FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS

N-CSRS 1 d797537dncsrs.htm FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS - CLASS 2 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS - CLASS 2

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: 06/30/19

Item 1.

Reports to Stockholders.

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SEMIANNUAL REPORT FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST June 30, 2019

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 Global Real Estate VIP Fund		FGR-1

*Prospectus Supplement		FGR-7

Franklin Growth and Income VIP Fund		FGI-1

Franklin Income VIP Fund		FI-1

Franklin Large Cap Growth VIP Fund		FLG-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

Franklin U.S. Government Securities VIP Fund		FUS-1

Franklin VolSmart Allocation VIP Fund		FVA-1

Templeton Developing Markets VIP Fund		TD-1

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 annual report. Retain for your records.

Not FDIC Insured | May Lose Value | No Bank Guarantee

MASTER CLASS – 2

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

Franklin Allocation VIP Fund

(Formerly, Franklin Founding Funds Allocation VIP Fund)

This semiannual report for Franklin Allocation VIP Fund covers the period ended June 30, 2019. As previously communicated, effective May 1, 2019, the Fund changed its name to Franklin Allocation VIP Fund and changed from a fund of funds that invested fixed percentages in three underlying funds to an actively managed fund that invests in a variety of equity and fixed income investments.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +12.99% total return* for the six-month period ended June 30, 2019.

*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 and a fee waiver associated with any investments in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/20. 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 2 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

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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. 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.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. In comparison, one of the Fund’s benchmarks, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a +18.54% total return. The Fund’s new benchmarks, the Bloomberg Barclays U.S. Aggregate Index posted a +6.11% total return; the MSCI World ex USA Index posted a +17.38% total return; and the Linked Allocation VIP Fund Benchmark (Blended Benchmark) posted a +12.63% total

Portfolio Composition

Based on Total Net Assets as of 6/30/19

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return.^1,2 One of the Fund’s old benchmarks, the MSCI World Index posted a +17.38% total return for the same period.¹ The Fund changed from a fund that invested fixed percentages in three underlying funds to an actively managed fund that invests in a variety of equity and fixed income investments; its benchmarks also changed.

Economic and Market Overview

The global economy expanded during the six months ended June 30, 2019, despite weakness in certain regions. Global developed and emerging market stocks were aided by upbeat economic data in some regions, encouraging corporate earnings reports and periods of optimism about a potential U.S.-China trade deal. Further supporting markets were the U.S. Federal Reserve’s (Fed’s) patient approach to its monetary policy in 2019 and recent indication it will act as appropriate to sustain U.S. economic expansion.

However, markets reflected concerns about political uncertainties in the U.S. and the European Union,

1. Source: Morningstar.

2. Source: Factset. The Fund’s blended 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.

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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Semiannual Report

FRANKLIN ALLOCATION VIP FUND

geopolitical risks in certain regions, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. In this environment, global developed and emerging stocks, as measured by the MSCI All Country World Index, posted a +16.60% total return for the six-month period.¹

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

Geographic Composition

Based on Total Net Assets as of 6/30/19

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market-based inflation measures remaining low recently, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

In Europe, the U.K.’s quarterly gross domestic product (GDP) growth accelerated in 2019’s first quarter. The Bank of England left its key policy rate unchanged during the period. The eurozone’s quarterly GDP accelerated in 2019’s first quarter. However, the bloc’s annual inflation rate decreased during the period. The European Central Bank (ECB) kept its benchmark interest rate unchanged during the period. In June, the ECB mentioned it would leave interest rates unchanged through the first half of 2020, provided details of its new stimulus, and indicated its openness to cut rates or increase stimulus.

In Asia, Japan’s quarterly GDP growth accelerated in 2019’s first quarter. In June, the Bank of Japan also left its benchmark interest rate unchanged, while continuing its stimulus measures, and expressed its openness to cut interest rates or increase stimulus.

In larger emerging markets, Brazil’s quarterly GDP growth contracted in 2019’s first quarter. The Central Bank of Brazil left its benchmark interest rate unchanged during the period. Russia’s annual GDP growth moderated in 2019’s first quarter. The Bank of Russia cut its key rate once during the period. China’s annual GDP growth rate stabilized in 2019’s first quarter. The People’s Bank of China left its benchmark interest rate unchanged, but it took measures to improve financial liquidity to mitigate the effects of the U.S.-China trade dispute and support economic growth. Overall, global emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a +10.78% total return during the six-month period.¹

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 and Templeton Global

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

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

Semiannual Report

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FRANKLIN ALLOCATION VIP FUND

Bond VIP Fund 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 Fund’s 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.

Manager’s Discussion

From January 1, 2019, through the date of the investment strategy change on May 1, 2019, the Fund’s performance can be attributed largely to its allocation among the underlying funds and their investments in domestic and foreign equities, fixed income securities, and short-term investments and other net assets. For the period after the investment strategy change through June 30, 2019, 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.


Top 10 Holdings
6/30/19

Company *Sector/Industry*		% of Total Net Assets

Templeton Global Bond VIP Fund Diversified Financials		4.0%

Microsoft Corp. Software & Services		1.1%

Apple Inc. Technology Hardware & Equipment		0.7%

Amazon.com Inc. Retailing		0.6%

Linde PLC (United Kingdom) Materials		0.6%

Texas Instruments Inc. Semiconductors & Semiconductor Equipment		0.5%

Mastercard Inc. Software & Services		0.5%

Roper Technologies Inc. Capital Goods		0.5%

Union Pacific Corp. Transportation		0.5%

NIKE Inc. Consumer Durables & Apparel		0.5%

For the period before the investment strategy change, Franklin Income VIP Fund – Class 1 and Franklin Mutual

Shares VIP Fund – Class 1 underperformed the S&P 500. Templeton Growth VIP Fund – Class 1 underperformed the MSCI World Index. For the period after the investment strategy change, the Franklin Growth Strategy outperformed the S&P 500, the Franklin Rising Dividends Strategy outperformed the S&P 500, the Templeton Foreign Strategy underperformed the MSCI All Country World ex U.S.A. Index, the Franklin International Growth Strategy underperformed the MSCI EAFE Index , the U.S. Smart Beta Equity Strategy outperformed the Russell 1000^® Index, the Franklin U.S. Government Securities Strategy underperformed the Bloomberg Barclays U.S. Government Index: Intermediate Component, the Investment-Grade Corporate Strategy outperformed the Bloomberg Barclays U.S. Corporate Index: Investment-Grade Component.

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, 2019, 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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Semiannual Report

FRANKLIN ALLOCATION VIP FUND

Class 2 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 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,2

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^1,2

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,129.90

$2.59

$1,022.36

$2.46

0.49%

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 181/365 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses from 1/1/2019 to 4/30/2019 and includes acquired fees and expenses from 5/1/2019 to 6/30/2019.

Effective 5/01/2019, the expense waiver changed and the new annualized net expense ratio was 0.82%. Had such expense waiver been in effect for the full period, the expenses paid would have been $4.33 based upon the Fund’s actual performance and $4.11 based upon a hypothetical 5% return.

Semiannual Report

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Allocation VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 6.37			$ 7.44			$ 7.13			$ 6.80			$ 7.47			$ 7.47


Income from investment operations^a:

Net investment income^b,c		0.05			0.23			0.21			0.21			0.26			0.22

Net realized and unrealized gains (losses)		0.77			(0.89	)		0.63			0.64			(0.68	)		0.02


Total from investment operations		0.82			(0.66	)		0.84			0.85			(0.42	)		0.24


Less distributions from:

Net investment income		(0.27	)		(0.24	)		(0.22	)		(0.29	)		(0.24	)		(0.23)

Net realized gains		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)		(0.01)


Total distributions		(0.73	)		(0.41	)		(0.53	)		(0.52	)		(0.25	)		(0.24)


Net asset value, end of period		$ 6.46			$ 6.37			$ 7.44			$ 7.13			$ 6.80			$ 7.47


Total return^d		13.04%			(9.34)%			12.17%			13.43%			(5.93)%			3.05%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates^f		0.27%			0.12%			0.12%			0.11%			0.11%			0.11%

Expenses net of waiver and payments by affiliates^f		0.24%			0.10%			0.10%			0.10%			0.10%			0.10%

Net investment income^c		1.36%			3.13%			2.75%			3.09%			3.51%			2.88%

Supplemental data

Net assets, end of period (000’s)		$1,139			$984			$1,047			$1,025			$1,083			$1,114

Portfolio turnover rate		130.55%			2.23%			1.28%			0.10%			0.26%			4.80%

Portfolio turnover rate excluding mortgage dollar rolls		128.50%	^g		2.23%			1.28%			0.10%			0.26%			4.80%

^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.

^fDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and exchange traded funds was 0.39% for the period ended June 30, 2019.

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

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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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 6.32			$ 7.39			$ 7.08			$ 6.75			$ 7.42			$ 7.42


Income from investment operations^a:

Net investment income^b,c		0.04			0.21			0.18			0.19			0.24			0.20

Net realized and unrealized gains (losses)		0.77			(0.89	)		0.64			0.64			(0.68	)		0.02


Total from investment operations		0.81			(0.68	)		0.82			0.83			(0.44	)		0.22


Less distributions from:

Net investment income		(0.25	)		(0.22	)		(0.20	)		(0.27	)		(0.22	)		(0.21)

Net realized gains		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)		(0.01)


Total distributions		(0.71	)		(0.39	)		(0.51	)		(0.50	)		(0.23	)		(0.22)


Net asset value, end of period		$ 6.42			$ 6.32			$ 7.39			$ 7.08			$ 6.75			$ 7.42


Total return^d		12.99%			(9.65)%			11.98%			13.18%			(6.21)%			2.85%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates^f		0.52%			0.37%			0.37%			0.36%			0.36%			0.36%

Expenses net of waiver and payments by affiliates^f		0.49%			0.35%			0.35%			0.35%			0.35%			0.35%

Net investment income^c		1.11%			2.88%			2.50%			2.84%			3.26%			2.63%

Supplemental data

Net assets, end of period (000’s)		$415,902			$390,300			$480,402			$474,669			$480,715			$557,704

Portfolio turnover rate		130.55%			2.23%			1.28%			0.10%			0.26%			4.80%

Portfolio turnover rate excluding mortgage dollar rolls		128.50%	^g		2.23%			1.28%			0.10%			0.26%			4.80%

^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.

^eRatios are annualized for periods less than one year.

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Allocation VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 6.46			$ 7.53			$ 7.21			$ 6.87			$ 7.54			$ 7.54


Income from investment operations^a:

Net investment income^b,c		0.03			0.20			0.18			0.19			0.23			0.20

Net realized and unrealized gains (losses)		0.79			(0.89	)		0.64			0.64			(0.68	)		0.02


Total from investment operations		0.82			(0.69	)		0.82			0.83			(0.45	)		0.22


Less distributions from:

Net investment income		(0.24	)		(0.21	)		(0.19	)		(0.26	)		(0.21	)		(0.21)

Net realized gains		(0.46	)		(0.17	)		(0.31	)		(0.23	)		(0.01	)		(0.01)


Total distributions		(0.70	)		(0.38	)		(0.50	)		(0.49	)		(0.22	)		(0.22)


Net asset value, end of period		$ 6.58			$ 6.46			$ 7.53			$ 7.21			$ 6.87			$ 7.54


Total return^d		12.87%			(9.58)%			11.78%			12.92%			(6.24)%			2.75%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates^f		0.62%			0.47%			0.47%			0.46%			0.46%			0.46%

Expenses net of waiver and payments by affiliates^f		0.59%			0.45%			0.45%			0.45%			0.45%			0.45%

Net investment income^c		1.01%			2.78%			2.40%			2.74%			3.16%			2.53%

Supplemental data

Net assets, end of period (000’s)		$408,472			$393,385			$528,862			$530,403			$550,825			$702,324

Portfolio turnover rate		130.55%			2.23%			1.28%			0.10%			0.26%			4.80%

Portfolio turnover rate excluding mortgage dollar rolls		128.50%	^g		2.23%			1.28%			0.10%			0.26%			4.80%

^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.

^eRatios are annualized for periods less than one year.

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Franklin Allocation VIP Fund


	Country	Shares		Value


Common Stocks 57.5%
Automobiles & Components 0.6%
Aptiv PLC	United States		26,000	$	2,101,579
BorgWarner Inc.	United States		11,694		490,914
Cie Generale des Etablissements Michelin SCA	France		7,087		898,742
Ford Motor Co.	United States		49,009		501,362
Gentex Corp.	United States		7,242		178,226
Lear Corp.	United States		1,609		224,086
Sumitomo Rubber Industries Ltd.	Japan		56,200		649,464
Thor Industries Inc.	United States		1,287		75,225


					5,119,598

Banks 2.7%
Bangkok Bank PCL, fgn	Thailand		46,100		298,921
Bangkok Bank PCL, NVDR	Thailand		23,800		152,773
Bank of Ireland Group PLC	Ireland		184,044		961,623
Barclays PLC	United Kingdom		428,479		815,132
BNP Paribas SA	France		56,661		2,690,295
FinecoBank Banca Fineco SpA	Italy		190,000		2,118,975
Hana Financial Group Inc.	South Korea		36,260		1,172,165
HSBC Holdings PLC (GBP Traded)	United Kingdom		192,145		1,602,931
HSBC Holdings PLC (HKD Traded)	United Kingdom		16,000		132,716
ING Groep NV	Netherlands		171,468		1,987,541
Kasikornbank PCL, fgn	Thailand		100,800		622,405
KB Financial Group Inc.	South Korea		62,761		2,487,244
KBC Groep NV	Belgium		30,000		1,965,841
People’s United Financial Inc.	United States		8,691		145,835
Shinhan Financial Group Co. Ltd.	South Korea		21,953		851,980
Standard Chartered PLC	United Kingdom		299,437		2,715,888
Sumitomo Mitsui Financial Group Inc., ADR	Japan		209,200		1,476,952


					22,199,217

Capital Goods 6.2%
3M Co.	United States		12,027		2,084,760
Allegion PLC	United States		4,995		552,197
Allison Transmission Holdings Inc.	United States		965		44,728
AMETEK Inc.	United States		4,953		449,930
BAE Systems PLC	United Kingdom		158,378		996,409
The Boeing Co.	United States		9,974		3,630,636
BWX Technologies Inc.	United States		14,545		757,794
CAE Inc.	Canada		47,000		1,263,501
Carlisle Cos. Inc.	United States		3,300		463,353
Caterpillar Inc.	United States		3,957		539,300
CK Hutchison Holdings Ltd.	Hong Kong		179,500		1,769,231
Compagnie de Saint-Gobain	France		26,493		1,032,314
Cummins Inc.	United States		3,862		661,715
Deere & Co.	United States		3,589		594,733
Donaldson Co. Inc.	United States		8,800		447,568
Dover Corp.	United States		9,800		981,960
Emerson Electric Co.	United States		24,482		1,633,439

Semiannual Report

FFA-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Capital Goods (continued)
Fastenal Co.	United States		17,704	$	576,973
Ferguson PLC	United Kingdom		34,000		2,417,985
Fortive Corp.	United States		3,817		311,162
General Dynamics Corp.	United States		13,184		2,397,115
Graco Inc.	United States		4,265		214,018
Honeywell International Inc.	United States		13,800		2,409,342
Huntington Ingalls Industries Inc.	United States		3,218		723,213
Illinois Tool Works Inc.	United States		7,173		1,081,760
Ingersoll-Rand PLC	United States		7,870		996,893
Johnson Controls International PLC	United States		24,400		1,007,964
Lockheed Martin Corp.	United States		7,666		2,786,898
MSC Industrial Direct Co. Inc., A	United States		1,046		77,676
MTU Aero Engines AG	Germany		11,000		2,619,871
Northrop Grumman Corp.	United States		7,858		2,538,998
nVent Electric PLC	United States		15,800		391,682
Pentair PLC	United States		14,500		539,400
Raytheon Co.	United States		14,005		2,435,189
Rockwell Automation Inc.	United States		3,540		579,958
Roper Technologies Inc.	United States		10,800		3,955,608
Sinopec Engineering Group Co. Ltd.	China		751,500		636,820
Snap-on Inc.	United States		402		66,587
Stanley Black & Decker Inc.	United States		5,402		781,183
Toro Co.	United States		3,460		231,474
United Technologies Corp.	United States		16,377		2,132,285
Vestas Wind Systems AS	Denmark		5,751		496,637
W.W. Grainger Inc.	United States		3,129		839,292
^aWABCO Holdings Inc.	United States		402		53,305
Watsco Inc.	United States		724		118,396


					51,321,252

Commercial & Professional Services 1.1%
Cintas Corp.	United States		6,753		1,602,419
^aCopart Inc.	United States		5,150		384,911
Equifax Inc.	United States		3,896		526,895
Experian PLC	United Kingdom		85,000		2,573,427
^aIHS Markit Ltd.	United States		25,509		1,625,434
Matthews International Corp., A	United States		7,900		275,315
Republic Services Inc.	United States		1,300		112,632
Robert Half International Inc.	United States		4,023		229,351
Rollins Inc.	United States		4,587		164,536
Verisk Analytics Inc.	United States		10,757		1,575,470


					9,070,390

Consumer Durables & Apparel 1.0%
^aCapri Holdings Ltd.	United States		4,828		167,435
Carter’s Inc.	United States		1,207		117,731
Garmin Ltd.	United States		3,621		288,956
Hasbro Inc.	United States		3,299		348,638
^aKontoor Brands Inc.	United States		1,322		37,042

FFA-10

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Consumer Durables & Apparel (continued)
Leggett & Platt Inc.	United States		3,621	$	138,938
^aLululemon Athletica Inc.	United States		2,736		493,055
NIKE Inc., B	United States		44,031		3,696,402
Panasonic Corp., ADR	Japan		170,700		1,414,762
Polaris Industries Inc.	United States		1,770		161,477
Ralph Lauren Corp.	United States		643		73,038
Tapestry Inc.	United States		8,771		278,304
VF Corp.	United States		9,254		808,337


					8,024,115

Consumer Services 1.3%
Carnival Corp.	United States		17,695		823,702
Choice Hotels International Inc.	United States		1,046		91,013
Darden Restaurants Inc.	United States		3,862		470,121
Domino’s Pizza Inc.	United States		1,207		335,884
Graham Holdings Co., B	United States		568		391,937
^aGrand Canyon Education Inc.	United States		643		75,244
H&R Block Inc.	United States		6,840		200,412
Las Vegas Sands Corp.	United States		6,679		394,662
McDonald’s Corp.	United States		12,318		2,557,956
Six Flags Entertainment Corp.	United States		1,046		51,965
Starbucks Corp.	United States		18,428		1,544,819
^aTAL Education Group, ADR	China		70,000		2,667,000
Wyndham Destinations Inc.	United States		965		42,364
Yum! Brands Inc.	United States		10,864		1,202,319


					10,849,398

Diversified Financials 1.5%
American Express Co.	United States		4,310		532,026
^aBerkshire Hathaway Inc., B	United States		1,999		426,127
BlackRock Inc.	United States		1,610		755,573
The Charles Schwab Corp.	United States		21,421		860,910
Chimera Investment Corp.	United States		4,828		91,104
Deutsche Boerse AG	Germany		18,000		2,545,635
Evercore Inc.	United States		563		49,865
FactSet Research Systems Inc.	United States		965		276,530
Flow Traders	Netherlands		31,438		917,811
Intercontinental Exchange Inc.	United States		10,030		861,978
Invesco Ltd.	United States		3,058		62,567
Lazard Ltd., A	United States		3,540		121,741
MarketAxess Holdings Inc.	United States		885		284,457
Morningstar Inc.	United States		482		69,716
MSCI Inc.	United States		1,931		461,104
Navient Corp.	United States		2,011		27,450
S&P Global Inc.	United States		5,391		1,228,016
Santander Consumer USA Holdings Inc.	United States		2,575		61,697
SEI Investments Co.	United States		2,253		126,393
State Street Corp.	United States		2,700		151,362
T. Rowe Price Group Inc.	United States		6,437		706,203

Semiannual Report

FFA-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Diversified Financials (continued)
UBS Group AG	Switzerland		112,597	$	1,337,626


					11,955,891

Energy 2.7%
^aApergy Corp.	United States		8,000		268,320
BP PLC	United Kingdom		446,496		3,110,713
Cabot Oil & Gas Corp., A	United States		24,348		559,030
Chevron Corp.	United States		7,800		970,632
Cimarex Energy Co.	United States		724		42,955
Concho Resources Inc.	United States		4,340		447,801
The Drilling Co. of 1972 AS	Denmark		1,670		129,717
Eni SpA	Italy		124,395		2,065,558
EOG Resources Inc.	United States		6,600		614,856
Exxon Mobil Corp.	United States		22,451		1,720,420
Husky Energy Inc.	Canada		80,300		760,850
John Wood Group PLC	United Kingdom		420,000		2,410,873
Occidental Petroleum Corp.	United States		11,700		588,276
Phillips 66	United States		5,472		511,851
Royal Dutch Shell PLC, B	United Kingdom		67,820		2,222,964
SBM Offshore NV	Netherlands		64,376		1,242,696
Schlumberger Ltd.	United States		14,700		584,178
Tenaris SA	Italy		53,565		700,906
Total SA	France		40,836		2,287,563
Valero Energy Corp.	United States		10,300		881,783


					22,121,942

Food & Staples Retailing 0.8%
Casey’s General Stores Inc.	United States		885		138,051
Costco Wholesale Corp.	United States		5,311		1,403,485
The Kroger Co.	United States		6,518		141,506
Seven & I Holdings Co. Ltd., ADR	Japan		52,600		887,362
^aSprouts Farmers Market Inc.	United States		1,770		33,435
Sysco Corp.	United States		13,680		967,450
Walgreens Boots Alliance Inc.	United States		16,968		927,641
Walmart Inc.	United States		21,154		2,337,305


					6,836,235

Food, Beverage & Tobacco 2.0%
Altria Group Inc.	United States		22,452		1,063,102
Archer-Daniels-Midland Co.	United States		7,564		308,611
Brown-Forman Corp., A	United States		1,609		88,495
Brown-Forman Corp., B	United States		11,709		649,030
Bunge Ltd.	United States		11,000		612,810
The Coca-Cola Co.	United States		24,384		1,241,633
Constellation Brands Inc., A	United States		3,910		770,035
Ezaki Glico Co. Ltd.	Japan		5,300		235,949
Flowers Foods Inc.	United States		4,587		106,740
General Mills Inc.	United States		16,175		849,511
The Hershey Co.	United States		4,667		625,518

FFA-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Food, Beverage & Tobacco (continued)
Hormel Foods Corp.	United States		8,208	$	332,752
Ingredion Inc.	United States		1,689		139,326
The J. M. Smucker Co.	United States		1,529		176,126
Kellogg Co.	United States		2,092		112,068
Kirin Holdings Co. Ltd.	Japan		12,900		277,993
Lamb Weston Holdings Inc.	United States		5,455		345,629
McCormick & Co. Inc.	United States		6,700		1,038,567
Mondelez International Inc., A	United States		10,656		574,358
^aMonster Beverage Corp.	United States		26,347		1,681,729
PepsiCo Inc.	United States		22,778		2,986,879
Philip Morris International Inc.	United States		14,163		1,112,220
Suntory Beverage & Food Ltd.	Japan		19,800		860,351
Tyson Foods Inc.	United States		7,323		591,259


					16,780,691

Health Care Equipment & Services 3.8%
Abbott Laboratories	United States		24,020		2,020,082
^aABIOMED Inc.	United States		1,452		378,232
Baxter International Inc.	United States		2,790		228,501
Becton, Dickinson and Co.	United States		9,143		2,304,127
^aCentene Corp.	United States		3,807		199,639
Cerner Corp.	United States		5,874		430,564
Chemed Corp.	United States		241		86,962
Cochlear Ltd.	Australia		19,000		2,758,635
CVS Health Corp.	United States		7,300		397,777
Danaher Corp.	United States		7,487		1,070,042
DENTSPLY SIRONA Inc.	United States		4,900		285,964
^aEdwards Lifesciences Corp.	United States		2,887		533,344
Encompass Health Corp.	United States		1,287		81,544
GN Store Nord A/S	Denmark		45,000		2,099,287
^aHaemonetics Corp.	United States		7,214		868,133
HCA Holdings Inc.	United States		3,460		467,688
^aIntuitive Surgical Inc.	United States		5,383		2,823,653
^aLaboratory Corp. of America Holdings	United States		3,613		624,688
^aLivaNova PLC	United Kingdom		36,000		2,590,560
Medtronic PLC	United States		18,500		1,801,715
Quest Diagnostics Inc.	United States		6,448		656,471
ResMed Inc.	United States		3,862		471,280
Sinopharm Group Co. Ltd., H	China		227,200		799,780
Stryker Corp.	United States		15,274		3,140,029
Teleflex Inc.	United States		3,587		1,187,835
UnitedHealth Group Inc.	United States		4,345		1,060,224
Universal Health Services Inc., B	United States		643		83,841
^aVarian Medical Systems Inc.	United States		4,659		634,230
West Pharmaceutical Services Inc.	United States		9,400		1,176,410


					31,261,237

Semiannual Report

FFA-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Household & Personal Products 0.9%
Church & Dwight Co. Inc.	United States		7,081	$	517,338
Clorox Co.	United States		4,345		665,263
Colgate-Palmolive Co.	United States		31,114		2,229,940
Estee Lauder Cos. Inc., A	United States		6,518		1,193,511
Kimberly-Clark Corp.	United States		2,977		396,775
Nu Skin Enterprises Inc., A	United States		1,448		71,415
The Procter & Gamble Co.	United States		22,756		2,495,195


					7,569,437

Insurance 0.6%
Aflac Inc.	United States		19,775		1,083,868
American National Insurance Co.	United States		241		28,069
Assured Guaranty Ltd.	United States		804		33,832
Erie Indemnity Co., A	United States		4,343		1,104,338
Everest Re Group Ltd.	United States		563		139,162
Marsh & McLennan Cos. Inc.	United States		11,668		1,163,883
Mercury General Corp.	United States		804		50,250
The Progressive Corp.	United States		11,507		919,755


					4,523,157

Materials 3.9%
Air Products and Chemicals Inc.	United States		13,665		3,093,346
Alamos Gold Inc., A	Canada		229,900		1,390,895
Albemarle Corp.	United States		26,465		1,863,401
Avery Dennison Corp.	United States		1,770		204,754
^aAxalta Coating Systems Ltd.	United States		24,143		718,737
Celanese Corp.	United States		8,901		959,528
CRH PLC	Ireland		20,944		683,114
Eastman Chemical Co.	United States		1,850		143,985
Ecolab Inc.	United States		11,001		2,172,037
Huntsman Corp.	United States		1,770		36,179
International Flavors & Fragrances Inc.	United States		2,896		420,181
Johnson Matthey PLC	United Kingdom		36,353		1,536,882
Koninklijke DSM NV	Netherlands		22,000		2,718,663
Linde PLC	United Kingdom		22,735		4,565,188
Lotte Chemical Corp.	South Korea		4,358		951,125
LyondellBasell Industries NV, A	United States		10,622		914,873
Martin Marietta Materials Inc.	United States		2,841		653,742
NewMarket Corp.	United States		241		96,627
Nucor Corp.	United States		5,500		303,050
Packaging Corp. of America	United States		1,529		145,744
Sealed Air Corp.	United States		2,011		86,031
Sonoco Products Co.	United States		2,655		173,478
Steel Dynamics Inc.	United States		1,689		51,008
Sumitomo Metal Mining Co. Ltd.	Japan		38,700		1,155,401
Symrise AG	Germany		22,500		2,165,017
Taiheiyo Cement Corp.	Japan		21,900		662,159
Umicore SA	Belgium		76,000		2,436,497

FFA-14

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)



	Country	Shares		Value

Common Stocks (continued)
Materials (continued)
Wheaton Precious Metals Corp.	Canada		90,000	$	2,176,217


					32,477,859

Media & Entertainment 2.2%
^aAlphabet Inc., A	United States		2,311		2,502,351
^aAMC Networks Inc., A	United States		804		43,810
Ascential PLC	United Kingdom		467,885		2,116,507
^aBaidu Inc., ADR	China		9,600		1,126,656
Cable One Inc.	United States		571		668,635
Cinemark Holdings Inc.	United States		804		29,024
Comcast Corp., A	United States		37,203		1,572,943
CyberAgent Inc.	Japan		70,000		2,535,244
^aElectronic Arts Inc.	United States		4,324		437,848
^aFacebook Inc., A	United States		5,408		1,043,744
^aIAC/InterActiveCorp.	United States		2,167		471,388
The Interpublic Group of Cos. Inc.	United States		5,150		116,339
John Wiley & Sons Inc., A	United States		4,243		194,584
Match Group Inc.	United States		885		59,534
Omnicom Group Inc.	United States		5,552		454,986
SES SA, IDR	Luxembourg		67,868		1,060,891
Viacom Inc., B	United States		4,989		149,022
The Walt Disney Co.	United States		22,974		3,208,089


					17,791,595

Pharmaceuticals, Biotechnology & Life Sciences 5.7%
AbbVie Inc.	United States		21,989		1,599,040
Agilent Technologies Inc.	United States		9,233		689,428
^aAlkermes PLC	United States		70,000		1,577,800
Amgen Inc.	United States		13,045		2,403,933
Astellas Pharma Inc., ADR	Japan		69,600		989,712
AstraZeneca PLC, ADR	United Kingdom		14,409		594,804
Bayer AG	Germany		25,713		1,781,387
^aBiogen Inc.	United States		7,273		1,700,936
Bristol-Myers Squibb Co.	United States		22,613		1,025,500
^aCatalent Inc.	United States		24,353		1,320,176
CSL Ltd.	Australia		16,000		2,414,708
^aElanco Animal Health Inc.	United States		10,878		367,676
Eli Lilly & Co.	United States		19,385		2,147,664
^aExelixis Inc.	United States		5,230		111,765
Gilead Sciences Inc.	United States		21,747		1,469,227
^aGW Pharmaceuticals PLC, ADR	United Kingdom		600		103,434
Hikma Pharmaceuticals PLC	United Kingdom		100,000		2,186,854
^aIllumina Inc.	United States		3,751		1,380,931
Johnson & Johnson	United States		26,090		3,633,815
Merck & Co. Inc.	United States		22,696		1,903,060
Merck KGaA	Germany		10,543		1,102,215
^aMettler-Toledo International Inc.	United States		3,689		3,098,760
^aNeurocrine Biosciences Inc.	United States		3,506		296,012
Pfizer Inc.	United States		55,746		2,414,917

Semiannual Report

FFA-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)



	Country	Shares		Value

Common Stocks (continued)
Pharmaceuticals, Biotechnology & Life Sciences (continued)
Roche Holding AG	Switzerland		10,125	$	2,847,899
Sanofi	France		26,276		2,267,574
Santen Pharmaceutical Co. Ltd.	Japan		140,000		2,317,752
Takeda Pharmaceutical Co. Ltd., ADR	Japan		82,400		1,458,480
^aTeva Pharmaceutical Industries Ltd., ADR	Israel		110,800		1,022,684
^aUnited Therapeutics Corp.	United States		1,368		106,786
^aWaters Corp.	United States		4,414		950,069


					47,284,998

Real Estate 1.0%
American Tower Corp.	United States		5,778		1,181,312
CK Asset Holdings Ltd.	Hong Kong		97,800		765,534
EPR Properties	United States		1,770		132,024
Equinix Inc.	United States		1,434		723,152
Gaming and Leisure Properties Inc.	United States		4,587		178,801
Kimco Realty Corp.	United States		8,288		153,162
Mitsui Fudosan Co. Ltd.	Japan		46,700		1,131,550
National Retail Properties Inc.	United States		4,748		251,692
OMEGA Healthcare Investors Inc.	United States		6,035		221,786
Public Storage	United States		4,828		1,149,885
Realty Income Corp.	United States		8,369		577,210
Senior Housing Properties Trust	United States		6,518		53,904
Simon Property Group Inc.	United States		5,633		899,928
Spirit Realty Capital Inc.	United States		2,736		116,718
STORE Capital Corp.	United States		4,506		149,554
Ventas Inc.	United States		2,736		187,006
VEREIT Inc.	United States		28,166		253,776
WP Carey Inc.	United States		2,736		222,108


					8,349,102

Retailing 3.7%
Advance Auto Parts Inc.	United States		482		74,295
^aAlibaba Group Holding Ltd., ADR	China		3,443		583,416
^aAmazon.com Inc.	United States		2,506		4,745,437
^aAutoZone Inc.	United States		402		441,987
Best Buy Co. Inc.	United States		7,323		510,633
^aboohoo Group PLC	United Kingdom		735,000		1,976,036
Dick’s Sporting Goods Inc.	United States		2,414		83,597
Dollar General Corp.	United States		4,828		652,552
Expedia Group Inc.	United States		2,521		335,369
Foot Locker Inc.	United States		4,184		175,393
The Gap Inc.	United States		19,645		353,021
Genuine Parts Co.	United States		4,104		425,092
The Home Depot Inc.	United States		6,840		1,422,515
^aJust Eat PLC	United Kingdom		230,000		1,825,553
Kingfisher PLC	United Kingdom		393,321		1,073,421
Kohl’s Corp.	United States		5,311		252,538
L Brands Inc.	United States		7,242		189,016
Lowe’s Cos. Inc.	United States		13,037		1,315,564

FFA-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Retailing (continued)
Macy’s Inc.	United States		8,128	$	174,427
^aMercadoLibre Inc.	Argentina		3,900		2,385,903
^aThe Michaels Cos. Inc.	United States		2,494		21,698
Nordstrom Inc.	United States		3,460		110,236
^aO’Reilly Automotive Inc.	United States		2,414		891,539
Penske Automotive Group Inc.	United States		563		26,630
Pool Corp.	United States		965		184,315
Ross Stores Inc.	United States		25,937		2,570,875
Target Corp.	United States		19,517		1,690,367
Tiffany & Co.	United States		10,675		999,607
The TJX Cos. Inc.	United States		25,108		1,327,711
Tractor Supply Co.	United States		3,540		385,152
^aUlta Beauty Inc.	United States		1,689		585,897
^aUrban Outfitters Inc.	United States		2,092		47,593
Williams-Sonoma Inc.	United States		2,736		177,840
Zozo Inc.	Japan		140,000		2,621,592


					30,636,817

Semiconductors & Semiconductor Equipment 2.6%
Analog Devices Inc.	United States		18,400		2,076,808
Applied Materials Inc.	United States		24,303		1,091,448
ASML Holding NV, N.Y. shs	Netherlands		4,650		966,874
Infineon Technologies AG	Germany		135,000		2,386,532
Intel Corp.	United States		32,733		1,566,929
KLA-Tencor Corp.	United States		3,701		437,458
Lam Research Corp.	United States		3,219		604,657
Maxim Integrated Products Inc.	United States		7,323		438,062
^aMicron Technology Inc.	United States		21,728		838,484
Monolithic Power Systems	United States		3,188		432,867
NVIDIA Corp.	United States		11,154		1,831,821
NXP Semiconductors NV	Netherlands		16,300		1,591,043
Skyworks Solutions Inc.	United States		5,713		441,443
Taiwan Semiconductor Manufacturing Co. Ltd.	Taiwan		187,000		1,442,734
Texas Instruments Inc.	United States		38,842		4,457,508
Xilinx Inc.	United States		7,323		863,528


					21,468,196

Software & Services 6.6%
Accenture PLC, A	United States		19,884		3,673,967
^aAdobe Inc.	United States		6,013		1,771,730
^aAdyen NV	Netherlands		2,035		1,569,934
Amdocs Ltd.	United States		4,104		254,817
^aAspen Technology Inc.	United States		643		79,912
^aAutodesk Inc.	United States		5,697		928,041
Automatic Data Processing Inc.	United States		13,396		2,214,761
Broadridge Financial Solutions Inc.	United States		3,540		451,987
Cognizant Technology Solutions Corp., A	United States		7,484		474,411
^aFortinet Inc.	United States		1,931		148,359
International Business Machines Corp.	United States		9,978		1,375,966

Semiannual Report

FFA-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)

Software & Services (continued)
^aInterXion Holding NV	Netherlands		37,000	$	2,815,330
Intuit Inc.	United States		12,895		3,369,850
Jack Henry & Associates Inc.	United States		2,253		301,722
Keywords Studios PLC	Ireland		95,000		2,201,776
Mastercard Inc., A	United States		16,157		4,274,011
Microsoft Corp.	United States		67,359		9,023,453
Oracle Corp.	United States		13,300		757,701
Paychex Inc.	United States		10,139		834,338
^aPTC Inc.	United States		5,403		484,973
The Sage Group PLC	United Kingdom		280,000		2,853,222
^asalesforce.com Inc.	United States		3,964		601,458
SAP SE	Germany		20,000		2,745,720
^aServiceNow Inc.	United States		7,151		1,963,450
^aShopify Inc., A	Canada		9,500		2,851,425
Sophos Group PLC	United Kingdom		480,000		2,405,996
^aTwilio Inc., A	United States		2,840		387,234
^aTyler Technologies Inc.	United States		1,229		265,489
^aVeriSign Inc.	United States		2,816		588,995
Visa Inc., A	United States		14,954		2,595,267
VMware Inc., A	United States		2,011		336,259
Western Union Co.	United States		6,357		126,441

					54,727,995

Technology Hardware & Equipment 2.2%
Amphenol Corp., A	United States		6,508		624,378
Apple Inc.	United States		30,685		6,073,175
Cisco Systems Inc.	United States		46,733		2,557,697
Cognex Corp.	United States		6,103		292,822
^aF5 Networks Inc.	United States		2,011		292,862
HP Inc.	United States		49,170		1,022,244
^aKeysight Technologies Inc.	United States		4,588		412,048
Motorola Solutions Inc.	United States		4,023		670,755
NetApp Inc.	United States		5,794		357,490
Samsung Electronics Co. Ltd.	South Korea		82,146		3,337,132
TE Connectivity Ltd.	United States		13,418		1,285,176
^aTrimble Inc.	United States		19,388		874,593
Ubiquiti Networks Inc.	United States		241		31,692
^aViaSat Inc.	United States		4,982		402,645


					18,234,709

Telecommunication Services 1.0%
AT&T Inc.	United States		39,433		1,321,400
China Mobile Ltd.	China		142,500		1,297,834
Singapore Telecommunications Ltd.	Singapore		609,500		1,576,390
Telefonica Deutschland Holding AG	Germany		248,243		693,402
Verizon Communications Inc.	United States		20,360		1,163,167
Vodafone Group PLC	United Kingdom		1,011,010		1,660,381


					7,712,574



FFA-18		Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Transportation 1.9%
A.P. Moeller-Maersk AS, B	Denmark		829	$	1,028,011
Alaska Air Group Inc.	United States		26,597		1,699,814
C.H. Robinson Worldwide Inc.	United States		4,345		366,501
Canadian National Railway Co.	Canada		7,104		656,978
Canadian Pacific Railway Ltd.	Canada		3,572		840,277
Copa Holdings SA	Panama		643		62,738
Delta Air Lines Inc.	United States		15,209		863,111
DSV AS	Denmark		28,000		2,748,911
Expeditors International of Washington Inc.	United States		4,748		360,183
J.B. Hunt Transport Services Inc.	United States		6,205		567,199
Kansas City Southern	United States		5,340		650,519
Landstar System Inc.	United States		1,046		112,958
^aLyft Inc., A	United States		2,125		139,634
Norfolk Southern Corp.	United States		1,600		318,928
^aRyanair Holdings PLC, ADR	Ireland		1,675		107,434
Schneider National Inc., B	United States		804		14,665
Southwest Airlines Co.	United States		13,278		674,257
^aUber Technologies Inc.	United States		4,838		224,386
Union Pacific Corp.	United States		22,498		3,804,637
United Parcel Service Inc., B	United States		5,800		598,966


					15,840,107

Utilities 1.5%
Alliant Energy Corp.	United States		5,391		264,590
Ameren Corp.	United States		1,931		145,037
American Water Works Co. Inc.	United States		5,059		586,844
Atmos Energy Corp.	United States		2,575		271,817
Consolidated Edison Inc.	United States		7,886		691,444
DTE Energy Co.	United States		4,989		637,993
E.ON SE	Germany		106,983		1,161,627
Evergy Inc.	United States		2,092		125,834
Eversource Energy	United States		6,116		463,348
Exelon Corp.	United States		26,476		1,269,259
Hawaiian Electric Industries Inc.	United States		2,655		115,625
^aKorea Electric Power Corp.	South Korea		30,261		668,288
NextEra Energy Inc.	United States		10,360		2,122,350
OGE Energy Corp.	United States		4,426		188,371
Pinnacle West Capital Corp.	United States		3,138		295,254
PPL Corp.	United States		5,794		179,672
Public Service Enterprise Group Inc.	United States		15,209		894,593
The Southern Co.	United States		7,806		431,516
UGI Corp.	United States		1,287		68,739
Veolia Environnement SA	France		46,867		1,141,274
WEC Energy Group Inc.	United States		5,391		449,448


					12,172,923


Total Common Stocks (Cost $475,243,276)					474,329,435

Semiannual Report

FFA-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Shares			Value


Management Investment Companies 4.5%
Diversified Financials 4.5%
^aAltaba Inc.	United States		12,169		$	844,164
Invesco Senior Loan ETF	United States		125,000			2,832,500
^bTempleton Global Bond VIP Fund, Class 1	United States		1,978,020			33,329,645


