auto Components		2,014,800		421,778
							3,850,415
	Pakistan 0.2%
	Habib Bank Ltd.		Banks		1,116,900		640,418
	Peru 0.3%
	Intercorp Financial Services Inc.		Banks		31,950		845,078
	Philippines 0.2%
	BDO Unibank Inc.		Banks		327,469		647,421
	Russia 8.5%
	Gazprom PJSC, ADR		Oil, Gas & Consumable Fuels		312,600		1,688,018
	LUKOIL PJSC, ADR		Oil, Gas & Consumable Fuels		95,250		7,080,324
a	Mail.Ru Group Ltd., GDR		Interactive Media & Services		81,525		1,838,918
a	Sberbank of Russia PJSC, ADR		Banks		498,847		5,670,765
a	Yandex NV, A		Interactive Media & Services		126,319		6,318,476
							22,596,501
	South Africa 4.8%
a	Massmart Holdings Ltd.		Food & Staples Retailing		580,084		769,260
	Naspers Ltd., N		Internet & Direct Marketing Retail		64,938		11,929,100
							12,698,360
	South Korea 19.2%
	Fila Holdings Corp.		Textiles, Apparel & Luxury Goods		64,280		1,901,969
	Hankook Tire & Technology Co. Ltd.		Auto Components		15,300		317,500
	KT Skylife Co. Ltd.		Media		166,071		1,101,986
	LG Corp.		Industrial Conglomerates		96,342		5,765,192
	Naver Corp.		Interactive Media & Services		53,983		12,177,767
	POSCO		Metals & Mining		15,429		2,253,347
	Samsung Electronics Co. Ltd.		Technology Hardware, Storage & Peripherals		513,903		22,810,142
	Samsung Life Insurance Co. Ltd.		Insurance		76,937		2,900,434
	SK Hynix Inc.		Semiconductors & Semiconductor Equipment		24,040		1,721,012
							50,949,349
	Taiwan 11.4%
	Catcher Technology Co. Ltd.		Technology Hardware, Storage & Peripherals		114,000		866,423
	CTBC Financial Holding Co. Ltd.		Banks		350,500		243,616
a	FIT Hon Teng Ltd.		Electronic Equipment, Instruments & Components		990,600		386,111
	Hon Hai Precision Industry Co. Ltd.		Electronic Equipment, Instruments & Components		1,185,000		3,489,454
	Largan Precision Co. Ltd.		Electronic Equipment, Instruments & Components		5,300		739,053
	Taiwan Semiconductor Manufacturing Co. Ltd.		Semiconductors & Semiconductor Equipment		2,299,000		24,623,553
							30,348,210

TD-12     Semiannual Report       

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

		Industry		Shares		Value
	Common Stocks (continued)
	Thailand 1.5%
	Kasikornbank PCL, fgn		Banks		705,000	$	2,142,460
	Kiatnakin Bank PCL, fgn		Banks		859,600		1,118,932
	Thai Beverage PCL, fgn		Beverages		1,450,900		708,301
							3,969,693
	United Kingdom 3.0%
	Unilever PLC		Personal Products		146,186		7,885,110
	United States 1.9%
	Cognizant Technology Solutions Corp., A		IT Services		64,484		3,663,981
a	IMAX Corp		Entertainment		118,755		1,331,243
							4,995,224
	Total Common Stocks (Cost $185,963,504)						249,309,707
	Preferred Stocks 3.0%
	Brazil 3.0%
c	Banco Bradesco SA, 13.248%, ADR, pfd		Banks		1,026,866		3,912,359
c	Itau Unibanco Holding SA, 10.51%, ADR, pfd		Banks		897,443		4,209,008
	Total Preferred Stocks (Cost $7,746,131)						8,121,367
	Total Investments before Short Term Investments (Cost $193,709,635)						257,431,074
	Short Term Investments 2.9%
	Money Market Funds (Cost $6,684,070) 2.5%
	United States 2.5%
d,e	Institutional Fiduciary Trust Money Market Portfolio, 0.00%				6,684,070		6,684,070
	Investments from Cash Collateral Received for Loaned Securities 0.4%
	Money Market Funds (Cost $960,000) 0.4%
	United States 0.4%
d,e	Institutional Fiduciary Trust Money Market Portfolio, 0.00%				960,000		960,000
	Total Investments (Cost $201,353,705) 99.8%						265,075,144
	Other Assets, less Liabilities 0.2%						477,889
	Net Assets 100.0%					$	265,553,033

See Abbreviations on page TD-24.

^aNon-income producing.

^bA portion or all of the security is on loan at June 30, 2020. See Note 1(c).

^cVariable rate security. The rate shown represents the yield at period end.

^dSee Note 3(e) regarding investments in affiliated management investment companies.

^eThe rate shown is the annualized seven-day effective yield at period end.

    The accompanying notes are an integral part of these financial statements.    |    Semiannual Report             TD-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Templeton Developing Markets VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$193,709,635
Cost - Non-controlled affiliates (Note 3e)		7,644,070
Value - Unaffiliated issuers+		$257,431,074
Value - Non-controlled affiliates (Note 3e)		7,644,070
Receivables:
Investment securities sold		653,901
Capital shares sold		599,038
Dividends		795,076
Other assets		255
Total assets		267,123,414
Liabilities:
Payables:
Capital shares redeemed		167,083
Management fees		223,081
Distribution fees		39,327
Trustees’ fees and expenses		94
Reports to shareholders		102,061
Payable upon return of securities loaned		960,000
Accrued expenses and other liabilities		78,735
Total liabilities		1,570,381
Net assets, at value		$265,553,033
Net assets consist of:
Paid-in capital		$207,856,171
Total distributable earnings (losses)		57,696,862
Net assets, at value		$265,553,033
Class 1:
Net assets, at value		$  71,751,609
Shares outstanding		8,054,721
Net asset value and maximum offering price per share		$8.91
Class 2:
Net assets, at value		$189,208,015
Shares outstanding		21,388,950
Net asset value and maximum offering price per share		$8.85
Class 4:
Net assets, at value		$    4,593,409
Shares outstanding		515,826
Net asset value and maximum offering price per share		$8.90
+Includes securities loaned		$    1,057,818

TD-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.        

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Templeton Developing Markets VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers		$     1,949,098
Non-controlled affiliates (Note 3e)		9,562
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		7,753
Non-controlled affiliates (Note 3e)		1,521
Total investment income		1,967,934
Expenses:
Management fees (Note 3a)		1,425,717
Distribution fees: (Note 3c)
Class 2		240,375
Class 4		8,184
Custodian fees (Note 4)		43,751
Reports to shareholders		67,422
Professional fees		46,728
Trustees’ fees and expenses		906
Other		13,674
Total expenses		1,846,757
Expenses waived/paid by affiliates (Note 3e)		(5,530	)
Net expenses		1,841,227
Net investment income		126,707
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:#
Unaffiliated issuers		1,449,392
Foreign currency transactions		(41,807	)
Net realized gain (loss)		1,407,585
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(40,080,079	)
Translation of other assets and liabilities denominated in foreign currencies		2,367
Change in deferred taxes on unrealized appreciation		559,174
Net change in unrealized appreciation (depreciation)		(39,518,538	)
Net realized and unrealized gain (loss)		(38,110,953	)
Net increase (decrease) in net assets resulting from operations		$(37,984,246	)
*Foreign taxes withheld on dividends		$      441,127
#Net of foreign taxes		$      180,958

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Developing Markets VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	126,707		$	5,141,772
Net realized gain (loss)		1,407,585			16,774,357
Net change in unrealized appreciation (depreciation)		(39,518,538	)		50,174,103
Net increase (decrease) in net assets resulting from operations		(37,984,246	)		72,090,232
Distributions to shareholders:
Class 1		(5,313,566	)		(1,134,638	)
Class 2		(13,445,802	)		(2,113,534	)
Class 4		(329,902	)		(46,961	)
Total distributions to shareholders		(19,089,270	)		(3,295,133	)
Capital share transactions: (Note 2)
Class 1		(11,001,413	)		(8,627,549	)
Class 2		(817,504	)		(10,720,631	)
Class 4		(60,712	)		(845,695	)
Total capital share transactions		(11,879,629	)		(20,193,875	)
Net increase (decrease) in net assets		(68,953,145	)		48,601,224
Net assets:
Beginning of period		334,506,178			285,904,954
End of period	$	265,553,033		$	334,506,178

TD-16     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Templeton Developing Markets VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Developing Markets VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day

Semiannual Report             TD-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

1.  Organization and Significant Accounting

Policies (continued)

a. Financial Instrument Valuation (continued)

of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.   Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.   Securities Lending

Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives collateral in the form of cash and/or U.S.

Government and Agency securities against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. Any cash collateral received is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds. Additionally, the Fund received $156,817 in U.S. Government and Agency securities as collateral. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to any cash collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

d.   Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be

TD-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of

number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

f. Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

g. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		297,789		$	2,572,312			544,413		$	5,344,264
Shares issued in reinvestment of distributions		605,880			5,313,566			121,873			1,134,638
Shares redeemed		(1,856,447	)		(18,887,291	)		(1,570,097	)		(15,106,451)
Net increase (decrease)		(952,778	)	$	(11,001,413	)		(903,811	)	$	(8,627,549)

Semiannual Report             TD-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

2.   Shares of Beneficial Interest (continued)

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		2,237,390		$	21,428,014			5,803,158		$	55,845,696
Shares issued in reinvestment of distributions		1,543,720			13,445,802			228,490			2,113,534
Shares redeemed		(4,019,076	)		(35,691,320	)		(7,263,336	)		(68,679,861)
Net increase (decrease)		(237,966	)	$	(817,504	)		(1,231,688	)	$	(10,720,631)
Class 4 Shares:
Shares sold		21,730		$	190,119			26,510		$	252,720
Shares issued in reinvestment of distributions		37,660			329,902			5,050			46,961
Shares redeemed		(62,602	)		(580,733	)		(118,358	)		(1,145,376)
Net increase (decrease)		(3,212	)	$	(60,712	)		(86,798	)	$	(845,695)

3.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or trustees of the following subsidiaries:

Subsidiary	Affiliation
Templeton Asset Management Ltd. (Asset Management)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.   Management Fees

The Fund pays an investment management fee to Asset Management based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
1.050%	Up to and including $1 billion
1.000%	Over $1 billion, up to and including $5 billion
0.950%	Over $5 billion, up to and including $10 billion
0.900%	Over $10 billion, up to and including $15 billion
0.850%	Over $15 billion, up to and including $20 billion
0.800%	In excess of $20 billion

b.   Administrative Fees

Under an agreement with Asset Management, FT Services provides administrative services to the Fund. The fee is paid by Asset Management based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

TD-20     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

c.   Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.25% and 0.35% per year of its average daily net assets of Class 2 and Class 4 respectively. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.   Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.   Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$3,522,232		$21,477,452		$(18,315,614)			$      —		$      —		$6,684,070		6,684,070		$ 9,562
																	Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		—		12,732,370		(11,772,370	)		—		—		960,000		960,000		1,521
Total Affiliated Securities		$3,522,232		$34,209,822		$(30,087,984)			$      —		$      —		$7,644,070				$11,083

4.   Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, there were no credits earned.

Semiannual Report             TD-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

5.   Income Taxes

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	208,884,501
Unrealized appreciation	$	91,324,396
Unrealized depreciation		(35,133,753)
Net unrealized appreciation (depreciation)	$	56,190,643

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of corporate actions.

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $6,536,950 and $39,857,980, respectively.

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $960,000 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7.   Concentration of Risk

Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

The United States and other nations have imposed and could impose additional sanctions on certain issuers in Russia due to regional conflicts. These sanctions could result in the devaluation of Russia’s currency, a downgrade in Russian issuers’ credit ratings, or a decline in the value and liquidity of Russian stocks or other securities. Such sanctions could also adversely affect Russia’s economy. The Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, if the Fund holds the securities of an issuer that is subject to such sanctions, an immediate freeze of that issuer’s securities could result, impairing the ability of the Fund to buy, sell, receive or deliver those securities. There is also the risk that countermeasures could be taken by Russia’s government, which could involve the seizure of the Fund’s assets. These risks could affect the value of the Fund’s portfolio. While the Fund holds securities of certain issuers impacted by the sanctions, existing investments do not presently violate the applicable terms and conditions of the sanctions. The sanctions currently do not affect the Fund’s ability to sell these securities. At June 30, 2020, the Fund had 8.5% of its net assets invested in Russia.

8.   Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

TD-22     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

9.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

10.   Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

Semiannual Report             TD-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

10.   Fair Value Measurements (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Cambodia	$	—	$	1,779,444	$	—	$	1,779,444
China		26,039,537		54,621,688		—		80,661,225
Czech Republic		—		883,994		—		883,994
Hungary		—		2,730,392		—		2,730,392
India		—		14,196,801		—		14,196,801
Indonesia		—		2,487,990		—		2,487,990
Philippines		—		647,421		—		647,421
Russia		6,318,476		16,278,025		—		22,596,501
South Africa		—		12,698,360		—		12,698,360
South Korea		—		50,949,349		—		50,949,349
Taiwan		—		30,348,210		—		30,348,210
Thailand		—		3,969,693		—		3,969,693
United Kingdom		—		7,885,110		—		7,885,110
All Other Equity Investments		25,596,584		—		—		25,596,584
Short Term Investments		7,644,070		—		—		7,644,070
Total Investments in Securities	$	65,598,667	$	199,476,477	$	—	$	265,075,144

^aFor detailed categories, see the accompanying Statement of Investments.

^bIncludes common and preferred stocks as well as other equity interests.

11.   New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

12.   Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Selected Portfolio
ADR	American Depositary Receipt
GDR	Global Depositary Receipt

TD-24     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Developing Markets VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 11, 2020, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid and foreign source income as reported by the Fund to shareholders of record.

Class	Foreign Tax Paid Per Share		Foreign Source Income Per Share
Class 1		$0.0543		$0.4959
Class 2		$0.0543		$0.4688
Class 4		$0.0543		$0.4576

Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.

Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.

Semiannual Report             TD-25

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Templeton Foreign VIP Fund

This semiannual report for Templeton Foreign VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -18.39% total return* for the six-month period ended June 30, 2020.

*The Fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             TF-1

TEMPLETON FOREIGN VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of issuers located outside the U.S., including those in emerging markets.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in developing markets involve heightened risks related to the same factors. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. Because the Fund may invest its assets in companies in a specific region, including Europe, it is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Current political uncertainty concerning the economic consequences of the departure of the U.K. from the European Union may increase market volatility. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as enable gains) on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, the Fund’s benchmark, the MSCI All Country World Index (ACWI) ex

Geographic Composition

Based on Total Net Assets as of 6/30/20

USA Index, posted a -10.76% total return for the same period.¹ Please note, index performance information is provided for reference and we do not attempt to track the index but rather undertake investments on the basis of fundamental research.

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI ACWI (USD), posted a -5.99% total return during the six months under review.¹ Stocks fell sharply in early 2020 as countries around the world implemented lockdown measures in an effort to slow the spread of the novel coronavirus (COVID-19). Global supply chain disruptions, business and personal restrictions, and subdued consumer spending drove many investors to sell equity holdings in favor of perceived safe investments such as government bonds and cash. While global equities, notably in the U.S., rebounded in April and May amid optimism about easing lockdown restrictions, concerns about a second wave of infections hindered equities in June, as investors weighed the possibility of renewed restrictions.

In the U.S., government mandates to mitigate the COVID-19 pandemic severely impacted the economy beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April, as many businesses, particularly those involved in hospitality, retail and travel, announced mass layoffs.² According to the National Bureau of Economic Research, the longest U.S. economic expansion in history ended in February 2020 as the country slipped into a severe recession. Nonetheless, near period-end, there were signs that a recovery was underway, as jobless claims fell

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

2. Source: U.S. Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

TF-2     Semiannual Report

TEMPLETON FOREIGN VIP FUND

considerably from their peak in early April, retail sales rose sharply in May, and the unemployment rate fell to 11.1% in June.² Along with optimism about improved treatments and potential vaccines for COVID-19, the positive economic signals contributed to a significant equity rebound in April and May. However, an increase in COVID-19 infections in many states throughout June pressured U.S. stocks.

The U.S. Federal Reserve (Fed) made significant efforts to support the U.S. economy. In March 2020, as the pandemic began to severely impact the economy and financial markets, the Fed implemented two emergency rate cuts, lowering the federal funds target rate to a range of 0.00%–0.25%, and announced sweeping quantitative easing measures aimed at ensuring credit flow to borrowers and supporting credit markets with unlimited amounts of bond purchasing.

In the eurozone, some analysts forecasted a significant contraction in 2020, particularly in southern European countries, as the magnitude of the economic disruption caused by the pandemic became apparent. European developed market equities, as measured by the MSCI Europe Index (USD), posted a -12.43% total return for the period.¹ To stimulate growth, the European Central Bank implemented a broad bond-buying program, and many countries passed fiscal stimulus measures.

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index (USD), posted a -5.51% total return during the six-month period.¹ The onset of the pandemic brought dramatically slower economic activity in Asia, as businesses halted operations and manufacturing and export activity declined sharply in the region’s major economies. Asian markets generally advanced toward period-end, bolstered by fiscal stimulus measures and economies reopening throughout the region.

Emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -9.67% total return due primarily to the COVID-19 pandemic.¹ A sharp decrease in prices for oil and other natural resources also hurt emerging market economies reliant on these exports. In the last quarter of the reporting period, however, investor optimism led to a stock rally, particularly in emerging market countries that had successfully lowered infection rates.

Investment Strategy

Our investment philosophy is bottom up, value oriented and long term. When choosing investments for the Fund, we generally focus on the market price of a company’s securities relative to our evaluation of the company’s

Top 10 Holdings

6/30/20

Company Sector/Industry, Country	% of Total Net Assets
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals,     South Korea		3.6%
Bayer AG Pharmaceuticals, Germany		3.5%
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan		3.1%
Wheaton Precious Metals Corp. Metals & Mining, Canada		2.9%
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan		2.5%
KB Financial Group Inc. Banks, South Korea		2.4%
NXP Semiconductors NV Semiconductors & Semiconductor Equipment,     Netherlands		2.3%
CK Hutchison Holdings Ltd. Industrial Conglomerates, Hong Kong		2.3%
Kirin Holdings Co. Ltd. Beverages, Japan		2.2%
Sanofi Pharmaceuticals, France		2.1%

potential long-term earnings, asset value and cash flow. Our analysis includes an assessment of the potential impacts of material environmental, social and governance (ESG) factors on the long-term risk and return profile of a company. We also consider a company’s price/earnings ratio, price/cash flow ratio, profit margins and liquidation value.

The Fund may, from time to time, engage in currency-related derivatives to seek to hedge (protect) against currency risks. The Fund may also use a variety of equity-related derivatives for various purposes including enhancing Fund returns, increasing liquidity and gaining exposure to particular markets in more efficient or less expensive ways.

Manager’s Discussion

During the six months under review, key contributors to the Fund’s performance relative to the MSCI ACWI ex USA Index included stock selection in the materials and utilities sectors.

Within materials, Canadian mining companies Wheaton Precious Metals and Alamos Gold (not part of the index) aided relative results. Their stocks performed particularly

Semiannual Report             TF-3

TEMPLETON FOREIGN VIP FUND

well in the first half of 2020 as the price of gold reached multi-year highs.

In the utilities sector, German energy solutions company E.ON benefited relative performance.

Other key notable contributors included Swiss pharmaceuticals firm Roche Holding and German industrial conglomerate Siemens. Roche performed well as its business is largely unaffected by the COVID-19 pandemic, with its cancer, hemophilia and multiple sclerosis medicines and treatments continuing to be administered.

In contrast, key detractors from the Fund’s relative performance included stock selection in the financials and communication services sectors and an overweighting in the energy sector.

Within financials, our positions in Standard Chartered, ING Groep and Bank of Ireland (not held at period-end) hindered relative results. U.K.-domiciled, Asia-focused lender Standard Chartered was negatively impacted by escalating turmoil in Hong Kong. We believe management’s recent efforts to de-risk the balance sheet, combined with the bank’s solid core franchise in trade finance and high net worth retail client base, position it well to withstand macro adversity and emerge with its growth strategy intact. The shares of Dutch banking services firm ING Groep and Bank of Ireland declined due to broad-based economic fears and low interest rates. ING’s shares were further pressured by management’s suspension of dividend payments.

In the communication services sector, our holding in Luxembourg-based communication satellite owner SES (not held at period-end) hindered relative results.

Within energy, our positions in U.K.-based integrated energy firm BP and U.K.-listed oil and natural gas producer Royal Dutch Shell (not held at period-end) dampened relative results.

From a regional perspective, stock selection and an underweighting in North America, particularly in Canada, contributed to the Fund’s relative performance. In contrast, stock selection in Asia, notably in China, Hong Kong and South Korea, detracted from relative performance. In Europe, stock selection and an overweighting hindered relative performance, as relative weakness in the Netherlands and the U.K. more than offset relative strength in Germany.

Thank you for your participation in Templeton Foreign VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

TF-4     Semiannual Report

TEMPLETON FOREIGN VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$816.10	$5.33	$1,019.00	$5.92	1.18%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report             TF-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Foreign VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$14.23			$13.01			$15.80			$13.89			$13.46			$15.34
Income from investment operationsa:
Net investment incomeb		0.14			0.44			0.29			0.30			0.33			0.31
Net realized and unrealized gains (losses)		(2.73	)		1.19			(2.64	)		2.03			0.62			(1.16	)
Total from investment operations		(2.59	)		1.63			(2.35	)		2.33			0.95			(0.85	)
Less distributions from:
Net investment income		(0.44	)		(0.27	)		(0.44	)		(0.42	)		(0.29	)		(0.53	)
Net realized gains		—			(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.44	)		(0.41	)		(0.44	)		(0.42	)		(0.52	)		(1.03	)
Net asset value, end of period		$11.20			$14.23			$13.01			$15.80			$13.89			$13.46
Total returnc		(18.22)%			12.84%			(15.27)%			17.02%			7.49%			(6.31)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		0.86%			0.85%			0.83%			0.82%			0.80%			0.78%
Expenses net of waiver and payments by affiliates		0.83%			0.83%			0.81%			0.81%e			0.78%			0.78%f
Net investment income		2.34%			3.25%			1.96%			1.99%			2.38%			2.05%
Supplemental data
Net assets, end of period (000’s)		$97,104			$121,948			$114,784			$152,684			$133,218			$214,172
Portfolio turnover rate		23.71%			28.52%			21.38%			26.81%			20.93%			15.15%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repur^chases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Prod^ucts Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

TF-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$13.93			$12.74			$15.47			$13.61			$13.20			$15.05
Income from investment operationsa:
Net investment incomeb		0.12			0.40			0.25			0.26			0.28			0.27
Net realized and unrealized gains (losses)		(2.67	)		1.16			(2.58	)		1.98			0.62			(1.13	)
Total from investment operations		(2.55	)		1.56			(2.33	)		2.24			0.90			(0.86	)
Less distributions from:
Net investment income		(0.40	)		(0.23	)		(0.40	)		(0.38	)		(0.26	)		(0.49	)
Net realized gains		—			(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.40	)		(0.37	)		(0.40	)		(0.38	)		(0.49	)		(0.99	)
Net asset value, end of period		$10.98			$13.93			$12.74			$15.47			$13.61			$13.20
Total returnc		(18.35)%			12.53%			(15.44)%			16.69%			7.18%			(6.49)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.11%			1.10%			1.08%			1.07%			1.05%			1.03%
Expenses net of waiver and payments by affiliates		1.08%			1.08%			1.06%			1.06%e			1.03%			1.03%f
Net investment income		2.09%			3.00%			1.71%			1.74%			2.13%			1.80%
Supplemental data
Net assets, end of period (000’s)		$917,866			$1,117,813			$1,060,101			$1,394,475			$1,436,518			$1,456,854
Portfolio turnover rate		23.71%			28.52%			21.38%			26.81%			20.93%			15.15%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repur^chases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Prod^ucts Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TF-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$14.20			$12.96			$15.71			$13.71			$13.29			$15.16
Income from investment operationsa:
Net investment incomeb		0.12			0.39			0.24			0.23			0.26			0.25
Net realized and unrealized gains (losses)		(2.73	)		1.20			(2.63	)		2.03			0.63			(1.14	)
Total from investment operations		(2.61	)		1.59			(2.39	)		2.26			0.89			(0.89	)
Less distributions from:
Net investment income		(0.39	)		(0.21	)		(0.36	)		(0.26	)		(0.24	)		(0.48	)
Net realized gains		—			(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.39	)		(0.35	)		(0.36	)		(0.26	)		(0.47	)		(0.98	)
Net asset value, end of period		$11.20			$14.20			$12.96			$15.71			$13.71			$13.29
Total returnc		(18.39)%			12.49%			(15.54)%			16.62%			7.09%			(6.65)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates		1.21%			1.20%			1.18%			1.17%			1.15%			1.13%
Expenses net of waiver and payments by affiliates		1.18%			1.18%			1.16%			1.16%e			1.13%			1.13%f
Net investment income		1.99%			2.90%			1.61%			1.64%			2.03%			1.70%
Supplemental data
Net assets, end of period (000’s)		$94,464			$113,681			$125,265			$159,944			$484,763			$472,189
Portfolio turnover rate		23.71%			28.52%			21.38%			26.81%			20.93%			15.15%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of expense reduction rounds to less than 0.01%.