Total Management Investment Companies (Cost $39,550,794)						37,006,309


			Principal Amount	*

Corporate Bonds 12.7%
Banks 2.5%
^cAkbank T.A.S., senior note, 144A, 5.125%, 3/31/25	Turkey		200,000			184,936
Bank of America Corp., sub. bond, 4.183%, 11/25/27	United States		2,600,000			2,760,307
Barclays PLC, senior note, 3.932% to 5/07/24, FRN thereafter, 5/07/25	United Kingdom		1,100,000			1,120,977
BB&T Corp., sub. bond, 3.875%, 3/19/29	United States		2,000,000			2,139,893
^cBPCE SA, sub. note, 144A, 5.15%, 7/21/24	France		1,400,000			1,510,852
Citigroup Inc., senior note, 3.352% to 4/24/24, FRN thereafter, 4/24/25	United States		2,300,000			2,376,437
Credit Suisse Group Funding Guernsey Ltd., senior note, 3.80%, 9/15/22	Switzerland		2,300,000			2,385,548
HSBC Holdings PLC, senior note, 4.30%, 3/08/26	United Kingdom		2,100,000			2,249,783
JPMorgan Chase & Co., senior bond, 3.54% to 5/01/27, FRN thereafter, 5/01/28	United States		1,350,000			1,405,747
Regions Financial Corp., senior note, 3.80%, 8/14/23	United States		2,200,000			2,302,350
^cStandard Chartered PLC, senior note, 144A, 4.05%, 4/12/26	United Kingdom		1,800,000			1,865,214


						20,302,044

Capital Goods 0.8%
^cBeacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25	United States		200,000			198,750
Caterpillar Financial Services Corp., senior note, I, 2.65%, 5/17/21	United States		1,800,000			1,816,252
General Electric Co., senior bond, 4.125%, 10/09/42	United States		1,300,000			1,198,635
^cHarsco Corp., senior note, 144A, 5.75%, 7/31/27	United States		200,000			208,772
Lockheed Martin Corp., senior bond, 3.55%, 1/15/26	United States		1,800,000			1,914,299
United Technologies Corp., senior bond, 4.50%, 6/01/42	United States		800,000			904,815
^cVertiv Group Corp., senior note, 144A, 9.25%, 10/15/24	United States		200,000			192,500


						6,434,023

Commercial & Professional Services 0.0%^†
^cWest Corp., senior note, 144A, 8.50%, 10/15/25	United States		300,000			264,000

Consumer Services 0.3%
^cAscend Learning LLC, senior note, 144A, 6.875%, 8/01/25	United States		300,000			306,750
Marriott International Inc., senior note, 3.60%, 4/15/24	United States		1,100,000			1,146,746
^cStars Group Holdings BV/Stars Group U.S. Co-Borrower LLC, senior note, 144A, 7.00%, 7/15/26	Canada		300,000			318,000
^cWynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.25%, 5/15/27	United States		300,000			301,500


						2,072,996

Diversified Financials 1.2%
^cAshtead Capital Inc., second lien, 144A, 4.125%, 8/15/25	United Kingdom		850,000			860,359
Capital One Financial Corp., senior note, 3.75%, 3/09/27	United States		1,100,000			1,136,059
DY9 Leasing LLC, secured bond, 2.372%, 3/19/27	United States		773,055			780,672

FFA-20

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*		Value
Corporate Bonds (continued)
Diversified Financials (continued)
^cFirstCash Inc., senior note, 144A, 5.375%, 6/01/24	United States	200,000		$	206,500
The Goldman Sachs Group Inc., senior note, 3.50%, 1/23/25	United States	1,900,000			1,965,975
Morgan Stanley, senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28	United States	2,300,000			2,395,720
Private Export Funding Corp., secured bond, 2.80%, 5/15/22	United States	1,600,000			1,645,460
Springleaf Finance Corp., senior note, 6.625%, 1/15/28	United States	100,000			105,250
^cUBS Group Funding Switzerland AG, senior note, 144A, 4.125%, 9/24/25	Switzerland	950,000			1,017,768


					10,113,763

Energy 1.4%
^cAker BP ASA, senior note, 144A, 4.75%, 6/15/24	Norway	200,000			206,000
Baker Hughes a GE Co. LLC/Baker Hughes Co-obligator Inc., senior bond, 4.08%, 12/15/47	United States	900,000			872,768
^cCalifornia Resources Corp., secured note, second lien, 144A, 8.00%, 12/15/22	United States	200,000			151,750
Canadian Natural Resources Ltd., senior bond, 3.90%, 2/01/25	Canada	1,350,000			1,409,027
Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25	United States	200,000			223,250
Cheniere Energy Partners LP, senior secured note, first lien, 5.25%, 10/01/25	United States	200,000			207,500
Energy Transfer Operating LP, senior bond, 6.05%, 6/01/41	United States	700,000			784,444
Enterprise Products Operating LLC, senior bond, 6.125%, 10/15/39	United States	700,000			863,969
Kinder Morgan Inc., senior bond, 5.55%, 6/01/45	United States	800,000			926,394
MPLX LP, senior bond, 5.50%, 2/15/49	United States	425,000			481,555
Oceaneering International Inc., senior note, 4.65%, 11/15/24	United States	200,000			197,000
Reliance Industries Ltd., senior note, 2.06%, 1/15/26	United States	875,000			875,976
^cSchlumberger Holdings Corp., senior note, 144A, 3.75%, 5/01/24	United States	1,800,000			1,878,982
Valero Energy Corp., senior bond, 4.00%, 4/01/29	United States	1,000,000			1,047,338
The Williams Cos. Inc., senior note, 4.125%, 11/15/20	United States	1,350,000			1,374,624


					11,500,577

Food & Staples Retailing 0.3%
^cAramark Services Inc., senior bond, 144A, 5.00%, 2/01/28	United States	300,000			309,375
^cCK Hutchison International 19 Ltd., senior note, 144A, 3.25%, 4/11/24	Hong Kong	1,275,000			1,307,863
The Kroger Co., senior bond, 5.40%, 1/15/49	United States	550,000			611,546


					2,228,784

Food, Beverage & Tobacco 0.8%
Anheuser-Busch InBev Worldwide Inc., senior bond, 5.80%, 1/23/59	Belgium	1,400,000			1,755,082
Bunge Ltd. Finance Corp., senior note, 4.35%, 3/15/24	United States	700,000			730,421
Coca-Cola Femsa SAB de CV, senior note, 3.875%, 11/26/23	Mexico	1,500,000			1,574,475
^cImperial Brands Finance PLC, senior note, 144A, 4.25%, 7/21/25	United Kingdom	585,000			612,934
Kraft Heinz Foods Co., senior bond, 6.50%, 2/09/40	United States	700,000			819,399
Reynolds American Inc., senior bond, 5.85%, 8/15/45	United Kingdom	650,000			701,234
Tyson Foods Inc., senior bond, 5.10%, 9/28/48	United States	690,000			779,392


					6,972,937

Semiannual Report

FFA-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*		Value

Corporate Bonds (continued)
Health Care Equipment & Services 0.6%
Abbott Laboratories, senior bond, 3.75%, 11/30/26	United States	1,200,000		$	1,297,972
Anthem Inc., senior bond, 5.10%, 1/15/44	United States	600,000			690,076
^cCentene Corp., senior note, 144A, 5.375%, 6/01/26	United States	300,000			316,125
CHS/Community Health Systems Inc., senior secured note, first lien, 6.25%, 3/31/23	United States	100,000			96,625
Cigna Corp., senior bond, 3.05%, 10/15/27	United States	850,000			841,568
CVS Health Corp., senior bond, 5.30%, 12/05/43	United States	1,050,000			1,138,764
^cMEDNAX Inc., senior note, 144A, 6.25%, 1/15/27	United States	200,000			197,250


					4,578,380

Insurance 0.8%
Aflac Inc., senior bond, 4.75%, 1/15/49	United States	700,000			827,895
The Allstate Corp., senior bond, 4.20%, 12/15/46	United States	700,000			783,556
Marsh & McLennan Cos. Inc., senior note, 3.875%, 3/15/24	United States	2,000,000			2,121,938
MetLife Inc., junior sub. bond, 6.40%, 12/15/66	United States	700,000			801,500
^cMetropolitan Life Global Funding I, secured note, 144A, 3.60%, 1/11/24	United States	1,800,000			1,897,914


					6,432,803

Materials 0.6%
^cArdagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 2/15/25	Luxembourg	200,000			207,750
^cBWAY Holding Co., senior note, 144A, 7.25%, 4/15/25	United States	200,000			193,500
^cCemex SAB de CV, senior secured bond, first lien, 144A, 5.70%, 1/11/25	Mexico	200,000			207,743
The Chemours Co., senior note, 5.375%, 5/15/27	United States	200,000			191,500
^cFirst Quantum Minerals Ltd., senior note, 144A, 7.25%, 4/01/23	Zambia	300,000			293,250
^cFMG Resources (August 2006) Pty. Ltd., senior note, 144A, 5.125%, 5/15/24	Australia	200,000			208,188
Freeport-McMoRan Inc., senior bond, 3.875%, 3/15/23	United States	200,000			200,500
^cGlencore Funding LLC, senior note, 144A, 4.625%, 4/29/24	Switzerland	1,350,000			1,428,328
International Paper Co., senior bond, 3.80%, 1/15/26	United States	1,100,000			1,148,330
^cNew Gold Inc., senior note, 144A, 6.375%, 5/15/25	Canada	200,000			167,000
^cNorthwest Acquisitions ULC/Dominion Finco Inc., secured note, second lien, 144A, 7.125%, 11/01/22	Canada	100,000			69,250
^cOI European Group BV, senior note, 144A, 4.00%, 3/15/23	United States	300,000			302,625
^cPlastipak Holdings Inc., senior note, 144A, 6.25%, 10/15/25	United States	200,000			182,000
^cReynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group
Issuer Luxembourg SA, senior secured note, first lien, 144A, 5.125%, 7/15/23	United States	300,000			306,375
^cSunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25	United States	200,000			196,000


					5,302,339

Media & Entertainment 0.5%
^cCCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 144A, 5.00%, 2/01/28	United States	300,000			307,110
Charter Communications Operating LLC / Charter Communications Operating Capital, senior secured note, first lien, 4.50%, 2/01/24	United States	700,000			745,560
Comcast Corp., senior bond, 4.049%, 11/01/52	United States	1,350,000			1,433,848
^cCSC Holdings LLC, senior bond, 144A, 5.375%, 2/01/28	United States	300,000			312,375

FFA-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*		Value

Corporate Bonds (continued)
Media & Entertainment (continued)
^cTencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28	China	1,200,000		$	1,225,098


					4,023,991

Pharmaceuticals, Biotechnology & Life Sciences 0.5%
Allergan Funding SCS, senior bond, 4.85%, 6/15/44	United States	550,000			571,453
AstraZeneca PLC, senior bond, 4.375%, 11/16/45	United Kingdom	1,000,000			1,115,335
^cBausch Health Cos. Inc., senior bond, 144A, 6.125%, 4/15/25	United States	200,000			204,500
Biogen Inc., senior bond, 5.20%, 9/15/45	United States	700,000			787,137
Celgene Corp., senior bond, 4.625%, 5/15/44	United States	600,000			684,304
Gilead Sciences Inc., senior bond, 4.80%, 4/01/44	United States	700,000			797,956


					4,160,685

Real Estate 0.0%^†
American Tower Corp., senior bond, 3.60%, 1/15/28	United States	200,000			203,678

Retailing 0.3%
Alibaba Group Holding Ltd., senior bond, 4.20%, 12/06/47	China	1,100,000			1,148,708
AutoZone Inc., senior note, 3.75%, 4/18/29	United States	500,000			520,126
Dollar Tree Inc., senior note, 4.00%, 5/15/25	United States	450,000			469,204
^cParty City Holdings Inc., senior note, 144A, 6.625%, 8/01/26	United States	200,000			194,500
^cPetSmart Inc., senior note, 144A, 7.125%, 3/15/23	United States	100,000			94,250


					2,426,788

Semiconductors & Semiconductor Equipment 0.0%^†
Qorvo Inc., senior note, 5.50%, 7/15/26	United States	300,000			318,240

Software & Services 0.3%
Microsoft Corp., senior note, 2.65%, 11/03/22	United States	2,700,000			2,759,972

Technology Hardware & Equipment 0.2%
^cDell International LLC/EMC Corp., senior secured bond, first lien, 144A, 6.02%, 6/15/26	United States	700,000			772,551
Tech Data Corp., senior bond, 4.95%, 2/15/27	United States	700,000			732,880
^cTempo Acquisition LLC/Tempo Acquisition Finance Corp., senior note, 144A, 6.75%, 6/01/25	United States	300,000			310,500


					1,815,931

Telecommunication Services 0.2%
AT&T Inc., senior bond, 4.85%, 7/15/45	United States	300,000			320,674
Telefonica Emisiones SA, senior bond, 5.52%, 3/01/49	Spain	800,000			924,704


					1,245,378

Transportation 0.2%
CSX Corp., senior bond, 4.75%, 11/15/48	United States	800,000			932,083
Fedex Corp., senior bond, 5.10%, 1/15/44	United States	550,000			605,361
^cKazakhstan Temir Zholy Finance BV, senior bond, 144A, 6.95%, 7/10/42	Kazakhstan	250,000			310,701
^cMexico City Airport Trust, secured bond, 144A, 5.50%, 7/31/47	Mexico	200,000			199,594


					2,047,739

Semiannual Report

FFA-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*		Value

Corporate Bonds (continued)
Utilities 1.2%
Dominion Energy Inc., senior note, 4.25%, 6/01/28	United States	1,750,000		$	1,905,399
Duke Energy Corp., senior bond, 3.75%, 4/15/24	United States	1,350,000			1,425,454
^cElectricite de France SA, senior note, 144A, 4.50%, 9/21/28	France	1,600,000			1,755,408
^cEnel Finance International NV, senior note, 144A, 4.25%, 9/14/23	Italy	1,400,000			1,471,344
Georgia Power Co., senior bond, 4.30%, 3/15/42	United States	1,400,000			1,485,032
Public Service Enterprise Group Inc., senior note, 2.875%, 6/15/24	United States	1,000,000			1,010,483
^cState Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27	China	400,000			414,246
^cTalen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27	United States	300,000			308,250


					9,775,616


Total Corporate Bonds (Cost $101,651,625)					104,980,664


^d,e Senior Floating Rate Interests 0.7%
Automobiles & Components 0.0%^†
^f,gAdient US LLC, Initial Term Loans, TBD, 5/06/24	United States	40,000			39,067
Allison Transmission Inc., Initial Term Loans, 4.475%, (2-month USD LIBOR + 2.00%), 3/29/26	United States	200,000			200,833


					239,900

Capital Goods 0.2%
^fAECOM, Term B Loans, 4.152%, (1-month USD LIBOR + 1.75%), 3/13/25	United States	199,448			198,900
^fDelos Finance S.A.R.L. (AerCap), New Loans, 4.08%, (3-month USD LIBOR + 1.75%), 10/06/23	Luxembourg	166,667			166,736
^fFlying Fortress Holdings LLC (ILFC), New Loan, 4.08%, (3-month USD LIBOR + 1.75%), 10/30/22	United States	200,000			200,107
Navistar Inc., Tranche B Term Loan, 5.91%, (1-month USD LIBOR + 3.50%), 11/06/24	United States	300,000			300,125
^fRBS Global Inc. (Rexnord), Term B Loan, 4.402%, (1-month USD LIBOR + 2.00%), 8/21/24	United States	300,000			300,063
Resideo Funding Inc., Tranche B Term Loans, 4.330%, (3-month USD LIBOR + 2.00%), 10/25/25	United States	200,000			200,165


					1,366,096

Commercial & Professional Services 0.0%^†
Nielsen Finance LLC, Class B-4 Term Loans, 4.411%, (1-month USD LIBOR + 2.00%), 10/04/23	United States	200,000			198,357
^fUnited Rentals North America Inc., Initial Term Loans, 4.152%, (1-month USD LIBOR + 1.75%), 10/31/25	United States	199,497			199,729


					398,086

Consumer Services 0.1%
Avis Budget Car Rental LLC, Tranche B Term Loans, 4.41%, (1-month USD LIBOR + 2.00%), 2/13/25	United States	200,000			199,813
^f,gHilton Worldwide Finance LLC, Series B-2 Term Loans, TBD, 10/25/23	United States	200,000			200,337
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC (Yum Brands), Term Loan B, 4.132%, (1-month USD LIBOR + 1.75%), 4/03/25	United States	200,000			199,890

FFA-24

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*		Value

^d,eSenior Floating Rate Interests (continued)
Consumer Services (continued)
^fLas Vegas Sands LLC, Term B Loans, 4.152%, (1-month USD LIBOR + 1.75%), 3/27/25	United States	200,000		$	198,841


					798,881

Food & Staples Retailing 0.0%^†
Aramark Corp., U.S. Term B-3 Loan, 4.08%, (3-month USD LIBOR + 1.75%), 3/11/25	United States	200,000			199,687
^fU.S. Foods Inc., Initial Term Loans, 4.402%, (1-month USD LIBOR + 2.00%), 6/27/23	United States	200,000			198,964


					398,651

Food, Beverage & Tobacco 0.0%^†
^fJBS USA Lux SA, Term Loan, 4.902%, (1-month USD LIBOR + 2.50%), 5/01/26	United States	221,515			221,408

Health Care Equipment & Services 0.1%
DaVita Healthcare Partners Inc., Tranche B Term Loan, 5.135%, (1-week USD LIBOR + 2.75%), 6/24/21	United States	200,000			200,125
^fHCA Inc., Term Loan B11, 4.08%, (3-month USD LIBOR + 1.75%), 3/18/23	United States	199,495			199,786


					399,911

Materials 0.1%
^fAxalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 4.08%, (3-month USD LIBOR + 1.75%), 6/01/24	United States	199,495			197,438
^fCrown Americas LLC, Dollar Term B Loan, 4.401%, (1-month USD LIBOR + 2.00%), 4/03/25	United States	200,000			201,363


					398,801

Media & Entertainment 0.1%
Charter Communications Operating LLC, Term B Loan, 4.33%, (3-month USD LIBOR + 2.00%), 4/30/25	United States	200,000			200,000
Gray Television Inc., Term C Loan, 4.931%, (1-month USD LIBOR + 2.50%), 1/02/26	United States	300,000			300,075
^f,gNexstar Broadcasting Inc., Term B-4 Loan, TBD, 7/31/26	United States	12,226			12,198


					512,273

Software & Services 0.0%^†
^fCarbonite Inc., Initial Term Loan, 6.152%, (1-month USD LIBOR + 3.75%), 3/26/26	United States	11,765			11,811

Technology Hardware & Equipment 0.1%
^fCDW LLC, Term B Loan, 4.16%, (1-month USD LIBOR + 1.75%), 8/17/23	United States	199,486			199,673
CommScope Inc., Initial Term Loans, 5.652%, (1-month USD LIBOR + 3.25%), 4/04/26	United States	300,000			300,038
Western Digital Corp., U.S. Term B-4 Loan, 4.152%, (1-month USD LIBOR + 1.75%), 4/29/23	United States	200,000			196,050


					695,761

Semiannual Report

FFA-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount	*			Value


^d,e Senior Floating Rate Interests (continued)
Telecommunication Services 0.0%^†
^fGlobal Tel*Link Corp., First Lien Term Loan, 6.652%, (1-month USD LIBOR + 4.25%), 11/29/25	United States	39,900			$	38,613
^fSecurus Technologies Holdings Inc., Initial Term Loan, 6.83%, (3-month USD LIBOR + 4.50%), 11/01/24	United States	29,924				27,929


						66,542

Transportation 0.0%^†
Air Canada, Term Loan, 4.428%, (1-month USD LIBOR + 2.00%), 10/06/23	Canada	200,000				200,000
^fXPO Logistics Inc., Refinanced Term Loan, 4.40%, (1-month USD LIBOR + 2.00%), 2/24/25	United States	200,000				198,682


						398,682

Utilities 0.0%^†
^f,gNRG Energy Inc., Term Loan B, TBD, 6/30/23	United States	200,000				200,146


Total Senior Floating Rate Interests (Cost $6,125,691)						6,106,949


Foreign Government and Agency Securities 0.5%
^cAngolan Government International Bond, senior note, 144A, 8.25%, 5/09/28	Angola	300,000				321,762
^hBanque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24	Tunisia	300,000		EUR		339,844
^cDominican Republic, senior note, 144A, 8.90%, 2/15/23	Dominican Republic	14,600,000		DOP		288,262
Government of Colombia,
senior bond, 9.85%, 6/28/27	Colombia	1,000,000,000		COP		392,753
senior bond, 5.00%, 6/15/45	Colombia	300,000				331,971
^cGovernment of Gabon, 144A, 6.375%, 12/12/24	Gabon	400,000				396,842
^cGovernment of Indonesia, senior bond, 144A, 4.35%, 1/08/27	Indonesia	300,000				320,762
^cGovernment of Iraq, 144A, 5.80%, 1/15/28	Iraq	400,000				395,282
Government of Mexico, senior note, 4.15%, 3/28/27	Mexico	200,000				209,700
Government of South Africa, senior bond, 7.00%, 2/28/31	South Africa	5,500,000		ZAR		334,511
^cGovernment of Ukraine, senior bond, 144A, 7.375%, 9/25/32	Ukraine	400,000				393,594
ⁱGovernment of Uruguay, senior bond, Index Linked, 3.70%, 6/26/37	Uruguay	9,963,196		UYU		281,654


Total Foreign Government and Agency Securities (Cost $3,894,913)						4,006,937


U.S. Government and Agency Securities 4.9%
Federal Agricultural Mortgage Corp., 2.90%, 1/03/22	United States	800,000				821,383
FFCB,
3.17%, 3/07/28	United States	800,000				854,825
senior bond, 2.86%, 7/11/28	United States	800,000				835,607
FHLB, 2.625%, 9/12/25	United States	1,600,000				1,655,154
Hashemite Kingdom of Jordan Government AID Bond, senior note, 2.578%, 6/30/22	United States	800,000				818,095
Israel Government Agency for International Development Bond, 5.50%, 9/18/23	United States	1,110,000				1,268,934
TVA, 5.88%, 4/01/36	United States	630,000				868,671

FFA-26

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)


	Country	Principal Amount*		Value


U.S. Government and Agency Securities (continued)
U.S. Treasury Bond,
3.125%, 2/15/42	United States		6,450,000	$	7,207,749
2.50%, 2/15/46	United States		840,000		834,652
3.00%, 2/15/49	United States		3,060,000		3,356,557
ⁱIndex Linked, 2.00%, 1/15/26	United States		514,926		573,195
ⁱIndex Linked, 1.75%, 1/15/28	United States		792,744		889,206
ⁱIndex Linked, 3.625%, 4/15/28	United States		710,872		913,079
U.S. Treasury Note,
1.125%, 6/30/21	United States		4,400,000		4,345,687
2.375%, 8/15/24	United States		1,680,000		1,728,562
2.25%, 8/15/27	United States		420,000		429,975
2.625%, 2/15/29	United States		8,100,000		8,538,064
ⁱIndex Linked, 0.125%, 7/15/24	United States		1,721,676		1,719,392
ⁱIndex Linked, 0.375%, 7/15/25	United States		2,909,032		2,942,275


Total U.S. Government and Agency Securities (Cost $39,061,770)					40,601,062


Asset-Backed Securities and Commercial Mortgage- Backed Securities 5.4%

Diversified Financials 5.4%
^c,jAtrium XII, 12A, CR, 144A, FRN, 4.242%, (3-month USD LIBOR + 1.65%), 4/22/27	United States		1,240,000		1,224,773
^c,kAtrium XIII, 2017-13A, A1, 144A, FRN, 3.772%, 11/21/30	United States		1,410,000		1,404,684
^c,kBlueMountain CLO XXII Ltd., 2018-1A, B, 144A, FRN, 4.283%, 7/30/30	United States		1,200,000		1,197,564
^c,kBlueMountain CLO XXIII Ltd., 2018-23A, D, 144A, FRN, 5.492%, 10/20/31	United States		800,000		776,000
^c,jBlueMountain Fuji U.S. CLO III Ltd., 2017-3A, A2, 144A, FRN, 3.747%, (3-month USD LIBOR + 1.15%), 1/15/30	United States		1,000,000		973,800
^cBRAVO Residential Funding Trust, 2019-1, A1C, 144A, 3.50%, 3/25/58	United States		948,573		969,386
^cBWAY Mortgage Trust, 2013-1515, C, 144A, 3.454%, 3/10/33	United States		750,000		787,224
^c,j Carlyle Global Market Strategies CLO Ltd.,
2014-4RA, C, 144A, FRN, 5.497%, (3-month USD LIBOR + 2.90%), 7/15/30	United States		440,000		420,732
2015-2A, A1R, 144A, FRN, 3.362%, (3-month USD LIBOR + 0.78%), 4/27/27	United States		1,000,000		997,260
^c,kCARLYLE US CLO Ltd., 2017-4A, A1, 144A, FRN, 3.777%, 1/15/30	United States		1,000,000		998,780
^c,kCent CLO, 2018-28A, C, 144A, FRN, 5.985%, 11/07/30	United States		750,000		738,750
^c,kCIM Trust, 2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49	United States		723,910		740,991
^c,kCOMM Mortgage Trust, 2014-277P, A, 144A, FRN, 3.611%, 8/10/49	United States		1,000,000		1,061,606
^c,jDryden 41 Senior Loan Fund, 2015-41A, AR, 144A, FRN, 3.567%, (3-month USD LIBOR + 0.97%), 4/15/31	United States		1,000,000		989,530
^c,jDryden 42 Senior Loan Fund, 2016-42A, CR, 144A, FRN, 4.647%, (3-month USD LIBOR + 2.05%), 7/15/30	United States		900,000		879,345
^c,jDryden 50 Senior Loan Fund, 2017-50A, A1, 144A, FRN, 3.817%, (3-month USD LIBOR + 1.22%), 7/15/30	United States		1,880,000		1,876,372

Semiannual Report

FFA-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)



	Country		Principal Amount*			Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
FHLMC Structured Agency Credit Risk Debt Notes,
^j2016-DNA2, M3, FRN, 7.054%, (1-month USD LIBOR + 4.65%), 10/25/28		United States		1,000,000		$	1,080,950
^k2017-DNA2, M2, FRN, 5.854%, 10/25/29		United States		1,000,000			1,070,460
^j2017-DNA3, M2, FRN, 4.904%, (1-month USD LIBOR + 2.50%), 3/25/30		United States		1,000,000			1,023,610
FNMA Connecticut Avenue Securities,
^j2013-C01, M2, FRN, 7.654%, (1-month USD LIBOR + 5.25%), 10/25/23		United States		863,390			959,832
^j2014-C01, M2, FRN, 6.804%, (1-month USD LIBOR + 4.40%), 1/25/24		United States		1,000,000			1,093,893
^j2014-C03, 1M2, FRN, 5.404%, (1-month USD LIBOR + 3.00%), 7/25/24		United States		1,446,690			1,518,150
^j2014-C04, 2M2, FRN, 7.404%, (1-month USD LIBOR + 5.00%), 11/25/24		United States		1,242,541			1,361,168
^k2016-C02, 1M2, FRN, 8.404%, 9/25/28		United States		948,333			1,049,068
^k2016-C04, 1M2, FRN, 6.654%, 1/25/29		United States		1,000,000			1,074,795
^j2017-C01, 1M2, FRN, 5.954%, (1-month USD LIBOR + 3.55%), 7/25/29		United States		1,000,000			1,059,460
^k2017-C03, 1M2, FRN, 5.404%, 10/25/29		United States		1,000,000			1,044,765
^k2017-C05, 1M2, FRN, 4.604%, 1/25/30		United States		1,000,000			1,010,418
^c,jLCM XXV Ltd., 25A, B2, 144A, FRN, 4.242%, (3-month USD LIBOR + 1.65%), 7/20/30		United States		1,200,000			1,194,624
^c,l,mMadison Park Euro Funding XIV DAC, 14A, A1N, 144A, FRN, 7/15/32		Ireland		250,000	EUR		284,213
^c,jMadison Park Funding XI Ltd., 2013-11, CR, 144A, FRN, 4.792%, (3-month USD LIBOR + 2.20%), 7/23/29		United States		1,000,000			993,730
^c,kMadison Park Funding XXIX Ltd., 2018-29A, B, 144A, FRN, 4.351%, 10/18/30		United States		1,500,000			1,499,970
^c,jMadison Park Funding XXVI Ltd., 2017-26A, AR, 144A, FRN, 3.782%, (3-month USD LIBOR + 1.20%), 7/29/30		United States		2,350,000			2,352,068
^c,kMill City Mortgage Loan Trust, 2018-2, A1, 144A, FRN, 3.50%, 5/25/58		United States		1,247,021			1,277,763
^c,kNeuberger Berman CLO XVIII Ltd., 2014-18A, CR2, 144A, FRN, 5.592%, 10/21/30		United States		800,000			778,576
^c,kOctagon Investment Partners 18-R Ltd., 2018-18A, A1A, 144A, FRN, 3.561%, 4/16/31		United States		1,000,000			989,500
^c,kOctagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 4.381%, 10/24/30		United States		1,200,000			1,201,764
^c,jOctagon Investment Partners XVI Ltd., 2013-1A, CR, 144A, FRN, 4.438%, (3-month USD LIBOR + 1.85%), 7/17/30		United States		850,000			823,540
^c,k Towd Point Mortgage Trust,
2015-5, A1B, 144A, FRN, 2.75%, 5/25/55		United States		785,540			789,071
2018-1, A1, 144A, FRN, 3.00%, 1/25/58		United States		1,429,085			1,447,577
2018-3, A1, 144A, FRN, 3.75%, 5/25/58		United States		1,070,337			1,116,239


Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $44,296,777)							44,132,001

FFA-28

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)



	Country		Principal Amount*		Value
Mortgage-Backed Securities 12.0%

Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 1.5%

ⁿFHLMC Gold 30 Year, 3.00%, 6/01/49		United States		5,700,000	$	5,746,467

FHLMC Gold 30 Year, 3.50%, 5/01/49		United States		6,519,759		6,669,322


						12,415,789


Federal National Mortgage Association (FNMA) Fixed Rate 4.7%

FNMA 30 Year, 3.00%, 5/01/49		United States		6,247,012		6,303,406

FNMA 30 Year, 3.50%, 6/01/49		United States		7,269,727		7,442,321

ⁿFNMA 30 Year, 3.50%, 7/01/49		United States		2,050,000		2,095,324

ⁿFNMA 30 Year, 4.00%, 6/01/49		United States		3,100,000		3,203,475

FNMA 30 Year, 4.00%, 6/01/49		United States		11,440,668		11,848,369

FNMA 30 Year, 4.50%, 1/01/49		United States		7,303,322		7,651,879


						38,544,774


Government National Mortgage Association (GNMA) Fixed Rate 5.8%

GNMA II SF 30 Year, 3.00%, 9/20/47		United States		2,960,894		3,028,842

GNMA II SF 30 Year, 3.00%, 11/20/47 - 5/20/49		United States		1,786,080		1,827,068

GNMA II SF 30 Year, 3.50%, 4/20/49		United States		12,733,895		13,159,184

GNMA II SF 30 Year, 3.50%, 5/20/49		United States		12,973,706		13,407,005

GNMA II SF 30 Year, 4.00%, 5/20/49		United States		7,783,595		8,104,889

GNMA II SF 30 Year, 4.50%, 5/20/49		United States		5,187,832		5,439,513

GNMA II SF 30 Year, 5.00%, 3/20/49		United States		2,976,941		3,127,345


						48,093,846


Total Mortgage-Backed Securities (Cost $98,201,518)						99,054,409


Total Investments before Short Term Investments (Cost $808,026,364)						810,217,766


			Shares
Short Term Investments (Cost $23,981,648) 2.9%

Money Market Funds 2.9%

^b,oInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		United States		23,981,648		23,981,648


Total Investments (Cost $832,008,012) 101.1%						834,199,414

Other Assets, less Liabilities (1.1)%						(8,686,335	)


Net Assets 100.0%					$	825,513,079

Semiannual Report

FFA-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation 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.

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

^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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019, the aggregate value of these securities was $58,858,466, representing 7.1% of net assets.

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

^eSee Note 1(f) regarding senior floating rate interests.

^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.

^hSecurity 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. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019, the value of this security was $339,844, representing less than 0.1% of net assets.

ⁱPrincipal amount of security is adjusted for inflation. See Note 1(h).

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

^kAdjustable 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.

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

^mThe coupon rate will be determined at time of issue.

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

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

At June 30, 2019, 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		9		$ 1,324,890		9/20/19		$ 14,172


Interest Rate Contracts

Australian 3 Yr. Bond		Long		67		5,408,413		9/16/19		6,064

Australian 10 Yr. Bond		Long		19		1,915,869		9/16/19		9,326

Canada 10 Yr. Bond		Long		11		1,200,405		9/19/19		(4,970	)

CME Ultra Long Term U.S. Treasury Bond		Long		7		1,242,938		9/19/19		14,646

U.S. Treasury 2 Yr. Note		Long		5		1,075,898		9/30/19		892

U.S. Treasury 5 Yr. Note		Long		163		19,259,469		9/30/19		218,824

U.S. Treasury 10 Yr. Note		Long		7		895,781		9/19/19		7,567

U.S. Treasury 10 Yr. Note		Short		28		3,583,125		9/19/19		(77,913	)

U.S. Treasury 30 Yr. Bond		Long		11		1,711,531		9/19/19		23,359


						$36,293,429				$197,795


Total Futures Contracts						$37,618,319				$211,967

*As of period end.

FFA-30

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

At June 30, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts


Currency	Counterparty^a		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation


OTC Forward Exchange Contracts

Mexican Peso		JPHQ		Buy		6,950,000		$360,384		8/08/19		$ —		$ (1,006	)

Canadian Dollar		JPHQ		Sell		830,000		620,670		9/18/19		—		(13,983	)

Euro		JPHQ		Sell		588,336		666,978		9/18/19		—		(6,276	)

Norwegian Krone		JPHQ		Buy		5,110,000		585,835		9/18/19		14,343		—

Swedish Krona		JPHQ		Sell		5,530,000		583,580		9/18/19		—		(15,493	)

Chinese Yuan Renminbi		JPHQ		Sell		1,845,000		273,637		9/27/19		5,305		—

Chinese Yuan Renminbi		JPHQ		Sell		3,250,000		470,074		9/27/19		—		(2,598	)

South Korean Won		JPHQ		Sell		467,500,000		403,243		9/27/19		—		(1,865	)

Australian Dollar		JPHQ		Sell		530,000		365,218		10/11/19		—		(7,940	)

Australian Dollar		JPHQ		Sell		570,000		403,325		10/11/19		2,004		—

Turkish Lira		JPHQ		Buy		1,380,000		221,633		10/18/19		3,140		—

Indonesian Rupiah		JPHQ		Buy		4,950,000,000		337,953		12/16/19		4,885		—


Total Forward Exchange Contracts												$ 29,677		$ (49,161	)


Net unrealized appreciation (depreciation)														$ (19,484	)

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

Semiannual Report

FFA-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

At June 30, 2019, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts


Description	Periodic Payment Rate Received (Paid)			Payment Frequency		Counter- party		Maturity Date		Notional Amount^a		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)		Rating^b

Centrally Cleared Swap Contracts

Contracts to Sell Protection^c,d

Traded Index

CDX.NA.HY.32		5.00	%		Quarterly				6/20/24		$2,160,000		$165,667			$ 159,371			$ 6,296		Non- Investment Grade
CDX.NA.IG.32		1.00	%		Quarterly				6/20/24		1,200,000		25,999			23,474			2,525		Investment Grade

Total Centrally Cleared Swap Contracts													$191,666			$ 182,845			$ 8,821


OTC Swap Contracts

Contracts to Sell Protection^c,d

Single Name

Government of Argentina		5.00	%		Quarterly		JPHQ		6/20/23		$ 550,000		$ (79,486	)		$ (116,349	)		$36,863		B

Government of Russia		1.00	%		Quarterly		CITI		6/20/24		300,000		(1,857	)		(4,085)			2,228		BBB-

Traded Index

^eCitibank Bespoke Phoenix, 5-7% Tranche		2.90	%		Quarterly		CITI		12/20/21		250,000		2,606			—			2,606		Non- Investment Grade

Total OTC Swap Contracts													$ (78,737	)		$ (120,434	)		$41,697


Total Credit Default Swap Contracts													$112,929			$ 62,411			$50,518

^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 issuers.

At June 30, 2019, 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

Long^a

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

JPHQ

12/20/19

$4,500,000

$(41,475

)

^aThe Fund receives the total return on the underlying instrument and pays a variable financing rate.

See Note 7 regarding other derivative information.

See Abbreviations on page FFA-49.

FFA-32

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, 2019 (unaudited)



	Franklin Allocation VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$ 772,265,729
Cost - Non-controlled affiliates (Note 3e)		59,742,283


Value - Unaffiliated issuers		$776,888,121
Value - Non-controlled affiliates (Note 3e)		57,311,293
Cash		48,778
Foreign currency, at value (cost $1,693,138)		1,693,353
Receivables:
Investment securities sold		6,084,633
Capital shares sold		121,970
Dividends and interest		2,672,361
Deposits with brokers for:
Futures contracts		278,158
Centrally cleared swap contracts		141,789
Variation margin on futures contracts		7,458
Variation margin on centrally cleared swap contracts		4,555
Unrealized appreciation on OTC forward exchange contracts		29,677
Unrealized appreciation on OTC swap contracts		41,697
Other assets		38,662


Total assets		845,362,505


Liabilities:
Payables:
Investment securities purchased		18,336,405
Capital shares redeemed		552,856
Management fees		328,014
Distribution fees		408,628
Trustees’ fees and expenses		1,191
OTC swap contracts (upfront receipts $125,215)		120,434
Unrealized depreciation on OTC forward exchange contracts		49,161
Unrealized depreciation on OTC swap contracts		41,475
Deferred tax		309
Accrued expenses and other liabilities		10,953


Total liabilities		19,849,426


Net assets, at value		$825,513,079

Net assets consist of:
Paid-in capital		$621,568,623
Total distributable earnings (loss)		203,944,456


Net assets, at value		$825,513,079

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

FFA-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

June 30, 2019 (unaudited)



	Franklin Allocation VIP Fund

Class 1:
Net assets, at value		$ 1,138,635

Shares outstanding		176,153

Net asset value and maximum offering price per share		$6.46

Class 2:
Net assets, at value		$415,902,294

Shares outstanding		64,791,246

Net asset value and maximum offering price per share		$6.42

Class 4:
Net assets, at value		$408,472,150

Shares outstanding		62,104,869

Net asset value and maximum offering price per share		$6.58

FFA-34

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, 2019 (unaudited)



	Franklin Allocation VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 2,474,960
Non-controlled affiliates (Note 3e)		2,528,859
Interest: (net of foreign taxes)~
Unaffiliated issuers		1,554,491

Total investment income		6,558,310

Expenses:
Management fees (Note 3a)		748,057
Administrative fees (Note 3b)		272,591
Distribution fees: (Note 3c)
Class 2		512,155
Class 4		712,082
Custodian fees (Note 4)		359
Reports to shareholders		36,502
Professional fees		46,763
Trustees’ fees and expenses		3,701
Other		9,590

Total expenses		2,341,800
Expenses waived/paid by affiliates (Note 3e and 3f)		(138,572	)

Net expenses		2,203,228

Net investment income		4,355,082

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		302,456
Controlled affiliates (Note 3e)		82,811,056
Non-controlled affiliates (Note 3e)		153,335,293
Foreign currency transactions		(57,395	)
Forward exchange contracts		1,333
Futures contracts		44,513
Swap contracts		(46,642	)

Net realized gain (loss)		236,390,614

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		4,622,392
Controlled affiliates (Note 3e)		(56,876,879	)
Non-controlled affiliates (Note 3e)		(89,551,617	)
Translation of other assets and liabilities denominated in foreign currencies		(929	)
Forward exchange contracts		(19,484	)
Futures contracts		211,967
Swap contracts		9,043
Change in deferred taxes on unrealized appreciation		(309	)

Net change in unrealized appreciation (depreciation)		(141,605,816	)


Net realized and unrealized gain (loss)		94,784,798

Net increase (decrease) in net assets resulting from operations		$ 99,139,880


*Foreign taxes withheld on dividends		$ 151,060
^~Foreign taxes withheld on interest		$ 4,313

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

FFA-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets



	Franklin Allocation VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 4,355,082			$ 26,188,755
Net realized gain (loss)		236,390,614			57,368,194
Net change in unrealized appreciation (depreciation)		(141,605,816	)		(166,306,372	)


Net increase (decrease) in net assets resulting from operations		99,139,880			(82,749,423	)

Distributions to shareholders:
Class 1		(114,944	)		(60,348	)
Class 2		(41,503,915	)		(24,442,861	)
Class 4		(39,405,922	)		(24,951,975	)


Total distributions to shareholders		(81,024,781	)		(49,455,184	)


Capital share transactions: (Note 2)
Class 1		140,911			99,087
Class 2		17,474,659			(25,472,556	)
Class 4		5,113,540			(68,063,868	)


Total capital share transactions		22,729,110			(93,437,337	)


Net increase (decrease) in net assets		40,844,209			(225,641,944	)
Net assets:
Beginning of period		784,668,870			1,010,310,814


End of period		$ 825,513,079			$ 784,668,870

FFA-36

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 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. The Fund invests in other funds of the Trust (Underlying Funds). 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 accounting policies of the Underlying Funds are outlined in their respective shareholder reports. A copy of the Underlying Funds’ shareholder reports is available on the U.S. Securities and Exchange Commission (SEC) website at sec.gov. The Underlying Funds’ shareholder reports are not covered by this report.

Effective May 1, 2019, the Fund repositioned to a direct investment fund with an actively managed dynamic allocation strategy, which involved modifying the Fund’s principal investment strategies and changing the name of the Fund from Franklin Founding Funds Allocation VIP Fund to Franklin Allocation VIP Fund.

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.

Investments in the Underlying Funds are valued at their closing NAV each trading day. Exchange traded funds 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.

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.



		Semiannual Report			FFA-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

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.

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. Occasionally, events 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, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an

event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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.

FFA-38

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

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.

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

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. 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.

Semiannual Report

FFA-39

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)

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 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 total return swap contracts primarily to manage and/or gain exposure to credit and other 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 7 regarding other derivative information.

e. 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.

f. 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.

g. 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

FFA-40

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

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, 2019, 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.

h. 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 income, capital gain distributions by Underlying Funds and ETFs 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.

The Fund indirectly bears its proportionate share of expenses from the Underlying Funds. Since the Underlying Funds have varied expense levels and the Fund may own different proportions of the Underlying Funds at different times, the amount of expenses incurred indirectly by the Fund will vary.

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.

i. 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.

j. 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

Semiannual Report

FFA-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

j. Guarantees and Indemnifications (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, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		8,946		$	62,501			17,451		$	125,360
Shares issued in reinvestment of distributions		18,101			114,944			8,536			60,348
Shares redeemed		(5,329	)		(36,534	)		(12,205	)		(86,621)


Net increase (decrease)		21,718		$	140,911			13,782		$	99,087


Class 2 Shares:
Shares sold		1,098,654		$	7,545,389			4,193,705		$	28,329,864
Shares issued in reinvestment of distributions		6,577,483			41,503,915			3,476,936			24,442,861
Shares redeemed		(4,614,006	)		(31,574,645	)		(10,985,773	)		(78,245,281)


Net increase (decrease)		3,062,131		$	17,474,659			(3,315,132	)	$	(25,472,556)

Class 4 Shares:
Shares sold		434,567		$	3,007,997			1,130,901		$	8,277,821
Shares issued in reinvestment of distributions		6,099,988			39,405,922			3,475,205			24,951,975
Shares redeemed		(5,352,130	)		(37,300,379	)		(13,897,304	)		(101,293,664)

Net increase (decrease)		1,182,425		$	5,113,540			(9,291,198	)	$	(68,063,868)

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/or trustees of the Fund are also officers and 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

FFA-42

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

a. Management Fees

Effective May 1, 2019, the Fund pays an investment management fee to Advisers of 0.55% per year of the average daily net assets of the Fund.

Effective May 1, 2019, 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

Effective May 1, 2019, 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.

Prior to May 1, 2019, the Fund paid FT Services for administrative services. The Fund paid administrative fees of 0.10% per year of the average daily net assets 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.

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, 2019, 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

Controlled Affiliates
Templeton Growth VIP Fund, Class 1	$	259,507,605	$	—	$	(285,441,782	)	$	82,811,056	$	(56,876,879	)	$	—		—	$	—

Non-Controlled Affiliates
Franklin Income VIP Fund, Class 1		260,563,549		700,000		(290,767,442	)		62,950,179		(33,446,286	)		—		—		—
Franklin Mutual Shares VIP Fund, Class 1		262,865,813		600,000		(300,176,586	)		90,385,114		(53,674,341	)		—		—		—
Institutional Fiduciary Trust Money Market Portfolio, 2.05%		—		292,991,384		(269,009,736	)		—		—			23,981,648		23,981,648		212,257

Semiannual Report

FFA-43

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation 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		Dividend Income

Non-Controlled Affiliates (continued)
Templeton Global Bond VIP Fund, Class 1	$	—	$	35,760,635	$	—	$	—	$	(2,430,990	)	$	33,329,645		1,978,020	$	2,316,602


Total Non-Controlled Affiliates	$	523,429,362	$	330,052,019	$	(859,953,764)	$	153,335,293	$	(89,551,617	)	$	57,311,293			$	2,528,859

Total Affiliated Securities	$	782,936,967	$	330,052,019	$	(1,145,395,546)	$	236,146,349	$	(146,428,496	)	$	57,311,293			$	2,528,859

f. Waiver and Expense Reimbursements

Effective May 1, 2019, 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 expenses (including acquired fund fees and expenses but excluding distribution fees, and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) for each class of the Fund do not exceed 0.57%, based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

Prior to May 1, 2019, expenses (excluding certain fees and expenses as previously disclosed) for the Fund was limited to 0.10% based on the average net assets of the Fund.

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, 2019, there were no credits earned.

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	871,304,931

Unrealized appreciation	$	21,265,916
Unrealized depreciation		(58,102,744)

Net unrealized appreciation (depreciation)	$	(36,836,828)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of short term capital gains distributions from Underlying Funds and wash sales.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $1,065,348,430 and $1,135,012,871, respectively.



FFA-44		Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

7. Other Derivative Information

At June 30, 2019, 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

$280,678^a

Variation margin on futures contracts

$ 82,883

Unrealized appreciation on OTC swap contracts

—

Unrealized depreciation on OTC swap contracts

41,475

Foreign exchange contracts

Unrealized appreciation on OTC forward exchange contracts

29,677

Unrealized depreciation on OTC forward exchange contracts

49,161

Credit contracts

Variation margin on centrally cleared swap contracts

8,821^a

Variation margin on centrally cleared swap contracts

—

OTC swap contracts (upfront payments)

—

OTC swap contracts (upfront receipts)

120,434

Unrealized appreciation on OTC swap contracts

41,697

Unrealized depreciation on OTC swap contracts

—

Equity contracts

Variation margin on futures contracts

14,172^a

Variation margin on futures contracts

—

Totals

$375,045

$293,953

^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.

For the period ended June 30, 2019, 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	Futures contracts	$	44,513		Futures contracts		$197,795
	Swap contracts		—		Swap contracts		(41,475	)

Foreign exchange contracts	Forward exchange contracts		1,333		Forward exchange contracts		(19,484	)

Credit contracts	Swap contracts		(46,642	)	Swap contracts		50,518

Equity contracts	Futures contracts		—		Futures contracts		14,172


Totals		$	(796	)			$201,526

For the period ended June 30, 2019, the average month end notional amount of futures contracts and swap contracts represented $9,987,637 and $8,347,143, respectively. The average month end contract value of forward exchange contracts was $1,586,381.

Semiannual Report

FFA-45

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

7. Other Derivative Information (continued)

At June 30, 2019, OTC derivative assets and liabilities are as follows:



	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities

	Assets^a		Liabilities^a

Derivatives
Forward exchange contracts		$29,677		$ 49,161
Swap contracts		41,697		161,909


Total		$71,374		$211,070

^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, 2019, 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 Received		Cash Collateral Received		Net Amount (Not less than zero)

Counterparty
CITI		$ 4,834		$ (4,085	)		$ —		$ —		$ 749
JPHQ		66,540		(66,540	)		—		—		—

Total		$71,374		$(70,625	)		$ —		$ —		$ 749

At June 30, 2019, 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 Pledged		Net Amount (Not less than zero)

Counterparty
CITI		$ 4,085		$ (4,085	)		$ —		$ —		$ —
JPHQ		206,985		(66,540	)		—		—		140,445

Total		$211,070		$(70,625	)		$ —		$ —		$140,445

See Note 1(d) regarding derivative financial instruments.

See Abbreviations on page FFA-49.

FFA-46

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation 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 7, 2020. 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, 2019, 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.

Semiannual Report

FFA-47

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

9. Fair Value Measurements (continued)

A summary of inputs used as of June 30, 2019, 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	$	511,335,744	$	—	$	—	$	511,335,744
Corporate Bonds		—		104,980,664		—		104,980,664
Senior Floating Rate Interests		—		6,106,949		—		6,106,949
Foreign Government and Agency Securities		—		4,006,937		—		4,006,937
U.S. Government and Agency Securities		—		40,601,062		—		40,601,062
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		44,132,001		—		44,132,001
Mortgage-Backed Securities		—		99,054,409		—		99,054,409
Short Term Investments		23,981,648		—		—		23,981,648

Total Investments in Securities	$	535,317,392	$	298,882,022	$	—	$	834,199,414

Other Financial Instruments:
Futures Contracts	$	294,850	$	—	$	—	$	294,850
Forward Exchange Contracts		—		29,677		—		29,677
Swap Contracts		—		50,518		—		50,518

Total Other Financial Instruments	$	294,850	$	80,195	$	—	$	375,045


Liabilities:
Other Financial Instruments:
Futures Contracts	$	82,883	$	—	$	—	$	82,883
Forward Exchange Contracts		—		49,161		—		49,161
Swap Contracts		—		41,475		—		41,475

Total Other Financial Instruments	$	82,883	$	90,636	$	—	$	173,519

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

^bIncludes common stocks and management investment companies.

10. 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.

FFA-48

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Allocation VIP Fund (continued)

Abbreviations


Counterparty		Currency		Selected Portfolio

CITI	Citigroup, Inc.	COP	Colombian Peso	ADR	American Depositary Receipt

JPHQ	JP Morgan Chase & Co.	DOP	Dominican Peso	CLO	Collateralized Loan Obligations

		EUR	Euro	ETF	Exchange Traded Fund

		GBP	British Pound	FFCB	Federal Farm Credit Bank

		HKD	Hong Kong Dollar	FHLB	Federal Home Loan Bank

		USD	United States Dollar	FRN	Floating Rate Note

		UYU	Uruguayan Peso	IDR	International Depository Receipt

		ZAR	South African Rand	LIBOR	London InterBank Offered Rate

				SF	Single Family


Index

CDX.NA.HY.Series number		CDX North America High Yield Index

CDX.NA.IG.Series number		CDX North America Investment Grade Index

Semiannual Report

FFA-49

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Allocation VIP Fund

During the fiscal year ended December 31, 2018, the Fund, a qualified fund of funds under Section 852(g)(2) of Internal Revenue Code, received an allocation of foreign taxes paid from one or more of its underlying funds. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid by underlying funds, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 13, 2019, to treat their proportionate share of foreign taxes paid by the underlying funds 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 as reported by the Fund to shareholders of record.


Class	Foreign Tax Paid Per Share		Foreign Source Income Per Share

Class 1		$0.0054		$0.0526

Class 2		$0.0054		$0.0526

Class 4		$0.0054		$0.0526

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.

FFA-50

Semiannual Report

Franklin Flex Cap Growth VIP Fund

This semiannual report for Franklin Flex Cap Growth VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +24.98% total return* for the six-month period ended June 30, 2019.

*The Fund has an expense reduction and a fee waiver associated with any investments it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

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. 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 +21.41% total return, the Russell 1000^® Growth Index posted a +21.49% total return, and the Standard & Poor’s^® 500 Index (S&P 500^®) posted a +18.54% total return for the same period.¹

Economic and Market Overview

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

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

September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low in recent months, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

U.S. equity markets overall rose during the period, benefiting from upbeat economic data and U.S. corporate earnings. However, markets reflected concerns about tighter regulation of technology companies, U.S. political uncertainties, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. These concerns were partially alleviated in 2019’s first four months by easing trade tensions and optimism about a potential U.S.-China trade deal. Furthermore, markets benefited from the Fed’s indications of a patient approach to its monetary policy decisions. The broad U.S. stock market, as measured by the S&P 500, rallied in 2019’s first four months, reaching a new all-time high in April 2019. After declining in May due to escalating trade tensions, stocks reached another all-time high in June amid investor optimism about potential interest-rate cuts. Overall, the S&P 500 posted a +18.54% total return for the six-month period.¹

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.


Top 10 Holdings
6/30/19

Company *Sector/Industry*	% of Total Net Assets
Amazon.com Inc. Retailing		7.6%
Microsoft Corp. Software & Services		7.3%
Mastercard Inc. Software & Services		7.2%
ServiceNow Inc. Software & Services		5.3%
Alphabet Inc. Media & Entertainment		5.0%
salesforce.com Inc. Software & Services		4.3%
The Boeing Co. Capital Goods		3.7%
Visa Inc. Software & Services		3.5%
Xilinx Inc. Semiconductors & Semiconductor Equipment		3.2%
American Tower Corp. Real Estate		3.2%

Manager’s Discussion

During the six months ended June 30, 2019, all sectors represented in the Fund’s portfolio posted positive returns and contributed to absolute performance. Relative to the Russell 3000^® Growth Index, stock selection and an overweighting in the information technology (IT) sector contributed significantly to the Fund’s performance.³ Stock selection and an underweighting in the health care sector, as well as stock selection in the consumer staples sector, also contributed to relative performance.⁴

Within the IT sector, our investments in cloud-based enterprise workflow management provider ServiceNow, financial technology company Mastercard and programmable chipmaker Xilinx contributed to relative results. ServiceNow, which enables companies to become more automated and efficient, continues to execute well in its large addressable market. A leader in enabling digital transformation, the company is becoming a multi-platform growth business with a strong product line, in our analysis. The recently introduced pro version of a core offering comes at a

3. The IT sector comprises semiconductors and semiconductor equipment and software and services in the SOI.

4. The health care sector comprises health care equipment and services and pharmaceuticals, biotechnology and life sciences in the SOI. The consumer staples sector comprises food and staples retailing; food, beverage and tobacco; and household and personal products in the SOI

Semiannual Report

FFC-3

FRANKLIN FLEX CAP GROWTH VIP FUND

price premium we believe could drive revenue and billings growth. Mastercard continues to perform very well, exceeding expectations and announcing several growth initiatives, partnerships, acquisition of capabilities that expand its global network, investment in emerging regions and expansion into new payment flows. The company has shown an ability to both invest for the long term and deliver solid quarter-to-quarter execution, which we believe is supported by a strong organic growth profile. Xilinx has benefited from its deployment of wireless 5G technology and the growth of its data center business. We like Xilinx’s competitive position and business model, and we believe that data center and artificial intelligence trends can drive growth for years to come.

In the health care sector, our positions in veterinary products and services provider IDEXX Laboratories and medical equipment and services company Danaher (not part of the index) aided relative results.

In the consumer staples sector, our holding in Estee Lauder, a manufacturer of skin care, makeup, fragrance and hair care products, supported relative results.

Other notable contributors to relative results included our positions in streaming subscription service company Netflix and software and engineered products company Roper Technologies.

In contrast, stock selection in the energy and communication services sectors, as well as a lack of exposure to the materials sector, detracted from the Fund’s relative performance.⁵

Most of the Fund’s investments posted positive returns during the six-month period. However, positive returns from several holdings lagged the benchmark index, and our overweighted positions hurt relative performance. These holdings included oil and natural gas company Concho Resources in the energy sector and Google-parent Alphabet in the communication services sector. Alphabet continued to benefit from the shift toward online spending, Google’s innovation in its advertising businesses and Google Cloud’s strong growth momentum.

Other key detractors with positive returns that lagged the benchmark index included cloud-based customer relationship management company salesforce.com, pharmaceuticals firm Elanco Animal Health, robotic surgery systems manufacturer Intuitive Surgical and medical technology company Becton, Dickinson and Co. The only

key detractor that posted negative returns for the period was electric automobile manufacturer Tesla. Salesforce.com continued to drive digital transformations, aided by its 2018 acquisition of Mulesoft, which has been key to unlocking data from legacy systems to make digital transformation easier. Elanco benefited from robust growth in companion animal therapeutics and the performance of the new products it launched over the past few years. In our analysis, the company is well-positioned in the animal health industry, which is seeing increased demand for animal protein and growth in companion animal demand and spending.

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, 2019, 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.

5. The communication services sector comprises media and entertainment in the SOI.

FFC-4

Semiannual Report

FRANKLIN FLEX CAP GROWTH VIP FUND

Class 2 Fund 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

Actual

Hypothetical

(actual return after expenses)

(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses

Paid During
Period
1/1/19–6/30/19^1,²

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During

Period

1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,249.80

$5.36

$1,020.03

$4.81

0.96%

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, 2019 (unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)		2018			2017		2016		2015		2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 6.46		$ 7.46			$ 5.89		$ 7.09		$ 16.61		$18.11


Income from investment operations^a:

Net investment income (loss)^b		(0.01)		(0.02)			(0.01)		(0.03)		(0.06)		(0.08)

Net realized and unrealized gains (losses)		1.62		0.42			1.60		(0.20)		1.00		1.09


Total from investment operations		1.61		0.40			1.59		(0.23)		0.94		1.01


Less distributions from:

Net realized gains		(0.38)		(1.40)			(0.02)		(0.97)		(10.46)		(2.51)


Net asset value, end of period		$ 7.69		$ 6.46			$ 7.46		$ 5.89		$ 7.09		$16.61


Total return^c		24.98%		3.14%			26.94%		(2.89)%		4.37%		6.11%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		1.32%		1.30%			1.35%		1.36%		1.33%		1.20%

Expenses net of waiver and payments by affiliates		0.96%		0.96%	^e		0.96%		0.96%		0.96%		0.95%

Net investment income (loss)		(0.17)%		(0.20)%			(0.20)%		(0.44)%		(0.62)%		(0.46)%

Supplemental data

Net assets, end of period (000’s)		$95,382		$69,233			$81,084		$73,337		$82,901		$93,354

Portfolio turnover rate		6.82%		15.17%			52.12%		17.76%		88.15%		52.83%

^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, 2019 (unaudited)		Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)		2018			2017		2016		2015		2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 6.20		$ 7.21			$ 5.70		$ 6.90		$ 16.44		$17.96


Income from investment operations^a:

Net investment income (loss)^b		(0.01)		(0.02)			(0.02)		(0.03)		(0.07)		(0.10)

Net realized and unrealized gains (losses)		1.54		0.41			1.55		(0.20)		0.99		1.09


Total from investment operations		1.53		0.39			1.53		(0.23)		0.92		0.99


Less distributions from:

Net realized gains		(0.38)		(1.40)			(0.02)		(0.97)		(10.46)		(2.51)


Net asset value, end of period		$ 7.35		$ 6.20			$ 7.21		$ 5.70		$ 6.90		$16.44


Total return^c		24.91%		3.10%			26.78%		(2.98)%		4.32%		5.98%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		1.42%		1.40%			1.45%		1.46%		1.43%		1.30%

Expenses net of waiver and payments by affiliates		1.06%		1.06%	^e		1.06%		1.06%		1.06%		1.05%

Net investment income (loss)		(0.27)%		(0.30)%			(0.30)%		(0.54)%		(0.72)%		(0.56)%

Supplemental data

Net assets, end of period (000’s)		$32,498		$29,681			$30,112		$27,163		$34,479		$31,355

Portfolio turnover rate		6.82%		15.17%			52.12%		17.76%		88.15%		52.83%

^bBased on average daily shares outstanding.

^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, 2019 (unaudited)

Franklin Flex Cap Growth VIP Fund


	Shares		Value

Common Stocks 99.3%
Automobiles & Components 0.3%
^aTesla Inc.		1,980	$	442,451


Capital Goods 9.6%
The Boeing Co.		12,870		4,684,809
Fortive Corp.		39,590		3,227,377
Raytheon Co.		12,860		2,236,097
Roper Technologies Inc.		5,940		2,175,584

				12,323,867


Consumer Durables & Apparel 1.3%
NIKE Inc., B		19,800		1,662,210


Consumer Services 0.0%^†
^aLuckin Coffee Inc., ADR (China)		200		3,898


Diversified Financials 2.9%
CME Group Inc.		9,900		1,921,689
Intercontinental Exchange Inc.		19,790		1,700,752
Tradeweb Markets Inc.		2,870		125,735


				3,748,176

Energy 0.8%
Concho Resources Inc.		9,890		1,020,450


Food & Staples Retailing 3.4%
Costco Wholesale Corp.		14,850		3,924,261
^aGrocery Outlet Holding Corp.		12,420		408,370


				4,332,631


Food, Beverage & Tobacco 1.7%
^a,bBeyond Meat Inc.		1,390		223,345
Constellation Brands Inc., A		9,910		1,951,676


				2,175,021


Health Care Equipment & Services 9.1%
^aAlcon Inc. (Switzerland)		24,750		1,535,737
Becton, Dickinson and Co.		9,900		2,494,899
Danaher Corp.		19,790		2,828,387
^aIDEXX Laboratories Inc.		9,890		2,723,014
^aIntuitive Surgical Inc.		3,960		2,077,218


				11,659,255


Household & Personal Products 2.8%
Estee Lauder Cos. Inc., A		19,800		3,625,578


Media & Entertainment 10.6%
^aAlphabet Inc., C		5,940		6,420,605
^aCharter Communications Inc., A		4,956		1,958,512
^aElectronic Arts Inc.		12,860		1,302,204
^aNetflix Inc.		9,880		3,629,121
^aPinterest Inc., A		8,030		218,577


			13,529,019

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)

Pharmaceuticals, Biotechnology & Life Sciences 2.0%
^aElanco Animal Health Inc.		74,250	$	2,509,650


Real Estate 3.2%
American Tower Corp.		19,790		4,046,065


Retailing 10.0%
^aAlibaba Group Holding Ltd., ADR (China)		9,890		1,675,860
^aAmazon.com Inc.		5,120		9,695,386
^aBooking Holdings Inc.		590		1,106,079
^aChewy Inc., A		590		20,650
^aThe RealReal Inc.		4,310		124,559

^a,bRevolve Group Inc.		2,870		99,015


				12,721,549

Semiconductors & Semiconductor Equipment 7.5%
Analog Devices Inc.		34,640		3,909,817
NVIDIA Corp.		9,890		1,624,234
Xilinx Inc.		34,640		4,084,749


				9,618,800

Software & Services 33.7%
^aAdobe Inc.		9,890		2,914,089
^aCrowdstrike Holdings Inc., A		3,170		216,479
^aElastic NV		1,570		117,216
^aFastly Inc.		400		8,112
Mastercard Inc., A		34,600		9,152,738
Microsoft Corp.		69,290		9,282,089

^a,bPagerduty Inc.		1,180		55,519
^aPayPal Holdings Inc.		19,790		2,265,163
^asalesforce.com Inc.		36,630		5,557,870
^aServiceNow Inc.		24,740		6,792,862
Visa Inc., A		26,200		4,547,011
^aWorkday Inc., A		9,900		2,035,242

^a,bZoom Video Communications Inc., A		1,390		123,418


				43,067,808

Transportation 0.4%

^a,bLyft Inc., A		2,480		162,961
^aUber Technologies Inc.		7,550		350,169


				513,130


Total Common Stocks (Cost $65,676,016)				126,999,558


Short Term Investments 0.5%

Money Market Funds (Cost $686) 0.0%^†

^c,dInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		686		686



		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 (continued)


^eInvestments from Cash Collateral Received for Loaned Securities 0.5%
Money Market Funds (Cost $637,700) 0.5%
^c,dInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		637,700	$	637,700


Total Investments (Cost $66,314,402) 99.8%				127,637,944
Other Assets, less Liabilities 0.2%				242,041


Net Assets 100.0%			$	127,879,985

See Abbreviations on page FFC-19.

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

^aNon-income producing.

^bA portion or all of the security is on loan at June 30, 2019. See Note 1(b).

^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(b) regarding securities on loan.

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, 2019 (unaudited)



	Franklin Flex Cap Growth VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$ 65,676,016
Cost - Non-controlled affiliates (Note 3e)		638,386

Value - Unaffiliated issuers⁺		$126,999,558
Value - Non-controlled affiliates (Note 3e)		638,386
Cash		1,135,122
Receivables:
Investment securities sold		5,374
Capital shares sold		1,189
Dividends		37,140
Other assets		75


Total assets		128,816,844


Liabilities:
Payables:
Investment securities purchased		90,000
Capital shares redeemed		52,389
Management fees		64,802
Distribution fees		57,549
Trustees’ fees and expenses		67
Payable upon return of securities loaned		637,700
Accrued expenses and other liabilities		34,352


Total liabilities		936,859


Net assets, at value		$127,879,985

Net assets consist of:
Paid-in capital		$ 64,770,665
Total distributable earnings (loss)		63,109,320


Net assets, at value		$127,879,985


Class 2:
Net assets, at value		$ 95,381,928

Shares outstanding		12,409,286

Net asset value and maximum offering price per share		$7.69


Class 4:
Net assets, at value		$ 32,498,057

Shares outstanding		4,419,229

Net asset value and maximum offering price per share		$7.35



⁺Includes securities loaned		$ 620,349

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, 2019 (unaudited)



	Franklin Flex Cap Growth VIP Fund

Investment income:
Dividends:
Unaffiliated issuers		$ 378,138
Non-controlled affiliates (Note 3e)		58,193
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		24,330
Non-controlled affiliates (Note 3e)		7,489


Total investment income		468,150

Expenses:
Management fees (Note 3a)		581,802
Distribution fees: (Note 3c)
Class 2		108,648
Class 4		55,232
Custodian fees (Note 4)		1,367
Reports to shareholders		23,477
Professional fees		20,267
Trustees’ fees and expenses		452
Other		4,629


Total expenses		795,874

Expenses waived/paid by affiliates (Note 3e and 3f)		(212,142	)


Net expenses		583,732


Net investment income (loss)		(115,582	)

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		1,921,559

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		23,283,920


Net realized and unrealized gain (loss)		25,205,479


Net increase (decrease) in net assets resulting from operations		$25,089,897

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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income (loss)		$ (115,582	)		$ (278,068	)
Net realized gain (loss)		1,921,559			6,194,237
Net change in unrealized appreciation (depreciation)		23,283,920			(2,119,037	)


Net increase (decrease) in net assets resulting from operations		25,089,897			3,797,132

Distributions to shareholders:
Class 2		(4,527,604	)		(15,220,091	)
Class 4		(1,613,765	)		(5,742,189	)


Total distributions to shareholders		(6,141,369	)		(20,962,280	)


Capital share transactions: (Note 2)
Class 2		12,618,948			414,873
Class 4		(2,602,278	)		4,469,506


Total capital share transactions		10,016,670			4,884,379

Net increase (decrease) in net assets		28,965,198			(12,280,769	)
Net assets:
Beginning of period		98,914,787			111,195,556


End of period		$127,879,985			$ 98,914,787

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

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.

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.

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.

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.

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.

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

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)

d. Security Transactions, Investment Income, Expenses and Distributions (continued)

net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

e. Accounting Estimates

f. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 2 Shares:
Shares sold		2,714,443		$	20,070,664			2,321,138		$	17,811,401
Shares issued in reinvestment of distributions		606,105			4,527,604			2,079,248			15,220,091
Shares redeemed		(1,625,580	)		(11,979,320	)		(4,549,773	)		(32,616,619)


Net increase (decrease)		1,694,968		$	12,618,948			(149,387	)	$	414,873

Class 4 Shares:
Shares sold		232,995		$	1,678,368			1,392,557		$	10,306,262
Shares issued in reinvestment of distributions		226,018			1,613,765			816,812			5,742,189
Shares redeemed		(827,911	)		(5,894,411	)		(1,595,007	)		(11,578,945)


Net increase (decrease)		(368,898	)	$	(2,602,278	)		614,362		$	4,469,506

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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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, 2019, the annualized gross effective investment management fee rate was 0.982% 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


	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, 2.05%		$ 639	$	22,071,025	$	(22,070,978	)		$ —		$ —	$	686		686		$58,193

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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, 2.05%		$107,250	$	6,404,390	$	(5,873,940)			$ —		$ —	$	637,700		637,700		$ 7,489


Total Affiliated Securities		$107,889	$	28,475,415	$	(27,944,918	)		$ —		$ —	$	638,386				$ 65,682

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 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, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$66,333,636


Unrealized appreciation	$61,856,322
Unrealized depreciation	(552,014	)


Net unrealized appreciation (depreciation)	$61,304,308

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of passive foreign investment company shares.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $13,682,051 and $7,710,514, respectively.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Flex Cap Growth VIP Fund (continued)

At June 30, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $637,700 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 Facility

8. Fair Value Measurements

•

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, 2019, 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.

9. 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 Global Real Estate VIP Fund

This semiannual report for Franklin Global Real Estate VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +15.31% total return* for the six-month period ended June 30, 2019.

*The Fund has an expense reduction contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.

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FRANKLIN GLOBAL REAL ESTATE VIP FUND

Fund Goal and Main Investments

The Fund seeks high total return. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of companies located anywhere in the world that operate in the real estate sector, including: real estate investment trusts (REITs) and similar REIT-like entities domiciled outside the U.S.; companies qualifying under U.S. federal tax law as REITs; and companies that derive at least half of their assets or revenues from the ownership, management, development or sale of residential or commercial real estate (such as real estate operating or service companies).

What is a REIT?

A REIT is a type of real estate company that is dedicated to owning and usually operating income-producing real estate properties such as apartments, hotels, industrial properties, office buildings or shopping centers. Equity REITs generally receive income from rents received, are generally operated by experienced property management teams and typically concentrate on a specific geographic region or property type.

Fund Risks

All investments involve risks, including possible loss of principal. The Fund concentrates in real estate securities, which involve special risks, such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments affecting the sector. The Fund’s investments in REITs involve additional risks; since REITs typically are invested in a limited number of projects or in a particular market segment, they are more susceptible to adverse developments affecting a single project or market segment than more broadly diversified investments. Foreign investing, especially in emerging markets, involves additional risks such as currency and market volatility, as well as political and social instability. 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 FTSE

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

EPRA/NAREIT Developed Index posted a +15.09% total return for the same period.¹

Economic and Market Overview

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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its monetary policy in 2019 and recent indication it will act as appropriate to sustain U.S. economic expansion.

However, markets reflected concerns about political uncertainties in the U.S. and the European Union, geopolitical risks in certain regions, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. In this environment, global developed and emerging market stocks, as measured by the MSCI All Country World Index, posted a +16.60% total return for the six-month period.¹

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.¹ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

The (Fed) held its target range for the federal funds rate unchanged, at 2.25%–2.50%, during the reporting period. In March, the Fed mentioned it would end its balance sheet normalization program by the end of September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low recently, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

Top 10 Countries

6/30/19



		% of Total Net Assets

U.S.		53.0%

Japan		10.8%

Hong Kong		8.0%

Australia		5.8%

U.K.		5.3%

Germany		4.0%

Singapore		3.2%

France		2.9%

Sweden		2.7%

Canada		2.2%

In larger emerging markets, Brazil’s quarterly GDP growth contracted in 2019’s first quarter. The Central Bank of Brazil left its benchmark interest rate unchanged during the period. Russia’s annual GDP growth moderated in 2019’s first quarter. The Bank of Russia cut its key rate once during the reporting period. China’s annual GDP growth rate stabilized in 2019’s first quarter. The People’s Bank of China left its benchmark interest rate unchanged, but it took measures to improve financial liquidity to mitigate the effects of the U.S.-China trade dispute and support economic growth. Overall global, emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a +10.78% total return during the six-month period.¹

Investment Strategy

We seek to limit price volatility by investing across markets and property types. When selecting investments for the Fund’s portfolio, we apply a “bottom-up” stock selection process that incorporates macro-level views in the evaluation process. Our portfolio construction process combines bottom-up analysis of individual stock and real estate market fundamentals and top-down macro overlays to provide country/regional, property type, and company size perspectives in identifying international/local cyclical and thematic trends that highlight investment opportunities.

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

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FRANKLIN GLOBAL REAL ESTATE VIP FUND

Manager’s Discussion

During the six months under review, key contributors to the Fund’s performance relative to the FTSE EPRA/NAREIT Developed Index included an overweighting and security selection in the industrial property sector.³ Shares of Rexford Industrial Realty, a small-capitalization industrial REIT based in Los Angeles, performed well during the reporting period. Like its peers among industrial REITs, Rexford benefited from existing strong fundamentals in this group, with healthy and steady tenant demand for warehouse/distribution space both from traditional and increasingly important e-commerce businesses. We like the company’s focused and unique strategy to grow via accretive acquisitions in its core market, infill Southern California where ownership of warehouses remains highly fragmented and the company does not face strong competition on its target acquisitions from larger industrial players. We also think this core market remains less susceptible to any pick-up in supply given lack of available land and difficulty of getting construction permits. Rexford’s recent core results remained strong with increased occupancy, above average same store net-operating-income growth and double-digit rent spreads. For all these reasons, we believe Rexford’s earnings growth will continue to accelerate with strong internal and external growth (acquisitions) over the next 12 to 24 months.

Stock selection and an underweighting in the retail property sector also enhanced results, as did security selection in the office space sector, led by an underweighted investment in SL Green Realty (not held at period-end) as shares in the Manhattan office landlord underperformed over the reporting period.⁴ Similar to other New York City-centric office REITs, the stock has been under pressure for some time due to prevailing negative investor sentiment for Manhattan office fundamentals which we do not expect to improve meaningfully over the next 12 months, especially with supply deliveries in the near term. Additionally, despite strong leasing statistics, we do not expect positive net effective rent growth (after concessions and tenant improvements) for Manhattan office space. Despite the stock’s attractive valuation compared to current private asset values (based on recent transactions), we expect the stock will remain an underperformer. We also grew increasingly concerned about the company’s above average leverage metrics and near-term lease expirations in this environment.

A significant underweighting in Macerich (not held at period-end) also supported Fund relative returns as shares

Top 10 Holdings

6/30/19



Company Sector/Industry, Country		% of Total Net Assets

Prologis Inc. Industrial REITs, U.S.		4.5%

Simon Property Group Inc. Retail REITs, U.S.		3.6%

AvalonBay Communities Inc. Residential REITs, U.S.		2.9%

Equity Residential Residential REITs, U.S.		2.8%

Welltower Inc. Health Care REITs, U.S.		2.6%

Goodman Group Industrial REITs, Australia		2.5%

Sun Hung Kai Properties Ltd. Diversified Real Estate Activities, Hong Kong		2.4%

Mitsui Fudosan Co. Ltd. Diversified Real Estate Activities, Japan		2.4%

Mitsubishi Estate Co. Ltd. Diversified Real Estate Activities, Japan		2.2%

Segro PLC Industrial REITs, U.K.		2.1%

in the company underperformed over the reporting period. Macerich is an owner of predominantly A-quality regional malls in the U.S. with a significant presence on the West Coast, Arizona, Chicago and the Metro New York to Washington D.C. corridor. While we acknowledged the relatively high-quality nature of the company’s retail property portfolio, the outlook for the entire regional mall segment had eroded due to a pick-up in retailer bankruptcy activity (including company liquidations) in the U.S. in early 2019, notably Gymboree, Payless Shoes and Charlotte Russe, among others (these companies are not held by the Fund). Furthermore, rationalization continued to occur in the department store category as well as store closing programs announced by larger retailer holding companies including GAP and L Brands (these companies are not held by the Fund). In addition to the associated downtime (as retailers vacate) and required capital expenditure in order to re-tenant, Macerich’s ability to absorb these pressures has been an increasing concern given its elevated leverage and the high payout ratio on its dividend, not to mention its relatively high exposure to weak department store chains,

3. Industrial property holdings are in industrial REITs in the SOI.

4. Retail property holdings are in retail REITs in the SOI. Office holdings are in office REITs in the SOI.

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such as Sears and JC Penney (these companies are not held by the Fund). We have since exited the stock entirely.

Conversely, stock selection in the residential sector detracted from relative Fund performance⁵. Shares of Berlin apartment landlord Deutsche Wohnen underperformed during the reporting period. Overall, German residential stocks faced significant pressure after Berlin’s local government agreed on a five-year rent freeze and a draft law is expected in October on the matter. The draft law is questionable, in our view, as residential law is federal and governed by the German Civil Code. Deutsche Wohnen’s Berlin exposure by value is one of the highest in the sector. Overall, the Berlin residential market screened well with its supply-and-demand mismatch, which had put upward pressure on rents, as vacancy in the market had decreased sharply. New supply in the market for low-to-middle income housing is limited as portfolio valuations remain much below replacement costs. Berlin still offers low average rent levels compared to other larger western German cities and major cities in Europe. As of the first quarter report 2019, management saw a significant rent reversionary potential in the overall portfolio. We lowered our allocation to Deutsche Wohnen during the reporting period, as the political headwinds for the Berlin residential market created a high level of uncertainty for future rental growth and the potential impact to values.

Within the storage property sector, Public Storage, one of the largest REITs and the largest public storage REIT, performed well during the reporting period and the Fund’s underweight position dampened overall performance.⁶ Following several years of very strong fundamentals, storage revenue growth, albeit being stable, has been steadily declining toward a more normal (historical average) level. Nevertheless, recent results, came in better-than (low level) investor expectations. Despite better-than-expected results, and subsequent outperformance of storage REITs post first quarter results, we remain cautious on fundamentals over the next 12-18 months as we expect to see increased supply deliveries and thus softer operating trends.

An underweighted investment in health care REIT Ventas (not held at period-end) also hampered relative results. Shares of Ventas, one of the largest health care REITs, performed well during the reporting period as the stock surged following the company’s recently held investor day, which successfully laid out a more visible earnings growth story and changed the prevailing negative investor sentiment for the company causing subsequent upgrades by several

key analysts. Ventas has a diversified business profile and is active on different health care segments including life-science, hospitals and medical office segments. Overall, our outlook for health care real estate operating trends remain unfavorable given above-average senior housing supply and ongoing issues in the skilled nursing segment. The company has been active on the external growth front lately especially in life-science, but given its large size, we do not expect significant additional earnings accretion following recently completed acquisitions.

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

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.

5. Residential holdings are in real estate operating companies and residential REITs in the SOI.

6. Storage property holdings are in specialized REITs in the SOI.

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FRANKLIN GLOBAL REAL ESTATE VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses

Paid During
Period

1/1/19–6/30/19^1,²

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During

Period

1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,153.10

$7.15

$1,018.15

$6.71

1.34%

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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SUPPLEMENT DATED MAY 1, 2019

TO THE PROSPECTUSES

DATED MAY 1, 2019

FRANKLIN GLOBAL REAL ESTATE VIP FUND

(a series of Franklin Templeton Variable Insurance Products Trust)

The prospectuses are amended as follows:

I. The “Fund Summary – Annual Fund Operating Expenses” table on page FGR-S1 in the Fund’s Class 1 prospectus is replaced with the following:

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)


			Class 1

Management fees			1.05%

Distribution and service (12b-1) fees			None

Other expenses			0.10%

Total annual Fund operating expenses			1.15%

Fee waiver and/or expense reimbursement¹			-0.15%

Total annual Fund operating expenses after fee waiver and/or expense reimbursement¹			1.00%

1. The investment manager has contractually agreed to waive or assume certain expenses so that common expenses (excluding Rule 12b-1 fees, acquired fund fees and expenses and certain non-routine expenses) do not exceed 1.00% until April 30, 2020. Contractual fee waiver and/or expense reimbursement agreements may not be changed or terminated during the time period set forth above.

II. The “Fund Summary – Example” table on page FGR-S1 in the Fund’s Class 1 prospectus is replaced with the following:

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fun for the time periods indicated and then redeem all of your shares at the end of the period. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example reflects adjustments made to the Fund’s operating expenses due to the fee waivers and/or expense reimbursements by management for the 1 Year numbers only.

Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years

Class 1		$102		$350		$618		$1,384

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III. The “Fund Summary – Annual Fund Operating Expenses” table on page FGR-S1 in the Fund’s Class 2 prospectus is replaced with the following:

Annual Fund Operating Expenses=

(expenses that you pay each year as a percentage of the value of your investment)


			Class 2

Management fees			1.05%

Distribution and service (12b-1) fees			0.25%

Other expenses			0.10%

Total annual Fund operating expenses			1.40%

Fee waiver and/or expense reimbursement¹			-0.15%

Total annual Fund operating expenses after fee waiver and/or expense reimbursement¹			1.25%

IV. The “Fund Summary – Example” table on page FGR-S1 in the Fund’s Class 2 prospectus is replaced with the following:

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of the period. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example reflects adjustments made to the Fund’s operating expenses due to the fee waivers and/or expense reimbursements by management for the 1 Year numbers only. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years

Class 2		$127		$428		$752		$1,667

Please keep this supplement with your prospectus for future reference.

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Financial Highlights

Franklin Global Real Estate VIP Fund


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.41			$16.96			$15.83			$15.93			$16.36			$14.29


Income from investment operations^a:

Net investment income^b		0.14			0.33			0.17			0.30^c			0.24			0.26

Net realized and unrealized gains (losses)		2.24			(1.41	)		1.52			(0.16	)		(0.12	)		1.92


Total from investment operations		2.38			(1.08	)		1.69			0.14			0.12			2.18

Less distributions from:

Net investment income		(0.50	)		(0.47	)		(0.56	)		(0.24	)		(0.55	)		(0.11)

Net realized gains		(0.36	)		—			—			—			—			—


Total distributions		(0.86	)		(0.47	)		(0.56	)		(0.24	)		(0.55	)		(0.11)


Net asset value, end of period		$16.93			$15.41			$16.96			$15.83			$15.93			$16.36


Total return^d		15.39%			(6.52)%			10.76%			0.81%			0.83%			15.27%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		1.14%			1.15%			1.14%			1.11%			1.11%			1.10%

Expenses net of waiver and payments by affiliates		1.09%	^f		1.15%^f			1.14%	^g		1.11%^g			1.11%			1.10%^f

Net investment income		1.56%			1.92%			1.04%			1.99%^c			1.49%			1.66%

Supplemental data

Net assets, end of period (000’s)		$1,000			$878			$819			$821			$32,161			$35,686

Portfolio turnover rate		20.02%			17.78%			22.18%			28.53%	^h		23.35%			16.67%

^bBased on average daily shares outstanding.