^fBenefit of waiver and payments by affiliates rounds to less than 0.01%.

TF-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Templeton Foreign VIP Fund

		Country		Shares		Value
	Common Stocks 86.7%
	Aerospace & Defense 1.1%
	BAE Systems PLC		United Kingdom		1,961,611	$	11,728,900
	Auto Components 2.4%
a	Cie Generale des Etablissements Michelin SCA		France		158,794		16,550,108
	Toyota Industries Corp.		Japan		186,300		9,902,335
							26,452,443
	Automobiles 3.9%
	Bayerische Motoren Werke AG		Germany		205,506		13,118,469
	Honda Motor Co. Ltd.		Japan		517,600		13,381,886
	Isuzu Motors Ltd.		Japan		1,813,100		16,476,249
							42,976,604
	Banks 9.3%
b	BNP Paribas SA		France		276,049		11,028,284
	ING Groep NV		Netherlands		1,953,931		13,619,453
	Kasikornbank PCL, fgn		Thailand		1,860,000		5,652,448
a	KB Financial Group Inc., ADR		South Korea		956,806		26,618,343
	Shinhan Financial Group Co. Ltd.		South Korea		366,922		8,890,839
	Standard Chartered PLC		United Kingdom		3,651,049		19,790,786
	Sumitomo Mitsui Financial Group Inc.		Japan		606,500		17,116,516
							102,716,669
	Beverages 2.7%
a	Kirin Holdings Co. Ltd.		Japan		1,159,100		24,433,531
	Suntory Beverage & Food Ltd.		Japan		153,600		5,993,200
							30,426,731
	Chemicals 2.4%
	Covestro AG		Germany		199,631		7,602,917
	Johnson Matthey PLC		United Kingdom		537,960		14,010,021
	Tosoh Corp.		Japan		389,100		5,345,028
							26,957,966
	Construction & Engineering 0.5%
	Sinopec Engineering Group Co. Ltd.		China		11,734,000		5,038,255
	Diversified Telecommunication Services 0.8%
	China Telecom Corp. Ltd., H.		China		29,703,557		8,343,576
	Electronic Equipment, Instruments & Components 2.3%
	Hitachi Ltd.		Japan		542,500		17,243,267
	Landis+Gyr Group AG		Switzerland		120,834		7,827,652
							25,070,919
	Energy Equipment & Services 1.3%
	SBM Offshore NV		Netherlands		960,511		14,152,364
	Food & Staples Retailing 3.6%
	Matsumotokiyoshi Holdings Co. Ltd.		Japan		388,300		14,110,277
	Seven & i Holdings Co. Ltd.		Japan		360,100		11,780,139
	Sundrug Co. Ltd.		Japan		410,400		13,582,480
							39,472,896

Semiannual Report             TF-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Health Care Providers & Services 0.6%
	Sinopharm Group Co. Ltd., H		China		2,794,800	$	7,185,265
	Household Durables 2.3%
	Panasonic Corp.		Japan		1,239,300		10,867,479
	Sony Corp.		Japan		219,300		15,138,306
							26,005,785
	Industrial Conglomerates 3.8%
	CK Hutchison Holdings Ltd.		Hong Kong		3,873,500		25,083,025
	Siemens AG		Germany		140,525		16,571,641
							41,654,666
	Insurance 2.0%
	AIA Group Ltd.		Hong Kong		2,416,800		22,615,303
	Interactive Media & Services 1.5%
b	Baidu Inc., ADR		China		138,230		16,572,395
	Internet & Direct Marketing Retail 0.5%
b	Alibaba Group Holding Ltd., ADR		China		25,100		5,414,070
	Machinery 1.2%
	Komatsu Ltd.		Japan		655,000		13,414,740
	Marine 0.5%
	AP Moeller-Maersk A/S, B		Denmark		5,208		6,103,211
	Media 0.7%
	Nippon Television Holdings Inc.		Japan		338,900		3,670,618
	Tokyo Broadcasting System Holdings Inc.		Japan		262,400		4,197,442
							7,868,060
	Metals & Mining 7.0%
	Alamos Gold Inc., A		Canada		1,982,052		18,591,648
b	ArcelorMittal SA		France		1,011,540		10,713,140
	Sumitomo Metal Mining Co. Ltd.		Japan		603,700		17,006,099
	Wheaton Precious Metals Corp.		Canada		718,100		31,584,657
							77,895,544
	Multi-Utilities 1.8%
	E.ON SE		Germany		1,722,486		19,441,137
	Oil, Gas & Consumable Fuels 4.9%
	BP PLC		United Kingdom		4,677,890		17,920,464
	Eni SpA		Italy		535,991		5,137,556
	Equinor ASA		Norway		1,232,274		17,756,065
	Galp Energia SGPS SA, B		Portugal		844,528		9,795,642
	Husky Energy Inc.		Canada		1,163,600		3,822,810
							54,432,537
	Pharmaceuticals 11.7%
	Bayer AG		Germany		527,187		39,073,470
	Novartis AG		Switzerland		128,920		11,231,641
	Roche Holding AG		Switzerland		63,327		21,939,610
	Sanofi		France		228,345		23,285,600

TF-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Pharmaceuticals (continued)
	Takeda Pharmaceutical Co. Ltd.		Japan		966,094	$	34,709,763
							130,240,084
	Real Estate Management & Development 4.0%
	CK Asset Holdings Ltd.		Hong Kong		3,560,500		21,351,434
	Mitsui Fudosan Co. Ltd.		Japan		811,000		14,407,192
	Swire Pacific Ltd., A		Hong Kong		1,628,500		8,655,052
							44,413,678
	Semiconductors & Semiconductor Equipment 6.0%
	Infineon Technologies AG		Germany		590,665		13,839,342
	NXP Semiconductors NV		Netherlands		221,300		25,237,052
	Taiwan Semiconductor Manufacturing Co. Ltd.		Taiwan		2,587,000		27,708,192
							66,784,586
	Technology Hardware, Storage & Peripherals 3.6%
	Samsung Electronics Co. Ltd.		South Korea		909,188		40,355,295
	Thrifts & Mortgage Finance 1.5%
	Housing Development Finance Corp. Ltd.		India		737,453		17,137,981
	Tobacco 1.3%
	Imperial Brands PLC		United Kingdom		756,727		14,404,955
	Wireless Telecommunication Services 1.5%
	Vodafone Group PLC, ADR		United Kingdom		1,062,403		16,934,704
	Total Common Stocks (Cost $956,638,414)						962,211,319
	Short Term Investments 16.4%
	Money Market Funds (Cost $141,540,103) 12.8%
c,d	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		141,540,103		141,540,103
e	Investments from Cash Collateral Received for Loaned Securities 3.6%
	Money Market Funds (Cost $39,731,419) 3.6%
c,d	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		39,731,419		39,731,419
	Total Investments (Cost $1,137,909,936) 103.1%						1,143,482,841
	Other Assets, less Liabilities (3.1)%						(34,048,249	)
	Net Assets 100.0%					$	1,109,434,592

See Abbreviations on page TF-23.

^aA portion or all of the security is on loan at June 30, 2020. See Note 1(c).

^bNon-income producing.

^cSee Note 3(e) regarding investments in affiliated management investment companies.

^dThe rate shown is the annualized seven-day effective yield at period end.

^eSee Note 1(c) regarding securities on loan.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TF-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Templeton Foreign VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	956,638,414
Cost - Non-controlled affiliates (Note 3e)		181,271,522
Value - Unaffiliated issuers+	$	962,211,319
Value - Non-controlled affiliates (Note 3e)		181,271,522
Cash		25,093
Receivables:
Investment securities sold		269,828
Capital shares sold		1,391,446
Dividends		4,999,326
European Union tax reclaims		856,368
Other assets		1,024
Total assets		1,151,025,926
Liabilities:
Payables:
Capital shares redeemed		549,936
Management fees		718,128
Distribution fees		217,666
Trustees’ fees and expenses		500
Payable upon return of securities loaned		39,731,419
Deferred tax		22,519
Accrued expenses and other liabilities		351,166
Total liabilities		41,591,334
Net assets, at value	$	1,109,434,592
Net assets consist of:
Paid-in capital	$	1,237,636,914
Total distributable earnings (losses)		(128,202,322	)
Net assets, at value	$	1,109,434,592
Class 1:
Net assets, at value	$	97,104,260
Shares outstanding		8,670,295
Net asset value and maximum offering price per share		$11.20
Class 2:
Net assets, at value	$	917,866,180
Shares outstanding		83,628,570
Net asset value and maximum offering price per share		$10.98
Class 4:
Net assets, at value	$	94,464,152
Shares outstanding		8,435,462
Net asset value and maximum offering price per share		$11.20
+Includes securities loaned	$	37,647,516

TF-12     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Templeton Foreign VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers	$	17,583,181
Non-controlled affiliates (Note 3e)		183,236
Interest:
Unaffiliated issuers		11
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		89,713
Non-controlled affiliates (Note 3e)		14,818
Total investment income		17,870,959
Expenses:
Management fees (Note 3a)		4,576,857
Distribution fees: (Note 3c)
Class 2		1,167,848
Class 4		166,719
Custodian fees (Note 4)		66,366
Reports to shareholders		134,247
Professional fees		51,591
Trustees’ fees and expenses		3,862
Other		3,693
Total expenses		6,171,183
Expenses waived/paid by affiliates (Note 3e)		(168,562	)
Net expenses		6,002,621
Net investment income		11,868,338
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(99,310,057	)
Foreign currency transactions		(380,080	)
Net realized gain (loss)		(99,690,137	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(154,935,444	)
Translation of other assets and liabilities denominated in foreign currencies		(20,633	)
Change in deferred taxes on unrealized appreciation		(22,519	)
Net change in unrealized appreciation (depreciation)		(154,978,596	)
Net realized and unrealized gain (loss)		(254,668,733	)
Net increase (decrease) in net assets resulting from operations	$	(242,800,395	)
*Foreign taxes withheld on dividends	$	2,085,780

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TF-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Foreign VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	11,868,338		$	39,750,754
Net realized gain (loss)		(99,690,137	)		(42,940,121	)
Net change in unrealized appreciation (depreciation)		(154,978,596	)		161,044,541
Net increase (decrease) in net assets resulting from operations		(242,800,395	)		157,855,174
Distributions to shareholders:
Class 1		(3,651,171	)		(3,542,825	)
Class 2		(32,735,824	)		(29,727,357	)
Class 4		(3,189,135	)		(2,819,837	)
Total distributions to shareholders		(39,576,130	)		(36,090,019	)
Capital share transactions: (Note 2)
Class 1		756,121			(3,622,678	)
Class 2		33,518,547			(41,982,881	)
Class 4		4,094,883			(22,867,835	)
Total capital share transactions		38,369,551			(68,473,394	)
Net increase (decrease) in net assets		(244,006,974	)		53,291,761
Net assets:
Beginning of period		1,353,441,566			1,300,149,805
End of period	$	1,109,434,592		$	1,353,441,566

TF-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Templeton Foreign VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Foreign VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2, and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day

Semiannual Report             TF-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (continued)

of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives collateral in the form of cash and/or U.S. Government and

Agency securities against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. Any cash collateral received is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to any cash collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

d.�� Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

As a result of several court cases, in certain countries across the European Union, the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). These additional filings are subject to various administrative proceedings by the local

TF-16     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU reclaims is reflected as other income in the Statement of Operations and any related receivable, if any, is reflected as European Union tax reclaims in the Statement of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, when EU reclaims are received by the Fund and the Fund previously passed foreign tax credit on to its shareholders, the Fund must either amend historic tax reporting to shareholders or enter into a closing agreement with the Internal Revenue Service (IRS) in order to pay the associated tax liability on behalf of the Fund’s shareholders.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings

recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

f.   Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

g.   Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

Semiannual Report             TF-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		433,172		$	4,826,402			315,303		$	4,277,207
Shares issued in reinvestment of distributions		325,706			3,651,171			273,789			3,542,825
Shares redeemed		(656,723	)		(7,721,452	)		(844,252	)		(11,442,710)
Net increase (decrease)		102,155		$	756,121			(255,160	)	$	(3,622,678)
Class 2 Shares:
Shares sold		7,223,300		$	79,940,518			7,564,257		$	99,786,234
Shares issued in reinvestment of distributions		2,981,405			32,735,824			2,342,581			29,727,357
Shares redeemed		(6,792,654	)		(79,157,795	)		(12,910,655	)		(171,496,472)
Net increase (decrease)		3,412,051		$	33,518,547			(3,003,817	)	$	(41,982,881)
Class 4 Shares:
Shares sold		909,581		$	10,094,838			784,963		$	10,500,046
Shares issued in reinvestment of distributions		284,490			3,189,135			218,085			2,819,837
Shares redeemed		(766,654	)		(9,189,090	)		(2,661,084	)		(36,187,718)
Net increase (decrease)		427,417		$	4,094,883			(1,658,036	)	$	(22,867,835)

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Templeton Investment Counsel, LLC (TIC)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

TF-18     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

a.  Management Fees

The Fund pays an investment management fee to TIC based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.900%	Up to and including $200 million
0.810%	Over $200 million, up to and including $700 million
0.775%	Over $700 million, up to and including $1.2 billion
0.750%	Over $1.2 billion, up to and including $1.3 billion
0.675%	Over $1.3 billion, up to and including $10 billion
0.655%	Over $10 billion, up to and including $15 billion
0.635%	Over $15 billion, up to and including $20 billion
0.615%	In excess of $20 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.812% of the Fund’s average daily net assets.

b.  Administrative Fees

Under an agreement with TIC, FT Services provides administrative services to the Fund. The fee is paid by TIC based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.25% and 0.35% per year of its average daily net assets of Class 2 and Class 4, respectively. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

Semiannual Report             TF-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

3.  Transactions with Affiliates (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Investment Income
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$70,825,763		$199,707,826		$(128,993,486)			$      —		$      —		$141,540,103		141,540,103		$183,236
																	Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		—		149,211,823		(109,480,404	)		—		—		39,731,419		39,731,419		14,818
Total Affiliated Securities		$70,825,763		$348,919,649		$(238,473,890)			$      —		$      —		$181,271,522				$198,054

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, there were no credits earned.

5.  Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Long term	$	43,306,383

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	1,141,410,946
Unrealized appreciation	$	152,558,258
Unrealized depreciation		(150,486,363	)
Net unrealized appreciation (depreciation)	$	2,071,895

TF-20     Semiannual Report            

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions.

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $244,680,631 and $304,740,900, respectively.

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $39,731,419 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7. Concentration of Risk

Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

8.  Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

10.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

Semiannual Report             TF-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

10.  Fair Value Measurements (continued)

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level. A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:
Aerospace & Defense	$	—	$	11,728,900	$	—	$	11,728,900
Auto Components		—		26,452,443		—		26,452,443
Automobiles		—		42,976,604		—		42,976,604
Banks		26,618,343		76,098,326		—		102,716,669
Beverages		—		30,426,731		—		30,426,731
Chemicals		—		26,957,966		—		26,957,966
Construction & Engineering		—		5,038,255		—		5,038,255
Diversified Telecommunication Services		—		8,343,576		—		8,343,576
Electronic Equipment, Instruments &
Components		—		25,070,919		—		25,070,919
Energy Equipment & Services		—		14,152,364		—		14,152,364
Food & Staples Retailing		—		39,472,896		—		39,472,896
Health Care Providers & Services		—		7,185,265		—		7,185,265
Household Durables		—		26,005,785		—		26,005,785
Industrial Conglomerates		—		41,654,666		—		41,654,666
Insurance		—		22,615,303		—		22,615,303
Machinery		—		13,414,740		—		13,414,740
Marine		—		6,103,211		—		6,103,211
Media		—		7,868,060		—		7,868,060
Metals & Mining		50,176,305		27,719,239		—		77,895,544
Multi-Utilities		—		19,441,137		—		19,441,137
Oil, Gas & Consumable Fuels		3,822,810		50,609,727		—		54,432,537
Pharmaceuticals		—		130,240,084		—		130,240,084
Real Estate Management & Development		—		44,413,678		—		44,413,678
Semiconductors & Semiconductor Equipment		25,237,052		41,547,534		—		66,784,586
Technology Hardware, Storage & Peripherals		—		40,355,295		—		40,355,295
Thrifts & Mortgage Finance		—		17,137,981		—		17,137,981
Tobacco		—		14,404,955		—		14,404,955
All Other Equity Investments		38,921,169		—		—		38,921,169
Short Term Investments		181,271,522		—		—		181,271,522
Total Investments in Securities	$	326,047,201	$	817,435,640	$	—	$	1,143,482,841

^aFor detailed categories, see the accompanying Statement of Investments.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

11.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

12.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations
Selected Portfolio
ADR	American Depositary Receipt

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Foreign VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 11, 2020, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid and foreign source income as reported by the Fund to shareholders of record.

Class	Foreign Tax Paid Per Share		Foreign Source Income Per Share
Class 1		$0.0362		$0.4651
Class 2		$0.0362		$0.4323
Class 4		$0.0362		$0.4177

Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.

Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends.

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Templeton Global Bond VIP Fund

This semiannual report for Templeton Global Bond VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -5.35% total return*,** for the six-month period ended June 30, 2020.

*The Fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/21. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

**Total return information is based on net asset values calculated for shareholder transactions. Certain adjustments were made to the net asset values of the Fund at 12/31/19 for financial reporting purposes. Accordingly, adjusted total returns have been disclosed in the Financial Highlights and differ from those reported here.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

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Fund Goal and Main Investments

The Fund seeks high current income, consistent with preservation of capital, with capital appreciation as a secondary consideration. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills and debentures.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Foreign securities involve special risks, including currency fluctuations and economic and political uncertainties. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due. Adverse conditions in a certain region or country can adversely affect securities of issuers in other countries whose economies appear to be unrelated. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities market. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. For comparison, the J.P. Morgan Global Government Bond Index posted a +4.60% total return

Geographic Composition*

Based on Total Net Assets as of 6/30/20

*Figures represent the net Fund exposure and include certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives or other factors.

**The Fund’s supranational investment was denominated in the Mexican peso.

and the FTSE World Government Bond Index posted a +4.08% total return for the same period.¹

Economic and Market Overview

The novel coronavirus (COVID-19) pandemic profoundly impacted economies and global financial markets during the six-month period. Lockdown orders from governments trying to “flatten the curve” (i.e., stem the rate of infection) brought entire countries, regions and continents to an economic standstill in March and April. The speed and pervasiveness of the economic shocks were unprecedented. There is no historical comparison for the magnitude of aggregate demand that was destroyed, nor the magnitude of job losses in such a compressed timescale.

Risk aversion rapidly escalated to crisis levels and deepened throughout March, driving correlations to 1.0 across multiple asset classes as investors shed risk and moved into perceived safe havens. Credit markets experienced substantial price volatility, with the lower-rated credit tiers bearing the brunt of the selloffs. Sovereign bond yields declined in higher-rated countries but rose in more vulnerable ones as volatility escalated. The yield on the 10-year U.S. Treasury (UST) note quickly dropped from 2.00% at the start of the period to a low of 0.54% on March

.

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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9. It finished the six-month period at 0.66%, 134 basis points (bps) lower that where it began. The yield on the 10-year German Bund dropped 27 bps further into negative territory during the period, finishing at -0.46%.

The U.S. Federal Reserve (Fed) responded quickly to the deepening crisis with two emergency rate cuts in March, the second of which dropped the federal funds target rate 100 bps to the zero bound that was used during the 2008 global financial crisis (GFC). The Fed also cut reserve requirements and encouraged financial institutions to borrow directly from the discount window. Growing liquidity strains throughout financial markets prompted the Fed to re-start liquidity programs that had been created during the GFC, such as the Commercial Paper Funding Facility and the Primary Dealer Credit Facility.

On March 23, the Fed took its financial market interventions beyond the scope of the GFC programs by creating corporate lending programs, and announcing its intentions to support lending to small- and medium-sized businesses through the newly created Main Street Business Lending Program. The Fed also pledged to buy unlimited government bonds, abandoning the previous quantitative easing targets it had announced a week earlier on March 15.

The heightened demand for U.S. dollars (USD) around the world also led the Fed to expand its liquidity swaps program with foreign central banks beyond the five banks in its standing facility including the European Central Bank (ECB), Bank of Japan (BOJ), Bank of England, Bank of Canada and Swiss National Bank. The swap program was expanded on March 19 to include the Reserve Bank of Australia, Reserve Bank of New Zealand, Danmarks Nationalbank, Norges Bank, Sveriges Riksbank, Bank of Korea, Monetary Authority of Singapore, Banco de Mexico and Banco Central do Brasil. The program enables a foreign central bank to borrow USD directly from the Fed to lend to its own local institutions, facilitating the flow of the world’s reserve currency. The USD notably strengthened from mid-March to mid-May before broadly weakening over the final six weeks of the period.

On the U.S. fiscal side, Congress passed the Coronavirus Aid, Relief, and Economic Security Act on March 26, a USD$2.2 trillion fiscal relief program designed to provide loans to businesses, income support and unemployment benefits to individuals, and funding for hospitals and public health services. It was the largest economic relief bill in U.S. history and was designed as a stopgap for social distancing policies.

On March 18, ECB President Christine Lagarde unveiled the €750 billion Pandemic Emergency Purchase Programme (PEPP) in an unscheduled mid-week announcement. Lagarde commented that, “there are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.” PEPP appeared geared to support the more vulnerable states, as the program has unprecedented flexibility to buy a wide range of eligible securities, including Greek and Italian sovereign debt, as well as corporate commercial paper.

In the second quarter of 2020, global financial markets began to rebound from the extreme lows in March, as central banks and governments deployed massive monetary and fiscal measures to respond to the crisis. Regional economies began to incrementally reopen and improving economic data appeared to bolster optimism that the worst of the economic shocks had passed. Credit spreads tightened in many sectors during the second quarter, returning to levels last seen in early March and late February.

However, sharp resurgences in COVID-19 cases in several regions, including the U.S., Latin America and China amongst others, prompted governments to return to shutdown policies in June. Though several economic measures improved in May and June, the stronger figures reflected a rebound from the extreme low points in March and April, and were not trends that could be extrapolated into the upcoming months, in our assessment.

Unprecedented interventions from the Fed and central banks around the world widened the disconnect between financial markets and real economies during the period. Central bank efforts to bolster liquidity in financial markets have been effective, but they do not replace lost revenues or cure insolvencies; they only deepen the debt burdens. We expected corporate bankruptcies to be the next challenge policymakers will have to face, as business insolvencies appeared likely to worsen with each passing month of stifled economic activity. We saw risks for an upcoming second leg down in financial markets.

Rallies in risk assets during the final months of the period appeared to underappreciate the ongoing economic damage and the risks for successive waves of infections that could further suppress economic activity going forward, in our view. Massive unemployment, deepening economic hardship and growing insolvencies will not be fully remedied by partial reopenings or government interventions alone. The longer that economic activity remains suppressed and the longer that workers go without incomes, the more entrenched the economic damage will become.