^cNet 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 1.59%.

^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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Global Real Estate VIP Fund (continued)


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.00			$16.52			$15.42			$15.52			$15.95			$13.93


Income from investment operations^a:

Net investment income^b		0.11			0.27			0.13			0.28^c			0.20			0.21

Net realized and unrealized gains (losses)		2.20			(1.36	)		1.47			(0.19	)		(0.12	)		1.88


Total from investment operations		2.31			(1.09	)		1.60			0.09			0.08			2.09


Less distributions from:

Net investment income		(0.46	)		(0.43	)		(0.50	)		(0.19	)		(0.51	)		(0.07)

Net realized gains		(0.36	)		—			—			—			—			—


Total distributions		(0.82	)		(0.43	)		(0.50	)		(0.19	)		(0.51	)		(0.07)


Net asset value, end of period		$16.49			$15.00			$16.52			$15.42			$15.52			$15.95


Total return^d		15.31%			(6.77)%			10.47%			0.54%			0.57%			15.01%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		1.39%			1.40%			1.39%			1.36%			1.36%			1.35%

Expenses net of waiver and payments by affiliates		1.34%	^f		1.40%	^f		1.39%	^g		1.36%	^g		1.36%			1.35%^f

Net investment income		1.31%			1.67%			0.79%			1.74%^c			1.24%			1.41%

Supplemental data

Net assets, end of period (000’s)		$157,620			$146,408			$183,532			$193,707			$287,473			$333,554

Portfolio turnover rate		20.02%			17.78%			22.18%			28.53%	^h		23.35%			16.67%

^bBased on average daily shares outstanding.

^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.

FGR-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, 2019 (unaudited)

Franklin Global Real Estate VIP Fund


	Country	Shares		Value


Common Stocks 99.1%
Diversified Real Estate Activities 10.3%
CapitaLand Ltd.	Singapore		749,095	$	1,954,041
Mitsubishi Estate Co. Ltd.	Japan		190,956		3,550,981
Mitsui Fudosan Co. Ltd.	Japan		155,478		3,767,263
New World Development Co. Ltd.	Hong Kong		1,335,585		2,089,162
Nomura Real Estate Holdings Inc.	Japan		52,500		1,127,713
Sun Hung Kai Properties Ltd.	Hong Kong		226,671		3,844,512


					16,333,672

Diversified REITs 7.6%
Gecina SA	France		16,712		2,500,273
GPT Group	Australia		497,329		2,146,966
Hulic REIT Inc.	Japan		846		1,468,064
Kenedix Office Investment Corp.	Japan		257		1,837,757
Land Securities Group PLC	United Kingdom		145,010		1,534,383
Premier Investment Corp.	Japan		954		1,254,658
VEREIT Inc.	United States		151,200		1,362,312


					12,104,413

Health Care REITs 6.2%
CareTrust REIT Inc.	United States		47,100		1,120,038
HCP Inc.	United States		101,989		3,261,608
Physicians Realty Trust	United States		73,800		1,287,072
Welltower Inc.	United States		50,976		4,156,073


					9,824,791

Hotel & Resort REITs 3.1%
Host Hotels & Resorts Inc.	United States		127,006		2,314,049
MGM Growth Properties LLC, A	United States		41,400		1,268,910
Ryman Hospitality Properties Inc.	United States		16,900		1,370,421


					4,953,380


Hotels, Resorts & Cruise Lines 0.6%
Hilton Worldwide Holdings Inc.	United States		9,414		920,124


Industrial REITs 14.7%
Americold Realty Trust	United States		52,200		1,692,324
First Industrial Realty Trust Inc.	United States		64,253		2,360,655
GLP J-REIT	Japan		1,333		1,518,201
Goodman Group	Australia		367,478		3,877,006
Mapletree Logistics Trust	Singapore		1,109,971		1,304,160
Prologis Inc.	United States		89,469		7,166,467
Rexford Industrial Realty Inc.	United States		52,874		2,134,523
Segro PLC	United Kingdom		358,034		3,320,112


					23,373,448

Office REITs 12.1%
Alexandria Real Estate Equities Inc.	United States		20,421		2,881,199
Boston Properties Inc.	United States		23,485		3,029,565
Cousins Properties Inc.	United States		34,175		1,236,110
Derwent London PLC	United Kingdom		39,200		1,551,208
Dexus	Australia		291,219		2,653,387

Semiannual Report

FGR-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)


	Country	Shares		Value


Common Stocks (continued)
Office REITs (continued)
Highwoods Properties Inc.	United States		30,910	$	1,276,583
Ichigo Office REIT Investment	Japan		1,066		1,011,424
Inmobiliaria Colonial SA	Spain		179,176		1,995,205
Kilroy Realty Corp.	United States		27,244		2,010,880
ORIX JREIT Inc.	Japan		834		1,520,723


					19,166,284

Real Estate Development 2.1%
CK Asset Holdings Ltd.	Hong Kong		413,127		3,233,773


Real Estate Operating Companies 7.8%
ADO Properties SA	Germany		12,516		517,644
Aroundtown SA	Germany		270,113		2,225,087
Deutsche Wohnen AG	Germany		55,165		2,023,792
Fabege AB	Sweden		128,997		1,941,366
Hemfosa Fastigheter AB	Sweden		133,183		1,258,554
Hufvudstaden AB, A	Sweden		63,960		1,087,593
Swire Properties Ltd.	Hong Kong		412,400		1,665,511
Vonovia SE	Germany		34,045		1,625,571


					12,345,118

Residential REITs 13.1%
American Homes 4 Rent, A	United States		85,100		2,068,781
AvalonBay Communities Inc.	United States		22,289		4,528,679
Camden Property Trust	United States		30,200		3,152,578
Canadian Apartment Properties REIT	Canada		53,175		1,963,384
Equity Lifestyle Properties Inc.	United States		22,358		2,712,920
Equity Residential	United States		58,533		4,443,825
Unite Group PLC	United Kingdom		156,057		1,931,309


					20,801,476

Retail REITs 14.6%
Brixmor Property Group Inc.	United States		93,100		1,664,628
CapitaLand Mall Trust	Singapore		935,800		1,818,699
Link REIT	Hong Kong		147,337		1,810,558
Realty Income Corp.	United States		43,117		2,973,779
Regency Centers Corp.	United States		31,639		2,111,587
Retail Properties of America Inc., A	United States		112,000		1,317,120
Scentre Group	Australia		246,939		665,621
Simon Property Group Inc.	United States		36,126		5,771,490
SmartCentres REIT	Canada		60,230		1,527,191
Spirit Realty Capital Inc.	United States		33,300		1,420,578
Unibail-Rodamco-Westfield	France		13,938		2,087,634


					23,168,885

Specialized REITs 6.9%
American Tower Corp.	United States		8,100		1,656,045
Coresite Realty Corp.	United States		7,769		894,756
CubeSmart	United States		68,793		2,300,438
Digital Realty Trust Inc.	United States		28,168		3,317,909

FGR-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)


	Country	Shares		Value

Common Stocks (continued)
Specialized REITs (continued)
Public Storage	United States		11,644	$	2,773,251


					10,942,399


Total Common Stocks (Cost $100,998,947)					157,167,763


		Principal Amount
Short Term Investments (Cost $931,155) 0.6%

Repurchase Agreements 0.6%
^aJoint Repurchase Agreement, 2.451%, 7/01/19 (Maturity Value $931,346) BNP Paribas Securities Corp. (Maturity Value $692,512) Deutsche Bank Securities Inc. (Maturity Value $204,207) HSBC Securities (USA) Inc. (Maturity Value $34,627) Collateralized by U.S. Government Agency Securities, 4.00% - 4.50%, 7/15/40 - 3/20/49; U.S. Treasury Bonds, 8.00%, 11/15/21; U.S. Treasury Notes, 1.50% - 3.125%, 5/15/21 - 8/15/26; U.S. Treasury Notes, Index Linked, 0.875%, 1/15/29; and U.S. Treasury Strips, 8/15/22 - 6/15/35 (valued at $954,073)	United States	$	931,155		931,155


Total Investments (Cost $101,930,102) 99.7%					158,098,918

Other Assets, less Liabilities 0.3%					520,875


Net Assets 100.0%				$	158,619,793

See Abbreviations on page FGR-23.

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

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

FGR-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2019 (unaudited)



	Franklin Global Real Estate VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$100,998,947
Cost - Unaffiliated repurchase agreements		931,155

Value - Unaffiliated issuers		$157,167,763
Value - Unaffiliated repurchase agreements		931,155
Cash		32,309
Receivables:
Investment securities sold		1,293,457
Capital shares sold		3,871
Dividends		848,695
European Union tax reclaims		102,138
Other assets		114

Total assets		160,379,502

Liabilities:
Payables:
Investment securities purchased		1,414,365
Capital shares redeemed		79,309
Management fees		119,517
Distribution fees		66,452
Trustees’ fees and expenses		140
Accrued expenses and other liabilities		79,926


Total liabilities		1,759,709


Net assets, at value		$158,619,793

Net assets consist of:
Paid-in capital		$102,855,337
Total distributable earnings (loss)		55,764,456


Net assets, at value		$158,619,793

Class 1:
Net assets, at value		$ 999,802

Shares outstanding		59,040

Net asset value and maximum offering price per share		$16.93

Class 2:
Net assets, at value		$157,619,991

Shares outstanding		9,557,898

Net asset value and maximum offering price per share		$16.49

FGR-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, 2019 (unaudited)


	Franklin Global Real Estate VIP Fund


Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 2,087,803
Interest:
Unaffiliated issuers		6,657

Total investment income		2,094,460

Expenses:
Management fees (Note 3a)		830,084
Distribution fees: (Note 3c)
Class 2		196,528
Custodian fees (Note 4)		5,099
Reports to shareholders		25,469
Professional fees		32,276
Trustees’ fees and expenses		644
Other		5,916

Total expenses		1,096,016
Expense reductions (Note 4)		(19	)
Expenses waived/paid by affiliates (Note 3e)		(37,174	)

Net expenses		1,058,823

Net investment income		1,035,637

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		5,967,899
Realized gain distributions from REITs		466,789
Foreign currency transactions		(5,085	)

Net realized gain (loss)		6,429,603

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		14,775,925
Translation of other assets and liabilities denominated in foreign currencies		(3,636	)

Net change in unrealized appreciation (depreciation)		14,772,289


Net realized and unrealized gain (loss)		21,201,892


Net increase (decrease) in net assets resulting from operations		$22,237,529



*Foreign taxes withheld on dividends	$	134,132

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

FGR-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets


	Franklin Global Real Estate VIP Fund
	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income		$ 1,035,637			$ 2,794,772
Net realized gain (loss)		6,429,603			8,338,498
Net change in unrealized appreciation (depreciation)		14,772,289			(22,351,453	)


Net increase (decrease) in net assets resulting from operations		22,237,529			(11,218,183	)


Distributions to shareholders:
Class 1		(48,761	)		(26,319	)
Class 2		(7,479,667	)		(4,381,023	)

Total distributions to shareholders		(7,528,428	)		(4,407,342	)

Capital share transactions: (Note 2)
Class 1		34,256			146,852
Class 2		(3,410,049	)		(21,586,275	)

Total capital share transactions		(3,375,793	)		(21,439,423	)


Net increase (decrease) in net assets		11,333,308			(37,064,948	)

Net assets:
Beginning of period		147,286,485			184,351,433

End of period		$158,619,793			$147,286,485

FGR-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)

Franklin Global Real Estate 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 Global Real Estate 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, 2019, 84.1% 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 two classes of shares: Class 1 and Class 2. 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

(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 repurchase agreements are valued at cost, which approximates fair value.

Semiannual Report

FGR-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

b. Foreign Currency Translation

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 28, 2019.

d. Income and Deferred Taxes

FGR-18

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (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.

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 realized 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.

Distributions received by the Fund from certain securities may be a return of capital (ROC). Such distributions reduce the cost basis of the securities, and any distributions in excess of the cost basis are recognized as capital gains. For U.S. Real Estate Investment Trust (REIT) securities, the Fund records ROC estimates, if any, on the ex-dividend date and are adjusted once actual tax designations are known.

f. Accounting Estimates

g. Guarantees and Indemnifications

Semiannual Report

FGR-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

g. Guarantees and Indemnifications (continued)

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, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount

Class 1 Shares:
Shares sold		488		$	8,377			9,088		$	153,008
Shares issued in reinvestment of distributions		2,856			48,761			1,610			26,319
Shares redeemed		(1,313	)		(22,882	)		(2,003	)		(32,475)


Net increase (decrease)		2,031		$	34,256			8,695		$	146,852


Class 2 Shares:
Shares sold		112,984		$	1,929,197			144,050		$	2,286,461
Shares issued in reinvestment of distributions		449,770			7,479,667			274,845			4,381,023
Shares redeemed		(764,280	)		(12,818,913	)		(1,771,140	)		(28,253,759)


Net increase (decrease)		(201,526	)	$	(3,410,049	)		(1,352,245	)	$	(21,586,275)

3. Transactions with Affiliates



Subsidiary		Affiliation

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

FGR-20

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)

a. Management Fees

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



Annualized Fee Rate		Net Assets

1.050%		Up to and including $500 million

0.950%		Over $500 million, up to and including $1 billion

0.900%		Over $1 billion, up to and including $1.5 billion

0.850%		Over $1.5 billion, up to and including $6.5 billion

0.830%		Over $6.5 billion, up to and including $11.5 billion

0.810%		Over $11.5 billion, up to and including $16.5 billion

0.790%		Over $16.5 billion, up to and including $19 billion

0.780%		Over $19 billion, up to and including $21.5 billion

0.770%		In excess of $21.5 billion

b. Administrative Fees

Under an agreement with FT Institutional, FT Services provides administrative services to the Fund. The fee is paid by FT Institutional 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 a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plan, 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. 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. Waiver and Expense Reimbursements

Effective May 1, 2019, FT Institutional 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 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 do not exceed 1.00% based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4. Expense Offset Arrangement

Semiannual Report

FGR-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments			$109,893,031


Unrealized appreciation			$ 57,003,852
Unrealized depreciation			(8,797,965)


Net unrealized appreciation (depreciation)			$ 48,205,887

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of passive foreign investment company shares.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $27,351,972 and $37,505,821, respectively.

7. Concentration of Risk

The Fund invests a large percentage of its total assets in REIT securities. Such concentration may subject the Fund to special risks associated with real estate securities. These securities may be more sensitive to economic or regulatory developments due to a variety of factors such as local, regional, national and global economic conditions, interest rates and tax considerations.

8. Credit Facility

9. Fair Value Measurements

•

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.)

FGR-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Global Real Estate VIP Fund (continued)

•

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, 2019, 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		$ 157,167,763		$ —		$ —		$ 157,167,763
Short Term Investments		—		931,155		—		931,155

Total Investments in Securities		$ 157,167,763		$ 931,155		$ —		$ 158,098,918

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

10. 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


REIT		Real Estate Investment Trust

Semiannual Report

FGR-23

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Franklin Growth and Income VIP Fund

This semiannual report for Franklin Growth and Income VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +14.84% total return* for the six-month period ended June 30, 2019.

*The Fund has an expense reduction contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

Semiannual Report

FGI-1

FRANKLIN GROWTH AND INCOME VIP FUND

Fund Goal and Main Investments

The Fund seeks capital appreciation with current income as a secondary goal. Under normal market conditions, the Fund invests predominantly in equity securities, including common stock, preferred stock and securities convertible into common stocks.

Fund Risks

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. Value securities may not increase in price as anticipated or may decline further if other investors fail to recognize the company’s value or favor investing in faster growing companies. Because the Fund can only distribute what it earns, the Fund’s distributions to shareholders may decline when prevailing interest rates fall, when dividend income from investments in stocks decline, or when the Fund experiences defaults on debt securities it holds. 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 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. Special risks are associated with foreign investing, including currency exchange rates and policies, country or government specific issues, less favorable trading practices or regulation and greater price volatility; investments in emerging markets typically involve heightened risks related to the same factors. Common stocks with higher dividend yields can be sensitive to interest-rate movements. 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 +18.54% total return.¹

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

Economic and Market Overview

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the

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).

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FRANKLIN GROWTH AND INCOME VIP FUND

Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

The U.S. Federal Reserve (Fed) held its target range for the federal funds rate unchanged, at 2.25%–2.50%, during the reporting period. In March, the Fed mentioned it would end its balance sheet normalization program by the end of September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low in recent months, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

Investment Strategy

We seek to invest in a broadly diversified portfolio of equity securities that we consider to be financially strong, with a focus on “blue chip” companies. We apply a bottom-up approach to investing in individual securities. We will assess the market price of a company’s securities relative to our evaluation of the company’s long-term earnings, asset value and cash flow potential. We also consider a company’s price/earnings ratio, return on capital, profit margins, balance sheet and liquidation value. We consider dividend yield and the opportunity for dividend growth in selecting stocks for the Fund because we believe that, over time, dividend income can contribute significantly to total return and can be a more consistent source of investment return than capital appreciation. We seek to take advantage of price dislocations that result from the market’s short-term focus and choose to invest in those companies that, in our opinion, offer the best trade-off between growth opportunity, business and financial risk, and valuation.


Top 10 Holdings
6/30/19

Company *Sector/Industry*	% of Total Net Assets

JPMorgan Chase & Co. Financials		4.1%

Microsoft Corp. Information Technology		3.9%

Bank of America Corp. Financials		2.9%

The Procter & Gamble Co. Consumer Staples		2.6%

Chevron Corp. Energy		2.5%

The Coca-Cola Co. Consumer Staples		2.4%

Merck & Co. Inc. Health Care		2.3%

PepsiCo Inc. Consumer Staples		2.3%

Wells Fargo & Co. Financials		2.3%

Johnson & Johnson Health Care		2.2%

Manager’s Discussion

During the period under review, all sectors contributed to Fund performance, led by financials, information technology (IT) and industrials.

In the financials sector, banks and leading banking companies JPMorgan Chase and Bank of America were top contributors. JPMorgan Chase benefited in the first half of 2019 from double-digit growth in credit card sales, merchant processing volumes and client investment assets. The company also experienced growth in credit card loans and new deposits and increased its dividend and share repurchases. Bank of America reported better-than-expected fourth-quarter 2018 and first-quarter 2019 earnings due to improved investment banking income, strong expense management and good credit trends.

In the IT sector, information software and services firm Microsoft is a beneficiary of strong sales execution, a positive enterprise IT spending environment, its status as a critical partner to IT departments in this time of digital transformation, and a large installed base that is successfully moving to higher-value cloud and Service-as-a-Software deployments. The company saw sustained strength in its enterprise cloud computing platform Azure, solid growth in

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FRANKLIN GROWTH AND INCOME VIP FUND

its traditional server products and particularly strong growth in commercial bookings. Furthermore, the company continued to expand gross profit margins and control operational expenses. Networking firm Cisco Systems also boosted performance.

In the industrials sector, global security and aerospace company Lockheed Martin and freight railroad operator Norfolk Southern were notable contributors. In other sectors, branded consumer packaged goods provider Procter & Gamble also aided results.

Although no sectors detracted from performance, in the materials sector, which contributed least to performance, key detractors included specialty materials and chemicals company DuPont de Nemours and chemicals products producer Dow. DuPont experienced reduced earnings due to Midwest flooding that affected its agriculture division, margin compression in key value chains, sluggish auto and smartphone market conditions and investor fears about potential environmental liabilities. These factors were partially offset by stronger pricing in the company’s higher margin specialty products and agriculture divisions.

Other leading individual detractors were petroleum and chemical products company Occidental Petroleum, industrial technology company 3M, pharmaceuticals company Bristol-Meyers Squibb (not held at period-end) and managed care company UnitedHealth Group. Shares of Occidental declined surrounding its acquisition of Anadarko Petroleum after a bidding war with Chevron, which increased the acquisition price. Occidental’s decision to keep Anadarko’s Gulf of Mexico assets despite selling other unwanted assets also concerned some investors. Weaker first-quarter earnings also disappointed investors. Shares of 3M declined amid below-expected first-quarter 2019 results driven by lower profits across segments and slightly lower overall sales. Increased inventories as well as higher inventories of auto and electronics customers in China also concerned investors. A lower share buyback and worries about environmental product liability risks further depressed the stock.

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

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Class 2 Fund Expenses

Actual Fund Expenses

Hypothetical Example for Comparison with Other Mutual Funds

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,2

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During

Period

1/1/19–6/30/19^1,2

Net

Annualized
Expense
Ratio²

Class 2

$1,000

$1,148.40

$4.47

$1,020.63

$4.21

0.84%

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 Growth and Income VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$14.80			$16.32			$15.97			$15.94			$17.02			$15.97


Income from investment operations^a:

Net investment income^b		0.17			0.31			0.35			0.40			0.45			0.53^c

Net realized and unrealized gains (losses)		2.02			(0.97	)		2.04			1.33			(0.54	)		0.95


Total from investment operations		2.19			(0.66	)		2.39			1.73			(0.09	)		1.48


Less distributions from:

Net investment income		(0.41	)		(0.43	)		(1.03	)		(0.46	)		(0.61	)		(0.43)

Net realized gains		(0.88	)		(0.43	)		(1.01	)		(1.24	)		(0.38	)		—


Total distributions		(1.29	)		(0.86	)		(2.04	)		(1.70	)		(0.99	)		(0.43)


Net asset value, end of period		$15.70			$14.80			$16.32			$15.97			$15.94			$17.02


Total return^d		15.06%			(4.37)%			16.15%			11.86%			(0.62)%			9.40%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		0.73%			0.73%			0.72%			0.59%			0.58%			0.57%

Expenses net of waiver and payments by affiliates		0.59%^f			0.59%^f			0.59%^f			0.59%	^f,g		0.58%			0.57%^f

Net investment income		2.14%			1.96%			2.21%			2.38%			2.74%			3.26%^c

Supplemental data

Net assets, end of period (000’s)		$34,881			$31,479			$35,865			$29,829			$144,663			$168,961

Portfolio turnover rate		13.00%			24.29%			33.91%			40.59%	^h		48.81%			20.54%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.12 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 2.53%.

^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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Growth and Income VIP Fund (continued)


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$14.51			$16.02			$15.69			$15.68			$16.76			$15.73


Income from investment operations^a:

Net investment income^b		0.15			0.27			0.31			0.30			0.40			0.48^c

Net realized and unrealized gains (losses)		1.98			(0.96	)		2.00			1.37			(0.54	)		0.94


Total from investment operations		2.13			(0.69	)		2.31			1.67			(0.14	)		1.42


Less distributions from:

Net investment income		(0.37	)		(0.39	)		(0.97	)		(0.42	)		(0.56	)		(0.39)

Net realized gains		(0.88	)		(0.43	)		(1.01	)		(1.24	)		(0.38	)		—


Total distributions		(1.25	)		(0.82	)		(1.98	)		(1.66	)		(0.94	)		(0.39)


Net asset value, end of period		$15.39			$14.51			$16.02			$15.69			$15.68			$16.76


Total return^d		14.84%			(4.58)%			15.85%			11.62%			(0.91)%			9.14%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		0.98%			0.98%			0.97%			0.84%			0.83%			0.82%

Expenses net of waiver and payments by affiliates		0.84%^f			0.84%^f			0.84%^f			0.84%	^f,g		0.83%			0.82%^f

Net investment income		1.89%			1.71%			1.96%			2.13%			2.49%			3.01%^c

Supplemental data

Net assets, end of period (000’s)		$68,018			$61,855			$74,105			$69,474			$124,691			$138,191

Portfolio turnover rate		13.00%			24.29%			33.91%			40.59%	^h		48.81%			20.54%

^bBased on average daily shares outstanding.

^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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Franklin Growth and Income VIP Fund



	Country	Shares		Value

Common Stocks 87.0%
Communication Services 5.0%
Comcast Corp., A	United States		36,200	$	1,530,536
Rogers Communications Inc., B	Canada		15,444		826,563
TELUS Corp.	Canada		20,900		772,490
Verizon Communications Inc.	United States		34,610		1,977,269


					5,106,858

Consumer Discretionary 3.6%
^aAmazon.com Inc.	United States		100		189,363
Las Vegas Sands Corp.	United States		9,300		549,537
Lowe’s Cos. Inc.	United States		5,748		580,031
McDonald’s Corp.	United States		7,600		1,578,216
Target Corp.	United States		9,580		829,724


					3,726,871

Consumer Staples 9.9%
The Coca-Cola Co.	United States		48,000		2,444,160
Nestle SA	Switzerland		8,300		859,028
PepsiCo Inc.	United States		17,898		2,346,965
The Procter & Gamble Co.	United States		24,500		2,686,425
Walmart Inc.	United States		16,600		1,834,134


					10,170,712

Energy 8.7%
Chevron Corp.	United States		20,868		2,596,814
Exxon Mobil Corp.	United States		19,777		1,515,511
Occidental Petroleum Corp.	United States		23,700		1,191,636
ONEOK Inc.	United States		10,900		750,029
Royal Dutch Shell PLC, A, ADR	United Kingdom		24,113		1,569,033
Suncor Energy Inc.	Canada		42,182		1,314,391


					8,937,414

Financials 17.2%
Arthur J. Gallagher & Co.	United States		9,166		802,850
Bank of America Corp.	United States		65,500		1,899,500
BB&T Corp.	United States		38,876		1,909,978
BlackRock Inc.	United States		1,961		920,297
JPMorgan Chase & Co.	United States		37,400		4,181,320
MetLife Inc.	United States		35,500		1,763,285
Morgan Stanley	United States		50,637		2,218,407
U.S. Bancorp	United States		32,455		1,700,642
Wells Fargo & Co.	United States		49,350		2,335,242


					17,731,521

Health Care 12.2%
Baxter International Inc.	United States		14,800		1,212,120
Eli Lilly & Co.	United States		4,337		480,496
HCA Holdings Inc.	United States		3,900		527,163
Johnson & Johnson	United States		16,565		2,307,173
Medtronic PLC	United States		19,781		1,926,472
Merck & Co. Inc.	United States		29,000		2,431,650

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STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)



	Country	Shares		Value

Common Stocks (continued)
Health Care (continued)
Pfizer Inc.	United States		51,163	$	2,216,381
UnitedHealth Group Inc.	United States		6,100		1,488,461


					12,589,916

Industrials 10.6%
3M Co.	United States		6,800		1,178,712
Emerson Electric Co.	United States		11,000		733,920
Illinois Tool Works Inc.	United States		3,611		544,575
Lockheed Martin Corp.	United States		4,169		1,515,598
Norfolk Southern Corp.	United States		7,100		1,415,243
Raytheon Co.	United States		8,616		1,498,150
Republic Services Inc.	United States		21,780		1,887,019
Stanley Black & Decker Inc.	United States		4,832		698,756
United Technologies Corp.	United States		11,234		1,462,667


					10,934,640

Information Technology 9.7%
Analog Devices Inc.	United States		3,900		440,193
Apple Inc.	United States		5,632		1,114,685
Broadcom Inc.	United States		715		205,820
Cisco Systems Inc.	United States		27,589		1,509,946
Intel Corp.	United States		14,057		672,909
Microsoft Corp.	United States		29,776		3,988,793
Oracle Corp.	United States		12,629		719,474
Texas Instruments Inc.	United States		11,496		1,319,281


					9,971,101

Materials 1.5%
BASF SE	Germany		3,537		257,025
^aCorteva Inc.	United States		5,991		177,154
Dow Inc.	United States		7,024		346,354
DuPont de Nemours Inc.	United States		5,991		449,744
International Paper Co.	United States		7,520		325,766


					1,556,043

Real Estate 2.8%
Equity Residential	United States		13,000		986,960
Host Hotels & Resorts Inc.	United States		60,941		1,110,345
Prologis Inc.	United States		9,300		744,930


					2,842,235

Utilities 5.8%
Duke Energy Corp.	United States		20,200		1,782,448
NextEra Energy Inc.	United States		11,054		2,264,523
Xcel Energy Inc.	United States		31,196		1,855,850


					5,902,821


Total Common Stocks (Cost $59,249,522)					89,470,132

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)



	Country	Shares		Value

^bEquity-Linked Securities 9.7%
Communication Services 1.2%
^cGoldman Sachs International into Alphabet Inc., 5.00%, A, 144A	United States		1,100	$	1,204,336


Consumer Discretionary 2.4%
^cCitigroup Global Markets Holdings Inc. into Amazon.com Inc., 6.50%, 144A	United States		750		1,344,375
^cWells Fargo Bank National Assn. into Dollar General Corp., 6.50%, 144A	United States		9,000		1,079,454


					2,423,829


Energy 0.6%
^cCitigroup Global Markets Holdings Inc. into Anadarko Petroleum Corp., 8.00%, 144A	United States		11,000		623,128


Financials 1.8%
^cGoldman Sachs International into The Charles Schwab Corp., 7.00%, 144A	United States		19,000		786,445
^cMorgan Stanley BV into Bank of America Corp., 6.50%, 144A	United States		38,000		1,110,304


					1,896,749


Health Care 0.9%
^cGoldman Sachs International into HCA Holdings Inc., 6.00%, 144A	United States		6,400		877,782


Information Technology 2.8%
^cBarclays Bank PLC into Broadcom Inc., 10.00%, 144A	United States		2,900		839,384
^cGoldman Sachs International into Intel Corp., 8.00%, 144A	United States		10,700		515,326
^cMerrill Lynch International & Co. CV into Analog Devices Inc., 7.00%, 144A	United States		11,000		1,082,706
^cMerrill Lynch International & Co. CV into Cisco System Inc., 7.00%, 144A	United States		9,000		477,340


					2,914,756


Total Equity-Linked Securities (Cost $9,528,488)					9,940,580


Convertible Preferred Stocks 2.9%
Health Care 1.8%
Becton Dickinson and Co., 6.125%, cvt. pfd., A	United States		30,500		1,888,255


Industrials 0.5%
Fortive Corp., 5.00%, cvt. pfd., A	United States		510		522,704


Materials 0.6%
International Flavors & Fragrances Inc., 6.00%, cvt. pfd	United States		11,582		623,343


Total Convertible Preferred Stocks (Cost $2,728,780)					3,034,302


Total Investments before Short Term Investments (Cost $71,506,790)					102,445,014

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STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)



	Country	Principal Amount		Value

Short Term Investments (Cost $467,179) 0.4%

Repurchase Agreements 0.4%

^dJoint Repurchase Agreement, 2.451%, 7/01/19 (Maturity Value $467,275) BNP Paribas Securities Corp. (Maturity Value $347,447) Deutsche Bank Securities Inc. (Maturity Value $102,455) HSBC Securities (USA) Inc. (Maturity Value $17,373) Collateralized by U.S. Government Agency Securities, 4.00% - 4.50%, 7/15/40 - 3/20/49; U.S. Treasury Bonds, 8.00%, 11/15/21; U.S. Treasury Notes, 1.50% - 3.125%, 5/15/21 - 8/15/26; U.S. Treasury Notes, Index Linked, 0.875%, 1/15/29; and U.S. Treasury Strips, 8/15/22 - 6/15/35 (valued at $478,677)	United States	$	467,179	$	467,179

Total Investments (Cost $71,973,969) 100.0%					102,912,193
Other Assets, less Liabilities (0.0)%^†					(13,755	)

Net Assets 100.0%				$	102,898,438

See Abbreviations on page FGI-21.

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

^aNon-income producing.

^bSee Note 1(d) 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019 , the aggregate value of these securities was $9,940,580, representing 9.7% of net assets.

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

June 30, 2019 (unaudited)



	Franklin Growth and Income VIP Fund


Assets:
Investments in securities:
Cost - Unaffiliated issuers		$ 71,506,790
Cost - Unaffiliated repurchase agreements		467,179


Value - Unaffiliated issuers		$102,445,014
Value - Unaffiliated repurchase agreements		467,179
Receivables:
Capital shares sold		21,664
Dividends and interest		138,217
Other assets		70


Total assets		103,072,144

Liabilities:
Payables:
Capital shares redeemed		42,103
Management fees		39,602
Distribution fees		28,092
Trustees’ fees and expenses		73
Reports to shareholders		42,980
Professional fees		14,102
Accrued expenses and other liabilities		6,754


Total liabilities		173,706


Net assets, at value		$102,898,438


Net assets consist of:
Paid-in capital		$ 68,499,726
Total distributable earnings (loss)		34,398,712


Net assets, at value		$102,898,438


Class 1:
Net assets, at value		$ 34,880,691

Shares outstanding		2,222,100

Net asset value and maximum offering price per share		$15.70

Class 2:
Net assets, at value		$ 68,017,747

Shares outstanding		4,419,448

Net asset value and maximum offering price per share		$15.39

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin Growth and Income VIP Fund


Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 1,356,861
Interest:
Unaffiliated issuers		6,378


Total investment income		1,363,239

Expenses:
Management fees (Note 3a)		311,406
Distribution fees: (Note 3c) Class 2		82,699
Custodian fees (Note 4)		605
Reports to shareholders		24,572
Professional fees		21,365
Trustees’ fees and expenses		412
Other		6,849


Total expenses		447,908
Expense reductions (Note 4)		(471	)
Expenses waived/paid by affiliates (Note 3e)		(69,829	)


Net expenses		377,608


Net investment income		985,631

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		2,492,717
Foreign currency transactions		143


Net realized gain (loss)		2,492,860

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		10,307,718
Translation of other assets and liabilities denominated in foreign currencies		462


Net change in unrealized appreciation (depreciation)		10,308,180


Net realized and unrealized gain (loss)		12,801,040


Net increase (decrease) in net assets resulting from operations		$13,786,671


*Foreign taxes withheld on dividends		$ 24,141

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets



	Franklin Growth and Income VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income		$ 985,631			$ 1,900,960
Net realized gain (loss)		2,492,860			6,062,177
Net change in unrealized appreciation (depreciation)		10,308,180			(12,184,627	)


Net increase (decrease) in net assets resulting from operations		13,786,671			(4,221,490	)


Distributions to shareholders:
Class 1		(2,665,418	)		(1,845,139	)
Class 2		(5,148,061	)		(3,639,656	)


Total distributions to shareholders		(7,813,479	)		(5,484,795	)


Capital share transactions: (Note 2)
Class 1		1,379,615			(1,177,234	)
Class 2		2,211,199			(5,751,247	)


Total capital share transactions		3,590,814			(6,928,481	)


Net increase (decrease) in net assets		9,564,006			(16,634,766	)
Net assets:
Beginning of period		93,334,432			109,969,198


End of period		$102,898,438			$ 93,334,432

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Growth and 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 Growth and 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 two classes of shares: Class 1 and Class 2. 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

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

Investments in repurchase agreements are valued at cost, which approximates fair value.



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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

a. Financial Instrument Valuation (continued)

b. Foreign Currency Translation

c. Joint Repurchase Agreement

d. 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.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

e. Income and Deferred Taxes

f. 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.

g. Accounting Estimates

h. Guarantees and Indemnifications

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 1 Shares:
Shares sold		45,108		$	720,434			84,856		$	1,355,363
Shares issued in reinvestment of distributions		172,296			2,665,418			117,600			1,845,139
Shares redeemed		(122,875	)		(2,006,237	)		(272,261	)		(4,377,736)


Net increase (decrease)		94,529		$	1,379,615			(69,805	)	$	(1,177,234)


Class 2 Shares:
Shares sold		75,031		$	1,165,948			100,573		$	1,575,307
Shares issued in reinvestment of distributions		339,358			5,148,061			236,188			3,639,656
Shares redeemed.		(258,269	)		(4,102,810	)		(699,174	)		(10,966,210)


Net increase (decrease)		156,120		$	2,211,199			(362,413	)	$	(5,751,247)

3. Transactions with Affiliates



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, 2019, the annualized gross effective investment management fee rate was 0.623% of the Fund’s average daily net assets.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

b. Administrative Fees

c. Distribution Fees

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. 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 expenses (excluding distribution fees, acquired fund fees and expenses and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganisation and liquidations) for each class of the Fund do not exceed 0.59% based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	71,930,751


Unrealized appreciation	$	31,844,396
Unrealized depreciation		(862,954)


Net unrealized appreciation (depreciation)	$	30,981,442

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 and bond discounts and premiums.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $12,974,248 and $16,032,960, respectively.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

7. Credit Facility

8. Fair Value Measurements

•

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, 2019, 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	$	92,504,434	$	—	$	—	$	92,504,434

Equity-Linked Securities		—		9,940,580		—		9,940,580

Short Term Investments		—		467,179		—		467,179


Total Investments in Securities	$	92,504,434	$	10,407,759	$	—	$	102,912,193

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

^bIncludes common and convertible preferred stocks.

9. 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.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Growth and Income VIP Fund (continued)

Abbreviations



Selected Portfolio

ADR		American Depositary Receipt

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Franklin Income VIP Fund

This semiannual report for Franklin Income VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +11.10% total return* for the six-month period ended June 30, 2019.

*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 4/30/20. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.

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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. 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 an +18.54% total return.¹ The Fund’s new secondary benchmark, the Blended 50% MSCI USA High Dividend Yield Index + 25% Bloomberg Barclays High Yield Very Liquid Index + 25% Bloomberg Barclays US Aggregate Index posted a +10.58% total return (Blended Benchmark).² The Fund’s old secondary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index posted a +6.11% total return.¹ We believe the new second benchmark’s composition more accurately reflects the Fund’s holdings.


Portfolio Composition
6/30/19

	% of Total Net Assets
Equity*		46.5%
Financials		7.6%
Health Care		6.1%
Information Technology		5.9%
Energy		5.5%
Utilities		5.5%
Communication Services		3.7%
Consumer Discretionary		3.6%
Materials		3.4%
Consumer Staples		3.2%
Industrials		1.5%
Real Estate		0.5%
Fixed Income^**		48.5%
Health Care		14.6%
Financials		12.9%
Energy		6.5%
Communication Services		5.0%
Consumer Discretionary		2.7%
Materials		1.7%
Industrials		1.6%
Utilities		1.1%
Consumer Staples		1.1%
Information Technology		0.7%
Real Estate		0.6%
Short-Term Investments & Other Net Assets		5.0%

*Includes convertible bonds.

**Includes senior floating rate interests and index-linked notes.

Economic and Market Overview

1. Source: Morningstar.

2. Source: Factset. The Fund’s blended benchmark was calculated internally and rebalanced monthly. 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 INCOME VIP FUND

inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

The 10-year Treasury yield, which moves inversely to its price, decreased during the period. The yield rose at some points during 2019’s first quarter amid several better-than-expected U.S. economic reports and optimism about a potential U.S.-China trade deal. However, concerns about political uncertainties in the U.S., slower domestic and global economic growth, and the Fed’s patient approach to its monetary policy decisions weighed on the Treasury yield. Near period-end, the 10-year yield reached multi-year lows and fell below certain short-term yields, due to weaker economic data and escalating U.S. trade tensions with China and Mexico. Overall, the 10-year Treasury yield declined from 2.69% at the beginning of the period to 2.00% at period-end.

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 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.

3. Source: Bureau of Labor Statistics.


Top Five Equity Holdings
6/30/19

Company *Sector/Industry*	% of Total Net Assets
Wells Fargo & Co. Financials		2.1%
The Southern Co. Utilities		1.7%
JPMorgan Chase & Co. Banks		1.6%
Dominion Energy Inc. Utilities		1.6%
Verizon Communications Inc. Communication Services		1.3%

Manager’s Discussion

The Fund outperformed during the six-month period driven by strong performance across both equity and fixed income holdings. Asset allocation was relatively stable during the six-month period and ended with 48.5% in fixed income, 46.5% in equity and 5.0% in cash.

Fixed income holdings benefited from the sharp decline in interest rates during the period as well as the stabilization and then decline in credit spreads following the turbulence experienced at the end of 2018. This was true across most credit ratings categories and corporate sectors.

Health care bonds were significant positive contributors, especially those in the hospital services sector including Tenet Healthcare and Community Health Systems, where improvements in operations and focus on balance sheet improvements drove total return.

Energy sector corporate bond holdings were weak, especially Weatherford International as the company seeks a broader recapitalization of its balance sheet necessitated at least in part by the deteriorating upstream oil and gas fundamental outlook.

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

The Fund had positive performance from all sectors across the equity asset class with top contributors to performance in utilities, consumer discretionary and information technology.

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FRANKLIN INCOME VIP FUND


Top Five Fixed Income Holdings and Senior Floating Rate Interests*
6/30/19

Company *Sector/Industry*	% of Total Net Assets
U.S. Treasury Note Financials		7.0%
CHS/Community Health Systems Inc. Health Care		4.8%
Tenet Healthcare Corp. Health Care		2.8%
Chesapeake Energy Corp. Energy		2.6%
Bausch Health Cos. Inc. Health Care		1.8%

*Does not include convertible bonds.

Utilities including Southern Co. and Sempra Energy benefited from the decline in interest rates and heightened investor interest in stable businesses amid prospects for weakening economic growth and uncertainty related to trade tensions.

Consumer discretionary holdings, including Target and Ford Motor, had better-than-expected earnings as the macro backdrop improved due in part to the dovish pivot by the Federal Reserve.

Technology and financial sector exposures round out the list of top contributors, especially JP Morgan Chase, Bank of America, Apple and Texas Instruments.

Energy sector equity positions were the leading detractors, including the convertible securities of Weatherford International and the common equity investments in Occidental Petroleum and Halliburton.

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

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Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1, 2

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,
2

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,111.00

$3.72

$1,021.27

$3.56

0.71%

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 Income VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.26			$16.72			$15.87			$14.64			$16.48			$16.53


Income from investment operations^a:

Net investment income^b		0.39			0.71			0.69			0.67			0.71			0.72

Net realized and unrealized gains (losses)		1.31			(1.35	)		0.87			1.34			(1.78	)		0.11


Total from investment operations		1.70			(0.64	)		1.56			2.01			(1.07	)		0.83


Less distributions from:

Net investment income		(0.91	)		(0.82	)		(0.71	)		(0.78	)		(0.77	)		(0.88)

Net realized gains		(0.26	)		—			—			—			—			—


Total distributions		(1.17	)		(0.82	)		(0.71	)		(0.78	)		(0.77	)		(0.88)


Net asset value, end of period		$15.79			$15.26			$16.72			$15.87			$14.64			$16.48


Total return^c		11.28%			(4.09)%			9.94%			14.33%			(6.84)%			4.92%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.47%			0.47%			0.47%			0.47%			0.46%			0.47%

Expenses net of waiver and payments by affiliates^e		0.46%			0.45%			0.45%			0.44%			0.46%^f			0.47%

Net investment income		4.55%			4.33%			4.22%			4.47%			4.47%			4.26%

Supplemental data

Net assets, end of period (000’s)		$384,807			$612,657			$735,149			$696,227			$604,228			$714,664

Portfolio turnover rate		10.42%			43.22%			20.96%			39.03%			31.53%			24.77%

^bBased on average daily shares outstanding.

^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%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$14.74			$16.17			$15.38			$14.20			$16.00			$16.07


Income from investment operations^a:

Net investment income^b		0.34			0.65			0.63			0.61			0.65			0.66

Net realized and unrealized gains (losses)		1.28			(1.30	)		0.83			1.31			(1.73	)		0.11


Total from investment operations		1.62			(0.65	)		1.46			1.92			(1.08	)		0.77


Less distributions from:

Net investment income		(0.87	)		(0.78	)		(0.67	)		(0.74	)		(0.72	)		(0.84)

Net realized gains		(0.26	)		—			—			—			—			—


Total distributions		(1.13	)		(0.78	)		(0.67	)		(0.74	)		(0.72	)		(0.84)


Net asset value, end of period		$15.23			$14.74			$16.17			$15.38			$14.20			$16.00


Total return^c		11.10%			(4.30)%			9.67%			14.02%			(7.05)%			4.62%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.72%			0.72%			0.72%			0.72%			0.71%			0.72%

Expenses net of waiver and payments by affiliates^e		0.71%			0.70%			0.70%			0.69%			0.71%^f			0.72%

Net investment income		4.30%			4.08%			3.97%			4.22%			4.22%			4.01%

Supplemental data

Net assets, end of period (000’s)		$4,366,594			$4,086,652			$5,041,498			$5,088,556			$4,907,599			$6,022,804

Portfolio turnover rate		10.42%			43.22%			20.96%			39.03%			31.53%			24.77%

^bBased on average daily shares outstanding.

^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

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FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.08			$16.53			$15.71			$14.49			$16.31			$16.36


Income from investment operations^a:

Net investment income^b		0.33			0.64			0.62			0.61			0.65			0.66

Net realized and unrealized gains (losses)		1.32			(1.33	)		0.85			1.33			(1.76	)		0.11


Total from investment operations		1.65			(0.69	)		1.47			1.94			(1.11	)		0.77


Less distributions from:

Net investment income		(0.85	)		(0.76	)		(0.65	)		(0.72	)		(0.71	)		(0.82)

Net realized gains		(0.26	)		—			—			—			—			—


Total distributions		(1.11	)		(0.76	)		(0.65	)		(0.72	)		(0.71	)		(0.82)


Net asset value, end of period		$15.62			$15.08			$16.53			$15.71			$14.49			$16.31


Total return^c		11.07%			(4.42)%			9.55%			13.87%			(7.15)%			4.52%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.82%			0.82%			0.82%			0.82%			0.81%			0.82%

Expenses net of waiver and payments by affiliates^e		0.81%			0.80%			0.80%			0.79%			0.81%^f			0.82%

Net investment income		4.20%			3.98%			3.87%			4.12%			4.12%			3.91%

Supplemental data

Net assets, end of period (000’s)		$317,776			$294,700			$335,217			$309,935			$306,023			$378,545

Portfolio turnover rate		10.42%			43.22%			20.96%			39.03%			31.53%			24.77%

^bBased on average daily shares outstanding.

^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, 2019 (unaudited)

Franklin Income VIP Fund


	Country	Shares		Value


Common Stocks 39.0%
Communication Services 1.8%
BCE Inc.	Canada		466,000	$	21,198,152
Verizon Communications Inc.	United States		1,200,000		68,556,000

					89,754,152

Consumer Discretionary 2.7%
Ford Motor Co.	United States		3,903,000		39,927,690
General Motors Co.	United States		1,425,000		54,905,250
Target Corp.	United States		500,000		43,305,000

					138,137,940

Consumer Staples 3.2%
Anheuser-Busch InBev SA/NV, ADR	Belgium		300,000		26,553,000
The Coca-Cola Co.	United States		245,600		12,505,952
PepsiCo Inc.	United States		300,000		39,339,000
Philip Morris International Inc.	United States		350,000		27,485,500
The Procter & Gamble Co.	United States		500,000		54,825,000

					160,708,452

Energy 5.0%
Baker Hughes a GE Co., A	United States		795,000		19,580,850
Chevron Corp.	United States		400,000		49,776,000
Exxon Mobil Corp.	United States		500,000		38,315,000
Halliburton Co.	United States		839,165		19,082,612
Occidental Petroleum Corp.	United States		500,000		25,140,000
Royal Dutch Shell PLC, A, ADR	United Kingdom		900,000		58,563,000
Schlumberger Ltd.	United States		225,000		8,941,500
TC Energy Corp.	Canada		350,000		17,332,000
The Williams Cos. Inc.	United States		600,000		16,824,000

					253,554,962

Financials 5.6%
Bank of America Corp.	United States		715,000		20,735,000
Barclays PLC	United Kingdom		12,500,000		23,779,813
JPMorgan Chase & Co.	United States		600,000		67,080,000
MetLife Inc.	United States		1,095,108		54,394,015
Morgan Stanley	United States		250,000		10,952,500
Wells Fargo & Co.	United States		2,200,000		104,104,000

					281,045,328

Health Care 5.7%
AstraZeneca PLC	United Kingdom		700,000		57,231,565
Bristol-Myers Squibb Co.	United States		1,000,000		45,350,000
CVS Health Corp.	United States		750,000		40,867,500
Johnson & Johnson	United States		230,000		32,034,400
Merck & Co. Inc.	United States		700,000		58,695,000
Pfizer Inc.	United States		1,300,000		56,316,000

					290,494,465

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 1.5%
3M Co.	United States		250,000	$	43,335,000
^aCummins Inc.	United States		200,000		34,268,000


					77,603,000


Information Technology 5.3%
Apple Inc.	United States		309,783		61,312,251
^aApplied Materials Inc.	United States		286,000		12,844,260
Intel Corp.	United States		1,099,307		52,623,826
International Business Machines Corp.	United States		109,976		15,165,691
Lam Research Corp.	United States		70,000		13,148,800
Microchip Technology Inc.	United States		150,000		13,005,000
^aMicrosoft Corp.	United States		285,500		38,245,580
Texas Instruments Inc.	United States		520,000		59,675,200


					266,020,608


Materials 2.2%
BASF SE	Germany		700,000		50,867,218
Dow Inc.	United States		249,166		12,286,375
Rio Tinto PLC, ADR	Australia		800,000		49,872,000


					113,025,593


Real Estate 0.5%
Host Hotels & Resorts Inc.	United States		1,500,000		27,330,000


Utilities 5.5%
Dominion Energy Inc.	United States		1,036,638		80,152,850
Duke Energy Corp.	United States		577,500		50,958,600
Sempra Energy	United States		275,000		37,796,000
The Southern Co.	United States		1,560,000		86,236,800
Xcel Energy Inc.	United States		400,000		23,796,000


					278,940,250


Total Common Stocks (Cost $1,657,780,113)					1,976,614,750


^b Equity-Linked Securities 5.0%
Communication Services 1.9%
^cGoldman Sachs International into Alphabet Inc., 7.00%, A, 144A	United States		35,000		38,594,008
^cRoyal Bank of Canada into Alphabet Inc., 6.00%, A, 144A	Belgium		10,000		10,984,473
^cRoyal Bank of Canada into Comcast Corp., 7.00%, A, 144A	United States		1,270,000		49,641,984


					99,220,465

Consumer Discretionary 0.9%
^cJP Morgan Chase Financial Co. LLC into Amazon.com Inc., 9.00%, 144A	United States		25,000		45,196,215


Financials 0.4%
^cCredit Suisse AG into Bank of America Corp., 7.00%, 144A	United States		750,000		22,157,759


Information Technology 0.6%
^cCredit Suisse AG London into Analog Devices Inc., 7.50%, 144A	United States		260,000		28,541,434

FI-10

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)


	Country	Shares			Value


^bEquity-Linked Securities (continued)
Materials 1.2%
^cUBS AG London into DowDuPont Inc., 6.50%, 144A	United States		850,000		$	44,215,481
^cUBS AG London into Newmont Goldcorp Corp., 8.00%, cvt. pfd., 144A	United States		435,000			16,231,323


						60,446,804


Total Equity-Linked Securities (Cost $255,253,648)						255,562,677


Convertible Preferred Stocks 1.3%
Financials 1.3%
Bank of America Corp., 7.25%, cvt. pfd., L	United States		34,600			47,471,200
^dFNMA, 5.375%, cvt. pfd	United States		475			19,237,500


Total Convertible Preferred Stocks (Cost $65,397,102)						66,708,700


Preferred Stocks (Cost $15,000,000) 0.3%
Financials 0.3%
JPMorgan Chase & Co., 6.00%, pfd., EE	United States		600,000			16,290,000


		Units

^eIndex-Linked Notes (Cost $14,054,540) 0.3%
Financials 0.3%
^c,fMorgan Stanley Finance LLC, senior note, 144A, 6.98%, 10/03/19	United States		106,000			14,167,960


		Principal Amount*

Convertible Bonds 0.9%
Energy 0.5%
Chesapeake Energy Corp., cvt., senior note, 5.50%, 9/15/26	United States		10,000,000			8,006,785
^gWeatherford International Ltd., cvt., senior note, 5.875%, 7/01/21	United States		35,000,000			18,112,500

						26,119,285

Health Care 0.4%
^cBayer Capital Corp. BV, cvt., junior sub. note, 144A, 5.625%, 11/22/19	Germany		25,000,000	EUR		21,845,356


Total Convertible Bonds (Cost $67,852,716)						47,964,641


Corporate Bonds 38.5%
Communication Services 4.9%
AMC Entertainment Holdings Inc., senior sub. note, 5.875%, 11/15/26	United States		5,600,000			5,040,000
AT&T Inc., senior bond, 4.125%, 2/17/26	United States		12,000,000			12,770,319
CCO Holdings LLC/CCO Holdings Capital Corp.,
senior bond, 5.125%, 2/15/23	United States		10,000,000			10,183,000
senior bond, 5.75%, 1/15/24	United States		9,000,000			9,223,875
^csenior bond, 144A, 5.50%, 5/01/26	United States		10,000,000			10,490,500
DISH DBS Corp.,
senior bond, 5.875%, 7/15/22	United States		27,000,000			27,506,250
senior bond, 5.00%, 3/15/23	United States		21,000,000			20,370,000
senior note, 5.875%, 11/15/24	United States		9,400,000			8,930,000



		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		24,000,000		$ 24,870,000
^c Sirius XM Radio Inc., senior bond, 144A, 6.00%, 7/15/24		United States		4,000,000		4,126,000
Sprint Communications Inc.,
senior bond, 11.50%, 11/15/21		United States		30,000,000		34,800,000
senior note, 7.00%, 8/15/20		United States		7,500,000		7,790,625
senior note, 6.00%, 11/15/22		United States		6,300,000		6,583,500
Sprint Corp.,
senior bond, 7.875%, 9/15/23		United States		12,500,000		13,625,000
senior bond, 7.125%, 6/15/24		United States		8,200,000		8,714,960
senior note, 7.625%, 3/01/26		United States		7,500,000		8,013,750
^cSprint Spectrum Co. LLC, senior secured bond, first lien, 144A, 5.152%, 9/20/29		United States		16,000,000		16,520,000
^c Univision Communications Inc.,
senior secured note, first lien, 144A, 5.125%, 5/15/23		United States		15,000,000		14,737,500
senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		7,140,000		6,818,700


						251,113,979


Consumer Discretionary 1.8%
^c24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22		United States		6,300,000		6,237,000
Ford Motor Co., senior note, 4.346%, 12/08/26		United States		18,500,000		18,663,740
General Motors Co., senior bond, 5.15%, 4/01/38		United States		16,000,000		15,824,682
^cGolden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		5,000,000		5,162,500
^c Shea Homes LP/Shea Homes Funding Corp.,
senior bond, 144A, 6.125%, 4/01/25		United States		10,000,000		10,144,900
senior note, 144A, 5.875%, 4/01/23		United States		10,000,000		10,250,000
^c Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
senior bond, 144A, 5.50%, 3/01/25		United States		13,200,000		13,665,960
senior bond, 144A, 5.25%, 5/15/27		United States		10,000,000		10,050,000


						89,998,782


Consumer Staples 1.1%
BAT Capital Corp.,
senior note, 3.222%, 8/15/24		United Kingdom		10,000,000		10,088,195
senior note, 3.557%, 8/15/27		United Kingdom		20,000,000		19,920,216
Kraft Heinz Foods Co., senior bond, 4.625%, 1/30/29		United States		13,000,000		13,992,901
^c Post Holdings Inc.,
senior bond, 144A, 5.00%, 8/15/26		United States		7,500,000		7,631,250
senior bond, 144A, 5.625%, 1/15/28		United States		2,500,000		2,578,125


						54,210,687


Energy 6.5%
^cAscent Resources Utica Holdings LLC/ARU Finance Corp., senior note, 144A, 10.00%, 4/01/22		United States		3,200,000		3,403,680
Calumet Specialty Products Partners LP/Calumet Finance Corp.,
senior note, 6.50%, 4/15/21		United States		34,000,000		33,915,000
senior note, 7.625%, 1/15/22		United States		8,000,000		7,780,000
senior note, 7.75%, 4/15/23		United States		2,000,000		1,920,000



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)

Chesapeake Energy Corp.,

senior bond, 8.00%, 6/15/27		United States		26,000,000		$ 22,863,880

senior note, 4.875%, 4/15/22		United States		5,000,000		4,750,000

senior note, 5.75%, 3/15/23		United States		5,000,000		4,712,500

senior note, 7.00%, 10/01/24		United States		20,000,000		18,025,000

senior note, 8.00%, 1/15/25		United States		47,500,000		44,056,250

senior note, 7.50%, 10/01/26		United States		10,000,000		8,950,000

^csenior note, 144A, 8.00%, 3/15/26		United States		29,715,000		27,114,937

^cCNX Resources Corp., senior note, 144A, 7.25%, 3/14/27		United States		8,000,000		6,880,000

HighPoint Operating Corp.,

senior bond, 7.00%, 10/15/22		United States		17,937,000		17,398,890

senior note, 8.75%, 6/15/25		United States		26,600,000		25,669,000

Kinder Morgan Inc.,

senior bond, 7.75%, 1/15/32		United States		22,000,000		30,142,870

^csenior secured bond, first lien, 144A, 5.625%, 11/15/23		United States		6,400,000		7,088,520

^g Weatherford International Ltd.,

senior bond, 4.50%, 4/15/22		United States		11,900,000		6,158,250

senior note, 5.125%, 9/15/20		United States		22,500,000		11,643,750

senior note, 7.75%, 6/15/21		United States		47,500,000		25,293,750

senior note, 8.25%, 6/15/23		United States		37,500,000		19,781,250



						327,547,527



Financials 5.0%

Bank of America Corp.,

^hjunior sub. bond, AA, 6.10% to 3/17/25, FRN thereafter, Perpetual		United States		8,000,000		8,645,720

^hjunior sub. bond, X, 6.25% to 9/05/24, FRN thereafter, Perpetual		United States		6,000,000		6,532,500

senior bond, 3.419% to 12/20/27, FRN thereafter, 12/20/28		United States		10,000,000		10,306,413

Capital One Financial Corp., senior sub. note, 4.20%, 10/29/25		United States		15,500,000		16,286,742

Citigroup Inc.,

^hjunior sub. bond, 5.90% to 2/15/23, FRN thereafter, Perpetual		United States		12,500,000		12,964,425

^hjunior sub. bond, 5.95% to 1/30/23, FRN thereafter, Perpetual		United States		4,500,000		4,601,250

^hjunior sub. bond, M, 6.30% to 5/15/24, FRN thereafter, Perpetual		United States		15,800,000		16,423,547

^hjunior sub. bond, O, 5.875% to 3/27/20, FRN thereafter, Perpetual		United States		25,000,000		25,227,375

^hjunior sub. bond, Q, 5.95% to 8/15/20, FRN thereafter, Perpetual		United States		10,000,000		10,285,350

sub. bond, 4.125%, 7/25/28		United States		18,500,000		19,561,907

The Goldman Sachs Group Inc., senior note, 3.272% to 9/29/24, FRN thereafter, 9/29/25		United States		15,500,000		15,865,862

HSBC Holdings PLC, senior note, 4.292% to 9/12/25, FRN thereafter, 9/12/26		United Kingdom		28,500,000		30,315,593

^h JPMorgan Chase & Co.,

ⁱjunior sub. bond, FRN, 6.053%, (3-month USD LIBOR + 3.47%), Perpetual		United States		28,692,000		28,672,776

junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		3,200,000		3,366,288

junior sub. bond, V, 5.00% to 7/30/19, FRN thereafter, Perpetual		United States		10,000,000		9,980,500



		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)

Financials (continued)

^hMorgan Stanley, junior sub. bond, 5.55% to 7/15/20, FRN thereafter, Perpetual		United States		7,300,000		$ 7,381,979

Prudential Financial Inc., junior sub. bond, 5.70% to 9/15/28, FRN thereafter, 9/15/48		United States		17,000,000		18,291,660

^hWells Fargo & Co., junior sub. bond, S, 5.90% to 6/15/24, FRN thereafter, Perpetual		United States		6,600,000		6,909,969

						251,619,856


Health Care 14.1%

Allergan Funding SCS, senior bond, 3.80%, 3/15/25		United States		17,000,000		17,637,152

^cBausch Health Cos. Inc.,

senior bond, 144A, 6.125%, 4/15/25		United States		9,400,000		9,611,500

senior note, 144A, 5.50%, 3/01/23		United States		15,000,000		15,176,250

senior note, 144A, 5.875%, 5/15/23		United States		14,500,000		14,722,865

senior note, 144A, 9.00%, 12/15/25		United States		5,000,000		5,605,250

senior note, first lien, 144A, 7.00%, 3/15/24		United States		4,500,000		4,792,950

senior secured note, first lien, 144A, 6.50%, 3/15/22		United States		3,000,000		3,112,500

senior secured note, first lien, 144A, 5.50%, 11/01/25		United States		35,000,000		36,618,750

^cBayer U.S. Finance II LLC, senior note, 144A, 4.25%, 12/15/25		Germany		15,000,000		15,874,447

^c Bristol-Myers Squibb Co.,

senior bond, 144A, 3.40%, 7/26/29		United States		8,000,000		8,374,348

senior bond, 144A, 4.25%, 10/26/49		United States		8,000,000		8,818,573

CHS/Community Health Systems Inc.,

senior note, 6.875%, 2/01/22		United States		130,000,000		88,400,000

^csenior note, 144A, 8.125%, 6/30/24		United States		42,388,000		31,896,970

^csenior note, 144A, 11.00% to 6/22/19, 9.875% thereafter, 6/30/23		United States		101,596,000		83,144,134

senior secured note, first lien, 6.25%, 3/31/23		United States		39,000,000		37,683,750

^cCigna Corp., senior secured note, 144A, 3.75%, 7/15/23		United States		20,000,000		20,825,639

CVS Health Corp.,

senior bond, 4.30%, 3/25/28		United States		8,000,000		8,438,637

senior bond, 5.05%, 3/25/48		United States		3,900,000		4,154,286

senior note, 4.10%, 3/25/25		United States		5,100,000		5,379,654

DaVita Inc.,

senior bond, 5.125%, 7/15/24		United States		5,000,000		5,014,000

senior bond, 5.00%, 5/01/25		United States		4,000,000		3,964,000

^c Endo DAC/Endo Finance LLC/Endo Finco Inc.,

senior bond, 144A, 6.00%, 2/01/25		United States		7,600,000		5,130,000

senior note, 144A, 6.00%, 7/15/23		United States		15,000,000		10,875,000

HCA Inc.,

senior bond, 5.875%, 5/01/23		United States		7,500,000		8,174,100

senior note, 7.50%, 2/15/22		United States		25,000,000		27,625,000

senior secured note, first lien, 5.00%, 3/15/24		United States		10,400,000		11,336,955

Horizon Pharma USA Inc., senior note, 6.625%, 5/01/23		United States		2,842,000		2,929,036

Mallinckrodt International Finance SA, senior bond, 4.75%, 4/15/23		United States		1,000,000		710,000

^c Mallinckrodt International Finance SA/Mallinckrodt CB LLC,

senior note, 144A, 4.875%, 4/15/20		United States		20,200,000		19,568,750

senior note, 144A, 5.75%, 8/01/22		United States		24,000,000		20,520,000

senior note, 144A, 5.625%, 10/15/23		United States		14,300,000		10,850,125

senior note, 144A, 5.50%, 4/15/25		United States		10,000,000		6,750,000

FI-14

Semiannual Report

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)
Mylan NV, senior note, 3.95%, 6/15/26	United States		13,600,000	$	13,136,240
^cPar Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27	United States		8,500,000		8,372,500
Tenet Healthcare Corp.,
secured note, second lien, 5.125%, 5/01/25	United States		2,500,000		2,518,750
senior note, 8.125%, 4/01/22	United States		27,600,000		29,083,500
senior note, 6.75%, 6/15/23	United States		58,200,000		58,636,500
senior note, 7.00%, 8/01/25	United States		12,175,000		12,197,280
^csenior note, second lien, 144A, 6.25%, 2/01/27	United States		29,000,000		29,906,250
senior secured note, first lien, 4.50%, 4/01/21	United States		7,000,000		7,131,250


					714,696,891


Industrials 1.0%
^cTransDigm Inc., senior secured note, 144A, 6.25%, 3/15/26	United States		14,000,000		14,682,500
United Rentals North America Inc., senior bond, 4.875%, 1/15/28	United States		20,000,000		20,450,000
United Technologies Corp., senior note, 3.95%, 8/16/25	United States		15,000,000		16,181,635


					51,314,135


Information Technology 0.7%
^cCommScope Inc., senior bond, 144A, 5.50%, 6/15/24	United States		10,000,000		9,512,500
^cDell International LLC/EMC Corp., senior secured note, first lien, 144A, 5.45%, 6/15/23	United States		21,100,000		22,756,092
NCR Corp., senior note, 6.375%, 12/15/23	United States		4,212,000		4,354,155


					36,622,747


Materials 1.7%
^c BWAY Holding Co.,
secured note, 144A, 5.50%, 4/15/24	United States		10,000,000		10,043,750
senior note, 144A, 7.25%, 4/15/25	United States		23,000,000		22,252,500
^cCemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24	Mexico		14,700,000		15,167,680
DuPont de Nemours Inc.senior note, 4.493%, 11/15/25	United States		15,000,000		16,601,333
^cFMG Resources (August 2006) Pty. Ltd., senior note, 144A, 5.125%, 5/15/24	Australia		6,700,000		6,974,298
^cSyngenta Finance NV, senior note, 144A, 4.441%, 4/24/23	Switzerland		16,500,000		17,112,315


					88,151,876


Real Estate 0.6%
Equinix Inc., senior bond, 5.375%, 5/15/27	United States		11,000,000		11,819,170
Iron Mountain Inc., senior sub. bond, 5.75%, 8/15/24	United States		18,000,000		18,227,520


					30,046,690


Utilities 1.1%
Calpine Corp.,

senior note, 5.375%, 1/15/23	United States		20,000,000		20,275,000

senior note, 5.50%, 2/01/24	United States		16,375,000		16,272,656
Ferrellgas LP/Ferrellgas Finance Corp.,

senior note, 6.50%, 5/01/21	United States		9,500,000		8,668,750

senior note, 6.75%, 6/15/23	United States		5,000,000		4,412,500
Vistra Energy Corp., senior note, 5.875%, 6/01/23	United States		8,000,000		8,210,000


					57,838,906


Total Corporate Bonds (Cost $1,980,284,294)					1,953,162,076

Semiannual Report

FI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)


	Country	Principal Amount*		Value

^i,j Senior Floating Rate Interests 2.1%
Communication Services 0.1%
Securus Technologies Holdings Inc., Second Lien Initial Loan, 10.58%, (3-month USD LIBOR + 8.25%), 11/01/25	United States		6,000,000	$	5,560,002


Consumer Discretionary 0.9%
24 Hour Fitness Worldwide Inc., Term Loan, 5.902%, (1-month USD LIBOR + 3.50%), 5/30/25	United States		13,860,000		13,820,153
Belk Inc., Closing Date Term Loan, 7.285%, (3-month USD LIBOR + 4.75%), 12/12/22	United States		19,082,783		15,480,907
Stars Group Holdings BV, Stars Group (US), USD Term Loan, 5.83%, (3-month USD LIBOR + 3.50%), 7/10/25	United States		17,841,958		17,868,007


					47,169,067


Health Care 0.5%
Amneal Pharmaceuticals LLC, Initial Term Loans, 5.938%, (1-month USD LIBOR + 3.50%), 5/04/25	United States		24,744,222		24,630,894


Industrials 0.6%
Commercial Barge Line Co., Initial Term Loan, 11.152%, (1-month USD LIBOR + 8.75%), 11/12/20	United States		4,433,823		3,070,423
Vertiv Group Corp., Term B Loans, 6.33%, (3-month USD LIBOR + 4.00%), 11/30/23	United States		8,574,569		8,161,815
West Corp., Term B Loans, 6.522%, (3-month USD LIBOR + 4.00%), 10/10/24	United States		17,373,104		16,240,238


					27,472,476


Total Senior Floating Rate Interests (Cost $109,804,793)					104,832,439


U.S. Government and Agency Securities 7.6%
U.S. Treasury Bond, 3.00%, 2/15/49	United States		25,000,000		27,422,852
U.S. Treasury Note, 2.25%, 3/31/20	United States		50,000,000		50,085,937
2.50%, 5/31/20	United States		75,000,000		75,338,379
2.50%, 6/30/20	United States		50,000,000		50,258,789
2.375%, 3/15/21	United States		75,000,000		75,722,168
2.75%, 4/30/23	United States		25,000,000		25,930,176
2.75%, 5/31/23	United States		50,000,000		51,898,437
2.875%, 5/31/25	United States		25,000,000		26,461,426


Total U.S. Government and Agency Securities (Cost $375,256,437)					383,118,164

			Shares


Escrows and Litigation Trusts (Cost $62,602) 0.0%
^d,kMotors Liquidation Co., Escrow Account, cvt. pfd., C	United States		1,400,000		—


Total Investments before Short Term Investments (Cost $4,540,746,245)					4,818,421,407

FI-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)


	Country	Shares		Value

Short Term Investments (Cost $175,824,178) 3.5%

Money Market Funds 3.5%
^l,mInstitutional Fiduciary Trust Money Market Portfolio, 2.05%	United States		175,824,178	$	175,824,178


Total Investments (Cost $4,716,570,423) 98.5%					4,994,245,585
Options Written (0.0)%^†					(1,245,510	)
Other Assets, less Liabilities 1.5%					76,177,821


Net Assets 100.0%				$	5,069,177,896

	Number of Contracts	Notional Amount*


ⁿOptions Written (0.0)%^†
Calls - Exchange-Traded
Applied Materials Inc., September Strike Price $52.50, Expires 9/20/19	2,860		286,000		(188,760	)
Cummins Inc., August Strike Price $180.00, Expires 8/16/19	1,000		100,000		(225,000	)
Microsoft Corp., July Strike Price $135.00, Expires 7/19/19	2,855		285,500		(713,750	)


					(1,127,510	)


Puts - Exchange-Traded
CVS Health Corp., July Strike Price $52.50, Expires 7/19/19	2,000		200,000		(118,000	)


Total Options Written (Premiums received $1,273,962)				$	(1,245,510	)

See Abbreviations on page FI-30.

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

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

^aA portion or all of the security is held in connection with written option contracts open at period end.

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

^dNon-income producing.

^eSee Note 1(d) regarding index-linked notes.

^fSecurity pays a fixed 2.00% coupon rate and a variable coupon based on the distribution of the Morgan Stanley Custom Enhanced SPX B DT Index 20 Delta. The coupon rate shown represents the combined rate at period end. Cash payment at maturity or upon early redemption is based on the performance of the Morgan Stanley Custom Enhanced SPX B Index 20 Delta.

^gSee Note 7 regarding defaulted securities.

^hPerpetual security with no stated maturity date.

ⁱThe coupon rate shown represents the rate at period end.

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

^kFair valued using significant unobservable inputs. See Note 10 regarding fair value measurements.

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

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

ⁿSee Note 1(c) 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, 2019 (unaudited)


	Franklin Income VIP Fund


Assets:
Investments in securities:
Cost - Unaffiliated issuers		$4,540,746,245
Cost - Non-controlled affiliates (Note 3e)		175,824,178


Value - Unaffiliated issuers		$4,818,421,407
Value - Non-controlled affiliates (Note 3e)		175,824,178
Cash		802,666
Receivables:
Investment securities sold		35,399,357
Capital shares sold		2,258,191
Dividends and interest		44,890,050
Other assets		3,693


Total assets		5,077,599,542

Liabilities:
Payables:
Capital shares redeemed		2,898,404
Management fees		1,823,829
Distribution fees		1,994,439
Trustees’ fees and expenses		6,072
Options written, at value (premiums received $1,273,962)		1,245,510
Accrued expenses and other liabilities		453,392


Total liabilities		8,421,646


Net assets, at value		$5,069,177,896

Net assets consist of:
Paid-in capital		$4,652,292,846
Total distributable earnings (loss)		416,885,050


Net assets, at value		$5,069,177,896

Class 1:
Net assets, at value		$ 384,806,951

Shares outstanding		24,365,461

Net asset value and maximum offering price per share		$15.79

Class 2:
Net assets, at value		$4,366,594,448

Shares outstanding		286,708,752

Net asset value and maximum offering price per share		$15.23

Class 4:
Net assets, at value		$ 317,776,497

Shares outstanding		20,339,646

Net asset value and maximum offering price per share		$15.62

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, 2019 (unaudited)


	Franklin Income VIP Fund


Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 41,689,831
Non-controlled affiliates (Note 3e)		1,403,664
Interest:
Unaffiliated issuers		86,550,126
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		5,933
Non-controlled affiliates (Note 3e)		15,410


Total investment income		129,664,964

Expenses:
Management fees (Note 3a)		11,773,668
Distribution fees: (Note 3c)
Class 2		5,396,749
Class 4		538,362
Custodian fees (Note 4)		30,264
Reports to shareholders		235,139
Professional fees		63,455
Trustees’ fees and expenses		21,773
Other		55,668


Total expenses		18,115,078
Expense reductions (Note 4)		(25,029	)
Expenses waived/paid by affiliates (Note 3e)		(238,706	)


Net expenses		17,851,343


Net investment income		111,813,621

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		32,330,998
Realized gain distributions from REITs		3,984
Foreign currency transactions		(158,710	)


Net realized gain (loss)		32,176,272

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		407,169,707
Translation of other assets and liabilities denominated in foreign currencies		(19,451	)
Written options		28,452


Net change in unrealized appreciation (depreciation)		407,178,708


Net realized and unrealized gain (loss)		439,354,980


Net increase (decrease) in net assets resulting from operations		$551,168,601


*Foreign taxes withheld on dividends		$ 957,292

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, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income		$ 111,813,621			$ 235,338,694
Net realized gain (loss)		32,176,272			351,140,755
Net change in unrealized appreciation (depreciation)		407,178,708			(809,608,127	)


Net increase (decrease) in net assets resulting from operations		551,168,601			(223,128,678	)

Distributions to shareholders:
Class 1		(26,604,329	)		(34,377,723	)
Class 2		(301,656,285	)		(227,495,537	)
Class 4		(21,101,452	)		(14,948,805	)

Total distributions to shareholders		(349,362,066	)		(276,822,065	)

Capital share transactions: (Note 2)
Class 1		(270,269,053	)		(62,663,457	)
Class 2		131,519,747			(543,422,123	)
Class 4		12,111,032			(11,817,756	)

Total capital share transactions		(126,638,274	)		(617,903,336	)


Net increase (decrease) in net assets		75,168,261			(1,117,854,079	)
Net assets:
Beginning of period		4,994,009,635			6,111,863,714


End of period		$5,069,177,896			$ 4,994,009,635

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

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.

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)

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, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

b. Foreign Currency Translation

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

c. Derivative Financial Instruments

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

FI-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

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 8 regarding other derivative information.

d. Index-Linked Notes

The Fund invests in index-linked notes. Index-linked notes are senior, unsecured, subordinated debt securities issued by a financial institution, and the value is based on the price movements of the underlying index. Index-linked notes are designed to provide investors access to the returns of various market benchmarks and intended to replicate the economic effects that would apply had the Fund directly purchased the underlying referenced asset or basket of assets. The risks of investing in index-linked notes include unfavorable price movements in the underlying index and the credit risk of the issuing financial institution. There may be no guarantee of a return of principal with index-linked notes and the appreciation potential may be limited. Index-linked notes may be more volatile and less liquid than other investments held by the Fund.

e. Equity-Linked Securities

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, 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. At June 30, 2019, the Fund had no securities on loan.

g. Senior Floating Rate Interests

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

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. Income and Deferred Taxes (continued)

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.

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

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.

j. Accounting Estimates

FI-24

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

k. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018
	Shares			Amount			Shares		Amount

Class 1 Shares:
Shares sold		806,551		$	13,154,961			1,947,322		$ 31,806,598
Shares issued in reinvestment of distributions		1,709,790			26,604,329			2,128,651		34,377,723
Shares redeemed		(18,292,504	)		(310,028,343	)		(7,908,010)		(128,847,778)
Net increase (decrease)		(15,776,163	)	$	(270,269,053	)		(3,832,037)		$ (62,663,457)

Class 2 Shares:
Shares sold		11,147,845		$	175,850,953			11,659,052		$ 185,115,657
Shares issued in reinvestment of distributions		20,097,021			301,656,285			14,573,705		227,495,537
Shares redeemed		(21,839,655	)		(345,987,491	)		(60,726,257)		(956,033,317)
Net increase (decrease)		9,405,211		$	131,519,747			(34,493,500)		$(543,422,123)

Class 4 Shares:
Shares sold		1,437,622		$	23,391,101			2,953,880		$ 48,028,259
Shares issued in reinvestment of distributions		1,370,224			21,101,452			934,885		14,948,805
Shares redeemed		(2,005,393	)		(32,381,521	)		(4,625,977)		(74,794,820)

Net increase (decrease)		802,453		$	12,111,032			(737,212)		$ (11,817,756)

3. Transactions with Affiliates


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, 2019, the annualized gross effective investment management fee rate was 0.455% of the Fund’s average daily net assets.

b. Administrative Fees

c. Distribution Fees

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

FI-26

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (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
																	Dividends

Institutional Fiduciary Trust Money Market Portfolio, 2.05%		$157,193,174		$716,743,287		$(698,112,283	)		$ —		$ —		$175,824,178		175,824,178		$1,403,664

																	Income from securities loaned

Institutional Fiduciary Trust Money Market Portfolio, 2.05%		1,099,000		38,311,000		(39,410,000	)		—		—		—		—		15,410


Total Affiliated Securities		$158,292,174		$755,054,287		$(737,522,283	)		$ —		$ —		$175,824,178				$1,419,074

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:



Cost of investments	$	4,719,657,003



Unrealized appreciation	$	582,809,046

Unrealized depreciation		(309,465,974)



Net unrealized appreciation (depreciation)	$	273,343,072

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of bond discounts and premiums and equity-linked securities.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $521,769,403 and $936,269,985 respectively.

7. Credit Risk and Defaulted Securities

At June 30, 2019, the Fund had 33.6% 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.

Semiannual Report

FI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

7. Credit Risk and Defaulted Securities (continued)

The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At June 30, 2019, the aggregate value of these securities was $80,989,500, representing 1.6% 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 Statement of Investments.

8. Other Derivative Information

At June 30, 2019, 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

$ —

Options written, at value

$1,245,510

For the period ended June 30, 2019, 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

Written options

$ —

Written options

$28,452

For the period ended June 30, 2019, the average month end notional amount of options represented 124,500 shares.

See Note 1(c) regarding derivative financial instruments.

9. Credit Facility

FI-28

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

10. Fair Value Measurements

•

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, 2019, 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

Financials		$ 344,806,528		$ 19,237,500		$ —			$ 364,044,028

All Other Equity Investments		1,695,569,422		—		—			1,695,569,422

Equity-Linked Securities		—		255,562,677		—			255,562,677

Index-Linked Notes		—		14,167,960		—			14,167,960

Convertible Bonds		—		47,964,641		—			47,964,641

Corporate Bonds		—		1,953,162,076		—			1,953,162,076

Senior Floating Rate Interests		—		104,832,439		—			104,832,439

U.S. Government and Agency Securities		—		383,118,164		—			383,118,164

Escrows and Litigation Trusts		—		—		—	^c		—

Short Term Investments		175,824,178		—		—			175,824,178


Total Investments in Securities		$ 2,216,200,128		$ 2,778,045,457		$ —			$ 4,994,245,585


Liabilities:

Other Financial Instruments:

Options Written		$ 1,245,510		$ —		$ —			$ 1,245,510

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

^bIncludes common, preferred and convertible preferred stocks.

^cIncludes securities determined to have no value at June 30, 2019.

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

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.

Semiannual Report

FI-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Income VIP Fund (continued)

Abbreviations



Currency		Selected Portfolio

EUR	Euro	ADR	American Depositary Receipt

USD	United States Dollar	FNMA	Federal National Mortgage Association

		FRN	Floating Rate Note

		LIBOR	London InterBank Offered Rate

FI-30

Semiannual Report

Franklin Large Cap Growth VIP Fund

This semiannual report for Franklin Large Cap Growth VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +26.44% total return for the six-month period ended June 30, 2019.

Semiannual Report

FLG-1

FRANKLIN LARGE CAP GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of large-capitalization companies. For this Fund, large-capitalization companies are those with market capitalization values within those of the top 50% of companies in the Russell 1000^® Index at the time of purchase.¹

Fund 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 +18.54% total return.²

Economic and Market Overview

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

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.

3. 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).

FLG-2

Semiannual Report

FRANKLIN LARGE CAP GROWTH VIP FUND

labor market. With market-based inflation measures remaining low in recent months, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

Investment Strategy

We are a research driven, fundamental investor, pursuing a growth strategy. As a bottom-up investor focusing primarily on individual securities, we seek companies that have identifiable drivers of future earnings growth and that present, in our opinion, the best trade-off between that potential earnings growth, business and financial risk, and valuation.

Manager’s Discussion

Looking back on the key factors affecting the Fund’s returns during the six months under review, we would like to remind shareholders that our investment strategy is primarily bottom-up and driven by individual stock selection. However, we recognize that a sector-based discussion can be a helpful way to organize a portfolio review of key performance drivers. We employed our long-held strategy: bottom-up, individual company, fundamental research aimed at opportunistically finding what we believed to be outstanding large-capitalization companies across all sectors, at valuations we believed understated their fair worth, with future growth potential being a key driver of estimated worth.

During the period under review, all sectors represented in the Fund’s portfolio posted positive returns and contributed to absolute performance, as well as to performance relative to the S&P 500. An overweighting and stock selection in the


Top 10 Holdings
6/30/19

Company *Sector/Industry*		% of Total Net Assets
Amazon.com Inc.		7.7%
Consumer Discretionary
Mastercard Inc.		6.1%
Information Technology
Microsoft Corp.		5.7%
Information Technology
Visa Inc.		4.9%
Information Technology
Alphabet Inc.		3.4%
Communication Services
ServiceNow Inc.		3.3%
Information Technology
SBA Communications Corp.		2.7%
Real Estate
CoStar Group Inc.		2.7%
Industrials
Apple Inc.		2.5%
Information Technology
Adobe Inc.		2.4%
Information Technology

information technology (IT) sector contributed significantly to the Fund’s relative performance. Other notable contributors included stock selection in the health care and industrials sectors.