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On the policy front, the Fed maintained its monetary stance at its April and June meetings, and reaffirmed its commitment to using its “full range of tools to support the U.S. economy.” The updated dot plot survey in June indicated that Fed officials expected rates to remain unchanged through 2022. The Fed also updated its projections for U.S. GDP (gross domestic product) growth to -6.5% for 2020 and +5.0% for 2021. It also projected unemployment to be 9.3% at the end of 2020. Fed Chair Jay Powell commented at the end of June during testimony to the House financial services committee that, “the path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus.” He also continued to emphasize the importance of fiscal support for workers. Powell also indicated that yield curve control was not in imminent consideration and likely not an appropriate tool for U.S. financial markets. In previous comments, he had also ruled out the potential for negative policy rates.

In Europe, the European Commission proposed a €750 billion financing program in May that would deliver up to €500 billion in grants and €250 billion in loans to member states in need of financial support. The program was still in policy discussions at the end of June. On the monetary side, the ECB increased the size of the PEPP by €600 billion to €1.35 trillion at its June 4 policy meeting. Italian bonds rallied on the news, as did the euro, which appreciated 1.2% against the USD in the month of June. The ECB also updated its growth forecast for the eurozone in 2020 to -8.7%, which would be the largest contraction in the post-war era. In May, Lagarde acknowledged that a recovery to previous GDP levels would take at least two to three years.

In Japan, monetary policy responses to the crisis focused more on ensuring businesses had ample access to capital through various loan programs than on lowering the cost of capital. At its April 27 meeting, the BOJ quadrupled the size of its corporate debt purchases. It also announced that it would remove quantitative easing caps. On the price stability front, deflation returned during the period, despite years of persistent efforts from the BOJ to drive inflation higher. Core inflation dropped to -0.2% year-over-year in April and May. The BOJ offered no indications on whether the return of deflation would alter monetary policy in the months ahead, but it remained a concern that officials continued to monitor. The BOJ kept overnight interest rates at -0.1% and the yield target on the 10-year Japanese government bond at 0.0% throughout the period.

Nearly every country in the world declared some form of fiscal response to the crisis, with most countries pursuing

programs that went beyond the measures they deployed during the GFC. Debt-to-GDP ratios rose significantly in just about every country. On the monetary front, many central banks aggressively cut policy rates during the peaks in financial market volatility in March, but paused on making additional cuts in April, similar to the approaches taken by the Fed and the ECB. Several central banks returned to rate cuts in May and June, with many indicating they intended to respond with additional accommodation as needed. During the period, Brazil cut its policy rate by 225 bps to 2.25%, Mexico by 225 bps to 5.00%, Colombia by 175 bps to 2.50%, India by 115 bps to 4.00%, Indonesia by 75 bps to 4.25%, South Korea by 75 bps to 0.50%, Australia by 50 bps to 0.25%, Norway by 150 bps to 0.00%, Canada by 150 bps to 0.25% and the United Kingdom by 65 bps to 0.10%.

Investment Strategy

We invest selectively in bonds around the world based upon our assessment of changing market, political and economic conditions. While seeking opportunities, we monitor various factors including changes in interest rates, currency exchange rates and credit risks. We seek to manage the Fund’s exposure to various currencies and regularly utilize currency and cross currency forward contracts and may also use currency and currency index futures contracts, currency options and other derivative instruments.

Manager’s Discussion

The fixed income sleeve of the strategy was structured around four key pillars during the reporting period: (1) maintaining high liquidity through elevated cash balances and risk-adjusted position weights; (2) holding long exposures to perceived safe-haven assets such as the Japanese yen, Swiss franc, Norwegian krone and Swedish krona; (3) targeting appropriate risk-adjusted returns in a select subset of emerging markets; and (4) underweighting overvalued developed fixed income markets, notably longer-term USTs. The strategy continued to emphasize select duration exposures in countries that have attractive risk-adjusted yields, resilient economic fundamentals and prudent fiscal and monetary policies. Several emerging markets continued to offer significantly higher yields than those available in the developed markets. The strategy entered the reporting period in a de-risked state as the investment team saw elevated global financial market risks that it believed were significantly underappreciated by markets. While the team was not explicitly anticipating the COVID-19 crisis or the collapse in oil prices in the first quarter of 2020, it was concerned that overvalued risk assets were vulnerable to a geopolitical, economic or financial market shock. The team adjusted the risk-sizing of

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various positions and hedged (using currency forwards) a substantial amount of local-currency emerging market beta risk through proxy hedges (net-negative Australian dollar) and direct hedges (Indian rupee, South Korean won, Mexican peso and Brazilian real). The team also continued to broadly avoid credit sectors, which it believed were overvalued leading up to the crisis and increasingly vulnerable to insolvencies as the economic crisis progressed. The strategy also maintained negative duration exposure to longer-term USTs before the COVID-19 crisis erupted in March 2020, as the team believed that inflation pressures, rising deficit spending and surging levels of debt issuance were significantly underpriced in the longer-term range of the U.S. Treasury yield curve. The team unwound its net-negative positioning in longer-term USTs into curve steepening in March. The strategy continued to hold undervalued safe-haven assets that it had previously added in the third quarter of 2019, notably the Japanese yen, Swiss franc, Swedish krona and Norwegian krone. These positions were intended to hedge against global financial market risks associated with rising geopolitical tensions as well as price distortions from ongoing loose monetary policies across the developed world. The strategy also continued to hold a net-negative position in the euro to hedge against broad-based USD strength and unresolved structural risks across Europe, and a net-negative position in the Australian dollar to hedge against broad emerging market risks. During the period, the team used forward currency exchange contracts and currency options to actively manage currencies, and used interest-rate swaps to tactically manage duration exposures.

During the period, the Fund’s negative absolute performance was primarily due to currency positions. Interest-rate strategies contributed to absolute results, while sovereign credit exposures had a largely neutral effect. Among currencies, positions in Latin America (the Brazilian real, Mexican peso and Argentine peso) detracted from absolute performance, as did currency positions in northern Europe (Norwegian krone). The Fund maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Select duration exposures in Latin America (Mexico and Argentina) and Asia (India) contributed to absolute results, while negative duration exposure to USTs during the first quarter detracted.

On a relative basis, the Fund underperformed its benchmark due to interest-rate strategies, followed by currency positions. Sovereign credit exposures had a largely neutral effect on relative results. Among currencies, overweighted positions in Latin America (the Brazilian real, Mexican peso

and Argentine peso) detracted from relative performance, as did overweighted positions in northern European currencies (the Norwegian krone). Underweighted duration exposure in the U.S. detracted from relative performance, as did select underweighted duration exposures in Europe. However, select overweighted duration exposures in Latin America (Mexico and Argentina) contributed to relative results.

Thank you for your participation in Templeton Global Bond VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund.

Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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TEMPLETON GLOBAL BOND VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual     (actual return after expenses)		Hypothetical    (5% annual return before expenses)
			Fund-Level		Fund-Level
			Expenses		Expenses	Net
	Beginning	Ending	Paid During	Ending	Paid During	Annualized
Share	Account	Account	Period	Account	Period	Expense
Class	Value 1/1/20	Value 6/30/20	1/1/20–6/30/201, 2	Value 6/30/20	1/1/20–6/30/201, 2	Ratio2
Class 4	$1,000	$950.00	$3.78	$1,020.98	$3.92	0.78%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

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Financial Highlights

Templeton Global Bond VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$16.63			$17.54			$17.17			$16.85			$16.34			$18.56
Income from investment operationsa:
Net investment incomeb		0.30			0.89			0.88			0.83			0.62			0.52
Net realized and unrealized gains (losses)		(1.11	)		(0.54	)		(0.51	)		(0.46	)		(0.10	)		(1.22	)
Total from investment operations		(0.81	)		0.35			0.37			0.37			0.52			(0.70	)
Less distributions from:
Net investment income and net foreign currency gains		(1.35	)		(1.26	)		—			—			—			(1.43	)
Net realized gains		—			—			—			(0.05	)		(0.01	)		(0.09	)
Total distributions		(1.35	)		(1.26	)		—			(0.05	)		(0.01	)		(1.52	)
Net asset value, end of period		$14.47			$16.63			$17.54			$17.17			$16.85			$16.34
Total returnc		(4.80)%			1.89%			2.15%			2.15%			3.21%			(4.10)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates and expense reduction		0.52%			0.53%			0.56%			0.53%			0.53%			0.52%
Expenses net of waiver and payments by affiliates		0.45%			0.44%			0.47%			0.46%			0.48%			0.52%	e
Expenses net of waiver and payments by affiliates and expense reduction		0.43%			0.42%			0.45%			0.46%f			0.48%	f		0.52%	e,f
Net investment income		3.79%			5.22%			5.09%			4.81%			3.88%			2.99%
Supplemental data
Net assets, end of period (000’s)		$255,388			$322,794			$285,046			$286,502			$241,792			$292,802
Portfolio turnover rate		39.24%			22.58%			18.22%			37.97%			59.00%			51.58%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned, adjustments to interest income for the inflation-indexed bonds, and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TGB-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Global Bond VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$15.91			$16.83			$16.51			$16.25			$15.80			$17.99
Income from investment operationsa:
Net investment incomeb		0.27			0.82			0.81			0.76			0.56			0.46
Net realized and unrealized gains (losses)		(1.06	)		(0.53	)		(0.49	)		(0.45	)		(0.10	)		(1.17	)
Total from investment operations		(0.79	)		0.29			0.32			0.31			0.46			(0.71	)
Less distributions from:
Net investment income and net foreign currency gains		(1.31	)		(1.21	)		—			—			—			(1.39	)
Net realized gains		—			—			—			(0.05	)		(0.01	)		(0.09	)
Total distributions		(1.31	)		(1.21	)		—			(0.05	)		(0.01	)		(1.48	)
Net asset value, end of period		$13.81			$15.91			$16.83			$16.51			$16.25			$15.80
Total returnc		(4.99)%			1.63%			1.94%			1.93%			2.94%			(4.30)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates and expense reduction		0.77%			0.78%			0.81%			0.78%			0.78%			0.77%
Expenses net of waiver and payments by affiliates		0.70%			0.69%			0.72%			0.71%			0.73%			0.77%	e
Expenses net of waiver and payments by affiliates and expense reduction		0.68%			0.67%			0.70%			0.71%	f		0.73%	f		0.77%	e,f
Net investment income		3.54%			4.97%			4.84%			4.56%			3.63%			2.74%
Supplemental data
Net assets, end of period (000’s)		$2,060,001			$2,389,610			$2,544,900			$2,730,081			$2,812,535			$2,971,667
Portfolio turnover rate		39.24%			22.58%			18.22%			37.97%			59.00%			51.58%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned, adjustments to interest income for the inflation-indexed bonds, and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

TGB-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Global Bond VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$16.27			$17.19			$16.88			$16.62			$16.18			$18.38
Income from investment operationsa:
Net investment incomeb		0.27			0.82			0.81			0.76			0.56			0.46
Net realized and unrealized gains (losses)		(1.08	)		(0.55	)		(0.50	)		(0.45	)		(0.11	)		(1.21	)
Total from investment operations		(0.81	)		0.27			0.31			0.31			0.45			(0.75	)
Less distributions from:
Net investment income and net foreign currency gains		(1.29	)		(1.19	)		—			—			—			(1.36	)
Net realized gains		—			—			—			(0.05	)		(0.01	)		(0.09	)
Total distributions		(1.29	)		(1.19	)		—			(0.05	)		(0.01	)		(1.45	)
Net asset value, end of period		$14.17			$16.27			$17.19			$16.88			$16.62			$16.18
Total returnc		(5.00)%			1.48%			1.84%			1.76%			2.87%			(4.39)%
Ratios to average net assetsd
Expenses before waiver and payments by affiliates and expense reduction		0.87%			0.88%			0.91%			0.88%			0.88%			0.87%
Expenses net of waiver and payments by affiliates		0.80%			0.79%			0.82%			0.81%			0.83%			0.87%	e
Expenses net of waiver and payments by affiliates and expense reduction		0.78%			0.77%			0.80%			0.81%	f		0.83%	f		0.87%	e,f
Net investment income		3.44%			4.87%			4.74%			4.46%			3.53%			2.64%
Supplemental data
Net assets, end of period (000’s)		$76,889			$90,272			$94,312			$98,934			$96,798			$103,045
Portfolio turnover rate		39.24%			22.58%			18.22%			37.97%			59.00%			51.58%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned, adjustments to interest income for the inflation-indexed bonds, and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TGB-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Templeton Global Bond VIP Fund
		Principal   Amount*			Value
	Foreign Government and Agency Securities 47.8%
	Argentina 1.9%
a,b	Argentina Treasury Bond BONCER,
	Index Linked, 1.20%, 3/18/22		1,476,595,148	ARS	$	13,968,764
	Index Linked, 1.40%, 3/25/23		892,881,163	ARS		7,555,529
	Index Linked, 1.50%, 3/25/24		892,881,166	ARS		7,054,517
a	Argentine Bonos del Tesoro,
	18.20%, 10/03/21		820,823,000	ARS		5,964,086
	16.00%, 10/17/23		844,288,000	ARS		4,236,420
	senior note, 15.50%, 10/17/26		1,668,306,000	ARS		5,998,914
a,c	Government of Argentina, FRN, 26.415%, (ARS Badlar + 2.00%), 4/03/22		24,036,000	ARS		217,324
						44,995,554
	Brazil 6.9%
	Letra Tesouro Nacional,
	Strip, 7/01/20		719,675d	BRL		132,360,143
	Strip, 4/01/21		25,610d	BRL		4,635,595
	Strip, 7/01/21		34,210d	BRL		6,147,342
	Nota do Tesouro Nacional, 10.00%, 1/01/21		117,516d	BRL		22,438,395
						165,581,475
	Colombia 1.6%
	Government of Colombia,
	senior bond, 7.75%, 4/14/21		2,386,000,000	COP		652,155
	senior bond, 4.375%, 3/21/23		362,000,000	COP		96,872
	senior bond, 9.85%, 6/28/27		576,000,000	COP		193,733
	Titulos de Tesoreria,
	senior bond, B, 11.00%, 7/24/20		9,167,000,000	COP		2,451,055
	senior bond, B, 7.00%, 5/04/22		10,237,000,000	COP		2,913,236
	senior bond, B, 10.00%, 7/24/24		40,977,000,000	COP		13,432,810
	senior bond, B, 7.50%, 8/26/26		35,134,200,000	COP		10,655,342
	senior bond, B, 6.00%, 4/28/28		29,113,600,000	COP		7,889,794
						38,284,997
	Ghana 1.6%
	Government of Ghana,
	24.75%, 3/01/21		690,000	GHS		125,135
	16.25%, 5/17/21		7,250,000	GHS		1,245,419
	24.50%, 6/21/21		80,000	GHS		14,686
	24.75%, 7/19/21		1,190,000	GHS		219,100
	18.75%, 1/24/22		26,840,000	GHS		4,704,739
	17.60%, 11/28/22		370,000	GHS		63,366
	19.75%, 3/25/24		26,840,000	GHS		4,730,705
	19.00%, 11/02/26		80,510,000	GHS		12,903,808
	senior bond, 19.75%, 3/15/32		80,510,000	GHS		13,008,949
	senior note, 18.25%, 9/21/20		480,000	GHS		83,850
	senior note, 16.50%, 3/22/21		1,730,000	GHS		298,706
						37,398,463

TGB-10     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

		Principal   Amount*			Value
	Foreign Government and Agency Securities (continued)
	India 2.8%
	Government of India,
	senior bond, 8.20%, 2/15/22		500,000,000	INR	$	7,030,227
	senior bond, 8.35%, 5/14/22		212,700,000	INR		2,981,170
	senior note, 8.79%, 11/08/21		653,000,000	INR		9,171,674
	senior note, 8.15%, 6/11/22		1,621,000,000	INR		22,990,586
	senior note, 6.84%, 12/19/22		98,000,000	INR		1,376,372
	senior note, 7.16%, 5/20/23		133,700,000	INR		1,894,284
	senior note, 8.83%, 11/25/23		1,468,100,000	INR		21,780,740
						67,225,053
	Indonesia 4.2%
	Government of Indonesia,
	senior bond, FR34, 12.80%, 6/15/21		324,406,000,000	IDR		24,453,919
	senior bond, FR35, 12.90%, 6/15/22		71,229,000,000	IDR		5,664,842
	senior bond, FR39, 11.75%, 8/15/23		5,491,000,000	IDR		445,598
	senior bond, FR40, 11.00%, 9/15/25		46,856,000,000	IDR		3,898,368
	senior bond, FR43, 10.25%, 7/15/22		147,832,000,000	IDR		11,280,040
	senior bond, FR44, 10.00%, 9/15/24		4,454,000,000	IDR		353,070
	senior bond, FR46, 9.50%, 7/15/23		226,780,000,000	IDR		17,380,374
	senior bond, FR61, 7.00%, 5/15/22		244,849,000,000	IDR		17,597,175
	senior bond, FR63, 5.625%, 5/15/23		258,951,000,000	IDR		17,962,162
	senior bond, FR70, 8.375%, 3/15/24		32,315,000,000	IDR		2,415,407
						101,450,955
	Mexico 13.7%
	Government of Mexico,
	senior bond, M, 6.50%, 6/10/21		18,568,200e	MXN		82,125,630
	senior bond, M, 6.50%, 6/09/22		21,479,940e	MXN		96,690,517
	senior bond, M, 6.75%, 3/09/23		2,291,440e	MXN		10,491,439
	senior bond, M, 8.00%, 12/07/23		8,364,900e	MXN		40,141,108
	senior note, M, 7.25%, 12/09/21		21,545,600e	MXN		97,115,742
f	Mexican Udibonos, Index Linked, 2.50%, 12/10/20		392,943g	MXN		1,722,665
						328,287,101
	Norway 4.9%
h,i	Government of Norway,
	144A, Reg S, 3.75%, 5/25/21		335,990,000	NOK		36,067,133
	144A, Reg S, 2.00%, 5/24/23		315,007,000	NOK		34,443,753
	144A, Reg S, 3.00%, 3/14/24		265,052,000	NOK		30,365,034
	144A, Reg S, 1.75%, 3/13/25		89,312,000	NOK		9,912,855
	144A, Reg S, 1.50%, 2/19/26		52,969,000	NOK		5,854,514
						116,643,289
	South Korea 9.8%
	Korea Treasury Bond,
	senior note, 3.00%, 3/10/23		3,919,000,000	KRW		3,452,698
	senior note, 2.25%, 9/10/23		88,312,000,000	KRW		76,685,619
	senior note, 1.875%, 3/10/24		33,811,000,000	KRW		29,095,346
	senior note, 1.375%, 9/10/24		75,881,910,000	KRW		64,103,846

Semiannual Report         TGB-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

				Principal   Amount*			Value
	Foreign Government and Agency Securities (continued)
	South Korea (continued)
	Korea Treasury Bond, (continued)
	senior note, 3.00%, 9/10/24				18,500,000,000	KRW	$	16,655,382
	senior note, 1.375%, 12/10/29				53,382,000,000	KRW		44,517,796
								234,510,687
j	Supranational 0.4%
	Inter-American Development Bank, senior bond, 7.50%, 12/05/24				200,000,000	MXN		9,382,165
	Total Foreign Government and Agency Securities (Cost $1,438,265,663)							1,143,759,739
	U.S. Government and Agency Securities 20.3%
	United States 20.3%
	U.S. Treasury Note,
	1.125%, 9/30/21				3,497,000			3,538,392
	1.50%, 9/30/21				15,768,000			16,030,389
	2.125%, 12/31/21				3,953,000			4,069,042
	1.50%, 10/31/24				64,160,000			67,642,434
	1.50%, 11/30/24				50,420,000			53,199,009
	1.75%, 12/31/24				22,672,000			24,192,618
	2.00%, 2/15/25				49,140,000			53,069,281
	2.125%, 5/15/25				58,760,000			63,994,460
	2.875%, 5/31/25				76,680,000			86,356,357
	2.625%, 12/31/25				44,803,000			50,361,372
	1.625%, 2/15/26				24,220,000			25,916,819
	2.125%, 5/31/26				11,063,000			12,185,722
	1.625%, 10/31/26				24,220,000			26,023,255
	Total U.S. Government and Agency Securities (Cost $465,062,407)							486,579,150
		Number of Contracts		Notional  Amount#
	Options Purchased 1.5%
	Calls - Over-the-Counter
	Currency Options 1.1%
	AUD/JPY, Counterparty CITI, September Strike Price 79.45 JPY, Expires 9/11/20		1		19,760,000	AUD		38,694
	AUD/JPY, Counterparty CITI, October Strike Price 77.95 JPY, Expires 10/22/20		1		39,519,000	AUD		252,366
	AUD/JPY, Counterparty CITI, October Strike Price 79.00 JPY, Expires 10/29/20		1		16,302,000	AUD		75,702
	AUD/JPY, Counterparty CITI, November Strike Price 84.33 JPY, Expires 11/12/20		1		8,878,000	AUD		7,663
	AUD/JPY, Counterparty CITI, December Strike Price 82.15 JPY, Expires 12/21/20		1		35,514,000	AUD		86,477
	AUD/JPY, Counterparty CITI, January Strike Price 79.00 JPY, Expires 1/22/2		1		26,674,000	AUD		212,247
	AUD/JPY, Counterparty CITI, April Strike Price 72.90 JPY, Expires 4/29/21		1		15,018,000	AUD		563,529
	AUD/JPY, Counterparty CITI, April Strike Price 81.00 JPY, Expires 4/29/21		1		19,266,000	AUD		125,770

TGB-12     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional  Amount#			Value
Options Purchased (continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
AUD/JPY, Counterparty CITI, June Strike Price 81.00 JPY, Expires 6/21/21		1		29,640,000	AUD	$	237,648
AUD/USD, Counterparty HSBK, January Strike Price $0.71, Expires 1/22/21		1		7,904,000	AUD		121,019
AUD/USD, Counterparty HSBK, February Strike Price $0.75, Expires 2/08/21		1		15,808,000	AUD		78,589
AUD/USD, Counterparty HSBK, February Strike Price $0.74, Expires 2/10/21		1		18,969,000	AUD		111,306
AUD/USD, Counterparty MSCO, October Strike Price $0.75, Expires 10/28/20		1		7,904,000	AUD		12,838
AUD/USD, Counterparty MSCO, May Strike Price $0.77, Expires 5/12/21		1		21,309,000	AUD		94,880
USD/JPY, Counterparty CITI, September Strike Price 112.24 JPY, Expires 9/22/20		1		38,210,000			48,909
USD/JPY, Counterparty CITI, February Strike Price 115.00 JPY, Expires 2/24/21		1		98,607,000			261,309
USD/MXN, Counterparty CITI, July Strike Price 21.03 MXN, Expires 7/30/20		1		12,204,000			1,096,297
USD/MXN, Counterparty CITI, September Strike Price 21.94 MXN, Expires 9/03/20		1		3,050,000			187,846
USD/MXN, Counterparty CITI, September Strike Price 23.21 MXN, Expires 9/03/20		1		6,941,000			203,836
USD/MXN, Counterparty CITI, September Strike Price 23.34 MXN, Expires 9/03/20		1		4,083,000			107,534
USD/MXN, Counterparty CITI, September Strike Price 31.04 MXN, Expires 9/03/20		1		11,917,000			7,734
USD/MXN, Counterparty CITI, September Strike Price 21.91 MXN, Expires 9/08/20		1		21,237,000			1,351,289
USD/MXN, Counterparty CITI, September Strike Price 27.34 MXN, Expires 9/24/20		1		37,848,000			158,394
USD/MXN, Counterparty CITI, November Strike Price 26.72 MXN, Expires 11/09/20		1		34,941,000			368,313
USD/MXN, Counterparty CITI, December Strike Price 23.97 MXN, Expires 12/07/20		1		26,279,000			912,249
USD/MXN, Counterparty CITI, February Strike Price 25.49 MXN, Expires 2/11/21		1		49,104,000			1,351,244
USD/MXN, Counterparty CITI, March Strike Price 24.62 MXN, Expires 3/24/21		1		22,167,000			897,564
USD/MXN, Counterparty CITI, April Strike Price 23.75 MXN, Expires 4/09/21		1		11,742,000			649,943
USD/MXN, Counterparty CITI, April Strike Price 25.48 MXN, Expires 4/09/21		1		22,442,000			751,964
USD/MXN, Counterparty CITI, April Strike Price 27.45 MXN, Expires 4/28/21		1		69,992,000			1,538,634
USD/MXN, Counterparty CITI, June Strike Price 26.09 MXN, Expires 6/18/21		1		23,833,000			831,295
USD/MXN, Counterparty CITI, June Strike Price 24.81 MXN, Expires 6/30/21		1		35,754,000			1,857,134
USD/MXN, Counterparty CITI, December Strike Price 29.73 MXN, Expires 12/07/21		1		31,535,000			880,552
USD/MXN, Counterparty GSCO, July Strike Price 20.00 MXN, Expires 7/31/20		1		11,665,000			1,560,649
USD/MXN, Counterparty GSCO, July Strike Price 24.18 MXN, Expires 7/31/20		1		11,665,000			96,330
USD/MXN, Counterparty GSCO, March Strike Price 20.62 MXN, Expires 3/03/21		1		7,624,000			1,029,263
USD/MXN, Counterparty GSCO, June Strike Price 22.83 MXN, Expires 6/09/21		1		7,291,000			589,543
USD/MXN, Counterparty JPHQ, July Strike Price 20.90 MXN, Expires 7/27/20		1		12,571,000			1,187,809
USD/MXN, Counterparty JPHQ, September Strike Price 23.25 MXN, Expires 9/22/20		1		16,908,000			539,686
USD/MXN, Counterparty JPHQ, December Strike Price 22.30 MXN, Expires 12/04/20		1		25,925,000			1,763,263