In the IT sector, our investments in financial technology companies Mastercard and Visa, as well as cloud-based enterprise workflow management provider ServiceNow (not part of the index), boosted relative results. Mastercard continues to perform very well, exceeding expectations and announcing several growth initiatives, partnerships, acquisition of capabilities that expand its global network, investment in emerging regions and expansion into new payment flows. The company has shown an ability to both invest for the long term and deliver solid quarter-to-quarter execution, which we believe is supported by a strong organic growth profile. ServiceNow, which enables companies to become more automated and efficient, continues to execute well in its large addressable market. A leader in enabling digital transformation, the company is becoming a multi-platform growth business with a strong product line, in our analysis. The recently introduced pro version of a core offering comes at a price premium we believe could drive revenue and billings growth.

Semiannual Report

FLG-3

FRANKLIN LARGE CAP GROWTH VIP FUND

In the health care sector, our positions in cloud-based life sciences software solutions provider Veeva Systems (not part of the index) and precision oncology company Guardant Health (not part of the index) contributed to relative results.

In the industrials sector, commercial real estate information, analytics and marketing services company CoStar Group (not part of the index) performed well as all business segments exhibited strong growth. We expect CoStar to continue to achieve robust growth with the help of its Apartments.com and LoopNet.com businesses, which concentrate on apartment rental listings and commercial property marketplaces, respectively.

Other notable contributors to relative results included our position in MSCI, a provider of investment decision support tools, including indexes and portfolio risk and performance analytics.

In contrast, key individual detractors from relative results included our holdings in biotechnology firm Heron Therapeutics (not part of the index), medical devices manufacturer ABIOMED and frozen potato products company Lamb Weston Holdings. Heron’s shares fell after the company announced the U.S. Food and Drug Administration (FDA) said it was unable to approve the new drug application for HTX-011 for the management of postoperative pain, citing the need for additional information. However, the FDA did not mention any issues with HTX-011’s safety or efficacy. ABIOMED’s shares declined after an FDA investigation suggested higher mortality rates of patients using the firm’s Impella RP heart pump. ABIOMED is beginning a launch of Impella CP, its most widely used pump model, in Japan, which could support growth. Lamb Weston’s shares declined due to investor concerns about modestly higher capacity coming online. However, the company continued to see strong growth, driven by robust sales trends and strong pricing power.

Other key detractors included our positions in health care coverage and services firm UnitedHealth Group, government-sponsored health care programs and services provider Centene (not held at period-end), education technology company 2U (not part of the index) and financial services firm Charles Schwab.

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

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Semiannual Report

FRANKLIN LARGE CAP GROWTH VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1, 2

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During

Period

1/1/19–6/30/19^{1, 2}

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,264.40

$6.12

$1,019.39

$5.46

1.09%

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Large Cap Growth VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$19.19			$20.93			$17.85			$18.42			$23.26			$20.91


Income from investment operations^a:

Net investment income (loss)^b		(0.03	)		(0.04	)		(0.03	)		(0.04	)		(0.06	)		0.11

Net realized and unrealized gains (losses)		5.07			0.03			4.91			(0.26	)		1.56			2.54


Total from investment operations		5.04			(0.01	)		4.88			(0.30	)		1.50			2.65


Less distributions from:

Net investment income		—			—			(0.20	)		—			(0.13	)		(0.30)

Net realized gains		(2.91	)		(1.73	)		(1.60	)		(0.27	)		(6.21	)		—


Total distributions		(2.91	)		(1.73	)		(1.80	)		(0.27	)		(6.34	)		(0.30)


Net asset value, end of period		$21.32			$19.19			$20.93			$17.85			$18.42			$23.26


Total return^c		26.60%			(1.24)%			28.38%			(1.49)%			5.89%			12.74%

Ratios to average net assets^d

Expenses		0.84%	^e		0.85%	^e		0.87%	^e		0.80%	^e		0.78%			0.79%

Net investment income (loss)		(0.26)%			(0.17)%			(0.14)%			(0.19)%			(0.27)%			0.50%

Supplemental data

Net assets, end of period (000’s)		$1,305			$1,040			$1,092			$883			$47,864			$54,971

Portfolio turnover rate		8.62%			21.93%			24.96%			36.26%^f			23.23%			93.53%

^bBased on average daily shares outstanding.

^dRatios are annualized for periods less than one year.

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

^fExcludes the value of portfolio securities delivered as a result of redemption in-kind.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Large Cap Growth VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$18.70			$20.48			$17.48			$18.09			$22.94			$20.62


Income from investment operations^a:

Net investment income (loss)^b		(0.05	)		(0.09	)		(0.08	)		(0.08	)		(0.11	)		0.06

Net realized and unrealized gains (losses)		4.93			0.04			4.81			(0.26	)		1.54			2.50


Total from investment operations		4.88			(0.05	)		4.73			(0.34	)		1.43			2.56


Less distributions from:

Net investment income		—			—			(0.13	)		—			(0.07	)		(0.24)

Net realized gains		(2.91	)		(1.73	)		(1.60	)		(0.27	)		(6.21	)		—


Total distributions		(2.91	)		(1.73	)		(1.73	)		(0.27	)		(6.28	)		(0.24)


Net asset value, end of period		$20.67			$18.70			$20.48			$17.48			$18.09			$22.94


Total return^c		26.44%			(1.47)%			28.11%			(1.79)%			5.62%			12.46%

Ratios to average net assets^d

Expenses		1.09%	^e		1.10%	^e		1.12%	^e		1.05%	^e		1.03%			1.04%

Net investment income (loss)		(0.51)%			(0.42)%			(0.39)%			(0.44)%			(0.52)%			0.25%

Supplemental data

Net assets, end of period (000’s)		$116,502			$100,435			$118,875			$113,028			$223,807			$256,098

Portfolio turnover rate		8.62%			21.93%			24.96%			36.26%	^f		23.23%			93.53%

^bBased on average daily shares outstanding.

^dRatios are annualized for periods less than one year.

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

^fExcludes the value of portfolio securities delivered as a result of redemption in-kind.

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

FLG-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Franklin Large Cap Growth VIP Fund


	Shares		Value


Common Stocks 99.9%
Communication Services 7.6%
^aAlphabet Inc., A		3,276	$	3,547,253
^aAlphabet Inc., C		399		431,283
^aFacebook Inc., A		6,063		1,170,159
^aLiberty Broadband Corp., C		11,649		1,214,059
^aNetflix Inc.		2,871		1,054,575
^aPinterest Inc., A		7,600		206,872
The Walt Disney Co.		9,556		1,334,400


				8,958,601

Consumer Discretionary 10.2%
^aAlibaba Group Holding Ltd., ADR (China)		3,369		570,877
^aAmazon.com Inc.		4,819		9,125,403
Aptiv PLC		9,176		741,696
^aLevi Strauss & Co., A		24,521		511,998
^aUnder Armour Inc., A		43,865		1,111,978


				12,061,952

Consumer Staples 3.2%
^aBeyond Meat Inc.		1,300		208,884
Constellation Brands Inc., A		5,709		1,124,331
Lamb Weston Holdings Inc.		18,080		1,145,549
^aMonster Beverage Corp.		10,706		683,364
^aNomad Foods Ltd. (United Kingdom)		28,351		605,577


				3,767,705

Energy 1.0%
Diamondback Energy Inc.		10,305		1,122,936

Financials 6.6%
The Charles Schwab Corp.		26,225		1,053,983
Intercontinental Exchange Inc.		15,385		1,322,187
MarketAxess Holdings Inc.		3,390		1,089,614
MSCI Inc.		8,515		2,033,297
S&P Global Inc.		7,237		1,648,516
^aSVB Financial Group		2,428		545,304
Tradeweb Markets Inc.		2,800		122,668


				7,815,569

Health Care 14.8%
^aABIOMED Inc.		2,221		578,548
^aArray BioPharma Inc.		8,886		411,688
^aEdwards Lifesciences Corp.		10,022		1,851,464
^aElanco Animal Health Inc.		15,960		539,448
^aGuardant Health Inc.		7,833		676,223
^aGW Pharmaceuticals PLC, ADR (United Kingdom)		6,769		1,166,908
^aHeron Therapeutics Inc.		39,434		733,078
^aIDEXX Laboratories Inc.		2,680		737,885
^aIllumina Inc.		3,524		1,297,361
^aIntuitive Surgical Inc.		2,120		1,112,046

FLG-8

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)


	Shares		Value


Common Stocks (continued)
Health Care (continued)
^aNevro Corp.		14,984	$	971,413
^aPTC Therapeutics Inc.		7,689		346,005
^aSage Therapeutics Inc.		3,881		710,572
UnitedHealth Group Inc.		10,656		2,600,171
^aVeeva Systems Inc.		12,554		2,035,129
West Pharmaceutical Services Inc.		12,809		1,603,046


				17,370,985

Industrials 11.8%
The Boeing Co.		3,306		1,203,417
^aCoStar Group Inc.		5,703		3,159,804
Honeywell International Inc.		7,344		1,282,189
^aIHS Markit Ltd.		20,484		1,305,240
Raytheon Co.		9,825		1,708,371
Rockwell Automation Inc.		4,906		803,750
Roper Technologies Inc.		3,957		1,449,291
Stanley Black & Decker Inc.		4,888		706,854
^aUnivar Inc.		27,801		612,734
Verisk Analytics Inc.		11,395		1,668,912


				13,900,562

Information Technology 40.1%
^a2U Inc.		11,422		429,924
^aAdobe Inc.		9,700		2,858,105
Analog Devices Inc.		9,065		1,023,167
Apple Inc.		14,770		2,923,278
^aAutodesk Inc.		7,461		1,215,397
^aBlack Knight Inc.		9,837		591,696
^aCrowdstrike Holdings Inc., A		3,000		204,870
^aDocuSign Inc.		5,366		266,744
^aFiserv Inc.		10,977		1,000,663
^aGuidewire Software Inc.		5,985		606,759
^aInterXion Holding NV (Netherlands)		17,512		1,332,488
Intuit Inc.		1,186		309,937
Mastercard Inc., A		27,358		7,237,012
Microsoft Corp.		50,208		6,725,864
Monolithic Power Systems		7,092		962,952
NVIDIA Corp.		6,658		1,093,443
^aPayPal Holdings Inc.		14,442		1,653,031
^aPTC Inc.		5,972		536,047
^asalesforce.com Inc.		11,050		1,676,617
^aServiceNow Inc.		14,143		3,883,244
^aSlack Technologies Inc.		8,800		330,000
^aTwilio Inc., A		10,437		1,423,085
Visa Inc., A		33,357		5,789,107
Xilinx Inc.		13,985		1,649,111
^aZendesk Inc.		17,442		1,552,861


				47,275,402

Semiannual Report

FLG-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)


	Shares		Value


Common Stocks (continued)
Materials 0.7%
^aIngevity Corp.		7,639	$	803,394

Real Estate 3.9%
American Tower Corp.		6,584		1,346,099
^aSBA Communications Corp., A		14,309		3,217,235


				4,563,334


Total Common Stocks (Cost $56,848,468)				117,640,440


	Principal Amount

Short Term Investments (Cost $234,182) 0.2%

Repurchase Agreements 0.2%
^bJoint Repurchase Agreement, 2.451%, 7/01/19 (Maturity Value $234,230)
BNP Paribas Securities Corp. (Maturity Value $174,164)
Deutsche Bank Securities Inc. (Maturity Value $51,357)
HSBC Securities (USA) Inc. (Maturity Value $8,709)
Collateralized by U.S. Government Agency Securities, 4.00% - 4.50%, 7/15/40 - 3/20/49; U.S. Treasury Bonds, 8.00%, 11/15/21; U.S. Treasury Notes, 1.50% - 3.125%, 5/15/21 - 8/15/26; U.S. Treasury Notes, Index Linked, 0.875%, 1/15/29; and U.S. Treasury Strips, 8/15/22 - 6/15/35 (valued at $239,946)		$234,182		234,182


Total Investments (Cost $57,082,650) 100.1%				117,874,622
Other Assets, less Liabilities (0.1)%				(67,635	)


Net Assets 100.0%			$	117,806,987

See Abbreviations on page FLG-19.

^aNon-income producing.

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

FLG-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, 2019 (unaudited)



	Franklin Large Cap Growth VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	56,848,468
Cost - Unaffiliated repurchase agreements		234,182

Value - Unaffiliated issuers	$	117,640,440
Value - Unaffiliated repurchase agreements		234,182
Cash		182,687
Receivables:
Dividends		8,894
Other assets		79


Total assets		118,066,282

Liabilities:
Payables:
Capital shares redeemed		81,314
Management fees		70,554
Distribution fees		47,833
Trustees’ fees and expenses		92
Reports to shareholders		44,374
Accrued expenses and other liabilities		15,128


Total liabilities		259,295


Net assets, at value	$	117,806,987

Net assets consist of:
Paid-in capital	$	51,609,876
Total distributable earnings (loss)		66,197,111


Net assets, at value	$	117,806,987

Class 1:
Net assets, at value	$	1,305,354

Shares outstanding		61,219

Net asset value and maximum offering price per share	$	21.32

Class 2:
Net assets, at value	$	116,501,633

Shares outstanding		5,636,443

Net asset value and maximum offering price per share		$20.67

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

FLG-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin Large Cap Growth VIP Fund

Investment income:
Dividends:
Unaffiliated issuers		$ 309,912
Interest:
Unaffiliated issuers		18,270


Total investment income		328,182

Expenses:
Management fees (Note 3a)		426,492
Distribution fees: (Note 3c)
Class 2		140,927
Custodian fees (Note 4)		574
Reports to shareholders		22,844
Professional fees		20,371
Trustees’ fees and expenses		467
Other		6,391


Total expenses		618,066
Expense reductions (Note 4)		(96	)


Net expenses		617,970


Net investment income (loss)		(289,788	)

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		5,734,212

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		21,059,253


Net realized and unrealized gain (loss)		26,793,465


Net increase (decrease) in net assets resulting from operations		$26,503,677

FLG-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 Large Cap Growth VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	(289,788	)	$	(511,818	)
Net realized gain (loss)		5,734,212			14,550,257
Net change in unrealized appreciation (depreciation)		21,059,253			(13,910,632	)


Net increase (decrease) in net assets resulting from operations		26,503,677			127,807

Distributions to shareholders:
Class 1		(156,170	)		(89,524	)
Class 2		(14,406,046	)		(9,610,684	)


Total distributions to shareholders		(14,562,216	)		(9,700,208	)

Capital share transactions: (Note 2)
Class 1		145,684			44,632
Class 2		4,244,167			(8,964,036	)


Total capital share transactions		4,389,851			(8,919,404	)


Net increase (decrease) in net assets		16,331,312			(18,491,805	)
Net assets:
Beginning of period		101,475,675			119,967,480


End of period	$	117,806,987		$	101,475,675

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

FLG-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin Large 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 Large 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, 2019, 69.9% 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 two classes of shares: Class 1 and Class 2. 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

Investments in repurchase agreements are valued at cost, which approximates fair value.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)

b. Foreign Currency Translation

c. Joint Repurchase Agreement

d. Income and Deferred Taxes

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Large Cap 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.

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.

f. Accounting Estimates

g. Guarantees and Indemnifications

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares issued in reinvestment of distributions		7,497		$	156,170			3,993		$	89,524
Shares redeemed		(480	)		(10,486	)		(1,981	)		(44,892)


Net increase (decrease)		7,017		$	145,684			2,012		$	44,632


Class 2 Shares:
Shares sold		164,664		$	3,284,261			542,097		$	11,784,792
Shares issued in reinvestment of distributions		713,171			14,406,046			439,446			9,610,684
Shares redeemed		(612,981	)		(13,446,140	)		(1,413,745	)		(30,359,512)


Net increase (decrease)		264,854		$	4,244,167			(432,202	)	$	(8,964,036)

3. Transactions with Affiliates



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%		In excess of $1 billion

b. Administrative Fees

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)

3. Transactions with Affiliates (continued)

c. Distribution Fees

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.

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	57,121,474


Unrealized appreciation	$	62,042,002
Unrealized depreciation		(1,288,854)


Net unrealized appreciation (depreciation)	$	60,753,148

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 $9,727,172 and $18,096,964, respectively.

7. Credit Facility

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Large Cap Growth VIP Fund (continued)

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, 2019, the Fund did not use the Global Credit Facility.

8. 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, 2019, 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	$	117,640,440	$	—	$	—	$	117,640,440
Short Term Investments		—		234,182		—		234,182


Total Investments in Securities	$	117,640,440	$	234,182	$	—	$	117,874,622

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

9. 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 Mutual Global Discovery VIP Fund

This semiannual report for Franklin Mutual Global Discovery VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +14.56% total return* for the six-month period ended June 30, 2019.

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Fund Goal and Main Investments

The Fund seeks capital appreciation. Under normal market conditions, the Fund invests primarily in U.S. and foreign equity securities that the investment manager believes are available at market prices less than their intrinsic value. The equity securities in which the Fund invests are primarily common stock. 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.

Fund Risks

All investments involve risks, including possible loss of principal. 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.

Geographic Composition*

Based on Total Net Assets as of 6/30/19

LOGO

*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.

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 +17.38% total return for the same period.¹

Economic and Market Overview

However, markets reflected concerns about political uncertainties in the U.S. and the European Union,

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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geopolitical risks in certain regions, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. In this environment, global developed and emerging market stocks, as measured by the MSCI All Country World Index, posted a +16.60% total return for the six-month period.¹

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

The Fed held its target range for the federal funds rate unchanged, at 2.25%–2.50%, during the reporting period. In March, the Fed mentioned it would end its balance sheet normalization program by the end of September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low recently, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

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.

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 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.

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

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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.

What is meant by “hedge”?

To hedge an investment is to take a position intended to offset potential losses/gains that may be incurred by a companion financial instrument.

Manager’s Discussion

Franklin Mutual Series has long analyzed companies in many ways beyond just looking at the numbers. We analyze the way a company is run and how decisions are made at the executive and board levels. We look at the sustainability of a company, including the relationships with employees and customers, as well as the environmental impacts of a company’s business. In many ways this is common sense. A company that takes advantage of customers and unsustainably produces environmental waste is worth less than one that does not do these things. Similarly, a company that is well-run and responsive to shareholders is worth more than one whose executives manage the company for their private benefit. However, disclosure has been limited on many relevant issues, and there are disagreements about which things should be measured and how they should be measured.

This type of analysis is labeled ESG analysis, where ESG stands for environmental, social, and governance factors. Many firms, including Franklin Templeton, are incorporating ESG factors in their investment research. In addition, there are other bodies such as the Sustainable Accounting Standards Board that are working on standardizing metrics for companies and industries to improve their reporting on these factors, particularly in the environmental and social areas. As a result, ESG analysis is improving across the market, and Franklin Mutual Series analysts are better able to analyze non-traditional factors, including greenhouse gas emissions, water consumption, energy usage, talent management, diversity and inclusion, executive compensation, and enterprise risk management, to name a few. ESG investing should not be confused with social or exclusionary types of investing, but should rather be viewed as an additional tool analysts and portfolio managers use in the investment process to identify and measure non-traditional, potential business risks and opportunities at a company.


Top 10 Sectors/Industries
6/30/19

	% of Total Net Assets

Oil, Gas & Consumable Fuels		11.9%

Banks		11.5%

Insurance		9.2%

Pharmaceuticals		7.8%

Media		5.0%

Technology Hardware, Storage & Peripherals		4.2%

Software		4.2%

Entertainment		3.4%

Automobiles		3.3%

Health Care Equipment & Supplies		3.2%

Today, Franklin Mutual Series analysts review and analyze ESG reports produced by third parties or the companies themselves to assess potential risks that could have an impact on shareholder value. In addition, we have discussions with management teams around ESG risks, how they deal with them and the potential impact on stakeholders. Our discussions have included issues such as water consumption in mining, the impact of changing carbon dioxide emission standards on the automotive industry and discussions with boards and management teams around management pay. Although more work needs to be done to standardize data from companies within industries so that comparisons can be relevant, the identification and discussion of ESG risk factors is an input we consider in helping frame the potential negative events individual companies or industries may face. In our view, solid ESG ratings are an output of fundamentally good business practices, not an input. As the data and information regarding ESG risk factors continue to evolve, we believe the increased information will highlight additional risk factors to enterprises and help us make more informed investment decisions going forward.

Mergers and Acquisitions

Merger and acquisition (M&A) activity remained healthy in the first half of 2019. The health care sector led the way, with pharmaceuticals megamergers among the biggest transactions. The pending acquisitions of Celgene and Allergan (not a Fund holding), each worth almost $90 billion, exemplify this strength. Large deals have also been announced in the defense, oil and gas exploration and production, and diversified financial services industries, underlying the broad strength of the M&A boom. In addition, U.S. and foreign regulators appear to be more amenable to deals, leading markets to expect fewer regulatory surprises.

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We are closely monitoring the U.S.-China trade conflict, because flare-ups could potentially impact pending and future deals. We expect M&A activity to remain strong for as long as the equity markets remain strong, as has been the historical pattern.

Credit Markets

Opportunities to invest in mispriced risk across global fixed income markets remained limited in the first half of 2019. The low interest-rate environment kept credit widely available, and default rates are still at historically low levels. Debt covenant terms, which include restrictions on the borrower’s financial activities, remain loose or nonexistent. In such an environment, we believe it is prudent to focus our efforts on investing in short-term mispriced risk and catalyst-driven credit opportunities.

On the restructuring side, Cumulus Media and iHeartMedia, two long-term distressed credit positions, emerged from bankruptcy or had reached a confirmable restructuring agreement in 2018, reducing further the purely distressed portion of the credit holdings within the Funds. PG&E, which recently filed for bankruptcy, became a new distressed credit position. We are hopeful more opportunities may emerge as the business and economic cycles elongate amid persistent uncertainties. We will continue to seek to invest across the capital structures of companies that avail themselves of opportunities to bolster liquidity through internally generated free cash flow and corporate actions, including asset sales and debt refinancing.

Fund Performance

Turning to Fund performance, top positive contributors included Walt Disney, Novartis and Kinder Morgan.

The stock of U.S.-based diversified international family entertainment and media enterprise Walt Disney surged following an investor event outlining the strategy and expectations for its new streaming service. The breadth and depth of content, the price point, and the technology and user interface supporting it have increased optimism about the service. Market expectations for the service’s growth and profitability rose significantly on the back of this event.

In March, Switzerland-based drug maker Novartis announced the official process and dates for its tax-free spinoff of the eye care device and consumer products business of Alcon (not a Fund holding), and the U.S. Food and Drug Administration approved Mayzent, the first oral drug to treat secondary progressive multiple sclerosis. In May, Novartis won U.S. regulatory approval for gene therapy that treats spinal muscular atrophy and announced the


Top 10 Holdings
6/30/19

Company *Sector/Industry, Country*	% of Total Net Assets

The Walt Disney Co. Entertainment, U.S.		3.4%

Medtronic PLC Health Care Equipment & Supplies, U.S.		3.2%

Novartis AG Pharmaceuticals, Switzerland		3.2%

Royal Dutch Shell PLC Oil, Gas & Consumable Fuels, U.K.		2.4%

Charter Communications Inc. Media, U.S.		2.4%

GlaxoSmithKline PLC Pharmaceuticals, U.K.		2.4%

Citizens Financial Group Inc. Banks, U.S.		2.1%

Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		2.1%

Citigroup Inc. Banks, U.S.		2.1%

Kinder Morgan Inc. Oil, Gas & Consumable Fuels, U.S.		2.1%

purchase of a dry eye drug from a Japanese drug company. We believe Novartis is continuing to position itself as a more focused and innovation-driven drug company, and that the market does not fully appreciate the many innovative products it has in development.

Shares of U.S.-based energy company Kinder Morgan rose in early 2019, as the energy sector rebounded from weak performance in the fourth quarter of 2018. In addition, U.S. pipeline companies have benefited from increased volumes of U.S. crude oil, natural gas and natural gas liquids, along with limited pipeline supply. We believe conditions are likely to remain favorable for the energy sector if commodity prices hold up, most notably if crude oil prices remain above US$50 per barrel.

During the period under review, Fund investments that detracted from performance included Walgreens Boots Alliance, CVS Health and Imperial Brands.

Shares of U.S.-based Walgreens Boots Alliance did not keep up with the market rebound in January and February. In March, the stock price fell when the chief financial officer cited negative industry trends in drug prices and pharmacy benefit manager (PBM) reimbursement rates, as well as the company’s limited success offsetting those challenges by

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increasing its volume of drug sales or renegotiating with PBMs. These pressures and weakness in both its U.S. and U.K. stores resulted in a cut to full-year guidance in April. However, Walgreens is reducing costs throughout the enterprise, and within the front end of the store, it is attempting to reduce exposure to lower margin categories, which we believe can help boost growth and profitability over the longer term.

In January, the chief executive officer of U.S.-based CVS Health, an integrated pharmacy health care provider, highlighted probable headwinds for 2019, and in February the company detailed the financial drag from those headwinds. Possible negative factors included: higher costs from increased investments in its workforce, which could have a year-over-year drag on earnings through the first half of 2019; greater price competition in nursing care; and lower-than-expected branded drug price increases.

Shares of U.K. tobacco company Imperial Brands traded lower after the company reported below-expected first-half fiscal 2019 revenues amid concerns about stricter U.S. regulation and waning tobacco product distribution at large U.S. drugstores. The U.S. has considered banning menthol cigarettes and enacting stricter regulation of e-cigarettes and vaping products, particularly flavors more prone to attract underaged consumers. Tobacco companies were pressured by recent Nielsen industry data suggesting deteriorating U.S. industry volumes. The industry urged investors to use more reliable data sources, as Nielsen does not measure a number of tobacco distribution channels.

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 because of the appreciation of the U.S. dollar versus the hedged currencies.


What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.


What is a future?

A future is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

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

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Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,145.60

$6.28

$1,018.94

$5.91

1.18%

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 Global Discovery VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.47			$20.38			$20.22			$19.85			$22.61			$23.31


Income from investment operations^a:

Net investment income^b		0.27			0.36			0.47			0.41			0.37			0.68^c

Net realized and unrealized gains (losses)		2.30			(2.50	)		1.29			1.92			(1.17	)		0.76


Total from investment operations		2.57			(2.14	)		1.76			2.33			(0.80	)		1.44


Less distributions from:

Net investment income		—			(0.52	)		(0.42	)		(0.39	)		(0.69	)		(0.57)

Net realized gains		—			(0.25	)		(1.18	)		(1.57	)		(1.27	)		(1.57)


Total distributions		—			(0.77	)		(1.60	)		(1.96	)		(1.96	)		(2.14)


Net asset value, end of period		$20.04			$17.47			$20.38			$20.22			$19.85			$22.61


Total return^d		14.71%			(11.01)%			8.99%			12.32%			(3.39)%			5.98%

Ratios to average net assets^e

Expenses^f,^g		0.93%	^h		0.96%	^h		1.01%	^h		1.01%	^h		1.02%	^h		1.00%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.76%			1.81%			2.29%			2.10%			1.71%			2.85%	^c

Supplemental data

Net assets, end of period (000’s)		$3,729			$3,282			$3,189			$3,084			$2,632			$2,313

Portfolio turnover rate		10.94%			29.84%			17.49%			17.54%			21.88%			22.18%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.34 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 1.40%.

^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(d).

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

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

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FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$16.96			$19.80			$19.69			$19.37			$22.11			$22.84


Income from investment operations^a:

Net investment income^b		0.23			0.30			0.41			0.35			0.32			0.60^c

Net realized and unrealized gains (losses)		2.24			(2.42	)		1.25			1.87			(1.16	)		0.75


Total from investment operations		2.47			(2.12	)		1.66			2.22			(0.84	)		1.35


Less distributions from:

Net investment income		—			(0.47	)		(0.37	)		(0.33	)		(0.63	)		(0.51)

Net realized gains		—			(0.25	)		(1.18	)		(1.57	)		(1.27	)		(1.57)


Total distributions		—			(0.72	)		(1.55	)		(1.90	)		(1.90	)		(2.08)


Net asset value, end of period		$19.43			$16.96			$19.80			$19.69			$19.37			$22.11


Total return^d		14.56%			(11.22)%			8.71%			12.06%			(3.65)%			5.71%

Ratios to average net assets^e

Expenses^f,g		1.18%	^h		1.21%	^h		1.26%	^h		1.26%	^h		1.27%	^h		1.25%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.51%			1.56%			2.04%			1.85%			1.46%			2.60%	^c

Supplemental data

Net assets, end of period (000’s)		$535,270			$500,607			$631,179			$630,397			$629,366			$685,711

Portfolio turnover rate		10.94%			29.84%			17.49%			17.54%			21.88%			22.18%

^bBased on average daily shares outstanding.

^eRatios 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

MGD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.30			$20.17			$20.02			$19.66			$22.39			$23.10


Income from investment operations^a:

Net investment income^b		0.23			0.29			0.40			0.34			0.30			0.61^c

Net realized and unrealized gains (losses)		2.28			(2.47	)		1.27			1.89			(1.17	)		0.73


Total from investment operations		2.51			(2.18	)		1.67			2.23			(0.87	)		1.34


Less distributions from:

Net investment income		—			(0.44	)		(0.34	)		(0.30	)		(0.59	)		(0.48)

Net realized gains		—			(0.25	)		(1.18	)		(1.57	)		(1.27	)		(1.57)


Total distributions		—			(0.69	)		(1.52	)		(1.87	)		(1.86	)		(2.05)


Net asset value, end of period		$19.81			$17.30			$20.17			$20.02			$19.66			$22.39


Total return^d		14.51%			(11.31)%			8.61%			11.91%			(3.74)%			5.60%

Ratios to average net assets^e

Expenses^f,g		1.28%	^h		1.31%	^h		1.36%	^h		1.36%	^h		1.37%	^h		1.35%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.41%			1.46%			1.94%			1.75%			1.36%			2.50%	^c

Supplemental data

Net assets, end of period (000’s)		$31,288			$30,094			$41,713			$45,262			$49,054			$59,961

Portfolio turnover rate		10.94%			29.84%			17.49%			17.54%			21.88%			22.18%

^bBased on average daily shares outstanding.

^eRatios 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%.

MGD-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, 2019 (unaudited)

Franklin Mutual Global Discovery VIP Fund



	Country	Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests 91.8%
Aerospace & Defense 0.9%
BAE Systems PLC	United Kingdom		847,691	$	5,333,106

Auto Components 0.3%
^a,b,cInternational Automotive Components Group Brazil LLC	Brazil		424,073		10,890
Toyo Tire Corp.	Japan		138,565		1,821,059


					1,831,949

Automobiles 1.3%
General Motors Co.	United States		198,100		7,632,793


Banks 11.5%
Barclays PLC	United Kingdom		18,505		35,204
CIT Group Inc.	United States		108,969		5,725,231
Citigroup Inc.	United States		170,950		11,971,629
Citizens Financial Group Inc.	United States		345,523		12,217,693
First Horizon National Corp.	United States		353,473		5,277,352
ING Groep NV	Netherlands		440,135		5,101,747
JPMorgan Chase & Co.	United States		72,586		8,115,115
Standard Chartered PLC	United Kingdom		827,197		7,502,662
Wells Fargo & Co.	United States		209,020		9,890,826


					65,837,459

Biotechnology 1.4%
^aCelgene Corp.	United States		83,100		7,681,764


Building Products 1.5%
Johnson Controls International PLC	United States		206,500		8,530,515

Capital Markets 1.7%
Credit Suisse Group AG	Switzerland		499,643		5,989,371
Deutsche Bank AG	Germany		207,029		1,595,747
Guotai Junan Securities Co. Ltd.	China		1,275,797		2,273,266


					9,858,384

Chemicals 1.4%
BASF SE	Germany		113,111		8,219,488

Communications Equipment 1.0%
Cisco Systems Inc.	United States		100,180		5,482,851

Construction Materials 1.0%
LafargeHolcim Ltd., B	Switzerland		121,811		5,946,777

Consumer Finance 1.4%
Ally Financial Inc.	United States		32,830		1,017,402
Capital One Financial Corp.	United States		76,488		6,940,521


					7,957,923

Containers & Packaging 1.0%
International Paper Co.	United States		134,900		5,843,868

Diversified Financial Services 1.0%
Voya Financial Inc.	United States		101,650		5,621,245

Semiannual Report

MGD-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)



	Country	Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Diversified Telecommunication Services 1.0%
Koninklijke KPN NV	Netherlands		1,862,967	$	5,718,368

Electric Utilities 1.8%
Enel SpA	Italy		1,435,057		10,017,070

Energy Equipment & Services 1.2%
Baker Hughes a GE Co., A	United States		274,264		6,755,122

Entertainment 3.4%
The Walt Disney Co.	United States		137,500		19,200,500

Food & Staples Retailing 1.0%
Walgreens Boots Alliance Inc.	United States		102,904		5,625,762

Food Products 0.9%
The Kraft Heinz Co.	United States		165,900		5,149,536

Health Care Equipment & Supplies 3.2%
Medtronic PLC	United States		190,110		18,514,813

Health Care Providers & Services 1.4%
CVS Health Corp.	United States		148,791		8,107,622

Hotels, Restaurants & Leisure 2.2%
Accor SA	France		186,049		7,984,495
Sands China Ltd.	China		916,400		4,381,322


					12,365,817

Independent Power & Renewable Electricity Producers 0.5%
Vistra Energy Corp.	United States		117,933		2,670,003

Industrial Conglomerates 1.2%
General Electric Co.	United States		624,350		6,555,675

Insurance 9.2%
^aAlleghany Corp.	United States		2,730		1,859,430
American International Group Inc.	United States		177,333		9,448,302
China Pacific Insurance Group Co. Ltd., H	China		1,523,508		5,957,793
Chubb Ltd.	United States		49,566		7,300,576
The Hartford Financial Services Group Inc.	United States		192,796		10,742,593
NN Group NV	Netherlands		280,241		11,278,157
RSA Insurance Group PLC	United Kingdom		501,149		3,670,952
T&D Holdings Inc.	Japan		199,721		2,166,330


					52,424,133

IT Services 1.4%
Cognizant Technology Solutions Corp., A	United States		126,860		8,041,655


Machinery 0.4%
CNH Industrial NV	United Kingdom		239,035		2,450,614

Media 5.0%
^aCharter Communications Inc., A	United States		34,286		13,549,141
^aClear Channel Outdoor Holdings Inc.	United States		206,569		975,006
^aCumulus Media Inc., A	United States		8,189		151,906
^aCumulus Media Inc., B	United States		13,384		248,273

MGD-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)



	Country	Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Media (continued)
^aDISH Network Corp., A	United States		139,003	$	5,339,105
^a,b,ciHeartMedia Inc., A	United States		95,199		1,381,841
^a,b,ciHeartMedia Inc., B	United States		1,606		23,312
^aLiberty Global PLC, C	United Kingdom		263,900		7,001,267


					28,669,851

Metals & Mining 0.0%^†
Warrior Met Coal Inc.	United States		3,221		84,132


Oil, Gas & Consumable Fuels 11.9%
Anadarko Petroleum Corp.	United States		92,025		6,493,284
BP PLC	United Kingdom		884,587		6,162,869
Caltex Australia Ltd.	Australia		33,324		578,947
Canadian Natural Resources Ltd.	Canada		287,800		7,758,899
Crescent Point Energy Corp.	Canada		670,900		2,217,978
JXTG Holdings Inc.	Japan		897,639		4,449,066
Kinder Morgan Inc.	United States		571,770		11,938,558
Occidental Petroleum Corp.	United States		61,000		3,067,080
Plains All American Pipeline LP	United States		195,500		4,760,425
Royal Dutch Shell PLC, A (EUR Traded)	United Kingdom		237,549		7,753,353
Royal Dutch Shell PLC, A (GBP Traded)	United Kingdom		179,410		5,861,228
The Williams Cos. Inc.	United States		234,501		6,575,408


					67,617,095

Pharmaceuticals 7.8%
Eli Lilly & Co.	United States		54,384		6,025,203
GlaxoSmithKline PLC	United Kingdom		670,728		13,429,337
Merck & Co. Inc.	United States		83,452		6,997,450
Novartis AG, ADR	Switzerland		199,302		18,198,266


					44,650,256

Semiconductors & Semiconductor Equipment 0.7%
^aRenesas Electronics Corp.	Japan		791,797		3,928,876


Software 4.2%
^aAvaya Holdings Corp., wts., 12/15/22	United States		5,179		5,179
^aCheck Point Software Technologies Ltd.	Israel		85,267		9,857,718
^aRed Hat Inc.	United States		34,900		6,552,824
Symantec Corp.	United States		334,461		7,277,871


					23,693,592

Specialty Retail 0.7%
Dufry AG	Switzerland		44,773		3,791,112


Technology Hardware, Storage & Peripherals 4.2%
Hewlett Packard Enterprise Co.	United States		376,580		5,629,871
Samsung Electronics Co. Ltd.	South Korea		297,113		12,070,039
Western Digital Corp.	United States		132,012		6,277,171


					23,977,081

Semiannual Report

MGD-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)



	Country		Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Tobacco 3.1%
Altria Group Inc.		United States		107,584	$	5,094,102
British American Tobacco PLC		United Kingdom		224,633		7,842,146
British American Tobacco PLC, ADR		United Kingdom		83,985		2,928,557
Imperial Brands PLC		United Kingdom		66,232		1,553,368


						17,418,173

Total Common Stocks and Other Equity Interests (Cost $447,606,420)						523,204,980


Preferred Stocks (Cost $12,172,905) 2.0%
Automobiles 2.0%
^dVolkswagen AG, 3.279%, pfd		Germany		67,454		11,366,263


			Principal Amount
Corporate Notes 0.9%
Frontier Communications Corp.,
senior note, 10.50%, 9/15/22		United States	$	3,610,000		2,463,825
senior note, 11.00%, 9/15/25		United States		4,065,000		2,540,625


Total Corporate Notes (Cost $7,070,694)						5,004,450


Corporate Bonds and Notes in Reorganization 0.1%
^b,c,eBroadband Ventures III LLC, secured promissory note, 5.00%, 2/01/12		United States		595		—
^ePacific Gas & Electric Co.,
senior bond, 3.75%, 8/15/42		United States		225,000		204,750
senior bond, 4.45%, 4/15/42		United States		167,000		160,738
senior bond, 4.00%, 12/01/46		United States		295,000		269,187
senior bond, 3.95%, 12/01/47		United States		151,000		136,466


Total Corporate Bonds and Notes in Reorganization (Cost $631,884)						771,141


			Shares

Companies in Liquidation 0.0%^†
^a,b,fAvaya Holdings Corp., Contingent Distribution		United States		1,270,000		—
^a,b,fAvaya Inc., Contingent Distribution		United States		1,668,000		—
^a,b,fiHeartCommunications Inc., Contingent Distribution		United States		9,103,035		—
^a,bNewPage Corp., Litigation Trust		United States		4,854,000		—
^a,b,fTribune Media, Litigation Trust, Contingent Distribution		United States		57,569		—
^a,fVistra Energy Corp., Litigation Trust, Contingent Distribution		United States		5,912,263		8,869


Total Companies in Liquidation (Cost $185,917)						8,869


Total Investments before Short Term Investments (Cost $467,667,820)						540,355,703

MGD-14

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)


	Country		Principal Amount		Value

Short Term Investments 4.6%

U.S. Government and Agency Securities 4.6%
^gFHLB, 7/01/19		United States	$	4,400,000	$	4,400,000
^gU.S. Treasury Bill,
7/02/19 - 9/12/19		United States		18,000,000		17,975,601
^h10/17/19 - 10/31/19		United States		4,000,000		3,974,625


Total U.S. Government and Agency Securities (Cost $26,339,194)						26,350,226


Total Investments (Cost $494,007,014) 99.4%						566,705,929
Securities Sold Short (0.3)%						(1,428,525	)
Other Assets, less Liabilities 0.9%						5,009,872


Net Assets 100.0%					$	570,287,276


			Shares
ⁱSecurities Sold Short (Proceeds $1,511,775) (0.3)%
Common Stocks (0.3)%
Pharmaceuticals (0.3)%
Bristol-Myers Squibb Co.		United States		31,500		(1,428,525	)

^†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.

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

^eSee Note 7 regarding credit risk and defaulted securities.

^fContingent 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.

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

^hA portion or all of the security has been segregated as collateral for securities sold short and open forward exchange contracts. At June 30, 2019, the aggregate value of these securities pledged amounted to $1,734,754, representing 0.3% of net assets.

ⁱSee Note 1(d) regarding securities sold short.

Semiannual Report

MGD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Global Discovery VIP Fund (continued)

At June 30, 2019, the Fund had the following futures contracts outstanding. See Note 1(c).

Futures Contracts

Description

Type

Number of
Contracts

Notional
Amount*

Expiration
Date

Value/
Unrealized
Appreciation
(Depreciation)

Currency Contracts

EUR/USD

Short

181

$25,897,706

9/16/19

$(80,476

)

GBP/USD

Short

139

11,075,694

9/16/19

10,422

Total Futures Contracts

$(70,054

)

*As of period end.

At June 30, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(c).