Semiannual Report         TGB-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional  Amount#			Value
Options Purchased (continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
USD/MXN, Counterparty JPHQ, December Strike Price 23.25 MXN, Expires 12/23/20		1		19,020,000		$	935,366
USD/MXN, Counterparty MSCO, September Strike Price 22.82 MXN, Expires 9/02/20		1		24,211,000			876,172
USD/MXN, Counterparty MSCO, September Strike Price 25.02 MXN, Expires 9/02/20		1		8,051,000			72,829
USD/MXN, Counterparty MSCO, March Strike Price 28.75 MXN, Expires 3/30/21		1		49,338,000			711,553
							24,843,231
Puts - Over-the-Counter
Currency Options 0.4%
AUD/JPY, Counterparty CITI, October Strike Price 67.10 JPY, Expires 10/29/20		1		43,471,000	AUD		222,503
AUD/JPY, Counterparty CITI, November Strike Price 66.78 JPY, Expires 11/12/20		1		4,439,000	AUD		24,534
AUD/JPY, Counterparty CITI, November Strike Price 69.18 JPY, Expires 11/12/20		1		2,664,000	AUD		22,227
AUD/JPY, Counterparty CITI, December Strike Price 65.85 JPY, Expires 12/21/20		1		17,757,000	AUD		113,604
AUD/JPY, Counterparty CITI, March Strike Price 68.50 JPY, Expires 3/24/21		1		17,783,000	AUD		242,657
AUD/JPY, Counterparty CITI, April Strike Price 71.00 JPY, Expires 4/29/21		1		51,376,000	AUD		1,075,146
AUD/JPY, Counterparty CITI, June Strike Price 58.95 JPY, Expires 6/21/21		1		39,520,000	AUD		261,235
AUD/JPY, Counterparty CITI, June Strike Price 71.44 JPY, Expires 6/21/21		1		39,520,000	AUD		981,077
AUD/JPY, Counterparty CITI, June Strike Price 69.20 JPY, Expires 6/24/21		1		31,616,000	AUD		615,271
AUD/USD, Counterparty HSBK, October Strike Price $0.63, Expires 10/27/20		1		15,808,000	AUD		53,043
AUD/USD, Counterparty HSBK, January Strike Price $0.61, Expires 1/22/21		1		24,503,000	AUD		123,743
AUD/USD, Counterparty HSBK, February Strike Price $0.65, Expires 2/08/21		1		31,616,000	AUD		379,756
AUD/USD, Counterparty HSBK, February Strike Price $0.65, Expires 2/10/21		1		37,939,000	AUD		404,658
AUD/USD, Counterparty HSBK, March Strike Price $0.64, Expires 3/22/21		1		20,946,000	AUD		226,055
AUD/USD, Counterparty MSCO, October Strike Price $0.67, Expires 10/28/20		1		15,808,000	AUD		157,145
AUD/USD, Counterparty MSCO, November Strike Price $0.65, Expires 11/19/20		1		33,541,000	AUD		235,136
AUD/USD, Counterparty MSCO, December Strike Price $0.65, Expires 12/18/20		1		28,653,000	AUD		269,058
USD/JPY, Counterparty CITI, September Strike Price 100.70 JPY, Expires 9/16/20		1		69,025,000			78,896
USD/JPY, Counterparty CITI, September Strike Price 106.75 JPY, Expires 9/22/20		1		76,420,000			630,771
USD/JPY, Counterparty CITI, October Strike Price 103.60 JPY, Expires 10/29/20		1		49,304,000			251,450
USD/JPY, Counterparty CITI, February Strike Price 105.70 JPY, Expires 2/24/21		1		49,303,000			869,951
USD/MXN, Counterparty CITI, September Strike Price 19.11 MXN, Expires 9/03/20		1		23,836,000			4,147
USD/MXN, Counterparty CITI, September Strike Price 21.33 MXN, Expires 9/03/20		1		35,756,000			125,361
USD/MXN, Counterparty CITI, September Strike Price 20.85 MXN, Expires 9/17/20		1		43,738,000			99,242

TGB-14     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

		Number of Contracts		Notional  Amount#			Value
	Options Purchased (continued)
	Puts - Over-the-Counter (continued)
	Currency Options (continued)
	USD/MXN, Counterparty CITI, November Strike Price 22.45 MXN, Expires 11/09/20		1		17,471,000		$	352,093
	USD/MXN, Counterparty CITI, February Strike Price 20.88 MXN, Expires 2/11/21		1		24,552,000			179,328
	USD/MXN, Counterparty CITI, March Strike Price 20.66 MXN, Expires 3/24/21		1		10,516,000			72,287
	USD/MXN, Counterparty CITI, April Strike Price 21.20 MXN, Expires 4/09/21		1		24,495,000			272,139
	USD/MXN, Counterparty GSCO, July Strike Price 20.83 MXN, Expires 7/31/20		1		23,330,000			15,164
	USD/MXN, Counterparty GSCO, July Strike Price 22.03 MXN, Expires 7/31/20		1		10,459,000			54,565
	USD/MXN, Counterparty GSCO, August Strike Price 22.45 MXN, Expires 8/31/20		1		8,163,000			113,433
	USD/MXN, Counterparty GSCO, August Strike Price 20.30 MXN, Expires 8/31/20		1		8,730,000			6,713
	USD/MXN, Counterparty GSCO, September Strike Price 23.73 MXN, Expires 9/30/20		1		23,330,000			1,012,755
	USD/MXN, Counterparty GSCO, March Strike Price 18.65 MXN, Expires 3/03/21		1		7,624,000			8,325
	USD/MXN, Counterparty GSCO, June Strike Price 22.83 MXN, Expires 6/09/21		1		7,291,000			254,711
	USD/MXN, Counterparty MSCO, September Strike Price 20.11 MXN, Expires 9/02/20		1		24,211,000			15,447
	USD/MXN, Counterparty MSCO, September Strike Price 20.64 MXN, Expires 9/10/20		1		14,301,000			22,495
	USD/MXN, Counterparty MSCO, September Strike Price 20.13 MXN, Expires 9/22/20		1		25,142,000			24,061
	USD/MXN, Counterparty MSCO, September Strike Price 22.46 MXN, Expires 9/22/20		1		7,678,000			124,645
								9,994,827
	Total Options Purchased (Cost $41,855,242)							34,838,058
	Total Investments before Short Term Investments (Cost $1,945,183,312)							1,665,176,947
				Principal  Amount*
	Short Term Investments 30.8%
	Foreign Government and Agency Securities 7.4%
	Argentina 0.3%
a,b	Argentina Treasury Bond BONCER, Index Linked, 1.10%, 4/17/21				279,926,000	ARS		2,724,843
a,b	Letras de la Nacion Argentina con Ajuste por CER, Index Linked, 0.00%, 12/04/20				345,512,200	ARS		3,401,141
								6,125,984
	Brazil 1.3%
	Letra Tesouro Nacional, Strip, 10/01/20				166,070d	BRL		30,385,330

Semiannual Report         TGB-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

				Principal  Amount*			Value
	Short Term Investments (continued)
	Foreign Government and Agency Securities (continued)
	Japan 5.2%
k	Japan Treasury Discount Bill,
	7/06/20				5,427,000,000	JPY	$	50,262,439
	7/10/20 - 10/12/20				7,969,900,000	JPY		73,833,146
								124,095,585
	Mexico 0.5%
k	Mexico Treasury Bill, 7/16/20 - 10/22/20				28,120,440l	MXN		12,128,917
	Norway 0.1%
h,i,k	Norway Treasury Bill, 144A, Reg S, 9/16/20				28,866,000	NOK		2,997,979
	Total Foreign Government and Agency Securities (Cost $177,699,512)							175,733,795
	U.S. Government and Agency Securities 10.1%
	United States 10.1%
k	U.S. Treasury Bill,
	7/16/20				64,460,000			64,457,213
	8/06/20				113,820,000			113,806,626
	9/10/20				64,460,000			64,444,427
	Total U.S. Government and Agency Securities (Cost $242,709,226)							242,708,266
	Total Investments before Money Market Funds (Cost $2,365,592,050)							2,083,619,008
				Shares
	Money Market Funds (Cost $318,975,444) 13.3%
	United States 13.3%
m,n	Institutional Fiduciary Trust Money Market Portfolio, 0.00%				318,975,444			318,975,444
	Total Investments (Cost $2,684,567,494) 100.4%							2,402,594,452
	Options Written (1.3)%							(30,318,364	)
	Other Assets, less Liabilities 0.9%							20,001,366
	Net Assets 100.0%						$	2,392,277,454
		Number of Contracts		Notional  Amount#
o	Options Written (1.3)%
	Calls - Over-the-Counter
	Currency Options (0.8)%
	AUD/JPY, Counterparty CITI, September Strike Price 75.80 JPY, Expires 9/11/20		1		19,760,000	AUD		(194,617	)
	AUD/JPY, Counterparty CITI, October Strike Price 71.60 JPY, Expires 10/29/20		1		32,603,000	AUD		(1,231,052	)
	AUD/JPY, Counterparty CITI, December Strike Price 75.70 JPY, Expires 12/21/20		1		35,514,000	AUD		(620,213	)

TGB-16     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

		Number of Contracts		Notional  Amount#			Value
o	Options Written (continued)
	Calls - Over-the-Counter (continued)
	Currency Options (continued)
	AUD/JPY, Counterparty CITI, January Strike Price 76.00 JPY, Expires 1/22/21		1		26,674,000	AUD	$	(473,323	)
	AUD/JPY, Counterparty CITI, January Strike Price 76.95 JPY, Expires 1/22/21		1		31,616,000	AUD		(442,475	)
	AUD/JPY, Counterparty CITI, April Strike Price 71.75 JPY, Expires 4/29/21		1		38,532,000	AUD		(1,722,736	)
	AUD/JPY, Counterparty CITI, June Strike Price 78.00 JPY, Expires 6/21/21		1		29,640,000	AUD		(465,826	)
	AUD/USD, Counterparty HSBK, October Strike Price $0.67, Expires 10/27/20		1		23,712,000	AUD		(760,734	)
	AUD/USD, Counterparty HSBK, November Strike Price $0.71, Expires 11/05/20		1		11,838,000	AUD		(98,566	)
	AUD/USD, Counterparty HSBK, January Strike Price $0.67, Expires 1/22/21		1		24,503,000	AUD		(823,222	)
	AUD/USD, Counterparty HSBK, February Strike Price $0.69, Expires 2/08/21		1		15,808,000	AUD		(362,577	)
	AUD/USD, Counterparty HSBK, February Strike Price $0.69, Expires 2/10/21		1		18,969,000	AUD		(496,831	)
	AUD/USD, Counterparty HSBK, May Strike Price $0.78, Expires 5/05/21		1		19,730,000	AUD		(68,817	)
	AUD/USD, Counterparty MSCO, August Strike Price $0.69, Expires 8/12/20		1		14,674,000	AUD		(121,400	)
	AUD/USD, Counterparty MSCO, August Strike Price $0.70, Expires 8/12/20		1		10,236,000	AUD		(82,310	)
	AUD/USD, Counterparty MSCO, October Strike Price $0.72, Expires 10/28/20		1		7,904,000	AUD		(45,577	)
	AUD/USD, Counterparty MSCO, May Strike Price $0.74, Expires 5/12/21		1		42,617,000	AUD		(390,126	)
	USD/JPY, Counterparty CITI, September Strike Price 107.50 JPY, Expires 9/16/20		1		39,442,000			(529,351	)
	USD/JPY, Counterparty CITI, September Strike Price 108.77 JPY, Expires 9/22/20		1		76,420,000			(602,495	)
	USD/JPY, Counterparty CITI, February Strike Price 110.50 JPY, Expires 2/24/21		1		98,607,000			(1,020,583	)
	USD/MXN, Counterparty CITI, November Strike Price 31.74 MXN, Expires 11/09/20		1		17,471,000			(47,224	)
	USD/MXN, Counterparty CITI, December Strike Price 23.46 MXN, Expires 12/07/20		1		8,760,000			(373,623	)
	USD/MXN, Counterparty CITI, December Strike Price 25.43 MXN, Expires 12/07/20		1		8,760,000			(174,359	)
	USD/MXN, Counterparty CITI, February Strike Price 29.11 MXN, Expires 2/11/21		1		36,827,000			(398,137	)
	USD/MXN, Counterparty CITI, March Strike Price 25.87 MXN, Expires 3/24/21		1		17,883,000			(505,821	)
	USD/MXN, Counterparty CITI, March Strike Price 31.07 MXN, Expires 3/24/21		1		8,867,000			(77,125	)
	USD/MXN, Counterparty CITI, April Strike Price 27.24 MXN, Expires 4/09/21		1		22,442,000			(480,393	)
	USD/MXN, Counterparty CITI, June Strike Price 28.24 MXN, Expires 6/18/21		1		23,833,000			(522,086	)
	USD/MXN, Counterparty CITI, June Strike Price 28.40 MXN, Expires 6/30/21		1		23,836,000			(547,990	)
	USD/MXN, Counterparty CITI, December Strike Price 27.93 MXN, Expires 12/07/21		1		10,512,000			(394,105	)
	USD/MXN, Counterparty GSCO, July Strike Price 22.03 MXN, Expires 7/31/20		1		10,459,000			(534,675	)
	USD/MXN, Counterparty GSCO, July Strike Price 22.94 MXN, Expires 7/31/20		1		11,665,000			(291,613	)
	USD/MXN, Counterparty GSCO, July Strike Price 23.32 MXN, Expires 7/31/20		1		11,665,000			(209,585	)
	USD/MXN, Counterparty GSCO, August Strike Price 22.45 MXN, Expires 8/31/20		1		8,163,000			(368,037	)
	USD/MXN, Counterparty GSCO, August Strike Price 24.62 MXN, Expires 8/31/20		1		8,730,000			(96,702	)
	USD/MXN, Counterparty GSCO, June Strike Price 30.36 MXN, Expires 6/09/21		1		7,291,000			(104,524	)
	USD/MXN, Counterparty JPHQ, July Strike Price 22.30 MXN, Expires 7/27/20		1		12,571,000			(508,660	)

Semiannual Report         TGB-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

		Number of Contracts		Notional  Amount#			Value
o	Options Written (continued)
	Calls - Over-the-Counter (continued)
	Currency Options (continued)
	USD/MXN, Counterparty JPHQ, September Strike Price 24.90 MXN, Expires 9/22/20		1		8,454,000		$	(107,873	)
	USD/MXN, Counterparty MSCO, September Strike Price 23.31 MXN, Expires 9/02/20		1		24,211,000			(640,526	)
	USD/MXN, Counterparty MSCO, September Strike Price 22.46 MXN, Expires 9/10/20		1		4,767,000			(225,803	)
	USD/MXN, Counterparty MSCO, September Strike Price 22.46 MXN, Expires 9/22/20		1		7,678,000			(380,645	)
	USD/MXN, Counterparty MSCO, March Strike Price 34.23 MXN, Expires 3/30/21		1		32,892,000			(178,242	)
								(17,720,579	)
	Puts - Over-the-Counter
	Currency Options (0.5)%
	AUD/JPY, Counterparty CITI, October Strike Price 62.80 JPY, Expires 10/29/20		1		21,735,000	AUD		(53,375	)
	AUD/JPY, Counterparty CITI, April Strike Price 66.00 JPY, Expires 4/29/21		1		25,688,000	AUD		(297,970	)
	AUD/JPY, Counterparty CITI, April Strike Price 72.90 JPY, Expires 4/29/21		1		15,018,000	AUD		(397,451	)
	AUD/JPY, Counterparty CITI, June Strike Price 64.86 JPY, Expires 6/21/21		1		59,280,000	AUD		(716,256	)
	AUD/USD, Counterparty HSBK, January Strike Price $0.52, Expires 1/22/21		1		11,856,000	AUD		(11,502	)
	AUD/USD, Counterparty HSBK, January Strike Price $0.63, Expires 1/27/21		1		10,457,000	AUD		(68,315	)
	AUD/USD, Counterparty HSBK, March Strike Price $0.59, Expires 3/22/21		1		8,497,000	AUD		(33,683	)
	AUD/USD, Counterparty MSCO, August Strike Price $0.63, Expires 8/12/20		1		10,482,000	AUD		(8,108	)
	AUD/USD, Counterparty MSCO, August Strike Price $0.64, Expires 8/12/20		1		8,386,000	AUD		(9,524	)
	AUD/USD, Counterparty MSCO, August Strike Price $0.68, Expires 8/12/20		1		10,276,000	AUD		(61,502	)
	USD/JPY, Counterparty CITI, September Strike Price 89.80 JPY, Expires 9/16/20		1		34,512,000			(3,555	)
	USD/JPY, Counterparty CITI, September Strike Price 102.25 JPY, Expires 9/22/20		1		38,210,000			(76,917	)
	USD/JPY, Counterparty CITI, October Strike Price 106.00 JPY, Expires 10/29/20		1		49,304,000			(458,034	)
	USD/MXN, Counterparty CITI, July Strike Price 23.10 MXN, Expires 7/30/20		1		8,749,000			(184,455	)
	USD/MXN, Counterparty CITI, September Strike Price 22.93 MXN, Expires 9/03/20		1		23,838,000			(549,895	)
	USD/MXN, Counterparty CITI, September Strike Price 23.21 MXN, Expires 9/03/20		1		6,941,000			(203,836	)
	USD/MXN, Counterparty CITI, September Strike Price 23.34 MXN, Expires 9/03/20		1		4,083,000			(134,323	)
	USD/MXN, Counterparty CITI, September Strike Price 21.91 MXN, Expires 9/08/20		1		21,237,000			(169,259	)
	USD/MXN, Counterparty CITI, September Strike Price 20.06 MXN, Expires 9/17/20		1		21,869,000			(17,714	)
	USD/MXN, Counterparty CITI, September Strike Price 22.40 MXN, Expires 9/17/20		1		21,869,000			(321,124	)
	USD/MXN, Counterparty CITI, September Strike Price 24.20 MXN, Expires 9/24/20		1		10,516,000			(630,907	)
	USD/MXN, Counterparty CITI, November Strike Price 23.88 MXN, Expires 11/09/20		1		34,941,000			(1,868,819	)

TGB-18     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

		Number of Contracts		Notional  Amount#		Value
o	Options Written (continued)
	Puts - Over-the-Counter (continued)
	Currency Options (continued)
	USD/MXN, Counterparty CITI, February Strike Price 22.92 MXN, Expires 2/11/21		1		36,827,000	$	(1,241,328	)
	USD/MXN, Counterparty CITI, April Strike Price 22.71 MXN, Expires 4/09/21		1		24,495,000		(767,306	)
	USD/MXN, Counterparty CITI, April Strike Price 23.02 MXN, Expires 4/28/21		1		34,996,000		(1,328,623	)
	USD/MXN, Counterparty CITI, June Strike Price 20.24 MXN, Expires 6/30/21		1		11,918,000		(74,523	)
	USD/MXN, Counterparty GSCO, August Strike Price 21.54 MXN, Expires 8/31/20		1		8,730,000		(38,648	)
	USD/MXN, Counterparty GSCO, September Strike Price 22.40 MXN, Expires 9/30/20		1		46,660,000		(670,971	)
	USD/MXN, Counterparty GSCO, March Strike Price 19.80 MXN, Expires 3/03/21		1		7,624,000		(23,070	)
	USD/MXN, Counterparty GSCO, June Strike Price 19.61 MXN, Expires 6/09/21		1		7,291,000		(28,260	)
	USD/MXN, Counterparty JPHQ, December Strike Price 22.30 MXN, Expires 12/04/20		1		25,925,000		(498,615	)
	USD/MXN, Counterparty JPHQ, December Strike Price 23.25 MXN, Expires 12/23/20		1		19,020,000		(743,454	)
	USD/MXN, Counterparty MSCO, September Strike Price 21.23 MXN, Expires 9/02/20		1		18,669,000		(56,436	)
	USD/MXN, Counterparty MSCO, September Strike Price 21.50 MXN, Expires 9/10/20		1		14,301,000		(69,203	)
	USD/MXN, Counterparty MSCO, September Strike Price 21.68 MXN, Expires 9/22/20		1		25,142,000		(171,418	)
	USD/MXN, Counterparty MSCO, March Strike Price 23.03 MXN, Expires 3/30/21		1		16,446,000		(609,406	)
							(12,597,785	)
	Total Options Written (Premiums received $27,270,984)						(30,318,364	)

Semiannual Report         TGB-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^#Notional amount is the number of units specified in the contract, and can include currency units, bushels, shares, pounds, barrels or other units. Currency units are stated in U.S. dollars unless otherwise indicated.

^aSecurities denominated in Argentine Peso have been designated as Level 3 investments. See Note 12 regarding fair value measurements.

^bRedemption price at maturity is adjusted for inflation. See Note 1(g).

^cThe coupon rate shown represents the rate at period end.

^dPrincipal amount is stated in 1,000 Brazilian Real Units.

^ePrincipal amount is stated in 100 Mexican Peso Units.

^fPrincipal amount of security is adjusted for inflation. See Note 1(g).

^gPrincipal amount is stated in 100 Unidad de Inversion Units.

^hSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At June 30, 2020, the aggregate value of these securities was $119,641,268, representing 5.0% of net assets.

ⁱSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2020, the aggregate value of these securities was $119,641,268, representing 5.0% of net assets.

^jA supranational organization is an entity formed by two or more central governments through international treaties.

^kThe security was issued on a discount basis with no stated coupon rate.

^lPrincipal amount is stated in 10 Mexican Peso Units.

^mSee Note 3(e) regarding investments in affiliated management investment companies.

ⁿThe rate shown is the annualized seven-day effective yield at period end.

^oSee Note 1(c) regarding written options.

At June 30, 2020, the Fund had the following forward exchange contracts outstanding. See 1(c).