Forward Exchange Contracts



Currency	Counterparty^a	Type	Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation


OTC Forward Exchange Contracts
Euro	BOFA	Buy		586,727	$	658,750		7/15/19	$	9,246		$ —
Euro	BOFA	Sell		273,866		311,079		7/15/19		—		(721	)
Euro	HSBK	Buy		1,687,916		1,894,824		7/15/19		26,888		—
Euro	HSBK	Sell		38,373,289		43,092,627		7/15/19		—		(595,786	)
Euro	UBSW	Buy		845,118		950,349		7/15/19		11,827		—
Euro	UBSW	Sell		1,873,932		2,116,358		7/15/19		—		(17,135	)
Swiss Franc	HSBK	Buy		71,836		71,600		7/15/19		2,090		—
Swiss Franc	HSBK	Sell		86,420		87,178		7/15/19		—		(1,473	)
Swiss Franc	UBSW	Sell		5,708,155		5,705,187		7/15/19		—		(150,338	)
British Pound	BOFA	Buy		853,441		1,081,763		7/16/19		3,073		—
British Pound	HSBK	Buy		220,557		277,911		7/16/19		2,447		—
British Pound	SSBT	Sell		10,987,586		13,914,843		7/16/19		—		(51,843	)
British Pound	UBSW	Buy		67,858		86,346		7/16/19		—		(89	)
British Pound	UBSW	Buy		1,324,792		1,673,923		7/16/19		10,064		—
British Pound	UBSW	Sell		311,205		396,023		7/16/19		440		—
South Korean Won	HSBK	Sell		13,162,454,649		11,165,537		7/19/19		—		(218,237	)
South Korean Won	UBSW	Sell		356,186,851		301,649		7/19/19		—		(6,406	)
Australian Dollar	HSBK	Sell		711,357		495,172		8/26/19		—		(5,130	)
Japanese Yen	UBSW	Sell		226,566,498		2,113,822		8/26/19		2,993		—


Total Forward Exchange Contracts									$	69,068		$ (1,047,158	)


Net unrealized appreciation (depreciation)												$ (978,090	)

^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 MGD-30.



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, 2019 (unaudited)



	Franklin Mutual Global Discovery VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$494,007,014


Value - Unaffiliated issuers		$566,705,929
Cash		90,379
Foreign currency, at value (cost $311,989)		312,108
Receivables:
Investment securities sold		2,603,324
Capital shares sold		62,434
Dividends and interest		1,713,820
European Union tax reclaims		322,621
Deposits with brokers for:
Securities sold short		1,605,165
Futures contracts		688,050
Unrealized appreciation on OTC forward exchange contracts		69,068
Other assets		403


Total assets		574,173,301


Liabilities:
Payables:
Investment securities purchased		138,517
Capital shares redeemed		418,662
Management fees		402,967
Distribution fees		239,462
Trustees’ fees and expenses		649
Variation margin on futures contracts		45,275
Securities sold short, at value (proceeds $1,511,775)		1,428,525
Unrealized depreciation on OTC forward exchange contracts		1,047,158
Accrued expenses and other liabilities		164,810


Total liabilities		3,886,025


Net assets, at value		$570,287,276

Net assets consist of:
Paid-in capital		$422,378,765
Total distributable earnings (loss)		147,908,511


Net assets, at value		$570,287,276

Class 1:
Net assets, at value		$ 3,729,349

Shares outstanding		186,084

Net asset value and maximum offering price per share		$20.04

Class 2:
Net assets, at value		$535,270,286

Shares outstanding		27,546,874

Net asset value and maximum offering price per share		$19.43

Class 4:
Net assets, at value		$ 31,287,641

Shares outstanding		1,579,268

Net asset value and maximum offering price per share		$19.81

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, 2019 (unaudited)



	Franklin Mutual Global Discovery VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 9,364,286
Interest:
Unaffiliated issuers		931,676
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		98,044
Non-controlled affiliates (Note 3e)		19,652


Total investment income		10,413,658

Expenses:
Management fees (Note 3a)		2,468,235
Distribution fees: (Note 3c)
Class 2		661,084
Class 4		54,711
Custodian fees (Note 4)		19,358
Reports to shareholders		63,233
Professional fees		42,197
Trustees’ fees and expenses		2,390
Dividends on securities sold short		12,915
Other		12,415

Total expenses		3,336,538
Expense reductions (Note 4)		(1,671	)
Expenses waived/paid by affiliates (Note 3e)		(3,346	)


Net expenses		3,331,521


Net investment income		7,082,137

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		2,703,290
Foreign currency transactions		78,183
Forward exchange contracts		1,799,809
Futures contracts		825,508
Securities sold short		92,578


Net realized gain (loss)		5,499,368

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		64,894,263
Translation of other assets and liabilities denominated in foreign currencies		(12,639	)
Forward exchange contracts		198,721
Futures contracts		(97,085	)
Securities sold short		(995,825	)


Net change in unrealized appreciation (depreciation)		63,987,435


Net realized and unrealized gain (loss)		69,486,803


Net increase (decrease) in net assets resulting from operations		$76,568,940


*Foreign taxes withheld on dividends		$ 566,017

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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 7,082,137			$ 9,851,636
Net realized gain (loss)		5,499,368			54,878,424
Net change in unrealized appreciation (depreciation)		63,987,435			(132,139,062	)


Net increase (decrease) in net assets resulting from operations		76,568,940			(67,409,002	)


Distributions to shareholders:
Class 1		—			(139,418	)
Class 2		—			(21,021,401	)
Class 4		—			(1,188,087	)


Total distributions to shareholders		—			(22,348,906	)


Capital share transactions: (Note 2)
Class 1		(37,599	)		642,511
Class 2		(37,165,968	)		(46,304,313	)
Class 4		(3,061,109	)		(6,678,610	)


Total capital share transactions		(40,264,676	)		(52,340,412	)


Net increase (decrease) in net assets		36,304,264			(142,098,320	)
Net assets:
Beginning of period		533,983,012			676,081,332


End of period		$570,287,276			$ 533,983,012

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

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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, 2019, 44.8% 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

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.

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.

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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.

b. Foreign Currency Translation

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.

c. Derivative Financial Instruments

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

c. Derivative Financial Instruments (continued)

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, 2019, the Fund had OTC derivatives in a net liability position of $989,688 and the aggregate value of collateral pledged for such contracts was $879,972.

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 10 regarding other derivative information.

d. 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.

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

e. Securities Lending

f. Income and Deferred Taxes

g. Security Transactions, Investment Income, Expenses and Distributions

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

g. Security Transactions, Investment Income, Expenses and Distributions (continued)

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.

h. Accounting Estimates

i. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		16,009		$	302,324			45,098		$	915,165
Shares issued in reinvestment of distributions		—			—			6,995			139,418
Shares redeemed		(17,849	)		(339,923	)		(20,687	)		(412,072)


Net increase (decrease)		(1,840	)	$	(37,599	)		31,406		$	642,511


Class 2 Shares:
Shares sold		385,494		$	7,069,719			1,060,981		$	20,521,165
Shares issued in reinvestment of distributions		—			—			1,085,816			21,021,401
Shares redeemed		(2,363,724	)		(44,235,687	)		(4,500,413	)		(87,846,879)


Net increase (decrease)		(1,978,230	)	$	(37,165,968	)		(2,353,616	)	$	(46,304,313)

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)



	Six Months Ended June 30, 2019					Year Ended December 31, 2018


	Shares			Amount		Shares			Amount


Class 4 Shares:
Shares sold		17,902		$	339,554		49,992		$	917,196
Shares issued in reinvestment of distributions		—			—		60,157			1,188,087
Shares redeemed		(178,614	)		(3,400,663)		(438,307	)		(8,783,893)


Net increase (decrease)		(160,712	)	$	(3,061,109)		(328,158	)	$	(6,678,610)

3. Transactions with Affiliates



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
0.875%		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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

3. Transactions with Affiliates (continued)

c. Distribution Fees

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



	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at 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, 2.05%		$ —	$	53,814,000	$	(53,814,000	)		$ —		$ —		$ —		—		$19,652

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, 2019, these purchase and sale transactions aggregated $0 and $790,777, respectively.

4. Expense Offset Arrangement

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	494,081,707


Unrealized appreciation	$	115,048,792
Unrealized depreciation		(44,900,449)


Net unrealized appreciation (depreciation)	$	70,148,343

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 and securities sold short) for the period ended June 30, 2019, aggregated $58,116,128 and $88,995,715, 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 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.

At June 30, 2019, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $771,141, representing 0.1% 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 and regional 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. 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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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

9. Restricted Securities (continued)

At June 30, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:


Principal Amount/ Shares	Issuer	Acquisition Date		Cost		Value


595	Broadband Ventures III LLC, secured promissory note, 5.00%, 2/01/12		7/01/10 - 11/30/12	$	595	$	—

95,199	iHeartMedia Inc., A		3/28/11 - 12/19/13		2,253,730		1,381,841

1,606	iHeartMedia Inc., B		3/28/11 - 12/19/13		38,020		23,312
424,073	International Automotive Components Group Brazil LLC		4/13/06 - 12/26/08		281,629		10,890

	Total Restricted Securities (Value is 0.2% of Net Assets)			$	2,573,974	$	1,416,043

10. Other Derivative Information

At June 30, 2019, 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

10,422

Variation margin on futures

80,476

contracts

Unrealized appreciation on OTC

69,068

Unrealized depreciation on OTC

1,047,158

forward exchange contracts

Totals

79,490

1,127,634

^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, 2019, 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

$1,799,809

Forward exchange contracts

$198,721

Futures contracts

825,508

Futures contracts

(97,085)

Totals

$2,625,317

$101,636

For the period ended June 30, 2019, the average month end notional amount of futures contracts represented $37,798,371. The average month end contract value of forward exchange contracts was $89,235,299.

See Note 1(c) regarding derivative financial instruments.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

11. Credit Facility

12. Fair Value Measurements

•

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, 2019, 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
Auto Components	$	1,821,059	$	—	$	10,890		$	1,831,949
Media		27,264,698		—		1,405,153			28,669,851
All Other Equity Investments		504,069,443		—		—			504,069,443
Corporate Notes		—		5,004,450		—			5,004,450
Corporate Bonds and Notes in Reorganization		—		771,141		—	^c		771,141
Companies in Liquidation		—		8,869		—	^c		8,869
Short Term Investments		21,950,226		4,400,000		—			26,350,226


Total Investments in Securities	$	555,105,426	$	10,184,460	$	1,416,043		$	566,705,929

Other Financial Instruments:
Futures Contracts	$	10,422	$	—	$	—		$	10,422
Forward Exchange Contracts		—		69,068		—			69,068


Total Other Financial Instruments	$	10,422	$	69,068	$	—		$	79,490

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

12. Fair Value Measurements (continued)


	Level 1		Level 2		Level 3		Total


Liabilities:
Other Financial Instruments:
Securities Sold Short	$	1,428,525	$	—	$	—	$	1,428,525
Futures Contracts		80,476		—		—		80,476
Forward Exchange Contracts		—		1,047,158		—		1,047,158


Total Other Financial Instruments	$	1,509,001	$	1,047,158	$	—	$	2,556,159

^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, 2019.

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

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.

Abbreviations


Counterparty		Currency		Selected Portfolio

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

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Semiannual Report

Franklin Mutual Shares VIP Fund

This semiannual report for Franklin Mutual Shares VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +13.33% total return* for the six-month period ended June 30, 2019.

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FRANKLIN MUTUAL SHARES VIP FUND

Fund Goal and Main Investments

The Fund seeks capital appreciation, with income as a secondary goal, by investing primarily in equity securities of companies the Fund’s investment manager believes are available at market prices less than their intrinsic value. The equity securities in which the Fund invests are primarily common stock. 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. 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 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.

Geographic Composition*

Based on Total Net Assets as of 6/30/19

LOGO

*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.

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 +18.54% total return for the period under review.¹

Economic and Market Overview

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive

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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FRANKLIN MUTUAL SHARES VIP FUND

quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

Top 10 Sectors/Industries

6/30/19


	% of Total Net Assets

Banks		10.6%

Oil, Gas & Consumable Fuels		9.9%

Insurance		8.1%

Pharmaceuticals		6.9%

Media		6.7%

Health Care Equipment & Supplies		3.8%

Technology Hardware, Storage & Peripherals		3.5%

Entertainment		2.8%

Tobacco		2.6%

Software		2.6%

financial liquidity to mitigate the effects of the U.S.-China trade dispute and support economic growth. Overall, global emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a +10.78% total return during the six-month period.¹

Investment Strategy

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

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FRANKLIN MUTUAL SHARES VIP FUND

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.

What is meant by “hedge”?

To hedge an investment is to take a position intended to offset potential losses/gains that may be incurred by a companion financial instrument.

Manager’s Discussion

management, diversity and inclusion, executive compensation, and enterprise risk management, to name a few. ESG investing should not be confused with social or exclusionary types of investing, but should rather be viewed as an additional tool analysts and portfolio managers use in the investment process to identify and measure non-traditional, potential business risks and opportunities at a company.

Mergers and Acquisitions

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FRANKLIN MUTUAL SHARES VIP FUND

Credit Markets

On the restructuring side, Cumulus Media and iHeartMedia, two long-term distressed credit positions, emerged from bankruptcy or had reached a confirmable restructuring agreement in 2018, reducing further the purely distressed portion of the credit holdings within the Funds. PG&E, which recently filed for bankruptcy, became a new distressed credit position. Furthermore, Windstream Services became a new distressed credit position after parent company Windstream Holdings and its subsidiaries filed for bankruptcy. We are hopeful more opportunities may emerge as the business and economic cycles elongate amid persistent uncertainties. We will continue to seek to invest across the capital structures of companies that avail themselves of opportunities to bolster liquidity through internally generated free cash flow and corporate actions, including asset sales and debt refinancing.

Fund Performance

Turning to Fund performance, top positive contributors included Charter Communications, American International Group and Walt Disney.

In late January, U.S.-based Charter Communications, a telecommunications and mass media company, reported quarterly earnings, revenues and free cash flow that topped market expectations. Charter also estimated that 2019 capital spending and operating costs per customer could likely be lower than 2018, providing a boost to operating margins. In our view, Charter’s integration plan following the 2016 acquisition of Time Warner Cable is starting to produce positive results.

Shares of American International Group (AIG), a U.S.-based insurer, rose following its fiscal first-quarter 2019 earnings release in May, which indicated a stabilization in its business. AIG has been repositioning itself to focus on writing more profitable business and reducing its overall risk exposure. As a result, the insurer expects to report an underwriting profit for its full fiscal year.

Top 10 Holdings

6/30/19



Company *Sector/Industry, Country*		% of Total Net Assets

Medtronic PLC Health Care Equipment & Supplies, U.S.		3.8%

The Walt Disney Co. Entertainment, U.S.		2.8%

Novartis AG Pharmaceuticals, Switzerland		2.6%

Charter Communications Inc. Media, U.S.		2.6%

JPMorgan Chase & Co. Banks, U.S.		2.4%

American International Group Inc. Insurance, U.S.		2.3%

Royal Dutch Shell PLC Oil, Gas & Consumable Fuels, U.K.		2.0%

Alleghany Corp. Insurance, U.S.		1.9%

Citigroup Inc. Banks, U.S.		1.9%

Wells Fargo & Co. Banks, U.S.		1.8%

During the period under review, Fund investments that detracted from performance included Kroger, Walgreens Boots Alliance and CVS Health.

U.S.-based grocery retailer Kroger reported weaker-than-expected quarterly revenues and earnings per share (EPS), and its 2019 EPS guidance was below the consensus estimate. Investments, stronger growth in its lower-margin specialty pharmacy business and the opening of a new warehouse caused a decline in Kroger’s gross margin. In our view, the immediate stock price decline was an overreaction, but earnings announcements can be high volatility events, as a small change in the margin has a significant effect on earnings.

Shares of U.S.-based Walgreens Boots Alliance did not keep up with the market rebound in January and February. In

Semiannual Report

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FRANKLIN MUTUAL SHARES VIP FUND

March, the stock price fell when the chief financial officer cited negative industry trends in drug prices and pharmacy benefit manager (PBM) reimbursement rates, as well as the company’s limited success offsetting those challenges by increasing its volume of drug sales or renegotiating with PBMs. These pressures and weakness in both its U.S. and U.K. stores resulted in a cut to full-year guidance in April. However, Walgreens is reducing costs throughout the enterprise, and within the front end of the store, it is attempting to reduce exposure to lower margin categories, which we believe can help boost growth and profitability over the longer term.

What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

What is a future?

A future is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

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

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FRANKLIN MUTUAL SHARES VIP FUND

Class 2 Fund Expenses

Actual Fund Expenses

Hypothetical Example for Comparison with Other Mutual Funds

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,2

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^1,2

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,133.30

$5.02

$1,020.08

$4.76

0.95%

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

MS-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Mutual Shares VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014

Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.71			$20.71			$20.40			$19.48			$22.91			$21.92


Income from investment operations^a:

Net investment income^b		0.23			0.36			0.49			0.50			0.44			0.62^c

Net realized and unrealized gains (losses)		2.16			(2.04	)		1.22			2.56			(1.54	)		1.01


Total from investment operations		2.39			(1.68	)		1.71			3.06			(1.10	)		1.63


Less distributions from:

Net investment income		—			(0.55	)		(0.53	)		(0.46	)		(0.77	)		(0.52)

Net realized gains		—			(0.77	)		(0.87	)		(1.68	)		(1.56	)		(0.12)


Total distributions		—			(1.32	)		(1.40	)		(2.14	)		(2.33	)		(0.64)


Net asset value, end of period		$20.10			$17.71			$20.71			$20.40			$19.48			$22.91


Total return^d		13.50%			(8.86)%			8.64%			16.35%			(4.69)%			7.38%

Ratios to average net assets^e

Expenses^f,g		0.70%	^h		0.71%	^h		0.72%	^h		0.72%	^h		0.73%	^h		0.73%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.39%			1.77%			2.34%			2.57%			2.00%			2.83%^c

Supplemental data

Net assets, end of period (000’s)		$304,684			$537,324			$653,700			$610,395			$643,438			$656,463

Portfolio turnover rate		20.04%			24.67%			18.32%			24.45%			19.88%			21.33%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.23 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 1.79%.

^eRatios 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%.

MS-8

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014

Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.40			$20.36			$20.08			$19.20			$22.60			$21.63


Income from investment operations^a:

Net investment income^b		0.20			0.31			0.43			0.45			0.38			0.58^c

Net realized and unrealized gains (losses)		2.12			(2.00	)		1.20			2.52			(1.51	)		0.97


Total from investment operations		2.32			(1.69	)		1.63			2.97			(1.13	)		1.55


Less distributions from:

Net investment income		—			(0.50	)		(0.48	)		(0.41	)		(0.71	)		(0.46)

Net realized gains		—			(0.77	)		(0.87	)		(1.68	)		(1.56	)		(0.12)


Total distributions		—			(1.27	)		(1.35	)		(2.09	)		(2.27	)		(0.58)


Net asset value, end of period		$19.72			$17.40			$20.36			$20.08			$19.20			$22.60


Total return^d		13.33%			(9.07)%			8.35%			16.06%			(4.94)%			7.12%

Ratios to average net assets^e

Expenses^f,g		0.95%	^h		0.96%	^h		0.97%	^h		0.97%	^h		0.98%	^h		0.98%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.14%			1.52%			2.09%			2.32%			1.75%			2.58%^c

Supplemental data

Net assets, end of period (000’s)		$2,863,648			$2,516,834			$3,476,913			$3,621,358			$3,353,505			$4,218,342

Portfolio turnover rate		20.04%			24.67%			18.32%			24.45%			19.88%			21.33%

^bBased on average daily shares outstanding.

^eRatios 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

MS-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014

Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.55			$20.53			$20.23			$19.32			$22.72			$21.74


Income from investment operations^a:

Net investment income^b		0.19			0.29			0.41			0.44			0.36			0.57^c

Net realized and unrealized gains (losses)		2.14			(2.02	)		1.21			2.53			(1.52	)		0.96


Total from investment operations		2.33			(1.73	)		1.62			2.97			(1.16	)		1.53


Less distributions from:

Net investment income		—			(0.48	)		(0.45	)		(0.38	)		(0.68	)		(0.43)

Net realized gains		—			(0.77	)		(0.87	)		(1.68	)		(1.56	)		(0.12)


Total distributions		—			(1.25	)		(1.32	)		(2.06	)		(2.24	)		(0.55)


Net asset value, end of period		$19.88			$17.55			$20.53			$20.23			$19.32			$22.72


Total return^d		13.28%			(9.16)%			8.25%			15.94%			(5.05)%			7.04%

Ratios to average net assets^e

Expenses^f,g		1.05%	^h		1.06%	^h		1.07%	^h		1.07%	^h		1.08%	^h		1.08%

Expenses incurred in connection with securities sold short		0.01%			0.01%			—%			0.01%			0.02%			0.03%

Net investment income		2.04%			1.42%			1.99%			2.22%			1.65%			2.48%^c

Supplemental data

Net assets, end of period (000’s)		$116,018			$105,047			$122,942			$122,476			$130,978			$158,020

Portfolio turnover rate		20.04%			24.67%			18.32%			24.45%			19.88%			21.33%

^bBased on average daily shares outstanding.

^eRatios 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%.

MS-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, 2019 (unaudited)

Franklin Mutual Shares VIP Fund



	Country	Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests 89.5%
Aerospace & Defense 1.9%
BAE Systems PLC	United Kingdom		4,569,485	$	28,748,147
Huntington Ingalls Industries Inc.	United States		143,247		32,193,331


					60,941,478


Auto Components 0.1%
The Goodyear Tire & Rubber Co.	United States		314,543		4,812,508
^a,b,cInternational Automotive Components Group Brazil LLC	Brazil		1,730,515		44,436


					4,856,944

Automobiles 1.3%
General Motors Co.	United States		1,118,830		43,108,520


Banks 10.6%
Barclays PLC	United Kingdom		9,360,305		17,806,904
Cadence Bancorp	United States		447,646		9,311,037
CIT Group Inc.	United States		705,826		37,084,098
Citigroup Inc.	United States		876,719		61,396,632
Citizens Financial Group Inc.	United States		1,649,366		58,321,582
Independent Bank Group Inc.	United States		133,712		7,348,811
JPMorgan Chase & Co.	United States		712,520		79,659,736
Synovus Financial Corp.	United States		451,377		15,798,195
Wells Fargo & Co.	United States		1,265,060		59,862,639


					346,589,634


Biotechnology 1.1%
^aCelgene Corp.	United States		401,188		37,085,819


Building Products 1.5%
Johnson Controls International PLC	United States		1,171,600		48,398,796


Chemicals 0.0%^†
^a,b,dDow Corning Corp., Contingent Distribution	United States		100,000		53,346


Communications Equipment 1.0%
Cisco Systems Inc.	United States		611,364		33,459,952


Construction & Engineering 0.6%
Fluor Corp.	United States		584,682		19,697,937


Consumer Finance 1.6%
Ally Financial Inc.	United States		268,286		8,314,183
Capital One Financial Corp.	United States		492,885		44,724,385


					53,038,568


Containers & Packaging 1.5%
International Paper Co.	United States		924,175		40,035,261
WestRock Co.	United States		283,171		10,327,246


					50,362,507


Diversified Financial Services 1.4%
Voya Financial Inc.	United States		831,410		45,976,973


Diversified Telecommunication Services 0.7%
Koninklijke KPN NV	Netherlands		7,402,182		22,720,961

Semiannual Report

MS-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)



	Country	Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Electrical Equipment 1.6%
^aSensata Technologies Holding PLC	United States		1,069,230	$	52,392,270


Electronic Equipment, Instruments & Components 0.5%
Corning Inc.	United States		493,869		16,411,267

Energy Equipment & Services 1.3%
Baker Hughes a GE Co., A	United States		1,412,585		34,791,968
^aMcDermott International Inc.	United States		699,157		6,753,857


					41,545,825


Entertainment 2.8%
The Walt Disney Co.	United States		665,400		92,916,456


Equity Real Estate Investment Trusts (REITs) 1.4%
Alexander’s Inc.	United States		36,970		13,689,991
Vornado Realty Trust	United States		499,096		31,992,054


					45,682,045


Food & Staples Retailing 2.2%
The Kroger Co.	United States		1,835,560		39,850,007
Walgreens Boots Alliance Inc.	United States		600,658		32,837,973


					72,687,980


Food Products 1.6%
Archer-Daniels-Midland Co.	United States		412,167		16,816,414
The Kraft Heinz Co.	United States		1,105,600		34,317,824


					51,134,238


Health Care Equipment & Supplies 3.8%
Medtronic PLC	United States		1,278,912		124,553,240


Health Care Providers & Services 1.2%
CVS Health Corp.	United States		739,861		40,315,026


Household Durables 2.5%
Lennar Corp., A	United States		567,800		27,515,588
Newell Brands Inc.	United States		2,363,717		36,448,516
Toll Brothers Inc.	United States		486,000		17,797,320


					81,761,424


Household Products 0.5%
Energizer Holdings Inc.	United States		458,300		17,708,712


Independent Power & Renewable Electricity Producers 0.6%
Vistra Energy Corp.	United States		805,295		18,231,879


Industrial Conglomerates 1.1%
General Electric Co.	United States		3,334,300		35,010,150


Insurance 8.1%
^aAlleghany Corp.	United States		92,388		62,933,350
American International Group Inc.	United States		1,385,096		73,797,915
^aBrighthouse Financial Inc.	United States		190,912		7,004,561
Chubb Ltd.	United States		264,699		38,987,516

MS-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)



	Country		Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Insurance (continued)
The Hartford Financial Services Group Inc.		United States		914,578	$	50,960,286
MetLife Inc.		United States		680,203		33,785,683


						267,469,311


IT Services 1.6%
Cognizant Technology Solutions Corp., A		United States		816,570		51,762,372


Machinery 0.8%
CNH Industrial NV		United Kingdom		663,594		6,803,241
CNH Industrial NV, special voting		United Kingdom		1,844,814		18,913,243


						25,716,484


Media 6.7%
^aCharter Communications Inc., A		United States		213,013		84,178,477
^aClear Channel Outdoor Holdings Inc.		United States		1,644,649		7,762,743
Comcast Corp., A		United States		1,246,900		52,718,932
^aCumulus Media Inc., A		United States		51,866		962,114
^aCumulus Media Inc., B		United States		84,765		1,572,391
^aDiscovery Inc., C		United States		1,137,473		32,361,107
^aDISH Network Corp., A		United States		725,783		27,877,325
^a,b,ciHeartMedia Inc., A		United States		757,945		11,001,789
^a,b,ciHeartMedia Inc., B		United States		12,783		185,549


						218,620,427


Metals & Mining 0.0%^†
Warrior Met Coal Inc.		United States		21,563		563,226


Oil, Gas & Consumable Fuels 9.9%
Anadarko Petroleum Corp.		United States		783,170		55,260,475
BP PLC		United Kingdom		3,608,739		25,141,888
Kinder Morgan Inc.		United States		2,817,440		58,828,147
Marathon Oil Corp.		United States		2,720,801		38,662,582
Occidental Petroleum Corp.		United States		300,300		15,099,084
Plains All American Pipeline LP		United States		976,100		23,768,035
Royal Dutch Shell PLC, A (EUR Traded)		United Kingdom		1,247,949		40,731,763
Royal Dutch Shell PLC, A (GBP Traded)		United Kingdom		735,364		24,023,947
The Williams Cos. Inc.		United States		1,573,698		44,126,492


						325,642,413


Pharmaceuticals 6.9%
Eli Lilly & Co.		United States		381,286		42,242,676
GlaxoSmithKline PLC		United Kingdom		2,872,766		57,518,610
Merck & Co. Inc.		United States		510,912		42,839,971
Novartis AG, ADR		Switzerland		932,181		85,117,447


						227,718,704

Semiannual Report

MS-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)



	Country		Shares/ Units/ Warrants		Value

Common Stocks and Other Equity Interests (continued)
Software 2.6%
^aAvaya Holdings Corp., wts., 12/15/22		United States		91,551	$	91,551
^aRed Hat Inc.		United States		187,800		35,261,328
Symantec Corp.		United States		2,301,161		50,073,263


						85,426,142


Specialty Retail 0.2%
^a,bTRU Kids Parent LLC		United States		2,039		7,444,425


Technology Hardware, Storage & Peripherals 3.5%
Hewlett Packard Enterprise Co.		United States		1,835,967		27,447,707
Samsung Electronics Co. Ltd.		South Korea		1,351,118		54,888,366
^a,bWayne Services Legacy Inc.		United States		2,040		713,354
Western Digital Corp.		United States		672,700		31,986,885

						115,036,312


Textiles, Apparel & Luxury Goods 1.1%
PVH Corp.		United States		371,600		35,168,224


Tobacco 2.6%
Altria Group Inc.		United States		561,788		26,600,662
British American Tobacco PLC		United Kingdom		1,124,087		39,242,916
British American Tobacco PLC, ADR		United Kingdom		328,733		11,462,920
Imperial Brands PLC		United Kingdom		415,920		9,754,753

						87,061,251


Wireless Telecommunication Services 1.1%
^aT-Mobile U.S. Inc.		United States		475,280		35,237,259


Total Common Stocks and Other Equity Interests (Cost $2,280,498,565)						2,939,508,497


			Principal Amount


Corporate Notes and Senior Floating Rate Interests 3.8%
^eBanff Merger Sub Inc., senior note, 144A, 9.75%, 9/01/26		United States	$	18,444,000		16,092,390
Frontier Communications Corp.,
senior note, 10.50%, 9/15/22		United States		22,633,000		15,447,022
senior note, 11.00%, 9/15/25		United States		25,535,000		15,959,375
^esenior secured note, first lien, 144A, 8.00%, 4/01/27		United States		6,148,000		6,409,290
^eMcDermott Technology Americas Inc., senior note, 144A, 10.625%, 5/01/24		United States		9,797,000		9,184,687
^fVeritas U.S. Inc.,
Term Loan B1, 6.902%, (1-month USD LIBOR + 4.50%), 1/27/23		United States		14,529,546		13,221,887
Term Loan B1, 6.83%, (3-month USD LIBOR + 4.50%), 1/27/23		United States		2,883,961		2,624,405
^eVeritas U.S. Inc./Veritas Bermuda Ltd.,
senior note, 144A, 7.50%, 2/01/23		United States		2,856,000		2,684,640
senior note, 144A, 10.50%, 2/01/24		United States		23,445,000		20,162,700

MS-14

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)



	Country	Principal Amount		Value

Corporate Notes and Senior Floating Rate Interests (continued)
^f,g Windstream Services LLC,
^hRevolving Commitment, 8.50%, (Prime + 3.00%), 4/24/20	United States	$	17,758,664	$	17,855,805
ⁱTerm Loan B6, TBD, 3/30/21	United States		3,575,000		3,686,719


Total Corporate Notes and Senior Floating Rate Interests (Cost $138,839,979)					123,328,920


Corporate Bonds and Notes in Reorganization 0.1%
^b,c,jBroadband Ventures III LLC, secured promissory note, 5.00%, 2/01/12	United States		1,754		—
^j Pacific Gas & Electric Co.,
senior bond, 4.45%, 4/15/42	United States		991,000		953,837
senior bond, 3.75%, 8/15/42	United States		1,549,000		1,409,590
senior bond, 4.00%, 12/01/46	United States		1,755,000		1,601,437
senior bond, 3.95%, 12/01/47	United States		822,000		742,883


Total Corporate Bonds and Notes in Reorganization (Cost $3,873,477)					4,707,747


		Shares


Companies in Liquidation 0.0%^†
^a,b,dAvaya Holdings Corp., Contingent Distribution	United States		30,319,000		—
^a,b,dAvaya Inc., Contingent Distribution	United States		34,518,267		—
^a,b,dClear Channel Communications Inc., Contingent Distribution	United States		26,449,000		—
^a,b,diHeartCommunications Inc., Contingent Distribution	United States		45,914,872		—
^a,b,dTribune Media, Litigation Trust, Contingent Distribution	United States		398,509		—
^a,dVistra Energy Corp., Litigation Trust, Contingent Distribution	United States		90,618,406		135,928


Total Companies in Liquidation (Cost $2,836,069)					135,928


Total Investments before Short Term Investments (Cost $2,426,048,090)					3,067,681,092


		Principal Amount


Short Term Investments 5.6%

U.S. Government and Agency Securities 5.6%
^kFHLB, 7/01/19	United States	$	47,300,000		47,300,000
^k U.S. Treasury Bill,
7/02/19 - 9/05/19	United States		111,300,000		111,072,182
^l9/12/19 - 10/31/19	United States		25,000,000		24,862,728


Total U.S. Government and Agency Securities (Cost $183,158,534)					183,234,910


Total Investments (Cost $2,609,206,624) 99.0%					3,250,916,002

Securities Sold Short (0.3)%					(8,471,380	)

Other Assets, less Liabilities 1.3%					41,905,290


Net Assets 100.0%				$	3,284,349,912

Semiannual Report

MS-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)


	Country	Shares	Value

^m Securities Sold Short (Proceeds $8,965,066) (0.3)%
Common Stocks (0.3)%
Pharmaceuticals (0.3)%
Bristol-Myers Squibb Co.	United States	186,800	$	(8,471,380	)

^†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 8 regarding restricted securities.

^dContingent 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.

^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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019, the aggregate value of these securities was $54,533,707, representing 1.7% of net assets.

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

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

^hSee Note 9 regarding unfunded loan commitments.

ⁱA 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.

^jSee Note 7 regarding credit risk and defaulted securities.

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

^lA portion or all of the security has been segregated as collateral for securities sold short and open forward exchange contracts. At June 30, 2019, the aggregate value of these securities pledged amounted to $5,380,364, representing 0.2% of net assets.

^mSee Note 1(e) regarding securities sold short.

At June 30, 2019, 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

229

$32,765,606

9/16/19

$(109,142

)

GBP/USD

Short

765

60,956,157

9/16/19

56,407

Total Futures Contracts

$ (52,735

)

* 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, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts


Currency	Counterparty^a		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation

OTC Forward Exchange Contracts
Euro		BOFA		Sell		587,466	$	667,291		7/15/19		$ —	$	(1,546	)
Euro		HSBK		Sell		21,658,181		24,323,489		7/15/19		—		(334,589	)
British Pound		BOFA		Buy		157,956		200,354		7/16/19		430		—
British Pound		BOFA		Sell		63,991		81,600		7/16/19		258		—
British Pound		HSBK		Buy		187,200		237,914		7/16/19		42		—
British Pound		HSBK		Sell		178,615		227,578		7/16/19		534		—
British Pound		SSBT		Sell		17,334,745		21,952,981		7/16/19		—		(81,792	)
South Korean Won		HSBK		Sell		31,925,416,946		27,095,037		7/19/19		—		(516,206	)
South Korean Won		UBSW		Sell		29,550,452,054		25,025,789		7/19/19		—		(531,425	)


Total Forward Exchange Contracts												$ 1,264	$	(1,465,558	)


Net unrealized appreciation (depreciation)													$	(1,464,294	)

^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-32.

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, 2019 (unaudited)



	Franklin Mutual Shares VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$2,609,206,624


Value - Unaffiliated issuers		$3,250,916,002
Cash		830,663
Foreign currency, at value (cost $1,718,543)		1,720,665
Receivables:
Investment securities sold		25,916,323
Capital shares sold		6,955,157
Dividends and interest		8,765,960
European Union tax reclaims		1,574,871
Deposits with brokers for:
Securities sold short		8,730,761
Futures contracts		2,184,290
Unrealized appreciation on OTC forward exchange contracts		1,264
Unrealized appreciation on unfunded loan commitments (Note 9)		8,701
Other assets		2,382


Total assets		3,307,607,039

Liabilities:
Payables:
Investment securities purchased		8,418,647
Capital shares redeemed		1,204,757
Management fees		1,783,043
Distribution fees		1,259,915
Trustees’ fees and expenses		3,364
Variation margin on futures contracts		215,612
Securities sold short, at value (proceeds $8,965,066)		8,471,380
Unrealized depreciation on OTC forward exchange contracts		1,465,558
Accrued expenses and other liabilities		434,851


Total liabilities		23,257,127


Net assets, at value		$3,284,349,912

Net assets consist of:
Paid-in capital		$2,200,881,043
Total distributable earnings (loss)		1,083,468,869


Net assets, at value		$3,284,349,912

Class 1:
Net assets, at value		$ 304,683,946

Shares outstanding		15,161,453

Net asset value and maximum offering price per share		$20.10

Class 2:
Net assets, at value		$2,863,648,283

Shares outstanding		145,232,742

Net asset value and maximum offering price per share		$19.72

Class 4:
Net assets, at value		$ 116,017,683

Shares outstanding		5,836,603

Net asset value and maximum offering price per share		$19.88

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 Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin Mutual Shares VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$40,366,610
Interest:
Unaffiliated issuers		11,635,806
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		255,136
Non-controlled affiliates (Note 3e)		41,390


Total investment income		52,298,942

Expenses:
Management fees (Note 3a)		11,401,780
Distribution fees: (Note 3c)
Class 2		3,482,244
Class 4		199,138
Custodian fees (Note 4)		45,773
Reports to shareholders		213,878
Professional fees		44,144
Trustees’ fees and expenses		13,682
Dividends and interest on securities sold short		111,132
Other		38,041


Total expenses		15,549,812
Expense reductions (Note 4)		(8,338	)
Expenses waived/paid by affiliates (Note 3e)		(7,025	)


Net expenses		15,534,449


Net investment income		36,764,493

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		46,873,629
Realized gain distributions from REITs		74,381
Foreign currency transactions		421,427
Forward exchange contracts		3,892,295
Futures contracts		1,483,344
Securities sold short		(3,542,060	)


Net realized gain (loss)		49,203,016

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		339,610,302
Translation of other assets and liabilities denominated in foreign currencies		(71,322	)
Forward exchange contracts		(513,176	)
Futures contracts		(216,727	)
Securities sold short		(6,441,444	)


Net change in unrealized appreciation (depreciation)		332,367,633


Net realized and unrealized gain (loss)		381,570,649


Net increase (decrease) in net assets resulting from operations		$418,335,142


*Foreign taxes withheld on dividends		$ 956,323

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

MS-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets


	Franklin Mutual Shares VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income		$ 36,764,493			$ 60,982,102
Net realized gain (loss)		49,203,016			308,792,402
Net change in unrealized appreciation (depreciation)		332,367,633			(689,920,400	)


Net increase (decrease) in net assets resulting from operations		418,335,142			(320,145,896	)


Distributions to shareholders:
Class 1		—			(37,929,843	)
Class 2		—			(194,310,469	)
Class 4		—			(7,177,027	)


Total distributions to shareholders		—			(239,417,339	)


Capital share transactions: (Note 2)
Class 1		(306,195,412	)		(27,996,947	)
Class 2		15,995,262			(506,425,142	)
Class 4		(2,989,597	)		(365,846	)


Total capital share transactions		(293,189,747	)		(534,787,935	)


Net increase (decrease) in net assets		125,145,395			(1,094,351,170	)

Net assets:
Beginning of period		3,159,204,517			4,253,555,687


End of period		$3,284,349,912			$ 3,159,204,517

MS-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 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

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.

Semiannual Report

MS-21

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)

b. Foreign Currency Translation

c. Securities Purchased on a Delayed Delivery Basis

The Fund purchases securities on a 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

MS-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

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, 2019, the Fund had OTC derivatives in a net liability position of $1,463,436 and the aggregate value of collateral pledged for such contracts was $1,213,907.

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.

See Note 10 regarding other derivative information.

e. Securities Sold Short

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)

e. Securities Sold Short (continued)

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.

f. Securities Lending

g. Senior Floating Rate Interests

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.

h. Income and Deferred Taxes

MS-24

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

its technical merits. As of June 30, 2019, 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.

j. Accounting Estimates

k. Guarantees and Indemnifications

Semiannual Report

MS-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		403,550		$	7,789,101			1,228,202		$	23,646,682
Shares issued in reinvestment of distributions		—			—			1,881,441			37,929,843
Shares redeemed		(15,582,604	)		(313,984,513	)		(4,336,171	)		(89,573,472)


Net increase (decrease)		(15,179,054	)	$	(306,195,412	)		(1,226,528	)	$	(27,996,947)


Class 2 Shares:
Shares sold		18,294,534		$	353,687,491			14,955,793		$	302,887,079
Shares issued in reinvestment of distributions		—			—			9,803,757			194,310,469
Shares redeemed		(17,700,611	)		(337,692,229	)		(50,860,562	)		(1,003,622,690)


Net increase (decrease)		593,923		$	15,995,262			(26,101,012	)	$	(506,425,142)


Class 4 Shares:
Shares sold		378,174		$	7,137,753			743,333		$	14,855,135
Shares issued in reinvestment of distributions		—			—			358,852			7,177,027
Shares redeemed		(526,970	)		(10,127,350	)		(1,104,232	)		(22,398,008)


Net increase (decrease)		(148,796	)	$	(2,989,597)			(2,047	)	$	(365,846)

3. Transactions with Affiliates



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

MS-26

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (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
0.675%		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

c. Distribution Fees

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


	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, 2.05%		$ —		$90,240,000		$(90,240,000)		$ —		$ —		$ —		—		$41,390

Semiannual Report

MS-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments			$2,623,509,388


Unrealized appreciation			$ 789,047,411
Unrealized depreciation			(171,626,751)


Net unrealized appreciation (depreciation)			$ 617,420,660

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of defaulted securities, 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, 2019, aggregated $617,730,214 and $707,904,303, respectively.

7. Credit Risk and Defaulted Securities

At June 30, 2019, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $4,707,747, representing 0.2% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.

8. Restricted Securities

MS-28

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

At June 30, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:


Principal Amount/ Shares	Issuer	Acquisition Date		Cost		Value

1,754	Broadband Ventures III LLC, secured promissory note, 5.00%, 2/01/12		7/01/10 - 11/30/12	$	1,754	$	—
757,945	iHeartMedia Inc., A		1/03/11 - 12/19/13		17,769,776		11,001,789
12,783	iHeartMedia Inc., B		1/03/11 - 12/19/13		298,947		185,549
1,730,515	International Automotive Components Group Brazil LLC		4/13/06 - 12/26/08		1,149,241		44,436


	Total Restricted Securities (Value is 0.3% of Net Assets)			$	19,219,718	$	11,231,774

9. 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 Statement of Assets and Liabilities and the Statement of Operations. Funded portions of credit agreements are presented in the Statement of Investments.