Forward Exchange Contracts
Currency	Counterpartya		Type		Quantity		Contract   Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Brazilian Real		CITI		Buy		107,801,461		19,885,899			7/02/20	$	—	$	(59,590	)
Brazilian Real		CITI		Buy		206,375,000		36,375,253	EUR		7/02/20		—		(2,910,504	)
Brazilian Real		CITI		Sell		42,892,761		7,406,375			7/02/20		—		(482,249	)
Brazilian Real		CITI		Sell		64,908,700		12,516,622			7/02/20		578,936		—
Brazilian Real		CITI		Sell		206,375,000		33,607,185	EUR		7/02/20		—		(199,298	)
Brazilian Real		HSBK		Buy		93,532,700		17,146,233			7/02/20		55,837		—
Brazilian Real		HSBK		Sell		93,532,700		18,459,843			7/02/20		1,257,773		—
Brazilian Real		JPHQ		Buy		147,867,600		27,251,677			7/02/20		—		(56,602	)
Brazilian Real		JPHQ		Sell		147,867,600		29,149,224			7/02/20		1,954,148		—
South Korean Won		DBAB		Sell		13,919,000,000		11,570,241			7/06/20		—		(33,161	)
Brazilian Real		JPHQ		Sell		147,867,600		27,241,134			7/09/20		54,692		—
Australian Dollar		HSBK		Sell		14,684,959		1,102,253,022	JPY		7/13/20		76,121		—
Australian Dollar		JPHQ		Sell		22,450,754		1,688,925,318	JPY		7/13/20		151,313		—
Australian Dollar		JPHQ		Sell		25,330,000		1,891,479,755	JPY		7/14/20		40,658		—
Brazilian Real		CITI		Sell		107,801,461		19,875,267			7/15/20		60,643		—
Brazilian Real		HSBK		Sell		93,532,700		17,138,064			7/15/20		—		(53,867	)
Swedish Krona		DBAB		Buy		416,064,650		38,822,999	EUR		7/15/20		1,024,135		—
Norwegian Krone		JPHQ		Buy		198,445,700		18,305,288	EUR		7/16/20		51,432		—
South Korean Won		HSBK		Sell		13,984,825,441		12,171,831			7/17/20		512,165		—
Euro		UBSW		Buy		1,922,305		2,166,765			7/23/20		—		(6,025	)
Euro		UBSW		Sell		1,922,305		2,182,681			7/23/20		21,942		—
South Korean Won		HSBK		Sell		39,774,174,559		32,296,029			7/28/20		—		(869,126	)
South Korean Won		HSBK		Sell		24,029,880,977		19,597,032			7/29/20		—		(440,175	)
Euro		CITI		Sell		40,213,773		4,737,280,517	JPY		7/31/20		—		(1,318,635	)

TGB-20     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)
Currency		Counterpartya		Type		Quantity		Contract   Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Brazilian Real			CITI		Sell		42,960,900		7,406,375			8/04/20	$	—	$	(483,054	)
Brazilian Real			HSBK		Sell		40,142,900		7,652,972			8/04/20		281,046		—
Brazilian Real			HSBK		Sell		54,206,239		9,497,869			8/04/20		—		(456,677	)
Brazilian Real			JPHQ		Sell		193,543,900		38,701,031			8/04/20		3,158,227		—
South Korean Won			DBAB		Sell		13,920,000,000		11,743,862			8/07/20		137,240		—
Swiss Franc			UBSW		Buy		8,689,106		8,259,018	EUR		8/10/20		—		(104,649	)
Swiss Franc			UBSW		Buy		34,756,424		32,085,555	EUR		8/10/20		650,254		—
South Korean Won	��		HSBK		Sell		75,818,000,000		62,145,902			8/11/20		—		(1,070,112	)
Swiss Franc			GSCO		Buy		34,110,076		31,546,498	EUR		8/12/20		573,953		—
Swedish Krona			DBAB		Buy		416,064,600		39,213,964	EUR		8/13/20		571,158		—
Swiss Franc			GSCO		Buy		17,055,038		16,229,755	EUR		8/13/20		—		(226,249	)
Euro			HSBK		Buy		1,800,000		2,035,908			8/14/20		—		(11,642	)
Euro			HSBK		Sell		1,800,000		1,961,352			8/14/20		—		(62,914	)
Australian Dollar			JPHQ		Sell		45,472,501		3,268,860,463	JPY		8/21/20		—		(1,093,242	)
Australian Dollar			CITI		Sell		35,607,467		2,527,369,963	JPY		8/24/20		—		(1,154,961	)
Australian Dollar			JPHQ		Sell		52,305,500		3,724,936,182	JPY		8/24/20		—		(1,582,003	)
Euro			HSBK		Sell		50,507,118		5,965,867,876	JPY		8/24/20		—		(1,520,739	)
Australian Dollar			JPHQ		Sell		52,305,500		3,860,368,198	JPY		8/25/20		—		(326,463	)
Euro			HSBK		Sell		25,253,559		3,061,640,442	JPY		8/25/20		—		(31,181	)
Australian Dollar			CITI		Sell		3,372,533		239,109,190	JPY		8/26/20		—		(111,836	)
Indian Rupee			HSBK		Sell		640,300,000		8,350,069			8/26/20		—		(73,989	)
Japanese Yen			JPHQ		Buy		2,297,117,500		21,362,275			8/26/20		—		(72,169	)
Indian Rupee			SCNY		Sell		945,558,000		12,949,745			8/27/20		510,975		—
Japanese Yen			JPHQ		Buy		2,297,161,600		20,973,377			8/27/20		317,401		—
Indian Rupee			SCNY		Sell		1,135,539,000		15,483,004			8/28/20		546,713		—
Euro			BOFA		Buy		27,627,938		31,263,775			8/31/20		—		(182,138	)
Euro			BOFA		Sell		27,627,938		30,471,129			8/31/20		—		(610,508	)
Japanese Yen			CITI		Buy		2,796,566,000		27,059,295			8/31/20		—		(1,138,357	)
Brazilian Real			CITI		Sell		69,291,613		12,956,062			9/02/20		246,708		—
Brazilian Real			CITI		Sell		104,390,000		18,621,110			9/02/20		—		(525,933	)
Brazilian Real			HSBK		Sell		67,353,775		11,574,031			9/02/20		—		(779,890	)
Indian Rupee			SCNY		Sell		2,362,358,000		30,773,494			9/03/20		—		(278,227	)
Euro			JPHQ		Buy		6,775,311		7,663,872			9/04/20		—		(40,886	)
Euro			JPHQ		Sell		6,775,311		7,582,149			9/04/20		—		(40,837	)
Euro			SCNY		Buy		17,972,751		20,343,510			9/08/20		—		(120,260	)
Euro			SCNY		Sell		17,972,751		20,208,741			9/08/20		—		(14,508	)
South Korean Won			GSCO		Sell		44,346,000,000		36,942,686			9/09/20		—		(38,782	)
Australian Dollar			CITI		Sell		23,089,500		1,766,923,987	JPY		9/10/20		441,955		—
Australian Dollar			HSBK		Sell		14,685,041		1,101,157,799	JPY		9/11/20		71,600		—
Australian Dollar			HSBK		Sell		19,340,000		1,310,343,020	JPY		9/14/20		—		(1,201,770	)
Australian Dollar			JPHQ		Sell		22,449,246		1,687,049,615	JPY		9/14/20		144,447		—
Australian Dollar			JPHQ		Sell		22,880,000		1,553,370,104	JPY		9/14/20		—		(1,392,247	)
Swedish Krona			DBAB		Buy		208,032,350		19,832,248	EUR		9/15/20		24,764		—
Australian Dollar			HSBK		Sell		81,620,000		6,022,698,990	JPY		9/16/20		—		(502,144	)
Norwegian Krone			JPHQ		Buy		198,445,700		18,283,198	EUR		9/16/20		51,923		—
Swedish Krona			DBAB		Buy		208,032,400		19,801,766	EUR		9/16/20		58,836		—

Semiannual Report         TGB-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract   Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Australian Dollar		HSBK		Sell		9,830,000		716,970,710	JPY		9/17/20	$	—	$	(138,064	)
Norwegian Krone		JPHQ		Buy		177,591,200		19,683,519			9/21/20		—		(1,222,664	)
Norwegian Krone		JPHQ		Buy		202,667,400		18,878,646	EUR		9/21/20		—		(181,455	)
South Korean Won		CITI		Sell		4,215,000,000		3,491,406			9/22/20		—		(24,836	)
Japanese Yen		JPHQ		Buy		1,180,260,000		11,065,422			9/23/20		—		(121,458	)
Japanese Yen		BNDP		Buy		2,244,657,680		21,028,125			9/24/20		—		(214,173	)
Euro		HSBK		Sell		25,254,215		3,044,092,592	JPY		9/25/20		—		(200,417	)
Euro		CITI		Sell		74,682,227		8,935,683,733	JPY		9/30/20		—		(1,210,326	)
Norwegian Krone		JPHQ		Buy		230,077,650		21,080,208	EUR		9/30/20		185,504		—
Brazilian Real		HSBK		Sell		93,155,800		17,474,358			10/02/20		405,686		—
Brazilian Real		JPHQ		Sell		78,488,300		15,049,046			10/02/20		667,859		—
Euro		GSCO		Buy		17,044,025		19,273,383			10/05/20		—		(82,505	)
Euro		GSCO		Sell		17,044,025		19,070,901			10/05/20		—		(119,978	)
South Korean Won		HSBK		Sell		42,561,000,000		34,840,373			10/07/20		—		(674,717	)
Mexican Peso		CITI		Sell		157,383,000		6,167,287			10/08/20		—		(592,506	)
Mexican Peso		CITI		Sell		161,485,000		7,836,491			10/08/20		900,512		—
Mexican Peso		CITI		Sell		121,288,000		5,877,353			10/09/20		668,505		—
Euro		HSBK		Buy		33,800,018		38,282,239			10/13/20		—		(216,395	)
Euro		HSBK		Sell		33,800,018		37,982,433			10/13/20		—		(83,411	)
Mexican Peso		CITI		Sell		404,375,000		19,555,619			10/13/20		2,197,551		—
Mexican Peso		CITI		Sell		595,223,000		28,888,991			10/15/20		3,344,724		—
Euro		BOFA		Buy		3,900,000		4,416,052			10/16/20		—		(23,478	)
Euro		BOFA		Sell		5,251,819		5,944,009			10/16/20		28,880		—
Euro		HSBK		Buy		5,439,447		6,119,357			10/16/20		7,097		—
Euro		HSBK		Sell		8,692,000		9,833,042			10/16/20		43,234		—
Mexican Peso		CITI		Sell		545,017,000		26,695,974			10/16/20		3,309,103		—
South Korean Won		HSBK		Sell		7,007,000,000		5,737,799			10/20/20		—		(110,175	)
Japanese Yen		BNDP		Buy		8,410,370,000		77,686,199			10/26/20		358,041		—
Euro		BOFA		Buy		11,635,109		13,192,189			10/30/20		—		(82,491	)
Euro		BOFA		Buy		15,750,554		17,727,720			10/30/20		18,997		—
Euro		BOFA		Sell		27,385,662		29,817,509			10/30/20		—		(1,038,906	)
Euro		HSBK		Buy		25,974,891		29,458,291			10/30/20		—		(191,443	)
Euro		HSBK		Sell		25,974,891		28,262,500			10/30/20		—		(1,004,348	)
Japanese Yen		CITI		Buy		1,511,588,790		14,131,356			10/30/20		—		(103,184	)
Japanese Yen		JPHQ		Buy		4,187,000,000		39,263,309			10/30/20		—		(406,210	)
Brazilian Real		CITI		Sell		177,213,700		32,316,503			11/04/20		—		(119,209	)
Swiss Franc		UBSW		Buy		8,689,106		8,265,853	EUR		11/09/20		—		(105,630	)
Swiss Franc		UBSW		Buy		17,378,212		15,853,718	EUR		11/09/20		552,865		—
Swiss Franc		GSCO		Buy		17,055,038		15,564,006	EUR		11/12/20		537,363		—
Japanese Yen		CITI		Buy		727,486,679		6,790,754			11/16/20		—		(36,621	)
Euro		BOFA		Sell		10,878,191		11,840,584			11/20/20		—		(423,373	)
Euro		GSCO		Sell		1,898,500		2,069,593			11/20/20		—		(70,756	)
Euro		BOFA		Sell		7,066,000		7,766,311			11/23/20		—		(200,483	)
Euro		GSCO		Sell		1,230,811		1,350,975			11/23/20		—		(36,743	)
Euro		JPHQ		Buy		18,850,000		21,264,308			11/23/20		—		(11,256	)
Euro		JPHQ		Sell		48,239,690		53,079,523			11/23/20		—		(1,309,902	)

TGB-22     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract   Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Australian Dollar		JPHQ		Sell		15,157,499		1,110,777,880	JPY		11/24/20	$	—		$       (147,965	)
Euro		HSBK		Sell		25,253,559		2,982,874,592	JPY		11/24/20		—		(774,817	)
Euro		MSCO		Sell		30,744,500		33,641,247			11/27/20		—		(1,026,480	)
Japanese Yen		MSCO		Buy		12,189,000,000		115,214,473			12/18/20		—		(1,962,391	)
Japanese Yen		JPHQ		Buy		1,180,260,000		11,082,774			12/22/20		—		(115,529	)
Japanese Yen		BNDP		Buy		2,244,657,680		21,061,272			12/24/20		—		(202,400	)
Japanese Yen		CITI		Buy		4,212,680,000		39,535,263			12/24/20		—		(388,202	)
Euro		CITI		Sell		33,700,000		37,987,988			1/04/21		—		(50,894	)
Mexican Peso		CITI		Sell		539,656,000		23,963,623			3/11/21		1,200,531		—
Total Forward Exchange Contracts												$	28,053,447		$  (36,703,390	)
Net unrealized appreciation (depreciation)															$    (8,649,943	)

*In U.S. dollars unless otherwise indicated.

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

See Note 10 regarding other derivative information.

See Abbreviations on page TGB-40.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report         TGB-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

	Templeton Global Bond VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	2,365,592,050
Cost - Non-controlled affiliates (Note 3e)		318,975,444
Value - Unaffiliated issuers	$	2,083,619,008
Value - Non-controlled affiliates (Note 3e)		318,975,444
Restricted cash for OTC derivative contracts (Note 1d)		11,409,000
Restricted currency, at value (cost $84,852) (Note 1e)		91,508
Foreign currency, at value (cost $1,448,101)		1,412,177
Receivables:
Investment securities sold		8,539,316
Capital shares sold		3,671,185
Interest		12,967,979
Deposits with brokers for:
OTC derivative contracts		13,018,000
Unrealized appreciation on OTC forward exchange contracts		28,053,447
Other assets		2,208
Total assets		2,481,759,272
Liabilities:
Payables:
Investment securities purchased		7,067,962
Capital shares redeemed		446,814
Management fees		840,842
Distribution fees		443,513
Trustees’ fees and expenses		1,030
Deposits from brokers for:
OTC derivative contracts		11,409,000
Options written, at value (premiums received $27,270,984)		30,318,364
Unrealized depreciation on OTC forward exchange contracts		36,703,390
Deferred tax.		916,073
Accrued expenses and other liabilities.		1,334,830
Total liabilities		89,481,818
Net assets, at value	$	2,392,277,454
Net assets consist of:
Paid-in capital	$	2,865,789,115
Total distributable earnings (losses)		(473,511,661	)
Net assets, at value	$	2,392,277,454

TGB-24     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

June 30, 2020 (unaudited)

	Templeton Global Bond VIP Fund
Class 1:
Net assets, at value	$	255,387,738
Shares outstanding		17,644,597
Net asset value and maximum offering price per share		$14.47
Class 2:
Net assets, at value	$	2,060,001,073
Shares outstanding		149,131,897
Net asset value and maximum offering price per share		$13.81
Class 4:
Net assets, at value	$	76,888,643
Shares outstanding		5,425,612
Net asset value and maximum offering price per share		$14.17

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report         TGB-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Templeton Global Bond VIP Fund
Investment income:
Dividends:
Non-controlled affiliates (Note 3e)	$	1,688,573
Interest:(net of foreign taxes)~
Unaffiliated issuers		52,385,893
Total investment income		54,074,466
Expenses:
Management fees (Note 3a)		5,894,522
Distribution fees: (Note 3c)
Class 2		2,753,167
Class 4		145,714
Custodian fees (Note 4)		413,940
Reports to shareholders		164,117
Professional fees		48,535
Trustees’ fees and expenses		8,523
Other		65,559
Total expenses		9,494,077
Expense reductions (Note 4)		(234,633	)
Expenses waived/paid by affiliates (Note 3e)		(839,756	)
Net expenses		8,419,688
Net investment income		45,654,778
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:#
Unaffiliated issuers		(49,504,370	)
Written options		(7,136,540	)
Foreign currency transactions		(10,461,978	)
Forward exchange contracts		17,116,778
Swap contracts		(117,098,171	)
Net realized gain (loss)		(167,084,281	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(60,372,744	)
Translation of other assets and liabilities denominated in foreign currencies		(220,470	)
Forward exchange contracts		27,429,748
Written options		(8,433,743	)
Swap contracts		28,588,210
Change in deferred taxes on unrealized appreciation		164,682
Net change in unrealized appreciation (depreciation)		(12,844,317	)
Net realized and unrealized gain (loss)		(179,928,598	)
Net increase (decrease) in net assets resulting from operations	$	(134,273,820	)
~Foreign taxes withheld on interest	$	1,390,733
#Net of foreign taxes	$	446,028

TGB-26     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Global Bond VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	45,654,778		$	143,948,395
Net realized gain (loss)		(167,084,281	)		40,922,392
Net change in unrealized appreciation (depreciation)		(12,844,317	)		(136,420,695	)
Net increase (decrease) in net assets resulting from operations		(134,273,820	)		48,450,092
Distributions to shareholders:
Class 1		(22,007,754	)		(22,427,340	)
Class 2		(177,367,048	)		(175,601,316	)
Class 4		(6,339,040	)		(6,224,019	)
Total distributions to shareholders		(205,713,842	)		(204,252,675	)
Capital share transactions: (Note 2)
Class 1		(30,908,254	)		55,417,128
Class 2		(36,916,825	)		(21,954,185	)
Class 4		(2,586,311	)		758,324
Total capital share transactions		(70,411,390	)		34,221,267
Net increase (decrease) in net assets		(410,399,052	)		(121,581,316	)
Net assets:
Beginning of period		2,802,676,506			2,924,257,822
End of period	$	2,392,277,454		$	2,802,676,506

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report         TGB-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Templeton Global Bond VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Global Bond VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal

repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally,

TGB-28   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.  Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of

default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two

Semiannual Report         TGB-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

c. Derivative Financial Instruments (continued)

interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

The Fund purchased or wrote OTC option contracts primarily to manage and/or gain exposure to foreign exchange rate risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.

See Note 10 regarding other derivative information.

d.  Restricted Cash

At June 30, 2020, the Fund held restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s custodian and is reflected in the Statement of Assets and Liabilities.

e.  Restricted Currency

At June 30, 2020 the fund held currencies in certain markets in which the ability to repatriate such currency is limited. As a result of such limitations on repatriation, the Fund may incur substantial delays in gaining access to these assets and may be exposed to potential adverse movements in currency value.

f.  Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

g.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income is recorded on the ex-dividend date. Distributions to shareholders are

TGB-30   Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by

amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Statement of Operations.

h.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

i.  Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.  Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		2,470,753		$	38,475,650			5,087,795		$	89,164,653
Shares issued in reinvestment of distributions		1,520,923			22,007,754			1,330,210			22,427,340
Shares redeemed		(5,755,199	)		(91,391,658	)		(3,257,868	)		(56,174,865)
Net increase (decrease)		(1,763,523	)	$	(30,908,254	)		3,160,137		$	55,417,128
Class 2 Shares:
Shares sold		4,093,946		$	61,612,521			7,233,859		$	119,112,193
Shares issued in reinvestment of distributions		12,843,378			177,367,048			10,873,146			175,601,316
Shares redeemed		(18,006,272	)		(275,896,394	)		(19,122,225	)		(316,667,694)
Net increase (decrease)		(1,068,948	)	$	(36,916,825	)		(1,015,220	)	$	(21,954,185)

Semiannual Report             TGB-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

2.  Shares of Beneficial Interest (continued)

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 4 Shares:
Shares sold		316,381		$	4,929,156			692,994		$	11,712,750
Shares issued in reinvestment of distributions		447,356			6,339,040			376,529			6,224,019
Shares redeemed		(885,254	)		(13,854,507	)		(1,010,027	)		(17,178,445)
Net increase (decrease)		(121,517	)	$	(2,586,311	)		59,496		$	758,324

3.  Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.  Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.625%	Up to and including $100 million
0.500%	Over $100 million, up to and including $250 million
0.450%	Over $250 million, up to and including $7.5 billion
0.440%	Over $7.5 billion, up to and including $10 billion
0.430%	Over $10 billion, up to and including $12.5 billion
0.420%	Over $12.5 billion, up to and including $15 billion
0.400%	In excess of $15 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.460% of the Fund’s average daily net assets.

b.  Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

TGB-32         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

c.  Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.25% and 0.35% per year of its average daily net assets of Class 2 and Class 4, respectively. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.  Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Dividend Income
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%	$	691,092,548	$	336,305,086	$	(708,422,190	)		$      —		$      —	$	318,975,444		318,975,444	$	1,688,573

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, the custodian fees were reduced as noted in the Statement of Operations.

5.  Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	1,874,982
Long term		56,256,007
Total capital loss carryforwards	$	58,130,989

Semiannual Report             TGB-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

5. Income Taxes (continued)

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	2,705,229,978
Unrealized appreciation	$	108,946,474
Unrealized depreciation		(450,259,313)
Net unrealized appreciation (depreciation)	$	(341,312,839)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and tax straddles.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2020, aggregated $685,549,046 and $742,772,129, respectively.

7. Credit Risk

At June 30, 2020, the Fund had 11.8% of its portfolio invested in high yield or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

8. Concentration of Risk

Investments in issuers domiciled or with significant operations in developing or emerging market countries may be subject to higher risks than investments in developed countries. These risks include fluctuating currency values, underdeveloped legal or business systems, and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. Currencies of developing or emerging market countries may be subject to significantly greater risks than currencies of developed countries, including the potential inability to repatriate those currencies into U.S. dollars.

At June 30, 2020, the Fund had 2.2% of its net assets denominated in Argentine Pesos, which has restricted currency repatriation since September 2019, and had restructured certain issues of its debt. Political and economic conditions in Argentina could continue to affect the value of the Fund’s holdings.

9. Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

TGB-34         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

10.  Other Derivative Information

At June 30, 2020, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Investments in securities, at value	$	34,838,058	a	Options written, at value	$	30,318,364
	Unrealized appreciation on OTC forward exchange contracts		28,053,447		Unrealized depreciation on OTC forward exchange contracts		36,703,390
Totals		$	62,891,505			$	67,021,754

^aPurchased option contracts are included in investments in securities, at value in the Statement of Assets and Liabilities.

For the period ended June 30, 2020, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Period			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Swap contracts	$	(117,098,171	)	Swap contracts	$	28,588,210
Foreign exchange contracts	Investments		41,669,494	a	Investments		11,586,887	a
	Written options		(7,136,540	)	Written options		(8,433,743	)
	Forward exchange contracts		17,116,778		Forward exchange contracts		27,429,748
Totals		$	(65,448,439	)		$	59,171,102

^aPurchased option contracts are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the period ended June 30, 2020, the average month end notional amount of swap contracts and options represented $112,474,571 and $2,914,680,736, respectively. The average month end contract value of forward exchange contracts was $3,074,304,590.

See Note 1(c) regarding derivative financial instruments.

Semiannual Report             TGB-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

10.  Other Derivative Information (continued)

At June 30, 2020, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
		Assetsa		Liabilitiesa
Derivatives
Forward exchange contracts		$	28,053,447	$	36,703,390
Options purchased			34,838,058		—
Options written			—		30,318,364
Total		$	62,891,505	$	67,021,754

^aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

At June 30, 2020, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Receiveda,b			Cash Collateral Receivedb			Net Amount (Not less than zero)
Counterparty
BNDP	$	358,041	$	(358,041	)		$—			$—			$—
BOFA		47,877		(47,877	)		—			—			—
CITI		34,505,223		(31,229,399	)		—			(3,275,824	)		—
DBAB		1,816,133		(33,161	)		(1,696,771	)		—			86,201
GSCO		5,852,767		(2,941,098	)		—			(2,911,669	)		—
HSBK		4,208,728		(4,208,728	)		—			—			—
JPHQ		11,203,728		(9,979,490	)		(1,224,238	)		—			—
MSCO		2,616,259		(2,616,259	)		—			—			—
SCNY		1,057,688		(412,995	)		—			(644,693	)		—
UBSW		1,225,061		(216,304	)		(888,209	)		—			120,548
Total	$	62,891,505	$	(52,043,352	)	$	(3,809,218	)	$	(6,832,186	)	$	206,749

TGB-36         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

At June 30, 2020, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledgedb			Net Amount   (Not less   than zero)
Counterparty
BNDP		$     416,573		$     (358,041	)		$—		$—			$      58,532
BOFA		2,561,377		(47,877	)		—		(2,500,000	)		13,500
CITI		31,229,399		(31,229,399	)		—		—			—
DBAB		33,161		(33,161	)		—		—			—
GSCO		2,941,098		(2,941,098	)		—		—			—
HSBK		13,192,260		(4,208,728	)		—		(7,468,000	)		1,515,532
JPHQ		9,979,490		(9,979,490	)		—		—			—
MSCO		6,039,097		(2,616,259	)		—		(2,750,000	)		672,838
SCNY		412,995		(412,995	)		—		—			—
UBSW		216,304		(216,304	)		—		—			—
Total		$67,021,754		$(52,043,352	)		$—		$(12,718,000	)		$2,260,402

^aAt June 30, 2020, the Fund received U.S. Treasury Bills, Bonds and Notes as collateral for derivatives.

^bIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit the collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

See Abbreviations on page TGB-40.

11.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

12.  Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

Semiannual Report             TGB-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

12.  Fair Value Measurements (continued)

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Foreign Government and Agency Securities:
Argentina	$	—	$	—	$	44,995,554	$	44,995,554
All Other Foreign Government and Agency Securities		—		1,098,764,185		—		1,098,764,185
U.S. Government and Agency Securities		—		486,579,150		—		486,579,150
Options Purchased		—		34,838,058		—		34,838,058
Short Term Investments:
Argentina		—		—		6,125,984		6,125,984
All Other Short Term Investments		561,683,710		169,607,811		—		731,291,521
Total Investments in Securities	$	561,683,710	$	1,789,789,204	$	51,121,538	$	2,402,594,452
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	28,053,447	$	—	$	28,053,447
Restricted Currency (ARS)		—		—		91,508		91,508
Total Other Financial Instruments	$	—	$	28,053,447	$	91,508	$	28,144,955
Receivables:
Interest (ARS)	$	—	$	—	$	1,240,246	$	1,240,246
Liabilities:
Other Financial Instruments:
Options Written	$	—	$	30,318,364	$	—	$	30,318,364
Forward Exchange Contracts		—		36,703,390		—		36,703,390
Total Other Financial Instruments	$	—	$	67,021,754	$	—	$	67,021,754
Payables:
Deferred Tax (ARS)	$	—	$	—	$	2,884	$	2,884

^aFor detailed categories, see the accompanying Statement of Investments.

TGB-38         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period. At June 30, 2020, the reconciliation is as follows:

	Balance at Beginning of Period			Purchases		Sales			Transfer Into/Out of Level 3		Cost Basis Adjustmentsa		Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)			Balance at End of Period		Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Period End
Assets:
Investments in Securities:
Foreign Government and
Agency Securities:
Argentina		$	35,675,197	$	19,260,092	$	(10,217,792	)		$—		$4,900,882		$(18,641,512	)		$14,018,687		$	44,995,554		$6,508,509
Short Term Investments:
Argentina			3,394,233		6,610,964		(2,160,508	)		—		752,471		(817,458	)		(1,653,718	)		6,125,984		(644,903	)
Total Investments in Securities		$	39,069,430	$	25,871,056	$	(12,378,300	)		$—		$5,653,353		$(19,458,970	)		$12,364,969		$	51,121,538		$5,863,606
Other Financial Instruments:
Restricted Currency (ARS)		$	8,460,563	$	8,913,882	$	(15,804,994	)		$—		$            —		$(1,714,126)			$     236,183		$	91,508		$      6,656
Receivables:
Interest (ARS)		$	1,601,869	$	3,080,353	$	(2,879,272	)		$—		$            —		$   (761,876)			$     199,172		$	1,240,246		$    78,763
Liabilities:
Payables:
Deferred Tax (ARS)		$	4,066	$	—	$	—			$—		$            —		$               —			$       (1,182	)	$	2,884		$     (1,182	)

^aMay include accretion, amortization, partnership adjustments, and/or other cost basis adjustments.

Significant unobservable valuation inputs for material Level 3 assets and/or liabilities and impact to fair value as a result of changes in unobservable valuation inputs as of June 30, 2020, are as follows:

Description	Fair Value at End of Period	Valuation             Technique	Unobservable Inputs	Amount	Impact to Fair Value if Input Increasesa
Assets:
Investments in Securities:
Foreign Government and Agency Securities
Argentina	$44,995,554	Market comparables	Implied Foreign exchange rate	105.9 ARS/USD	Decreaseb
Short Term Investments
Argentina	6,125,984	Market comparables	Implied Foreign exchange rate	105.9 ARS/USD	Decreasec
Other Financial Instruments:
Restricted Currency (ARS)	91,508	Market comparables	Implied Foreign exchange rate	105.9 ARS/USD	Decreasec
All otherd	1,240,246

Semiannual Report         TGB-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

12.  Fair Value Measurements (continued)

Description	Fair Value at End of Period	Valuation             Technique	Unobservable Inputs	Amount	Impact to Fair Value if Input Increasesa
Liabilities:
All otherd	2,884

^aRepresents the directional change in the fair value that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.

^bRepresents a significant impact to fair value and net assets.

^cRepresents a significant impact to fair value but not net assets.

^dIncludes fair value of immaterial assets and/or liabilities developed using various valuation techniques and unobservable inputs. May also include with values derived using private transaction prices or non-public third party pricing information which is unobservable.

13.  New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

14.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Counterparty		Currency		Selected Portfolio
BNDP	BNP Paribas SA	ARS	Argentine Peso	BADLAR	Argentina Deposit Rates Badlar Private Banks ARS
BOFA	Bank of America Corp.	AUD	Australian Dollar	FRN	Floating Rate Note
CITI	Citigroup, Inc.	BRL	Brazilian Real
DBAB	Deutsche Bank AG	COP	Colombian Peso
GSCO	The Goldman Sachs Group, Inc.	EUR	Euro
HSBK	HSBC Bank PLC	GHS	Ghanaian Cedi
JPHQ	JP Morgan Chase & Co.	IDR	Indonesian Rupiah
MSCO	Morgan Stanley	INR	Indian Rupee
SCNY	Standard Chartered Bank	JPY	Japanese Yen
UBSW	UBS AG	KRW	South Korean Won
		MXN	Mexican Peso
		NOK	Norwegian Krone
		USD	United States Dollar

TGB-40         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Global Bond VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 11, 2020, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid and foreign source income as reported by the Fund to shareholders of record.

Class	Foreign Tax Paid Per Share		Foreign Source Income Per Share
Class 1		$0.0241		$0.8881
Class 2		$0.0241		$0.8586
Class 4		$0.0241		$0.8460

Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.

Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends.

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Templeton Growth VIP Fund

This semiannual report for Templeton Growth VIP Fund covers the period ended June 30, 2020.

Class 4 Performance Summary as of June 30, 2020

The Fund’s Class 4 Shares posted a -13.52% total return for the six-month period ended June 30, 2020.

Performance reflects the Fund’s Class 4 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Semiannual Report             TG-1

TEMPLETON GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests predominantly in equity securities (primarily common stocks) of companies located anywhere in the world, including developing markets.

Fund Risks

All investments involve risks, including possible loss of principal. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in developing markets involve heightened risks related to the same factors. Because the Fund may invest its assets in companies in a specific region, including Europe, it is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Political, social or economic disruptions in the region, even in countries in which the Fund is not invested, may adversely affect the value of securities held by the Fund. Current political uncertainty concerning the economic consequences of the departure of the U.K. from the European Union may increase market volatility. Derivatives involve costs and can create economic leverage which may result in significant volatility and cause the Fund to participate in losses (and enable gains) on an amount that exceeds the Fund’s initial investment. In addition, securities issued by small- and mid-capitalization companies have historically experienced more price volatility than larger-company stocks, especially over the short term and may involve additional risks. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Geographic Composition

Based on Total Net Assets as of 6/30/20

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. For comparison, the Fund’s benchmark, the MSCI All Country World Index (ACWI), posted a -5.99% total return for the period under review.¹

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI ACWI (USD), posted a -5.99% total return during the six months under review.¹ Stocks fell sharply in early 2020 as countries around the world implemented lockdown measures in an effort to slow the spread of the novel coronavirus (COVID-19). Global supply chain disruptions, business and personal restrictions, and subdued consumer spending drove many investors to sell equity holdings in favor of perceived safe investments such as government bonds and cash. While global equities, notably in the U.S., rebounded in April and May amid optimism about easing lockdown restrictions, concerns about a second wave of infections hindered equities in June, as investors weighed the possibility of renewed restrictions.

In the U.S., government mandates to mitigate the COVID-19 pandemic severely impacted the economy beginning in March 2020. As a result, the unemployment rate surged to 14.7% in April, as many businesses, particularly those involved in hospitality, retail and travel, announced mass layoffs.² According to the National Bureau of Economic Research, the longest U.S. economic expansion in history ended in February 2020 as the country slipped into a severe recession. Nonetheless, near period-end, there were signs that a recovery was underway, as jobless claims fell

1. Source: Morningstar. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Index Descriptions following the Fund Summaries.

2. Source: U.S. Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

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TEMPLETON GROWTH VIP FUND

considerably from their peak in early April, retail sales rose sharply in May, and the unemployment rate fell to 11.1% in June.² Along with optimism about improved treatments and potential vaccines for COVID-19, the positive economic signals contributed to a significant equity rebound in April and May. However, an increase in COVID-19 infections in many states throughout June pressured U.S. stocks.

The U.S. Federal Reserve (Fed) made significant efforts to support the U.S. economy. In March 2020, as the pandemic began to severely impact the economy and financial markets, the Fed implemented two emergency rate cuts, lowering the federal funds target rate to a range of 0.00%–0.25%, and announced sweeping quantitative easing measures aimed at ensuring credit flow to borrowers and supporting credit markets with unlimited amounts of bond purchasing.

In the eurozone, some analysts forecasted a significant contraction in 2020, particularly in southern European countries, as the magnitude of the economic disruption caused by the pandemic became apparent. European developed market equities, as measured by the MSCI Europe Index (USD), posted a -12.43% total return for the period.¹ To stimulate growth, the European Central Bank implemented a broad bond-buying program, and many countries passed fiscal stimulus measures.

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index (USD), posted a -5.51% total return during the six-month period.¹ The onset of the pandemic brought dramatically slower economic activity in Asia, as businesses halted operations and manufacturing and export activity declined sharply in the region’s major economies. Asian markets generally advanced toward period-end, bolstered by fiscal stimulus measures and economies reopening throughout the region.

Emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -9.67% total return due primarily to the COVID-19 pandemic.¹ A sharp decrease in prices for oil and other natural resources also hurt emerging market economies reliant on these exports. In the last quarter of the reporting period, however, investor optimism led to a stock rally, particularly in emerging market countries that had successfully lowered infection rates.

Investment Strategy

Our investment philosophy is bottom up, value oriented and long term. When choosing equity investments for the Fund, we focus on the market price of a company’s securities relative to our evaluation of the company’s potential

long-term earnings, asset value and cash flow. Our analysis includes an assessment of the potential impacts of material environmental, social and governance (ESG) factors on the long-term risk and return profile of a company. We also consider a company’s price/earnings ratio, price/cash flow ratio, profit margins and liquidation value.

The Fund may, from time to time, seek to hedge (protect) against currency risks, using certain currency-related derivative instruments. The Fund may also use a variety of equity-related derivatives for various purposes including enhancing Fund returns, increasing liquidity and gaining exposure to particular markets in more efficient or less expensive ways.

Manager’s Discussion

During the six months under review, key contributors to the Fund’s performance relative to the MSCI ACWI included stock selection in the materials, health care and industrials sectors, as well as underweighted allocations in the materials and industrials sectors and an overweighted allocation in the health care sector.

Within materials, Canadian mining company Wheaton Precious Metals aided relative results. Its stock performed particularly well in the first half of 2020 as the price of gold reached multi-year highs.

In the health care sector, U.S. biotechnology firm Gilead Sciences, U.S.-listed pharmaceutical products company Allergan (not held at period-end) and French pharmaceuticals firm Sanofi boosted relative performance. Gilead Sciences performed well due to indications that its remdesivir drug was a leading candidate for coronavirus treatment. The drug has received approval from the U.S. Food and Drug Administration.

In the industrials sector, U.S. diesel engine and military truck manufacturer Navistar International (not part of the index; not held at period-end) supported relative results.

Other key individual contributors to relative performance included U.S. supermarket operator Kroger, which benefited from consumer stockpiling ahead of an extended period of stay-at-home measures.

In contrast, key detractors from the Fund’s relative performance included stock selection and an underweighting in the information technology (IT) sector and stock selection in the communication services and consumer discretionary sectors.

Semiannual Report             TG-3

TEMPLETON GROWTH VIP FUND

Top 10 Holdings
6/30/20
Company Sector/Industry, Country	% of Total Net Assets
Wheaton Precious Metals Corp. Metals & Mining, Canada		3.2%
Sanofi Pharmaceuticals, France		2.9%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		2.7%
Roche Holding AG Pharmaceuticals, Switzerland		2.4%
Verizon Communications Inc. Diversified Telecommunication Services, U.S.		2.1%
Comcast Corp. Media, U.S.		2.1%
E.ON SE Multi-Utilities, Germany		2.1%
Dollar Tree Inc. Multiline Retail, U.S.		2.0%
Siemens AG Industrial Conglomerates, Germany		1.9%
Oracle Corp. Software, U.S.		1.8%

Within IT, our position in Japanese electronic equipment manufacturer Kyocera hindered relative results.

In the communication services sector, our positions in Luxembourg-based communication satellite owner SES and diversified telecommunication services provider Singapore Telecommunications (not held at period-end) hindered relative results.

In consumer discretionary, our position in U.K. specialty retailer Kingfisher (not held at period-end) hurt relative performance.

Other key individual detractors from relative performance included shares in U.S. energy exploration and production firm Apache (not held at period-end), U.K.-domiciled, Asia-focused lender Standard Chartered (not held at period-end) and French banking and financial services provider BNP Paribas (not held at period-end). Apache’s shares declined as sharply lower oil prices raised concerns about cash flow pressures and balance sheet dynamics. Standard Chartered was negatively impacted by escalating turmoil in Hong Kong. BNP Paribas declined due to broad-based economic fears and low interest rates.

From a geographic perspective, stock selection and an underweighting in the Middle East and Africa, namely in Israel, contributed to the Fund’s relative performance. In North America, stock selection and an underweighting in the U.S. detracted from relative results, while stock selection in Canada contributed. In Europe, relative weakness in the U.K., France and the Netherlands more than offset relative strength in Germany and Switzerland. In Asia, our positions in China, Hong Kong and Japan hindered relative results.

Thank you for your participation in Templeton Growth VIP Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of June 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

TG-4     Semiannual Report

TEMPLETON GROWTH VIP FUND

Class 4 Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract Level: (1) transaction expenses can include sales charges (loads) on purchases, surrender fees, transfer fees and premium taxes; and (2) ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses. The table below shows Fund-level ongoing expenses and can help you understand these costs and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The table below provides information about the actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of ongoing Fund expenses but does not include the effect of ongoing Contract expenses, is used to calculate the “Ending Account Value.” You can estimate the Fund-level expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number under the headings “Actual” and “Fund-Level Expenses Paid During Period” (if Fund-Level Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the estimated expenses paid this period at the Fund level are $64.50.

Hypothetical Example for Comparison with Other Mutual Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other mutual funds offered through the Contract. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds offered through the Contract.

Please note that expenses shown in the table are meant to highlight ongoing costs at the Fund level only and do not reflect any ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract levels. In addition, while the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 1/1/20	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Ending Account Value 6/30/20	Fund-Level Expenses Paid During Period 1/1/20–6/30/201, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$864.80	$5.80	$1,018.65	$6.27	1.25%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

Semiannual Report             TG-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Growth VIP Fund

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$11.15			$12.44			$16.24			$13.93			$13.54			$14.85
Income from investment operationsa:
Net investment incomeb		0.10			0.30			0.28			0.29			0.26			0.28
Net realized and unrealized gains (losses)		(1.59	)		1.30			(2.42	)		2.30			0.96			(1.17	)
Total from investment operations		(1.49	)		1.60			(2.14	)		2.59			1.22			(0.89	)
Less distributions from:
Net investment income		(0.33	)		(0.40	)		(0.35	)		(0.28	)		(0.31	)		(0.42	)
Net realized gains		—			(2.49	)		(1.31	)		—			(0.52	)		—
Total distributions		(0.33	)		(2.89	)		(1.66	)		(0.28	)		(0.83	)		(0.42	)
Net asset value, end of period		$ 9.33			$11.15			$12.44			$16.24			$13.93			$13.54
Total returnc		(13.41)%			15.43%			(14.61)%			18.77%			9.90%			(6.24)%
Ratios to average net assetsd
Expensese		0.90%			0.86%			0.83%			0.82%f			0.82%			0.80%
Net investment income		1.95%			2.52%			1.90%			1.94%			2.01%			1.96%
Supplemental data
Net assets, end of period (000’s)		$79,370			$97,988			$354,164			$466,207			$453,997			$468,548
Portfolio turnover rate		46.03%			19.69%			29.25%			26.46%			22.88%			20.92%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

TG-6     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Growth VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.90			$12.21			$15.97			$13.70			$13.32			$14.61
Income from investment operationsa:
Net investment incomeb		0.08			0.26			0.24			0.25			0.23			0.25
Net realized and unrealized gains (losses)		(1.55	)		1.28			(2.38	)		2.26			0.94			(1.16	)
Total from investment operations		(1.47	)		1.54			(2.14	)		2.51			1.17			(0.91	)
Less distributions from:
Net investment income		(0.30	)		(0.36	)		(0.31	)		(0.24	)		(0.27	)		(0.38	)
Net realized gains		—			(2.49	)		(1.31	)		—			(0.52	)		—
Total distributions		(0.30	)		(2.85	)		(1.62	)		(0.24	)		(0.79	)		(0.38	)
Net asset value, end of period		$ 9.13			$10.90			$12.21			$15.97			$13.70			$13.32
Total returnc		(13.52)%			15.15%			(14.85)%			18.50%			9.62%			(6.49)%
Ratios to average net assetsd
Expensese		1.15%			1.11%			1.08%			1.07%f			1.07%			1.05%
Net investment income		1.70%			2.27%			1.65%			1.69%			1.76%			1.71%
Supplemental data
Net assets, end of period (000’s)		$521,323			$659,412			$625,311			$879,521			$876,128			$921,895
Portfolio turnover rate		46.03%			19.69%			29.25%			26.46%			22.88%			20.92%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TG-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Growth VIP Fund (continued)

	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31,
				2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$11.07			$12.36			$16.13			$13.83			$13.44			$14.73
Income from investment operationsa:
Net investment incomeb		0.08			0.26			0.23			0.24			0.22			0.23
Net realized and unrealized gains (losses)		(1.58	)		1.29			(2.40	)		2.28			0.94			(1.16	)
Total from investment operations		(1.50	)		1.55			(2.17	)		2.52			1.16			(0.93	)
Less distributions from:
Net investment income		(0.28	)		(0.35	)		(0.29	)		(0.22	)		(0.25	)		(0.36	)
Net realized gains		—			(2.49	)		(1.31	)		—			(0.52	)		—
Total distributions		(0.28	)		(2.84	)		(1.60	)		(0.22	)		(0.77	)		(0.36	)
Net asset value, end of period		$ 9.29			$11.07			$12.36			$16.13			$13.83			$13.44
Total returnc		(13.52)%			14.97%			(14.88)%			18.38%			9.47%			(6.54)%
Ratios to average net assetsd
Expensese		1.25%			1.21%			1.18%			1.17%f			1.17%			1.15%
Net investment income		1.60%			2.17%			1.55%			1.59%			1.66%			1.61%
Supplemental data
Net assets, end of period (000’s)		$22,083			$27,330			$28,238			$38,798			$43,286			$47,777
Portfolio turnover rate		46.03%			19.69%			29.25%			26.46%			22.88%			20.92%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle. Total return is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^fBenefit of expense reduction rounds to less than 0.01%.

TG-8     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2020 (unaudited)

Templeton Growth VIP Fund
		Country		Shares		Value
	Common Stocks 86.3%
	Aerospace & Defense 0.9%
	BAE Systems PLC		United Kingdom		936,202	$	5,597,756
	Air Freight & Logistics 1.3%
	United Parcel Service Inc., B		United States		70,479		7,835,855
	Airlines 0.6%
	Japan Airlines Co. Ltd.		Japan		197,900		3,571,208
	Auto Components 1.0%
	BorgWarner Inc.		United States		93,910		3,315,023
	Lear Corp.		United States		27,913		3,043,075
							6,358,098
	Automobiles 1.8%
	Honda Motor Co. Ltd.		Japan		316,000		8,169,776
	Isuzu Motors Ltd.		Japan		304,100		2,763,459
							10,933,235
	Banks 2.6%
	Bangkok Bank PCL, fgn		Thailand		1,552,060		5,418,671
	KB Financial Group Inc.		South Korea		159,595		4,530,159
	Sumitomo Mitsui Financial Group Inc.		Japan		226,060		6,379,818
							16,328,648
	Beverages 5.4%
	Anheuser-Busch InBev SA/NV		Belgium		229,367		11,305,966
a	Kirin Holdings Co. Ltd.		Japan		497,400		10,485,065
	Pernod Ricard SA		France		31,230		4,917,237
	Suntory Beverage & Food Ltd.		Japan		185,560		7,240,223
							33,948,491
	Biotechnology 2.3%
	AbbVie Inc.		United States		45,763		4,493,011
	Gilead Sciences Inc.		United States		125,136		9,627,964
							14,120,975
	Chemicals 0.7%
	DuPont de Nemours Inc.		United States		86,981		4,621,301
	Diversified Telecommunication Services 2.1%
	Verizon Communications Inc.		United States		240,340		13,249,944
	Electrical Equipment 1.2%
	Mitsubishi Electric Corp.		Japan		565,700		7,388,758
	Electronic Equipment, Instruments & Components 1.7%
	Kyocera Corp.		Japan		192,100		10,485,694
	Entertainment 1.0%
	The Walt Disney Co.		United States		56,090		6,254,596
	Food & Staples Retailing 4.0%
	The Kroger Co.		United States		262,521		8,886,336
	Seven & i Holdings Co. Ltd.		Japan		233,500		7,638,607
	Sysco Corp.		United States		150,174		8,208,511
							24,733,454

Semiannual Report             TG-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Food Products 1.5%
	Kellogg Co.		United States		144,817	$	9,566,611
	Gas Utilities 0.5%
	Kunlun Energy Co. Ltd.		China		4,364,470		2,858,389
	Health Care Equipment & Supplies 1.5%
	Medtronic PLC		United States		46,160		4,232,872
	Zimmer Biomet Holdings Inc		United States		40,829		4,873,349
							9,106,221
	Health Care Providers & Services 0.5%
b	Laboratory Corp. of America Holdings		United States		19,533		3,244,627
	Hotels, Restaurants & Leisure 4.8%
	Compass Group PLC		United Kingdom		366,778		5,046,095
	Galaxy Entertainment Group Ltd.		Macau		1,031,300		7,074,411
	InterContinental Hotels Group PLC		United Kingdom		96,760		4,271,311
	Starbucks Corp.		United States		46,480		3,420,463
	Whitbread PLC		United Kingdom		45,548		1,253,089
	Yum China Holdings Inc.		China		181,361		8,718,023
							29,783,392
	Household Durables 3.2%
	Gree Electric Appliances Inc. of Zhuhai		China		379,820		3,054,252
	Panasonic Corp.		Japan		1,127,450		9,886,661
	Sony Corp.		Japan		98,620		6,807,751
							19,748,664
	Industrial Conglomerates 1.9%
	Siemens AG		Germany		100,557		11,858,349
	Insurance 1.5%
	AIA Group Ltd.		Hong Kong		977,000		9,142,317
	Interactive Media & Services 1.0%
b	Baidu Inc., ADR		China		50,650		6,072,429
	Internet & Direct Marketing Retail 2.7%
b	Alibaba Group Holding Ltd.		China		280,370		7,565,395
b	Booking Holdings Inc.		United States		5,950		9,474,423
							17,039,818
	IT Services 0.4%
b	EPAM Systems Inc.		United States		11,016		2,776,142
	Machinery 2.7%
	Komatsu Ltd.		Japan		440,500		9,021,669
	Makita Corp.		Japan		137,200		4,989,203
	Stanley Black & Decker Inc.		United States		22,400		3,122,112
							17,132,984
	Marine 1.4%
	AP Moeller-Maersk A/S, B		Denmark		7,724		9,051,690

TG-10         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Media 3.0%
	Comcast Corp., A		United States		333,281	$	12,991,293
	SES SA, IDR		Luxembourg		881,520		6,022,792
							19,014,085
	Metals & Mining 5.4%
b	ArcelorMittal SA		France		505,963		5,358,614
	Freeport-McMoRan Inc.		United States		734,044		8,492,889
	Wheaton Precious Metals Corp.		Canada		453,417		19,942,933
							33,794,436
	Multiline Retail 2.1%
b	Dollar Tree Inc.		United States		138,022		12,791,879
	Multi-Utilities 3.2%
	E.ON SE		Germany		1,144,619		12,918,941
	Veolia Environnement SA		France		299,720		6,767,422
							19,686,363
	Oil, Gas & Consumable Fuels 2.8%
	BP PLC		United Kingdom		2,100,831		8,048,044
	Husky Energy Inc.		Canada		686,221		2,254,463
	Royal Dutch Shell PLC, B		United Kingdom		467,119		7,081,374
							17,383,881
	Pharmaceuticals 8.6%
	Bayer AG		Germany		150,406		11,147,627
	Roche Holding AG		Switzerland		42,833		14,839,473
	Sanofi		France		177,087		18,058,539
	Takeda Pharmaceutical Co. Ltd.		Japan		261,562		9,397,383
							53,443,022
	Real Estate Management & Development 1.1%
	CK Asset Holdings Ltd.		Hong Kong		824,190		4,942,463
	Sun Hung Kai Properties Ltd.		Hong Kong		145,260		1,855,718
							6,798,181
	Road & Rail 0.6%
	East Japan Railway Co.		Japan		31,800		2,203,589
	Keisei Electric Railway Co. Ltd.		Japan		44,600		1,397,782
							3,601,371
	Semiconductors & Semiconductor Equipment 1.0%
	NXP Semiconductors NV		Netherlands		55,236		6,299,113
	Software 1.8%
	Oracle Corp.		United States		208,438		11,520,368
	Specialty Retail 2.1%
	Ross Stores Inc.		United States		72,630		6,190,981
	The TJX Cos. Inc.		United States		132,377		6,692,981
							12,883,962
	Technology Hardware, Storage & Peripherals 2.7%
	Samsung Electronics Co. Ltd.		South Korea		373,630		16,583,973

Semiannual Report             TG-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

		Country		Shares		Value
	Common Stocks (continued)
	Textiles, Apparel & Luxury Goods 1.7%
b	Adidas AG		Germany		14,503	$	3,823,399
	Burberry Group PLC		United Kingdom		355,780		7,029,960
							10,853,359
	Total Common Stocks (Cost $502,481,970)						537,463,639
				Principal   Amount*
	Short Term Investments 9.5%
	U.S. Government and Agency Securities (Cost $400,000) 0.1%
c	FFCB, 7/01/20		United States	$	400,000		400,000
	Time Deposits 7.7%
	BNP Paribas SA/New York NY, 0.06%, 7/01/20		France		28,000,000		28,000,000
	Royal Bank of Canada, 0.08%, 7/01/20		Canada		20,000,000		20,000,000
	Total Time Deposits (Cost $48,000,000)						48,000,000
				Shares
	Investments from Cash Collateral Received for Loaned Securities 1.7%
	Money Market Funds (Cost $10,490,166) 1.7%
d,e	Institutional Fiduciary Trust Money Market Portfolio, 0.00%		United States		10,490,166		10,490,166
	Total Investments (Cost $561,372,136) 95.8%						596,353,805
	Other Assets, less Liabilities 4.2%						26,422,056
	Net Assets 100.0%					$	622,775,861

See Abbreviations on page TG-24.

^*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aA portion or all of the security is on loan at June 30, 2020. See Note 1(c).

^bNon-income producing.

^cThe security was issued on a discount basis with no stated coupon rate.

^dSee Note 3(e) regarding investments in affiliated management investment companies.

^eThe rate shown is the annualized seven-day effective yield at period end.

TG-12     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2020 (unaudited)

Templeton Growth

VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	550,881,970
Cost - Non-controlled affiliates (Note 3e)		10,490,166
Value - Unaffiliated issuers+	$	585,863,639
Value - Non-controlled affiliates (Note 3e)		10,490,166
Cash		6,514
Foreign currency, at value (cost $34,109,277)		33,994,768
Receivables:
Investment securities sold		1,577,822
Capital shares sold		600,726
Dividends and interest		1,697,996
European Union tax reclaims		787,852
Other assets		594
Total assets		635,020,077
Liabilities:
Payables:
Investment securities purchased		532,391
Capital shares redeemed		410,181
Management fees		436,346
Distribution fees		114,738
Payable upon return of securities loaned		10,490,166
Accrued expenses and other liabilities		260,394
Total liabilities		12,244,216
Net assets, at value	$	622,775,861
Net assets consist of:
Paid-in capital	$	670,491,362
Total distributable earnings (losses)		(47,715,501	)
Net assets, at value	$	622,775,861
Class 1:
Net assets, at value	$	79,369,895
Shares outstanding		8,504,503
Net asset value and maximum offering price per share		$9.33
Class 2:
Net assets, at value	$	521,322,739
Shares outstanding		57,079,661
Net asset value and maximum offering price per share		$9.13
Class 4:
Net assets, at value	$	22,083,227
Shares outstanding		2,377,705
Net asset value and maximum offering price per share		$9.29
+Includes securities loaned	$	9,960,811

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TG-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2020 (unaudited)

	Templeton Growth VIP Fund
Investment income:
Dividends:(net of foreign taxes)*
Unaffiliated issuers	$	9,136,701
Interest:
Unaffiliated issuers		138,349
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		9,982
Non-controlled affiliates (Note 3e)		1,609
Total investment income		9,286,641
Expenses:
Management fees (Note 3a)		2,742,841
Distribution fees: (Note 3c)
Class 2		683,322
Class 4		40,255
Custodian fees (Note 4)		66,119
Reports to shareholders		83,758
Professional fees		53,098
Trustees’ fees and expenses		2,617
Other		(2,366	)
Total expenses		3,669,644
Expenses waived/paid by affiliates (Note 3e)		(4,997	)
Net expenses		3,664,647
Net investment income		5,621,994
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:#
Unaffiliated issuers		(69,975,086	)
Foreign currency transactions		312,185
Net realized gain (loss)		(69,662,901	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(40,871,435	)
Translation of other assets and liabilities denominated in foreign currencies		(162,654	)
Change in deferred taxes on unrealized appreciation		388,289
Net change in unrealized appreciation (depreciation)		(40,645,800	)
Net realized and unrealized gain (loss)		(110,308,701	)
Net increase (decrease) in net assets resulting from operations	$	(104,686,707	)
*Foreign taxes withheld on dividends	$	852,011
#Net of foreign taxes	$	523,662

TG-14     Semiannual Report   |    The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Growth VIP Fund
	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	5,621,994			$     19,938,552
Net realized gain (loss)		(69,662,901	)		(13,584,687	)
Net change in unrealized appreciation (depreciation)		(40,645,800	)		128,174,019
Net increase (decrease) in net assets resulting from operations		(104,686,707	)		134,527,884
Distributions to shareholders:
Class 1		(2,680,578	)		(20,901,613	)
Class 2		(16,492,099	)		(139,418,589	)
Class 4		(659,619	)		(6,044,047	)
Total distributions to shareholders		(19,832,296	)		(166,364,249	)
Capital share transactions: (Note 2)
Class 1		(3,075,020	)		(275,115,440	)
Class 2		(33,359,573	)		82,734,600
Class 4		(1,000,215	)		1,233,451
Total capital share transactions		(37,434,808	)		(191,147,389	)
Net increase (decrease) in net assets		(161,953,811	)		(222,983,754	)
Net assets:
Beginning of period		784,729,672			1,007,713,426
End of period	$	622,775,861			$     784,729,672

The accompanying notes are an integral part of these financial statements.    |   Semiannual Report             TG-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Templeton Growth VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Growth VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2 and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued

according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Investments in open-end mutual funds are valued at the closing NAV. Investments in time deposits are valued at cost, which approximates fair value.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the

TG-16 Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Fund’s portfolio securities to the latest indications of fair value at 4 p.m Eastern time. At June 30, 2020, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy. See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.   Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar

equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c.   Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

d.   Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital

Semiannual Report             TG-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

1.   Organization and Significant Accounting Policies (continued)

d.   Income and Deferred Taxes (continued)

gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

As a result of several court cases, in certain countries across the European Union, the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). These additional filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU reclaims is reflected as other income in the Statement of Operations and any related receivable, if any, is reflected as European Union tax reclaims in the Statement of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, when EU reclaims are received by the Fund and the Fund previously passed foreign tax credit on to its shareholders, the Fund must either amend historic tax reporting to shareholders or enter into a closing agreement with the Internal Revenue Service (IRS) in order to pay the associated tax liability on behalf of the Fund’s shareholders.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of June 30, 2020, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e.   Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income

and estimated expenses are accrued daily. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

f.   Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

g.   Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is

TG-18         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2.   Shares of Beneficial Interest

At June 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended June 30, 2020						Year Ended December 31, 2019
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		47,404		$	449,446			68,873		$	790,173
Shares issued in reinvestment of distributions		287,000			2,680,578			2,083,910			20,901,613
Shares redeemed		(614,433	)		(6,205,044	)		(21,838,635	)		(296,807,226	)
Net increase (decrease)		(280,029	)	$	(3,075,020	)		(19,685,852	)	$	(275,115,440	)
Class 2 Shares:
Shares sold		2,219,982		$	19,766,911			3,619,417		$	39,550,989
Shares issued in reinvestment of distributions		1,804,387			16,492,099			14,197,412			139,418,589
Shares redeemed		(7,418,146	)		(69,618,583	)		(8,538,686	)		(96,234,978	)
Net increase (decrease)		(3,393,777	)	$	(33,359,573	)		9,278,143		$	82,734,600
Class 4 Shares:
Shares sold		86,631		$	804,235			148,576		$	1,690,506
Shares issued in reinvestment of distributions		71,003			659,619			605,616			6,044,047
Shares redeemed		(248,136	)		(2,464,069	)		(571,458	)		(6,501,102	)
Net increase (decrease)		(90,502	)	$	(1,000,215	)		182,734		$	1,233,451

3.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Templeton Global Advisors Limited (Global Advisors)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

Semiannual Report             TG-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

3.   Transactions with Affiliates (continued)

a.   Management Fees

The Fund pays an investment management fee to Global Advisors based on the average daily net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
1.000%	Up to and including $100 million
0.900%	Over $100 million, up to and including $250 million
0.800%	Over $250 million, up to and including $500 million
0.750%	Over $500 million, up to and including $1 billion
0.700%	Over $1 billion, up to and including $5 billion
0.675%	Over $5 billion, up to and including $10 billion
0.655%	Over $10 billion, up to and including $15 billion
0.635%	Over $15 billion, up to and including $20 billion
0.615%	In excess of $20 billion

For the period ended June 30, 2020, the annualized gross effective investment management fee rate was 0.843% of the Fund’s average daily net assets.

b.   Administrative Fees

Under an agreement with Global Advisors, FT Services provides administrative services to the Fund. The fee is paid by Global Advisors based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c.   Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.35% per year of its average daily net assets of each class. The Board has agreed to limit the current rate to 0.25% per year for Class 2. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d.     Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

TG-20     Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

e.     Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended June 30, 2020, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.00%		$        —		$41,621,171		$(31,131,005	)		$        —		$        —		$10,490,166		10,490,166		$1,609

4.   Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended June 30, 2020, there were no credits earned.

5.   Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	1,856,399
Long term		3,209,150
Total capital loss carryforwards	$	5,065,549

At June 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	575,582,222
Unrealized appreciation	$	79,117,116
Unrealized depreciation		(58,345,533)
Net unrealized appreciation (depreciation)	$	20,771,583

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of wash sales.

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $268,297,262 and $335,926,574, respectively.

Semiannual Report             TG-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

6.   Investment Transactions (continued)

At June 30, 2020, in connection with securities lending transactions, the Fund loaned equity investments and received $10,490,166 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7.   Concentration of Risk

Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

8.   Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended June 30, 2020, the Fund did not use the Global Credit Facility.

10.   Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

TG-22     Semiannual Report       

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

A summary of inputs used as of June 30, 2020, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:
Aerospace & Defense	$	—	$	5,597,756	$	—	$	5,597,756
Airlines		—		3,571,208		—		3,571,208
Automobiles		—		10,933,235		—		10,933,235
Banks		—		16,328,648		—		16,328,648
Beverages		—		33,948,491		—		33,948,491
Electrical Equipment		—		7,388,758		—		7,388,758
Electronic Equipment, Instruments &
Components		—		10,485,694		—		10,485,694
Food & Staples Retailing		17,094,847		7,638,607		—		24,733,454
Gas Utilities		—		2,858,389		—		2,858,389
Hotels, Restaurants & Leisure		12,138,486		17,644,906		—		29,783,392
Household Durables		—		19,748,664		—		19,748,664
Industrial Conglomerates		—		11,858,349		—		11,858,349
Insurance		—		9,142,317		—		9,142,317
Internet & Direct Marketing Retail		9,474,423		7,565,395		—		17,039,818
Machinery		3,122,112		14,010,872		—		17,132,984
Marine		—		9,051,690		—		9,051,690
Media		12,991,293		6,022,792		—		19,014,085
Metals & Mining		28,435,822		5,358,614		—		33,794,436
Multi-Utilities		—		19,686,363		—		19,686,363
Oil, Gas & Consumable Fuels		2,254,463		15,129,418		—		17,383,881
Pharmaceuticals		—		53,443,022		—		53,443,022
Real Estate Management & Development		—		6,798,181		—		6,798,181
Road & Rail		—		3,601,371		—		3,601,371
Technology Hardware, Storage & Peripherals		—		16,583,973		—		16,583,973
Textiles, Apparel & Luxury Goods		—		10,853,359		—		10,853,359
All Other Equity Investments		126,702,121		—		—		126,702,121
Short Term Investments		10,490,166		48,400,000		—		58,890,166
Total Investments in Securities	$	222,703,733	$	373,650,072	$	—	$	596,353,805

^aFor detailed categories, see the accompanying Statement of Investments.

11.   New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying this ASU.

Semiannual Report             TG-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

12.     Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Selected Portfolio
ADR	American Depositary Receipt
FFCB	Federal Farm Credit Bank
IDR	International Depositary Receipt

TG-24     Semiannual Report       

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Growth VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 11, 2020, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid, and foreign source income as reported by the Fund to shareholders of record.

Class	Foreign Tax Paid Per Share		Foreign Source Income Per Share
Class 1		$0.0280		$0.2741
Class 2		$0.0280		$0.2517
Class 4		$0.0280		$0.2415

Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.

Foreign Source Income Per Share (Column 2) is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends.

Semiannual Report             TG-25

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Index Descriptions

The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes for the NR or Net Return Index). They do not reflect any fees, expenses or sales charges.

For Russell Indexes: Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company.

See www.franklintempletondatasources.com for additional data provider information.

Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index measures the performance of U.S. Treasury bills that have a remaining maturity of greater than or equal to one month and less than three months.

Bloomberg Barclays U.S. Aggregate Bond Index is a market capitalization-weighted index representing the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity and must be rated investment grade (Baa3/ BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

Bloomberg Barclays U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes U.S. dollar-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.

Bloomberg Barclays U.S. Corporate High Yield Bond Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and Standard & Poor’s is Ba1/BB+/BB+ or below.

Bloomberg Barclays U.S. Corporate Investment Grade Index is a broad-based benchmark that measures the investment-grade, fixed-rate, taxable corporate bond market.

Bloomberg Barclays U.S. Government Index: Intermediate Component is the intermediate component of the Barclays U.S. Government Index, which includes public obligations of the U.S. Treasury with at least one year to final maturity and publicly issued debt of U.S. government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. government.

Bloomberg Barclays U.S. High Yield Very Liquid Index is a component of the U.S. Corporate High Yield Index that is designed to track a more liquid component of the U.S. dollar-denominated, high-yield fixed-rate corporate bond market.

Bloomberg Barclays U.S. Treasury Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with at least one year until final maturity.

FTSE^® EPRA^®/NAREIT^® Developed Index

is a free float-adjusted index designed to measure the performance of publicly traded real estate securities in the North American, European and Asian real estate markets.

FTSE World Government Bond Index

is a market capitalization-weighted index consisting of investment-grade world government bond markets.

J.P. Morgan (JPM) Global Government Bond Index (GGBI) tracks total returns for liquid, fixed-rate, domestic government bonds with maturities greater than one year issued by developed countries globally.

Lipper Multi-Sector Income Funds Classification Average is calculated by averaging the total returns of all funds within the Lipper Multi-Sector Income Funds Classification in the Lipper Open-End underlying funds universe. Lipper Multi-Sector Income Funds are defined as funds that seek current income by allocation of assets among different fixed income securities sectors (not primarily in one sector except for defensive purposes), including U.S. and foreign governments, with a significant portion rated below investment grade. For the six-month period ended 6/30/20, there were 37 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

Lipper VIP General U.S. Government Funds Classification Average is an equally weighted average calculation of performance figures for all funds within the Lipper General U.S. Government Funds classification in the Lipper VIP underlying funds universe. Lipper General U.S. Government Funds invest primarily in U.S. government and agency issues. For the six-month period ended 6/30/20, there were 26 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

I-1         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

INDEX DESCRIPTIONS

MSCI All Country Asia Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in developed and emerging markets in Asia.

MSCI All Country World Index (ACWI) is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed and emerging markets.

MSCI All Country World Index (ACWI) ex USA Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed and emerging markets, excluding the U.S.

MSCI Europe Index is a free float-adjusted market capitalization-weighted index designed to measure the equity market performance of developed markets in Europe.

MSCI Europe, Australasia, Far East (EAFE) Index is a free float-adjusted market capitalization-weighted index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.

MSCI Emerging Markets (EM) Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global emerging markets.

MSCI USA High Dividend Yield Index is based on the MSCI USA Index, its parent index, and includes large- and mid-capitalization stocks. The index is designed to reflect the performance of equities in the parent index (excluding real estate investment trusts) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent.

MSCI World ex USA Index-NR is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets, excluding the U.S. Net Returns (NR) include income net of tax withholding when dividends are paid.

MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets.

Russell 1000^® Growth Index is market capitalization weighted and measures performance of those Russell 1000^® Index companies with relatively higher price-to-book ratios and higher forecasted growth values.

Russell 1000^® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000^® Index, which represents the majority of the U.S. market’s total capitalization.

Russell 1000^® Value Index is market capitalization weighted and measures performance of those Russell 1000^® Index companies with relatively lower price-to-book ratios and lower forecasted growth values.

Russell 2000^® Index is market capitalization weighted and measures performance of the 2,000 smallest companies in the Russell 3000^® Index, which represent a small amount of the total market capitalization of the Russell 3000^® Index.

Russell 2000^® Value Index is market capitalization weighted and measures performance of those Russell 2000^® Index companies with relatively lower price-to-book ratios and lower forecasted growth values.

Russell 3000^® Index is market capitalization weighted and represents the majority of the U.S. market’s total capitalization.

Russell 3000^® Growth Index is market capitalization weighted and measures performance of those Russell 3000^® Index companies with relatively higher price-to-book ratios and higher forecasted growth values.

Russell Midcap^® Growth Index is market capitalization weighted and measures performance of those Russell Midcap^® Index companies with relatively higher price-to-book ratios and higher forecasted growth values.

Russell Midcap^® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000^® Index, which represents a modest amount of the Russell 1000^® Index’s total market capitalization.

Standard & Poor’s^® 500 Index (S&P 500^®)

is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance.

Standard & Poor’s^®/International Finance Corporation Investable (S&P/IFCI) Composite Index is a free float-adjusted, market capitalization-weighted index designed to measure equity performance in global emerging markets.

Semiannual Report                 I-2

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

Shareholder Information

Board Approval of Investment

Management Agreements

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Franklin Allocation VIP Fund

Franklin Flex Cap Growth VIP Fund

Franklin Global Real Estate VIP Fund

Franklin Growth and Income VIP Fund

Franklin Income VIP Fund

Franklin Large Cap Growth VIP Fund

Franklin Mutual Global Discovery VIP Fund

Franklin Mutual Shares VIP Fund

Franklin Rising Dividends VIP Fund

Franklin Small Cap Value VIP Fund

Franklin Small-Mid Cap Growth VIP Fund

Franklin Strategic Income VIP Fund

Franklin U.S. Government Securities VIP Fund

Franklin VolSmart Allocation VIP Fund

Templeton Developing Markets VIP Fund

Templeton Foreign VIP Fund

Templeton Global Bond VIP Fund

Templeton Growth VIP Fund

(each a Fund)

At a meeting held on April 7, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton Variable Insurance Products Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the (i) investment management agreement between Franklin Advisers, Inc. (FAI) and the Trust, on behalf of each of Franklin Allocation VIP Fund, Franklin Flex Cap Growth VIP Fund, Franklin Growth and Income VIP Fund, Franklin Income VIP Fund, Franklin Large Cap Growth VIP Fund, Franklin Rising Dividends VIP Fund, Franklin Small-Mid Cap Growth VIP Fund, Franklin Strategic Income VIP Fund, Franklin U.S. Government Securities VIP Fund, Franklin VolSmart Allocation VIP Fund, and Templeton Global Bond VIP Fund; (ii) the investment sub-advisory agreement between FAI and Franklin Templeton Institutional, LLC (FTIL), an affiliate of FAI, on behalf of Franklin Allocation VIP Fund; (iii) the investment sub-advisory agreement between FAI and Templeton Global Advisors Limited (TGAL), an affiliate of FAI, on behalf of Franklin Allocation VIP Fund; (iv) the investment management agreement between FTIL and the Trust, on behalf of Franklin Global Real Estate VIP Fund; (v) the investment management agreement between Franklin

Mutual Advisers, LLC (FMA) and the Trust, on behalf of each of Franklin Mutual Global Discovery VIP Fund, Franklin Mutual Shares VIP Fund and Franklin Small Cap Value VIP Fund; (vi) the investment management agreement between Templeton Asset Management Ltd. (TAML) and the Trust, on behalf of Templeton Developing Markets VIP Fund; (vii) the investment management agreement between Templeton Investment Counsel, LLC (TICL) and the Trust, on behalf of Templeton Foreign VIP Fund; and (viii) the investment management agreement between TGAL and the Trust, on behalf of Templeton Growth VIP Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAI, FTIL, FMA, TAML, TICL and TGAL are each referred to herein as a Manager.

In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to each Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Managers relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by each Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by each Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.

In approving the continuance of each Management Agreement, the Board, including a majority of the

SI-1         Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by each Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of each Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses and shareholder services; legal and compliance matters; risk controls; pricing and other services provided by each Manager and its affiliates; and management fees charged by each Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board also reviewed and considered an annual report on payments made by Franklin Templeton (FT) or the Funds to financial intermediaries, as well as a memorandum relating to third-party servicing arrangements, which included discussion of the changing distribution landscape for the Funds. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans and developing strategies to address areas of heightened concern in the mutual fund industry, such as cybersecurity and liquidity risk management.

The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Managers’ parent, and its commitment to the mutual fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions, and growth opportunities, as evidenced by its

upcoming acquisition of the Legg Mason companies. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.

Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by each Manager and its affiliates to the Funds and their shareholders.

Fund Performance

The Board reviewed and considered the performance results of each Fund over various time periods ended January 31, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of mutual funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds included in a Performance Universe. The Board also considered the performance returns for the Franklin Income VIP Fund and Franklin VolSmart Allocation VIP Fund in comparison to the performance returns of a customized peer group (Performance Customized Peer Group) selected by the Manager. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. A summary of each Fund’s performance results is below.

Franklin Allocation VIP Fund - The Performance Universe for this Fund included the Fund and all mixed-asset target allocation growth funds underlying variable insurance products (VIPs). The Board noted that the Fund’s annualized income return for the one-, three-, five- and 10-year periods was above the median and in the first quintile (best) of its Performance Universe. The Board also noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that the Performance Universe was not directly comparable to the Fund as the Performance Universe includes funds with equity exposures between 60%-80% and the Fund maintains a strategic asset allocation of 60% equities. Management further explained that the Fund’s strategic allocation has served as a headwind for peer-relative returns since the Fund’s repositioning on May 1, 2019 to a direct investment fund with

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an actively managed dynamic allocation strategy. The Board noted management’s explanations and determined that, in light of the recent strategy changes, additional time will be needed to evaluate the effectiveness of management’s actions. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored.

Franklin Flex Cap Growth VIP Fund - The Performance Universe for this Fund included the Fund and all large-cap growth funds underlying VIPs. The Board noted that the Fund’s annualized total return for the three-year period was above the median of its Performance Universe, but for the one-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that during the one-year period, Information Technology and Industrials were the two largest sectors of underperformance for the Fund. Management further explained that the Fund’s cash position was also a detractor from the Fund’s performance. The Board noted management’s steps to address the underperformance of the Fund. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored. In doing so, the Board noted that, while below median, the Fund’s annualized total return for the one-, five- and 10-year periods was 23.48%, 12.99% and 12.87%, respectively.

Franklin Growth and Income VIP Fund - The Performance Universe for the Fund included the Fund and all equity income funds underlying VIPs. The Board noted that the Fund’s annualized income return and annualized total return for the one-, three-, five- and 10-year periods were above the medians of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Franklin Income VIP Fund - The Performance Universe for the Fund included the Fund and all mixed-asset target allocation moderate funds underlying VIPs. The Performance Customized Peer Group for the Fund consisted of funds sorted by trailing 12-month yield and set to be top quartile (highest yield). The Board noted that the Fund’s annualized income return for the one-, three-, five- and 10-year periods was above the medians and in the first quintile (best) of its Performance Universe and Performance Customized Peer Group. The Board also noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the medians of its Performance Universe and

Performance Customized Peer Group. Given the Fund’s income-oriented investment objective, the Board concluded that the Fund’s performance was satisfactory.

Franklin Strategic Income VIP Fund - The Performance Universe for the Fund included the Fund and all multi-sector income funds underlying VIPs. The Board noted that the Fund’s annualized income return for the one-, three-, five-and 10-year periods was above the median and in the first quintile (best) of its Performance Universe. The Board also noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s relative underperformance was due, in part, to a shorter duration profile of its portfolio holdings and a reduced exposure to credit risk. The Board also noted management’s continued enhancements to the Fund’s investment process, which includes a greater role for macroeconomics and incorporates more quantitative techniques to assist with portfolio construction. Given the Fund’s income-oriented investment objective and the considerations noted above, the Board concluded that the Fund’s performance was satisfactory.

Franklin Large Cap Growth VIP Fund - The Performance Universe for the Fund included the Fund and all multi-cap growth funds underlying VIPs. The Board noted that the Fund’s annualized total return for the 10-year period was below the median of its Performance Universe, but for the one-, three- and five-year periods was above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Franklin Mutual Global Discovery VIP Fund -The Performance Universe for the Fund included the Fund and all global multi-cap value funds underlying VIPs. The Board noted that the Fund’s annualized total return for the one- and 10-year periods was above the median and in the first quintile (best) of its Performance Universe, but for the three-year period was slightly below the median of its Performance Universe and for the five-year period was equal to the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Franklin Mutual Shares VIP Fund - The Performance Universe for the Fund included the Fund and all multi-cap value funds underlying VIPs. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with

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management and management explained that the Fund’s underperformance in 2017 was material and continues to adversely impact the Fund’s ranking over longer-term periods. Management reminded the Board of the primary factors that impacted the 2017 performance, including, among factors, exposure to non-US equities and stock selection. Management then explained that, over the one-year period, the Fund’s non-equity investments and stock selection weighed on the Fund’s relative performance. Management also explained that approximately 15% of the Fund’s portfolio was in non-equity investments which relatively underperformed the robust 2019 equity market performance. Management further explained that the Fund’s cash position also weighed on relative performance. Management then discussed with the Board the actions that continue to be taken in an effort to address the sources of the Fund’s underperformance, including enhancements to the Fund’s investment process, particularly with respect to portfolio and quantitative analytics. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored.

Franklin Small-Mid Cap Growth VIP Fund - The Performance Universe for the Fund included the Fund and all mid-cap growth funds underlying VIPs. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s positioning in the energy, healthcare, consumer, materials, industrial and information technology sectors was a primary detractor from relative performance over the one-, three- and five-year periods. Management further explained that, during the one-, three- and five-year periods, the Fund had more exposure to smaller cap stocks in comparison to its peers, noting that these stocks meaningfully underperformed during the requisite periods. Management then discussed with the Board the actions that are being taken in an effort to address the sources of the Fund’s underperformance, including consolidating the Fund into fewer positions which have demonstrated certain attributes and working closely with the Investment Risk Management Group to limit the amount of risk in the Fund’s portfolio and minimize permanent loss of capital. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored. In doing so, the Board noted that, while below median, the Fund’s annualized total return for the one-,

three-, five- and 10-year periods was 20.96%, 14.29%, 9.99% and 12.87%, respectively.

Franklin Global Real Estate VIP Fund - The Performance Universe for the Fund included the Fund and all global real estate funds underlying VIPs. The Board noted that the Fund’s annualized total return for the three-, five- and 10-year periods was above the median of its Performance Universe, but for the one-year period was below the median of its Performance Universe. The Board further noted that, while below the median, the Fund’s one-year annualized total return was 12.02% and only slightly below the Performance Universe median of 13.11%. The Board concluded that the Fund’s performance was acceptable.

Franklin Rising Dividends VIP Fund - The Performance Universe for the Franklin Rising Dividends VIP Fund included the Fund and all large-cap core funds underlying VIPs. The Board noted that the Fund’s annualized total return for the three-, five- and 10-year periods was above the median of its Performance Universe, but for the one-year period was below the median of its Performance Universe. The Board further noted that, while below the median, the Fund’s one-year annualized total return was 20.55% and only slightly below the Performance Universe median of 20.92%. The Board concluded that the Fund’s performance was acceptable.

Franklin Small Cap Value VIP Fund and Templeton Developing Markets VIP Fund - The Performance Universe for the Franklin Small Cap Value VIP Fund included the Fund and all small-cap value funds underlying VIPs. The Performance Universe for the Templeton Developing Markets VIP Fund included the Fund and all emerging markets funds underlying VIPs. The Board noted that each Fund’s annualized total return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board concluded that each Fund’s performance was satisfactory.

Franklin U.S. Government Securities VIP Fund - The Performance Universe for the Fund included the Fund and all intermediate US government funds underlying VIPs. The Board noted that the Fund’s annualized income return for the one-, three-, five- and 10-year periods was above the median and in the first quintile (best) of its Performance Universe. The Board also noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. Given the Fund’s income-oriented investment objective and conservative policy of investing a significant to substantial amount in

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Ginnie Mae obligations, the Board concluded that the Fund’s performance was satisfactory.

Franklin VolSmart Allocation VIP Fund - The Performance Universe for the Fund included the Fund and all flexible portfolio funds underlying VIPs. The Performance Customized Peer Group for the Fund consisted of the Fund and all retail and institutional mixed-asset target allocation moderate funds. The Fund has been in operation for less than 10 years. The Board noted that the Fund’s annualized total return for the three- and five-year periods was below the medians of its Performance Universe and Performance Customized Peer Group, but for the one-year period was above the medians of its Performance Universe and Performance Customized Peer Group. The Board further noted that the Fund’s annualized total return for the three-year period was only 0.02% below the median of its Performance Universe and that the Fund’s annualized total return for the one-year period was 13.90% and in the second quintile of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Templeton Foreign VIP Fund - The Performance Universe for the Fund included the Fund and all international multi-cap value funds underlying VIPs. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that, even though the Fund’s peer group is comprised of multi-cap value funds, the Fund has a more intense value tilt than the Performance Universe, which has negatively impacted the Fund’s relative returns during a period of historic and sustained outperformance of growth over value. Management further explained that over the one-, three- and five-year periods, the Fund’s performance was also negatively impacted by stock selection among overweight health care holdings and underweight industrials and consumer discretionary stocks. Management then discussed with the Board the actions that are being taken in an effort to address the sources of the Fund’s underperformance, including a focus on constructing a more diversified and high-conviction portfolio. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored.

Templeton Global Bond VIP Fund - The Performance Universe for the Fund included the Fund and all global income funds underlying VIPs. The Board noted that the

Fund’s annualized income return for the one-, three-, five-and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund’s annualized total return for the one-, three- and five-year periods was below the median of its Performance Universe, but for the 10-year period was above the median of its Performance Universe. The Board discussed this performance with management and management explained that during the one-, three- and five- year periods, management largely positioned the Fund’s strategies for rising rates by maintaining low portfolio duration and aiming at a negative correlation with US Treasury returns. Management further explained that the interest-rate strategies detracted from the Fund’s relative return, while currency positions contributed to the return. Management then discussed with the Board the portfolio manager’s outlook going forward and expectation that the risk management strategies that had weighted on return would be valuable in a diversifying portfolio going forward. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored.

Templeton Growth VIP Fund - The Performance Universe for this Fund included the Fund and all global multi-cap value funds underlying VIPs. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s higher exposure to value stocks, which have experienced a period of historic underperformance, and underweight position in US stocks, as compared to peers contributed to the Fund’s relative underperformance. Management also explained that weightings in particular sectors (such as information technology, communications services, cyclical energy and financials) and overall stock selection contributed to the Fund’s relative underperformance. Management then discussed with the Board the actions that are being taken in an effort to address the sources of the Fund’s underperformance, including a focus on constructing a more diversified and high-conviction portfolio. The Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and management’s efforts should continue to be monitored.

Comparative Fees and Expenses

The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees;

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transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board also noted the quarterly and annual reports it receives on all marketing support payments made by FT to financial intermediaries. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other mutual funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the mutual funds included in an Expense Group.

Franklin Flex Cap Growth VIP Fund, Templeton Foreign VIP Fund and Templeton Growth VIP Fund - The Expense Group for the Franklin Flex Cap Growth VIP Fund included the Fund and 11 other large-cap growth funds underlying VIPs. The Expense Group for the Templeton Foreign VIP Fund included the Fund, eight other international multi-cap value funds underlying VIPs and three international large-cap value funds underlying VIPs. The Expense Group for the Templeton Growth VIP Fund included the Fund, two other global multi-cap value funds underlying VIPs, two global multi-cap core funds underlying VIPs and five global multi-cap growth funds underlying VIPs. The Board noted that the Management Rates for these Funds were above the medians of their respective Expense Groups, but their actual total expense ratios were below the medians of their respective Expense Groups. The Board further noted that the Management Rate for the Templeton Foreign VIP Fund was approximately six basis points above the median of its Expense Group and the Management Rate for the Templeton Growth VIP Fund was approximately nine basis points above the median of its Expense Group. The Board concluded that the Management Rates charged to these Funds are reasonable. In doing so, the Board noted that the

Franklin Flex Cap Growth Fund’s actual total expense ratio reflected a fee waiver from management.

Franklin Mutual Shares VIP Fund - The Expense Group for the Fund included the Fund and 10 other multi-cap value funds underlying VIPs. The Board noted that the Management Rate for the Fund was approximately 7.5 basis points above the median of its Expense Group, but its actual total expense ratio was equal to the median of its Expense Group. The Board further noted management’s explanation that the portfolio management team makes investments in distressed securities and merger arbitrage situations that are specialized in nature and therefore require additional expertise and resources, whereas the Fund’s Expense Group generally does not make such investments. The Board concluded that the Management Rate charged to the Fund is reasonable.

Franklin Strategic Income VIP Fund and Templeton Developing Markets VIP Fund - The Expense Group for the Franklin Strategic Income VIP Fund included the Fund and 10 other multi-sector income funds underlying VIPs. The Expense Group for the Templeton Developing Markets VIP Fund included the Fund and 13 other emerging markets funds underlying VIPs. The Board noted that the Management Rates for the Funds were equal to the medians of their respective Expense Groups, and their actual total expense ratios were below the medians of their respective Expense Groups. The Board concluded that the Management Rate charged to each Fund is reasonable.

Franklin Small-Mid Cap Growth VIP Fund - The Expense Group for the Franklin Small-Mid Cap Growth VIP Fund included the Fund and 12 other mid-cap growth funds underlying VIPs. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, and the actual total expense ratio for the Fund was equal to the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable.

Franklin Allocation VIP Fund, Franklin Global Real Estate VIP Fund, Franklin Large Cap Growth VIP Fund and Franklin Mutual Global Discovery VIP Fund – The Expense Group for the Franklin Allocation VIP Fund included the Fund and 10 other mixed-asset target allocation growth affiliated funds of funds underlying VIPs. The Expense Group for the Franklin Global Real Estate VIP Fund included the Fund and seven other global real estate funds underlying VIPs. The Expense Group for the Franklin Large Cap Growth VIP Fund included the Fund and 11 other multi-cap growth funds underlying

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VIPs. The Expense Group for the Franklin Mutual Global Discovery VIP Fund included the Fund, two other global multi-cap value funds underlying VIPs, two global multi-cap core funds underlying VIPs and five global multi-cap growth funds underlying VIPs. The Board noted that the Management Rates and actual total expense ratios for these Funds were above the medians of their respective Expense Groups. With respect to the Franklin Allocation VIP Fund, the Board discussed with management the reasons for the increase in the contractual management fee over the past year. Management reminded the Board that prior to May 1, 2019, the Fund was a static allocation fund of funds and did not have an investment manager or pay direct investment management fees, and that effective May 1, 2019, the Fund began investing directly in securities, entered into the Management Agreement with FAI and began paying the contractual management fee. Management also explained that Broadridge did not account for the change in the Fund’s structure and continued to use a peer group of funds of funds to compare expenses. With respect to the Franklin Mutual Global Discovery VIP Fund, the Board noted management’s explanation that the portfolio management team makes investments in distressed securities and merger arbitrage situations that are specialized in nature and therefore require additional expertise and resources, whereas the Fund’s Expense Group generally does not make such investments. The Board also noted that the Fund’s actual total expense ratio was only slightly above (less than 5 basis points) the median of the Fund’s Expense Group. With respect to the Franklin Global Real Estate VIP Fund, the Board noted management’s explanation that the portfolio managers’ rigorous fundamental analysis and active risk controls elevate management costs. The Board also noted that the Fund’s actual total expense ratio reflected a fee waiver from management. With respect to the Franklin Large Cap Growth VIP Fund, the Board noted that the Fund’s Management Rate and actual total expense ratio were only slightly above (approximately 2 basis points or less) the medians of the Fund’s Expense Group. The Board concluded that the Management Rates charged to these Funds are reasonable. In doing so, the Board noted that the Franklin Allocation VIP Fund’s sub-advisers, FTIL and TGAL, are paid by FAI out of the management fee FAI receives from the Fund.

Franklin Growth and Income VIP Fund, Franklin Income VIP Fund, Franklin Rising Dividends VIP Fund, Franklin Small Cap Value VIP Fund, Franklin U.S. Government Securities VIP Fund and Templeton Global Bond VIP Fund –The Expense Group for the Franklin Growth and Income VIP

Fund included the Fund and 10 other equity income funds underlying VIPs. The Expense Group for the Franklin Income VIP Fund included the Fund and nine other mixed-asset target allocation moderate funds underlying VIPs. The Expense Group for Franklin Rising Dividends VIP Fund included the Fund and 11 other large-cap core funds underlying VIPs. The Expense Group for the Franklin Small Cap Value VIP Fund included the Fund and eight other small-cap value funds underlying VIPs. The Expense Group for the Franklin U.S. Government Securities VIP Fund included the Fund, three other intermediate US government funds underlying VIPs and eight inflation-protected bond funds underlying VIPs. The Expense Group for the Templeton Global Bond VIP Fund included the Fund and 10 other global income funds underlying VIPs. The Board noted that the Management Rates and actual total expense ratios for these Funds were below the medians of their respective Expense Groups. The Board concluded that the Management Rates charged to these Funds are reasonable. The Board also noted that the Franklin Growth and Income VIP Fund’s actual total expense ratio reflected a fee waiver from management.

Franklin VolSmart Allocation VIP Fund – The Expense Group for this Fund included the Fund, three other flexible portfolio funds underlying VIPs and one mixed-asset target allocation growth fund underlying VIP. The Board noted the small size of the Expense Group. The Board also noted that the Management Rate for the Fund was below the median of its Expense Group and its actual total expense ratio was above the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable. In doing so, the Board noted that the Fund’s actual total expense ratio reflected a fee waiver from management.

Profitability

The Board reviewed and considered information regarding the profits realized by each Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the

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Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.

The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by each Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by the Managers but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.

The Board also considered the extent to which each Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by each Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.

Economies of Scale

The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints for each Fund (except for the Franklin Allocation VIP Fund and the Franklin VolSmart Allocation VIP Fund), which operate generally to share any economies of scale with a Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in

size. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments each Manager incurs across the FT family of funds as a whole. The Board concluded that to the extent economies of scale may be realized by each Manager and its affiliates, each Fund’s management fee structure (except for the Franklin Allocation VIP Fund and the Franklin VolSmart Allocation VIP Fund) provided a sharing of benefits with the Fund and its shareholders as the Fund grows. The Board recognized that there would not likely be any economies of scale for the Franklin Flex Cap Growth VIP Fund, Franklin Global Real Estate VIP Fund, Franklin Growth and Income VIP Fund, Franklin Large Cap Growth VIP Fund and Franklin VolSmart Allocation VIP Fund until each Fund’s assets grow. The Board also recognized that given the decline in assets over the past three calendar years for each of the Franklin Income VIP Fund, Franklin Rising Dividends VIP Fund, Franklin Small Cap Value VIP Fund, Franklin Strategic Income VIP Fund, Franklin U.S. Government Securities VIP Fund, Templeton Foreign VIP Fund and Templeton Growth VIP Fund, these Funds are not expected to experience additional economies of scale in the foreseeable future.

Conclusion

Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.

Board Approval of Investment Management Agreements

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Templeton Developing Markets VIP Fund (Fund)

At a meeting held on May 13, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton Variable Insurance Products Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved a new investment sub-advisory agreement between Templeton Asset Management Ltd. (Manager), the Fund’s investment manager, and Franklin Templeton Investment Management Limited (Sub-Adviser),

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on behalf of the Fund (Sub-Advisory Agreement) for an initial two-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the Sub-Advisory Agreement.

The Board reviewed and considered information provided by the Manager at the Meeting with respect to the Sub-Advisory Agreement. The Board also reviewed and considered the factors it deemed relevant in approving the Sub-Advisory Agreement, including, but not limited to: (i) the nature, extent, and quality of the services to be provided by the Sub-Adviser; and (ii) the costs of the services to be provided by the Sub-Adviser. The Board further reviewed and considered information provided by management showing the expected impact of hiring the Sub-Adviser on the Manager’s profitability consistent with the Order (as defined below). The Board also considered that management proposed that the Board approve the Sub-Advisory Agreement in order to facilitate certain portfolio management team enhancements. The Board reviewed and further considered the form of Sub-Advisory Agreement and the terms of the Sub-Advisory Agreement which were discussed at the Meeting, noting that the terms and conditions of the Sub-Advisory Agreement were substantially identical to the terms and conditions of sub-advisory agreements for other Franklin Templeton (FT) mutual funds.

In approving the Sub-Advisory Agreement, the Board, including a majority of the Independent Trustees, determined that the hiring of the Sub-Adviser is in the best interests of the Fund and its shareholders and does not involve a conflict of interest from which the Manager or Sub-Adviser derives an inappropriate advantage. The Board also determined that the terms of the Sub-Advisory Agreement are fair and reasonable and that the approval of such Sub-Advisory Agreement is in the interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the Sub-Adviser and currently being provided by the Manager and its affiliates to the Fund and its shareholders. In doing so, the Board noted that the Fund employs a “manager of managers” structure pursuant to an exemptive order (Order) granted to the Manager by the U.S. Securities and Exchange Commission, whereby the

Manager and the Fund may, without shareholder approval, enter into sub-advisory agreements with sub-advisers that are indirect or direct wholly owned subsidiaries of Franklin Resources, Inc. (FRI). In particular, with respect to the Sub-Adviser, the Board took into account that the Sub-Advisory Agreement would not affect how the Fund is managed or the Fund’s investment goal, principal investment strategies or principal risks associated with an investment in the Fund. The Board reviewed and considered information regarding the nature, quality and extent of investment subadvisory services to be provided by the Sub-Adviser to the Fund and its shareholders under the Sub-Advisory Agreement; the Sub-Adviser’s experience as manager of other funds and accounts, including those within the FT organization; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of the Sub-Adviser and the Sub-Adviser’s capabilities, as demonstrated by, among other things, its policies and procedures designed to prevent violations of the federal securities laws, which had previously been approved by the Board in connection with its oversight of other funds in the FT organization.

The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of FRI, the parent of the Manager and Sub-Adviser, and its commitment to the mutual fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Fund.

Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the Sub-Adviser and its affiliates to the Fund and its shareholders.

Fund Performance

The Board noted its review and consideration of the performance results of the Fund in connection with the April

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

2020 annual contract renewal (Annual Contract Renewal) of the Fund’s investment management agreement. The Board recalled its conclusion at that time that the Fund’s performance was satisfactory. The Board also noted the proposed portfolio management team enhancements for the Fund, and determined that, in light of these changes, additional time will be needed to evaluate the effectiveness of management’s actions.

Comparative Fees and Expenses

The Board reviewed and considered information regarding the investment subadvisory fee to be charged by the Sub-Adviser. The Board noted that the addition of the Sub-Adviser will have no impact on the amount of management fees that are currently paid by the Fund as the Sub-Adviser will be paid by the Manager out of the management fee that the Manager receives from the Fund. The Board further noted that the allocation of the fee between the Manager and the Sub-Adviser reflected the services to be provided by each. The Board concluded that the proposed investment subadvisory fee is reasonable.

Management Profitability and Economies of Scale

The Board noted that it reviewed and considered information showing the expected impact of retaining the Sub-Adviser on the profitability of the Manager consistent with the conditions of the Order. The Board determined that its conclusions regarding profitability and economies of scale reached in connection with the Annual Contract Renewal of the investment management agreement with the Manager had not changed as a result of the proposal to approve the Sub-Advisory Agreement.

Conclusion

Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the Sub-Advisory Agreement for an initial two-year period.

Liquidity Risk Management Program

The Funds have adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940. The program is designed to assess and manage each Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other

funding sources including the Funds’ interfund lending facility and line of credit. The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.

The LRMP Administrator Annual Report was presented to the Fund(s) Board of Trustees at their meetings in May 2020. The report covered the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019 (the “covered period”). The report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. In addition, the LRMP Administrator presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.

During the reporting period, the Fund maintained a high level of liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments.” As a result, the Fund was designated a “Primarily Highly Liquid Fund” as defined under the Liquidity Rule and has not adopted a “Highly Liquid Investment Minimum.” A Highly Liquid Investment is defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.

There can be no assurance that the program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

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Franklin Templeton Variable Insurance Products Trust (FTVIP) shares are not offered to the public; they are offered and sold only to: (1) insurance company separate accounts (Separate Account) to serve as the underlying investment vehicle for variable contracts; (2) certain qualified plans; and (3) other mutual funds (funds of funds).

Authorized for distribution to investors in Separate Accounts only when accompanied or preceded by the current prospectus for the applicable contract, which includes the Separate Account and the FTVIP prospectuses. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. The prospectus contains this and other information; please read it carefully before investing.

To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.

	Semiannual Report
	Franklin Templeton Variable Insurance Products Trust
	Investment Managers	Fund Administrator	Distributor
	Franklin Advisers, Inc. Franklin Mutual Advisers, LLC Templeton Asset Management Ltd. Templeton Global Advisors Limited Templeton Investment Counsel, LLC	Franklin Templeton Services, LLC	Franklin Templeton Distributors, Inc.

© 2020 Franklin Templeton Investments. All rights reserved. VIP4 S 08/20

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.    N/A

Item 5. Audit Committee of Listed Registrants.    N/A

Item 6. Schedule of Investments.    N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.    N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies.    N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.  N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.     N/A

Item 13. Exhibits.

(a)(1) Code of Ethics

(a)(2) Certifications pursuant to Section  302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section  906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Franklin Templeton Variable Insurance Products Trust

By	/S/ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer – Finance and Administration

Date August 25, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/S/ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer – Finance and Administration
Date August 25, 2020
By	/S/ GASTON GARDEY
	Gaston Gardey
	Chief Financial Officer and Chief Accounting Officer
Date August 25, 2020