At June 30, 2019, unfunded commitments were as follows:



Borrower	Unfunded Commitment

Windstream Services LLC, Revolving Commitment		$53,481

10. Other Derivative Information

At June 30, 2019, 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

$56,407

Variation margin on futures contracts

109,142

Unrealized appreciation on OTC forward exchange contracts

1,264

Unrealized depreciation on OTC forward exchange contracts

1,465,558

Totals

$57,671

1,574,700

Semiannual Report

MS-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

10. Other Derivative Information (continued)

For the period ended June 30, 2019, 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		$3,892,295	Forward exchange contracts	$(513,176)

	Futures contracts		1,483,344	Futures contracts	(216,727)

Totals			$5,375,639		$(729,903)

For the period ended June 30, 2019, the average month end notional amount of futures contracts represented $105,304,246. The average month end contract value of forward exchange contracts was $117,526,716.

See Note 1(d) regarding derivative financial instruments.

11. Credit Facility

12. Fair Value Measurements

•

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.

MS-30

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

A summary of inputs used as of June 30, 2019, 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
Auto Components	$	4,812,508	$	—	$	44,436	$	4,856,944
Chemicals		—		—		53,346		53,346
Machinery		6,803,241		18,913,243		—		25,716,484
Media		207,433,089		—		11,187,338		218,620,427
Specialty Retail		—		—		7,444,425		7,444,425
Technology Hardware, Storage & Peripherals		114,322,958		—		713,354		115,036,312
All Other Equity Investments		2,567,780,559		—		—		2,567,780,559
Corporate Notes and Senior Floating Rate Interests		—		123,328,920		—		123,328,920
Corporate Bonds and Notes in Reorganization		—		4,707,747		—^c		4,707,747
Companies in Liquidation		—		135,928		—^c		135,928
Short Term Investments		135,934,910		47,300,000		—		183,234,910


Total Investments in Securities	$	3,037,087,265	$	194,385,838	$	19,442,899	$	3,250,916,002

Other Financial Instruments:
Futures Contracts	$	56,407	$	—	$	—	$	56,407
Forward Exchange Contracts		—		1,264		—		1,264
Unfunded Loan Commitments		—		8,701		—		8,701


Total Other Financial Instruments	$	56,407	$	9,965	$	—	$	66,372


Liabilities:
Other Financial Instruments:
Securities Sold Short	$	8,471,380	$	—	$	—	$	8,471,380
Futures Contracts		109,142		—		—		109,142
Forward Exchange Contracts		—		1,465,558		—		1,465,558


Total Other Financial Instruments	$	8,580,522	$	1,465,558	$	—	$	10,046,080

^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, 2019.

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

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.

Semiannual Report

MS-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Mutual Shares VIP Fund (continued)

Abbreviations

Counterparty

Currency

Selected Portfolio

BOFA

Bank of America Corp.

EUR

Euro

ADR

American Depositary Receipt

HSBK

HSBC Bank PLC

GBP

British Pound

FHLB

Federal Home Loan Bank

SSBT

State Street Bank and Trust Co., N.A.

USD

United States Dollar

LIBOR

London InterBank Offered Rate

UBSW

UBS AG

MS-32

Semiannual Report

Franklin Rising Dividends VIP Fund

This semiannual report for Franklin Rising Dividends VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +20.33% total return* for the six-month period ended June 30, 2019.

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. 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 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 +18.54% 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

The U.S. Federal Reserve (Fed) held its target range for the federal funds rate unchanged, at 2.25%–2.50%, during the period. In March, the Fed mentioned it would end its balance sheet normalization program by the end of September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low in recent months, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

Investment Strategy

We are a research-driven, fundamental investment adviser, pursuing a disciplined value-oriented strategy. As bottom-up investors concentrating primarily on individual securities, we seek fundamentally sound companies that we believe meet

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).

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FRANKLIN RISING DIVIDENDS VIP FUND

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, 2019, some holdings that contributed to absolute performance included Roper Technologies, Erie Indemnity and Air Products and Chemicals.

Roper Technologies, a diversified industrial company, enjoyed solid stock price performance during the period as the company continued to post strong revenue and earnings growth, as well as robust cash flow generation. Roper expects to continue achieving strong operating results in 2019, with moderate organic revenue growth and continued strong profitability. The company has increased its dividend for 26 consecutive years.

Erie Indemnity, a property-casualty insurer, contributed to relative performance based on steady earnings growth and margin expansion in recent quarters. Rate growth led to an increase in Erie’s premium growth during the recent period. The company has increased its dividend for 39 consecutive years.

Industrial gases company Air Products and Chemicals supported relative returns following a solid quarterly earnings report and what we considered promising guidance. We believe the overall fundamentals for the industrial gases industry remains robust. The industry has consolidated, competitive pressures remain stable, pricing power has improved and project backlogs look to be increasing. Moreover, we believe Air Products has what we consider a significant long-term opportunity in gasification projects. The company has increased its dividend for 36 consecutive years.

Conversely, some holdings that detracted from absolute performance included Albemarle, Occidental Petroleum and Medtronic.

Shares of Albemarle, a specialty chemicals producer, declined despite ongoing strong fundamental performance. Investor concerns about the possibility of lithium oversupply and pricing implications continued to weigh on the industry despite the company’s outlook for balanced supply and demand. Albemarle’s long-term contracts and low-cost position could provide insulation from spot price fluctuations,

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

in our view. The company has increased its dividend for 25 consecutive years.

Oil and gas producer Occidental Petroleum announced a $38 billion acquisition of oil and gas exploration and production firm Anadarko Petroleum. We believe the transaction will give Occidental Petroleum a greater presence in the U.S. shale producing Permian Basin and allow it to cut costs, but investor concerns about the



		Semiannual Report			FRD-3

FRANKLIN RISING DIVIDENDS VIP FUND

financing needed to complete the deal weighed on Occidental’s share price. The company has increased its dividend for 16 consecutive years.

Shares of Medtronic, a developer of medical products, was a relative detractor during the period, despite reporting strong financial results in recent quarters. We believe that Medtronic is positioned well going forward, based on good organic growth prospects driven by a strong pipeline, as well as improving margins and cash flow generation. The stock also trades at an undemanding valuation relative to the opportunity, in our view. The company has increased its dividend for 41 years.

During the period, the Fund initiated a new position in Norfolk Southern, a freight railroad (17 consecutive years of dividend increases). We added to existing positions including The Boeing Company, an aerospace company (eight consecutive years of dividend increases); Raytheon, a defense contractor and weapons, military and commercial electronics manufacturer (15 consecutive years of dividend increases); and Honeywell International, a diversified industrial company (nine consecutive years of dividend increases)

We did not liquidate any positions during the period. We also reduced several holdings including ABM Industries, Aflac and the aforementioned Roper Technologies.

Thank you for your participation in Franklin Rising Dividends VIP Fund. We look forward to continuing to serve your investment needs.

Top 10 Holdings

6/30/19



Company *Sector/Industry*	% of Total Net Assets
Microsoft Corp. Software & Services		6.4%
Roper Technologies Inc. Industrial Conglomerates		5.9%
Linde PLC (United Kingdom) Materials		3.9%
Honeywell International Inc. Industrial Conglomerates		3.9%
Stryker Corp. Health Care Equipment & Services		3.8%
Accenture PLC Software & Services		3.4%
Becton, Dickinson and Co. Health Care Equipment & Services		3.4%
Texas Instruments Inc. Semiconductors & Semiconductor Equipment		3.4%
Analog Devices Inc. Semiconductors & Semiconductor Equipment		3.3%
Air Products and Chemicals Inc. Materials		3.3%

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Class 2 Fund Expenses

Actual Fund Expenses

Hypothetical Example for Comparison with Other Mutual Funds

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1, 2

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^1,2

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,203.30

$4.81

$1,020.43

$4.41

0.88%

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 Rising Dividends VIP Fund


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$25.75			$29.21			$25.51			$25.26			$29.63			$28.14


Income from investment operations^a:

Net investment income^b		0.19			0.39			0.40			0.42			0.45			0.45

Net realized and unrealized gains (losses)		4.99			(1.65	)		4.76			3.45			(1.33	)		2.03


Total from investment operations		5.18			(1.26	)		5.16			3.87			(0.88	)		2.48


Less distributions from:

Net investment income		(0.45	)		(0.44	)		(0.48	)		(0.44	)		(0.48	)		(0.44)

Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)		(0.55)


Total distributions		(4.99	)		(2.20	)		(1.46	)		(3.62	)		(3.49	)		(0.99)


Net asset value, end of period		$25.94			$25.75			$29.21			$25.51			$25.26			$29.63


Total return^c		20.48%			(4.84)%			20.85%			16.33%			(3.42)%			9.01%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.64%			0.62%			0.62%			0.63%			0.63%			0.62%

Expenses net of waiver and payments by affiliates		0.63%	^e		0.62%	^e,f		0.62%	^e,f		0.62%	^e		0.63%	^f		0.62%^f

Net investment income		1.37%			1.38%			1.49%			1.67%			1.65%			1.58%

Supplemental data

Net assets, end of period (000’s)		$179,169			$157,838			$216,015			$181,072			$143,376			$160,480

Portfolio turnover rate		3.13%			3.09%	^g		3.36%			6.66%			4.74%			8.61%

^bBased on average daily shares outstanding.

^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 a redemption in-kind. See Note 8.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$25.04			$28.46			$24.89			$24.72			$29.06			$27.62


Income from investment operations^a:

Net investment income^b		0.15			0.31			0.33			0.35			0.37			0.37

Net realized and unrealized gains (losses)		4.85			(1.61	)		4.63			3.37			(1.29	)		1.99


Total from investment operations		5.00			(1.30	)		4.96			3.72			(0.92	)		2.36


Less distributions from:

Net investment income		(0.37	)		(0.36	)		(0.41	)		(0.37	)		(0.41	)		(0.37)

Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)		(0.55)


Total distributions		(4.91	)		(2.12	)		(1.39	)		(3.55	)		(3.42	)		(0.92)


Net asset value, end of period		$25.13			$25.04			$28.46			$24.89			$24.72			$29.06


Total return^c		20.33%			(5.07)%			20.56%			16.04%			(3.65)%			8.72%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.89%			0.87%			0.87%			0.88%			0.88%			0.87%

Expenses net of waiver and payments by affiliates		0.88%	^e		0.87%	^e,f		0.87%	^e,f		0.87%	^e		0.88%	^f		0.87%^f

Net investment income		1.12%			1.13%			1.24%			1.42%			1.40%			1.33%

Supplemental data

Net assets, end of period (000’s)		$1,393,720			$1,106,334			$1,640,883			$1,530,374			$1,310,783			$1,667,816

Portfolio turnover rate		3.13%			3.09%	^g		3.36%			6.66%			4.74%			8.61%

^bBased on average daily shares outstanding.

^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 a redemption in-kind. See Note 8.

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$25.11			$28.54			$24.98			$24.81			$29.19			$27.76


Income from investment operations^a:

Net investment income^b		0.14			0.29			0.30			0.32			0.35			0.35

Net realized and unrealized gains (losses)		4.86			(1.62	)		4.65			3.39			(1.31	)		2.00


Total from investment operations		5.00			(1.33	)		4.95			3.71			(0.96	)		2.35


Less distributions from:

Net investment income		(0.35	)		(0.34	)		(0.41	)		(0.36	)		(0.41	)		(0.37	)

Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)		(0.55	)


Total distributions		(4.89	)		(2.10	)		(1.39	)		(3.54	)		(3.42	)		(0.92	)


Net asset value, end of period		$25.22			$25.11			$28.54			$24.98			$24.81			$29.19


Total return^c		20.29%			(5.16)%			20.40%			15.93%			(3.75)%			8.62%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.99%			0.97%			0.97%			0.98%			0.98%			0.97%

Expenses net of waiver and payments by affiliates		0.98%	^e		0.97%	^e,f		0.97%	^e,f		0.97%	^e		0.98%	^f		0.97%^f

Net investment income		1.02%			1.03%			1.14%			1.32%			1.30%			1.23%

Supplemental data

Net assets, end of period (000’s)		$39,184			$32,825			$36,407			$28,579			$20,453			$15,503

Portfolio turnover rate		3.13%			3.09%^g			3.36%			6.66%			4.74%			8.61%

^bBased on average daily shares outstanding.

^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 a redemption in-kind. See Note 8.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Franklin Rising Dividends VIP Fund


	Shares	Value

Common Stocks 98.6%

Aerospace & Defense 6.3%
The Boeing Co.	49,152	$	17,891,820
General Dynamics Corp.	179,400		32,618,508
Raytheon Co.	118,028		20,522,709
United Technologies Corp.	227,897		29,672,189


			100,705,226


Building Products 1.6%
Johnson Controls International PLC	598,852		24,738,576
^aResideo Technologies Inc.	51,681		1,132,848


			25,871,424


Commercial & Professional Services 2.9%
ABM Industries Inc.	325,036		13,001,440
Cintas Corp.	113,399		26,908,449
Matthews International Corp., A	212,992		7,422,771


			47,332,660


Consumer Durables & Apparel 1.7%
NIKE Inc., B	333,499		27,997,241

Consumer Services 2.2%
McDonald’s Corp.	139,412		28,950,296
Yum! Brands Inc.	55,463		6,138,090


			35,088,386


Diversified Financials 0.2%
State Street Corp.	58,384		3,273,007


Electrical Equipment 0.6%
nVent Electric PLC	414,613		10,278,256


Energy 5.6%
^aApergy Corp.	190,719		6,396,715
Chevron Corp.	177,152		22,044,795
EOG Resources Inc.	197,458		18,395,187
Exxon Mobil Corp.	163,217		12,507,319
Occidental Petroleum Corp.	321,212		16,150,539
Schlumberger Ltd.	363,947		14,463,254


			89,957,809


Food & Staples Retailing 1.8%
Walgreens Boots Alliance Inc.	137,088		7,494,601
Walmart Inc.	199,488		22,041,429


			29,536,030


Food, Beverage & Tobacco 4.2%
Bunge Ltd.	304,273		16,951,049
McCormick & Co. Inc.	155,999		24,181,405
PepsiCo Inc.	198,800		26,068,645


			67,201,099

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FRD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)


	Shares	Value

Common Stocks (continued)
Health Care Equipment & Services 14.7%
Abbott Laboratories	372,879	$	31,359,124
Becton, Dickinson and Co.	215,303		54,258,509
CVS Health Corp.	170,555		9,293,542
DENTSPLY SIRONA Inc.	60,262		3,516,890
Medtronic PLC	497,861		48,486,683
Stryker Corp.	300,281		61,731,768
West Pharmaceutical Services Inc.	228,602		28,609,540


			237,256,056


Household & Personal Products 2.8%
Colgate-Palmolive Co.	278,562		19,964,539
The Procter & Gamble Co.	226,565		24,842,852


			44,807,391


Industrial Conglomerates 10.4%
Carlisle Cos. Inc.	70,317		9,873,210
Honeywell International Inc.	359,587		62,780,294
Roper Technologies Inc.	258,599		94,714,470


			167,367,974


Insurance 2.7%
Aflac Inc.	260,871		14,298,340
Arthur J. Gallagher & Co.	51,643		4,523,410
Erie Indemnity Co., A	94,349		23,991,064


			42,812,814


Machinery 3.4%
Donaldson Co. Inc.	211,247		10,744,022
Dover Corp.	301,849		30,245,270
Pentair PLC	377,850		14,056,020


			55,045,312


Materials 11.8%
Air Products and Chemicals Inc.	235,264		53,256,712
Albemarle Corp.	614,330		43,254,975
Ecolab Inc.	104,010		20,535,734
Linde PLC (United Kingdom)	317,828		63,819,863
Nucor Corp.	177,494		9,779,919


			190,647,203


Media & Entertainment 0.3%
John Wiley & Sons Inc., A	95,317		4,371,238


Pharmaceuticals, Biotechnology & Life Sciences 3.5%
AbbVie Inc.	137,521		10,000,527
Johnson & Johnson	228,731		31,857,654
Perrigo Co. PLC	121,314		5,776,973
Pfizer Inc.	210,251		9,108,073


			56,743,227

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)


	Shares	Value

Common Stocks (continued)
Retailing 3.0%
The Gap Inc.	328,296	$	5,899,479
Ross Stores Inc.	169,172		16,768,329
Target Corp.	130,217		11,278,094
Tiffany & Co.	155,069		14,520,661


			48,466,563


Semiconductors & Semiconductor Equipment 7.1%
Analog Devices Inc.	472,704		53,354,100
Texas Instruments Inc.	467,889		53,694,942
Versum Materials Inc.	131,028		6,758,424


			113,807,466


Software & Services 10.6%
Accenture PLC, A	293,820		54,289,121
Microsoft Corp.	769,540		103,087,578
Visa Inc., A	81,843		14,203,853


			171,580,552


Trading Companies & Distributors 0.4%
W.W. Grainger Inc.	25,696		6,892,438


Transportation 0.8%
Norfolk Southern Corp.	22,500		4,484,925
United Parcel Service Inc., B	78,756		8,133,132


			12,618,057


Total Common Stocks (Cost $829,540,777)			1,589,657,429


Short Term Investments (Cost $22,048,750) 1.4%
Money Market Funds 1.4%
^b,cInstitutional Fiduciary Trust Money Market Portfolio, 2.05%	22,048,750		22,048,750


Total Investments (Cost $851,589,527) 100.0%			1,611,706,179
Other Assets, less Liabilities 0.0%^†			366,694


Net Assets 100.0%		$	1,612,072,873

^†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.

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, 2019 (unaudited)


	Franklin Rising Dividends VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	829,540,777
Cost - Non-controlled affiliates (Note 3e)		22,048,750

Value - Unaffiliated issuers	$	1,589,657,429
Value - Non-controlled affiliates (Note 3e)		22,048,750
Receivables:
Investment securities sold		1,460,617
Capital shares sold		323,944
Dividends		1,557,904
Other assets		956


Total assets		1,615,049,600


Liabilities:
Payables:
Capital shares redeemed		1,438,681
Management fees		786,456
Distribution fees		589,905
Trustees’ fees and expenses		2,110
Accrued expenses and other liabilities		159,575


Total liabilities		2,976,727


Net assets, at value	$	1,612,072,873

Net assets consist of:
Paid-in capital	$	822,674,149
Total distributable earnings (loss)		789,398,724


Net assets, at value	$	1,612,072,873


Class 1:
Net assets, at value	$	179,169,008

Shares outstanding		6,907,347

Net asset value and maximum offering price per share	$	25.94


Class 2:
Net assets, at value	$	1,393,719,957

Shares outstanding		55,462,850

Net asset value and maximum offering price per share	$	25.13


Class 4:
Net assets, at value	$	39,183,908

Shares outstanding		1,553,696

Net asset value and maximum offering price per share	$	25.22

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)


	Franklin Rising Dividends VIP Fund

Investment income:
Dividends:
Unaffiliated issuers		$ 14,462,123
Non-controlled affiliates (Note 3e)		486,228


Total investment income		14,948,351


Expenses:
Management fees (Note 3a)		4,664,904
Distribution fees: (Note 3c)
Class 2		1,611,521
Class 4		63,372
Custodian fees (Note 4)		9,000
Reports to shareholders		88,314
Professional fees		30,429
Trustees’ fees and expenses		6,653
Other		18,311


Total expenses		6,492,504

Expense reductions (Note 4)		(955	)

Expenses waived/paid by affiliates (Note 3e)		(82,105	)


Net expenses		6,409,444


Net investment income		8,538,907

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		23,882,379


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		235,045,693


Net realized and unrealized gain (loss)		258,928,072


Net increase (decrease) in net assets resulting from operations		$267,466,979

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, 2019 (unaudited)			Year Ended December 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	8,538,907		$	20,055,601
Net realized gain (loss)		23,882,379			314,858,432
Net change in unrealized appreciation (depreciation)		235,045,693			(398,447,639	)


Net increase (decrease) in net assets resulting from operations		267,466,979			(63,533,606	)

Distributions to shareholders:
Class 1		(28,799,833	)		(13,329,516	)
Class 2		(227,983,493	)		(115,786,937	)
Class 4		(6,300,776	)		(2,574,964	)


Total distributions to shareholders		(263,084,102	)		(131,691,417	)

Capital share transactions: (Note 2)
Class 1		18,533,840			(37,447,873	)
Class 2		286,135,359			(364,402,663	)
Class 4		6,024,024			766,328


Total capital share transactions		310,693,223			(401,084,208	)


Net increase (decrease) in net assets		315,076,100			(596,309,231	)
Net assets:
Beginning of period		1,296,996,773			1,893,306,004


End of period	$	1,612,072,873		$	1,296,996,773

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

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.

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)

a. Financial Instrument Valuation (continued)

b. Foreign Currency Translation

c. Income and Deferred Taxes

d. Security Transactions, Investment Income, Expenses and Distributions

FRD-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 1 Shares:

Shares sold		103,609		$	2,877,106			296,177		$	8,482,359

Shares issued in reinvestment of distributions		1,132,514			28,799,833			481,211			13,329,516

Shares redeemed		(458,204	)		(13,143,099	)		(2,043,710	)		(59,259,748)



Net increase (decrease)		777,919		$	18,533,840			(1,266,322	)	$	(37,447,873)


Class 2 Shares:

Shares sold		6,310,410		$	174,923,723			3,479,467		$	95,894,196

Shares issued in reinvestment of distributions		9,252,577			227,983,493			4,293,174			115,786,937

Shares redeemed in-kind (Note 8)		—			—			(5,455,397	)		(147,395,561)

Shares redeemed		(4,284,464	)		(116,771,857	)		(15,794,114	)		(428,688,235)



Net increase (decrease)		11,278,523		$	286,135,359			(13,476,870	)	$	(364,402,663)


Class 4 Shares:

Shares sold		120,629		$	3,314,382			206,879		$	5,727,225

Shares issued in reinvestment of distributions		254,783			6,300,776			95,123			2,574,964

Shares redeemed		(128,731	)		(3,591,134	)		(270,440	)		(7,535,861)



Net increase (decrease)		246,681		$	6,024,024			31,562		$	766,328

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



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, 2019, the annualized gross effective investment management fee rate was 0.624% of the Fund’s average daily net assets.

b. Administrative Fees

c. Distribution Fees

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



	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, 2.05%		$8,504,577		$135,744,610		$(122,200,437	)		$ —		$ —		$22,048,750		22,048,750		$486,228

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments			$854,656,620


Unrealized appreciation			$820,900,111

Unrealized depreciation			(63,850,552)


Net unrealized appreciation (depreciation)			$757,049,559

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, 2019, aggregated $81,707,375 and $45,789,777, respectively.

7. Credit Facility

Semiannual Report

FDR-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Rising Dividends VIP Fund (continued)

7. Credit Facility (continued)

8. Redemption In-Kind

During the year ended December 31, 2018, the Fund realized $70,642,118 of net gains resulting from a redemption 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.

9. Fair Value Measurements

•

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.

10. 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.

FRD-20

Semiannual Report

Franklin Small Cap Value VIP Fund

This semiannual report for Franklin Small Cap Value VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +11.99% total return* for the six-month period ended June 30, 2019.

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. Value securities may not increase in price as anticipated, or may decline further in value. 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. 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 +13.47% 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

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first

quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

U.S. equity markets overall rose during the period, benefiting from upbeat economic data and U.S. corporate earnings. However, markets reflected concerns about tighter regulation of technology companies, U.S. political uncertainties, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. These concerns were partially alleviated in 2019’s first four months by easing trade tensions and optimism about a potential U.S.-China trade deal. Furthermore, markets benefited from the Fed’s indications of a patient approach to its monetary policy decisions. The broad U.S. stock market, as measured by the Standard & Poor’s^® 500 Index (S&P 500^®), rallied in 2019’s first four months, reaching a new all-time high in April 2019. After declining in May due to escalating trade tensions, stocks reached another all-time high in June amid investor optimism about potential interest-rate cuts. Overall, the S&P 500 posted a +18.54% total return for the six-month 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.

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

During the six months under review, holdings that positively contributed to Fund performance included Dairy Crest Group (sold at period-end), Versum Materials (sold at period-end) and Carpenter Technologies.

Dairy Crest, a U.K.-based dairy products company, benefited in mid-February 2019 from the company agreeing to a takeover offer from Saputo (not a Fund holding) for a 30% premium to the share price before the announcement of the agreement and any unusual preannouncement price changes based on speculation. As a result of the takeover offer and subsequent increase in the stock price, we exited the position at period-end.

Versum Materials is a specialty materials and equipment company that primarily supplies the semiconductor end market. The company agreed to be acquired by Merck KGaA (not a Fund holding) for $53 per share at period-end. The revised offer was higher than Merck KGaA’s initial offer of $48 and substantially higher than Entegris’s (not a Fund holding) competing offer of approximately $41. Merck’s offer represented a 68% premium to Versum’s share price on the day prior to the announcement of the Entegris merger. We exited the position prior to period-end.

Shares of Carpenter Technologies delivered strong performance during the six-month reporting period driven by favorable quarterly results. Specifically, the company’s revenue and profits continue to expand due to demand for their commercial aerospace specialty metals. Revenue derived from the aerospace end-market has increased for 10 consecutive quarters and profit margins continued to

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

improve as a result of improving product mix and operational improvement. Although recent delays in Boeing’s 737 Max launch represents a risk, in our opinion, we continue to like the prospects for Carpenter due to the large commercial aerospace backlogs at Boeing and Airbus and their respective jet engine suppliers.

Semiannual Report

FSV-3

FRANKLIN SMALL CAP VALUE VIP FUND

Top 10 Holdings

6/30/19


Company *Sector/Industry*	% of Total Net Assets
The Hanover Insurance Group Inc. Insurance		3.7%
Old Republic International Corp. Insurance		3.1%
Gibraltar Industries Inc. Building Products		2.9%
Mueller Water Products Inc. Machinery		2.8%
Maple Leaf Foods Inc. Food, Beverage & Tobacco		2.8%
Eagle Materials Inc. Materials		2.7%
First Horizon National Corp. Banks		2.6%
Horace Mann Educators Corp. Insurance		2.6%
McGrath RentCorp Commercial & Professional Services		2.5%
Regal Beloit Corp. Electrical Equipment		2.5%

Detractors from Fund performance included OceanaGold, Caleres and Synaptics.

Despite a 10% increase in the price of gold during the period, shares of OceanaGold meaningfully declined due to concerns over the company’s ability to renew its production permit for the Didipio mine located in the Philippines as environmental groups placed pressure on the government. The company maintains that it exceeds all environmental requirements and it continues to operate the mine while its permit is under review. Although we think most of the risk is already factored into the share price, we slightly reduced our position.

Caleres, a designer and retailer of women’s and family footwear, reported quarterly results that fell short of investor expectations due to price discounting in its Famous Footwear and Allen Edmonds businesses, as well as higher operating expenses related to e-commerce sales. Management expects these challenges to continue in the near term as it prepares for the important back-to-school season, and is relying on the strength of its women’s shoe brand portfolio to help it achieve its projected modest growth for the year.

Synaptics, a developer and seller of intuitive human interface solutions for electronic devices, fell during the period

primarily due to the weakness in the smartphone market and news of potential market share loss for some of its products. In addition to the weakness in operations, the company also experienced top-level executive turnover as both the chief executive officer and chief financial officer (with the latter leaving to join another public company) departed from the company. We retained a position, albeit substantially reduced, as historically the company has been the leading innovator in its markets and therefore we believe the intrinsic value to be higher than current market value.

During the reporting period, we added some new positions with the largest purchases including Eagle Materials, a producer of building materials; Cinemark, a movie theater chain; and Wyndham Hotels and Resorts, a hotel and resort chain. We added to existing positions in Kennametal, a supplier of tooling and industrial materials; Universal Forest Products, a manufacturer and distributer of wood and wood-alternative products; and Coherent, a laser manufacturer. Conversely, we exited some positions including AAR and the aforementioned Versum Materials and Dairy Crest Group. We also reduced our positions in Brinker International, Heartland Express and the aforementioned Synaptics.

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



FSV-4		Semiannual Report

FRANKLIN SMALL CAP VALUE VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1, 2

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^1,2

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,119.90

$4.84

$1,020.23

$4.61

0.92%

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.14			$20.43			$19.93			$18.12			$22.81			$24.54


Income from investment operations^a:

Net investment income^b		0.12			0.21			0.21	^c		0.15			0.21			0.19

Net realized and unrealized gains (losses)		1.66			(2.29	)		1.82			4.79			(1.53	)		0.06


Total from investment operations		1.78			(2.08	)		2.03			4.94			(1.32	)		0.25


Less distributions from:

Net investment income		(0.22	)		(0.23	)		(0.15	)		(0.21	)		(0.20	)		(0.20)

Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)		(1.78)


Total distributions		(3.00	)		(3.21	)		(1.53	)		(3.13	)		(3.37	)		(1.98)


Net asset value, end of period		$13.92			$15.14			$20.43			$19.93			$18.12			$22.81


Total return^d		12.14%			(12.69)%			10.92%			30.54%			(7.18)%			0.88%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		0.68%			0.66%			0.66%			0.66%			0.65%			0.63%

Expenses net of waiver and payments by affiliates^f		0.67%			0.65%			0.65%			0.64%			0.64%			0.63%^g

Net investment income		1.51%			1.13%			1.06%	^c		0.84%			1.04%			0.82%

Supplemental data

Net assets, end of period (000’s)		$43,554			$40,644			$51,245			$47,831			$45,897			$57,843

Portfolio turnover rate		29.33%			47.82%			33.36%			34.60%			27.05%			19.45%

^bBased on average daily shares outstanding.

^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%.

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2
Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$14.60			$19.80			$19.36			$17.68			$22.32			$24.07


Income from investment operations^a:

Net investment income^b		0.10			0.16			0.15	^c		0.10			0.16			0.13

Net realized and unrealized gains (losses)		1.59			(2.20	)		1.77			4.66			(1.49	)		0.05


Total from investment operations		1.69			(2.04	)		1.92			4.76			(1.33	)		0.18


Less distributions from:

Net investment income		(0.17	)		(0.18	)		(0.10	)		(0.16	)		(0.14	)		(0.15)

Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)		(1.78)


Total distributions		(2.95	)		(3.16	)		(1.48	)		(3.08	)		(3.31	)		(1.93)


Net asset value, end of period		$13.34			$14.60			$19.80			$19.36			$17.68			$22.32


Total return^d		11.99%			(12.88)%			10.65%			30.19%			(7.39)%			0.57%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		0.93%			0.91%			0.91%			0.91%			0.90%			0.88%

Expenses net of waiver and payments by affiliates^f		0.92%			0.90%			0.90%			0.89%			0.89%			0.88%^g

Net investment income		1.26%			0.88%			0.81%	^c		0.59%			0.79%			0.57%

Supplemental data

Net assets, end of period (000’s)		$1,047,855			$978,675			$1,302,055			$1,366,807			$1,172,173			$1,445,325

Portfolio turnover rate		29.33%			47.82%			33.36%			34.60%			27.05%			19.45%

^bBased on average daily shares outstanding.

^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%.

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$14.96			$20.22			$19.74			$17.96			$22.63			$24.37


Income from investment operations^a:

Net investment income^b		0.09			0.15			0.14	^c		0.09			0.14			0.11

Net realized and unrealized gains (losses)		1.65			(2.28	)		1.81			4.75			(1.52	)		0.05


Total from investment operations		1.74			(2.13	)		1.95			4.84			(1.38	)		0.16


Less distributions from:

Net investment income		(0.16	)		(0.15	)		(0.09	)		(0.14	)		(0.12	)		(0.12)

Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)		(1.78)


Total distributions		(2.94	)		(3.13	)		(1.47	)		(3.06	)		(3.29	)		(1.90)


Net asset value, end of period		$13.76			$14.96			$20.22			$19.74			$17.96			$22.63


Total return^d		11.99%			(13.01)%			10.56%			30.12%			(7.52)%			0.48%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		1.03%			1.01%			1.01%			1.01%			1.00%			0.98%

Expenses net of waiver and payments by affiliates^f		1.02%			1.00%			1.00%			0.99%			0.99%			0.98%^g

Net investment income		1.16%			0.78%			0.71%	^c		0.49%			0.69%			0.47%

Supplemental data

Net assets, end of period (000’s)		$26,586			$24,592			$32,053			$32,751			$26,128			$30,452

Portfolio turnover rate		29.33%			47.82%			33.36%			34.60%			27.05%			19.45%

^bBased on average daily shares outstanding.

^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%.

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, 2019 (unaudited)

Franklin Small Cap Value VIP Fund


	Shares	Value

Common Stocks 97.5%

Automobiles & Components 2.3%
Gentex Corp.	36,000	$	885,960
LCI Industries	280,066		25,205,940


			26,091,900


Banks 15.2%
Atlantic Union Bankshares Corp.	183,648		6,488,284
Bryn Mawr Bank Corp.	455,083		16,983,698
Chemical Financial Corp.	350,142		14,394,338
Columbia Banking System Inc.	743,100		26,885,358
First Horizon National Corp.	1,971,637		29,436,540
First of Long Island Corp.	614,355		12,336,248
German American Bancorp Inc.	163,523		4,925,313
Glacier Bancorp Inc.	209,600		8,499,280
Lakeland Financial Corp.	516,362		24,181,233
Peoples Bancorp Inc.	289,712		9,346,109
TrustCo Bank Corp. NY	782,700		6,198,984
Washington Trust Bancorp Inc.	200,891		10,482,492


			170,157,877


Building Products 5.4%
^aGibraltar Industries Inc.	806,679		32,557,564
Insteel Industries Inc.	282,352		5,878,569
Simpson Manufacturing Co. Inc.	5,719		380,085
Universal Forest Products Inc.	563,240		21,436,914


			60,253,132


Commercial & Professional Services 3.5%
^aHuron Consulting Group Inc.	205,815		10,368,960
McGrath RentCorp	458,768		28,512,431


			38,881,391


Consumer Durables & Apparel 2.8%
Carter’s Inc.	165,993		16,190,957
^aCrocs Inc.	156,700		3,094,825
Toll Brothers Inc.	263,605		9,653,215
^aUnifi Inc.	121,800		2,213,106


			31,152,103


Consumer Services 3.0%
Brinker International Inc.	245,240		9,650,194
Jack in the Box Inc.	68,800		5,599,632
Wyndham Hotels and Resorts Inc.	329,700		18,377,478


			33,627,304


Electrical Equipment 2.9%
Encore Wire Corp.	75,262		4,408,848
Regal Beloit Corp.	343,900		28,100,069


			32,508,917

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)



	Shares		Value

Common Stocks (continued)

Energy 2.3%
Hunting PLC (United Kingdom)		3,524,416	$	22,849,122
^aNatural Gas Services Group Inc.		173,987		2,870,786


				25,719,908


Food, Beverage & Tobacco 3.2%
^aLandec Corp.		443,589		4,156,429
Maple Leaf Foods Inc. (Canada)		1,414,971		30,984,057


				35,140,486


Insurance 9.4%
The Hanover Insurance Group Inc.		320,400		41,107,320
Horace Mann Educators Corp.		728,286		29,342,643
Old Republic International Corp.		1,526,100		34,154,118


				104,604,081


Machinery 10.4%
Astec Industries Inc.		227,127		7,395,255
Federal Signal Corp.		395,251		10,572,964
The Greenbrier Cos. Inc.		246,440		7,491,776
Kennametal Inc.		545,474		20,177,083
Mueller Industries Inc.		266,662		7,805,197
Mueller Water Products Inc., A		3,163,400		31,064,588
Oshkosh Corp.		221,200		18,467,988
^aRexnord Corp.		390,700		11,806,954
^aSPX Flow Inc.		45,980		1,924,723


				116,706,528


Materials 11.6%
Carpenter Technology Corp.		409,471		19,646,419
Eagle Materials Inc.		327,200		30,331,440
Minerals Technologies Inc.		421,752		22,567,949
OceanaGold Corp. (Australia)		9,070,561		24,792,982
PH Glatfelter Co.		887,200		14,975,936
Reliance Steel & Aluminum Co.		188,600		17,845,332


				130,160,058


Media & Entertainment 1.8%
Cinemark Holdings Inc.		558,900		20,176,290


Pharmaceuticals, Biotechnology & Life Sciences 1.3%
^aCambrex Corp.		310,547		14,536,705


Real Estate 7.9%
Brandywine Realty Trust		1,064,700		15,246,504
Highwoods Properties Inc.		478,400		19,757,920
LTC Properties Inc.		293,155		13,385,457
Retail Properties of America Inc., A		1,898,611		22,327,665
Sunstone Hotel Investors Inc.		1,308,797		17,943,607


				88,661,153

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)



	Shares		Value

Common Stocks (continued)
Retailing 0.7%
Caleres Inc.		384,841	$	7,666,033


Semiconductors & Semiconductor Equipment 3.3%
^aAdvanced Energy Industries Inc.		398,076		22,399,736
MKS Instruments Inc.		132,894		10,351,114
^aSynaptics Inc.		130,481		3,802,216


				36,553,066


Software & Services 0.2%
LogMeIn Inc.		36,172		2,665,153


Technology Hardware & Equipment 6.1%
^aCoherent Inc.		197,808		26,975,077
^aFARO Technologies Inc.		68,500		3,601,730
^aFinisar Corp.		502,300		11,487,601
^aPlexus Corp.		444,800		25,962,976


				68,027,384


Transportation 0.1%
Heartland Express Inc.		85,838		1,551,093


Utilities 4.1%
Black Hills Corp.		253,900		19,847,363
IDACORP Inc.		61,189		6,145,211
Spire Inc.		229,755		19,281,040


				45,273,614


Total Common Stocks (Cost $988,461,325)				1,090,114,176


	Principal Amount

Corporate Bonds 0.5%
Energy 0.3%
Unit Corp., senior sub. note, 6.625%, 5/15/21	$	2,836,000		2,573,670


Machinery 0.2%
Mueller Industries Inc., sub. bond, 6.00%, 3/01/27		2,378,000		2,395,835


Total Corporate Bonds (Cost $5,063,286)				4,969,505


Total Investments before Short Term Investments (Cost $993,524,611)				1,095,083,681

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)



	Shares		Value

Short Term Investments (Cost $13,865,812) 1.2%

Money Market Funds 1.2%
^b,cInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		13,865,812	$	13,865,812


Total Investments (Cost $1,007,390,423) 99.2%				1,108,949,493
Other Assets, less Liabilities 0.8%				9,044,775


Net Assets 100.0%			$	1,117,994,268

^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.

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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, 2019 (unaudited)



	Franklin Small Cap Value VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$ 993,524,611
Cost - Non-controlled affiliates (Note 3e)		13,865,812


Value - Unaffiliated issuers		$1,095,083,681
Value - Non-controlled affiliates (Note 3e)		13,865,812
Receivables:
Investment securities sold		11,232,101
Capital shares sold		333,719
Dividends and interest		1,186,308
Other assets		803


Total assets		1,121,702,424


Liabilities:
Payables:
Investment securities purchased		1,543,476
Capital shares redeemed		949,020
Management fees		563,468
Distribution fees		451,074
Trustees’ fees and expenses		1,460
Accrued expenses and other liabilities		199,658


Total liabilities		3,708,156


Net assets, at value		$1,117,994,268

Net assets consist of:
Paid-in capital		$ 977,634,649
Total distributable earnings (loss)		140,359,619


Net assets, at value		$1,117,994,268


Class 1:
Net assets, at value		$ 43,553,629


Shares outstanding		3,128,083

Net asset value and maximum offering price per share		$13.92


Class 2:
Net assets, at value		$1,047,854,657

Shares outstanding		78,535,478

Net asset value and maximum offering price per share		$13.34

Class 4:
Net assets, at value		$ 26,585,982

Shares outstanding		1,932,263

Net asset value and maximum offering price per share		$13.76

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin Small Cap Value VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 11,570,898
Non-controlled affiliates (Note 3e)		314,268
Interest:
Unaffiliated issuers		339,080


Total investment income		12,224,246


Expenses:
Management fees (Note 3a)		3,598,108
Distribution fees: (Note 3c)
Class 2		1,316,065
Class 4		46,755
Custodian fees (Note 4)		7,717
Reports to shareholders		135,407
Professional fees		27,049
Trustees’ fees and expenses		4,931
Other		16,553


Total expenses		5,152,585
Expense reductions (Note 4)		(208	)
Expenses waived/paid by affiliates (Note 3e)		(53,687	)


Net expenses		5,098,690


Net investment income		7,125,556

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		31,878,173
Realized gain distributions from REITs		757,889
Foreign currency transactions		(118,872	)


Net realized gain (loss)		32,517,190

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		85,190,270
Translation of other assets and liabilities denominated in foreign currencies		1,720


Net change in unrealized appreciation (depreciation)		85,191,990


Net realized and unrealized gain (loss)		117,709,180


Net increase (decrease) in net assets resulting from operations		$124,834,736


*Foreign taxes withheld on dividends		$ 57,129

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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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 7,125,556			$ 11,431,886
Net realized gain (loss)		32,517,190			192,518,890
Net change in unrealized appreciation (depreciation)		85,191,990			(356,985,491	)


Net increase (decrease) in net assets resulting from operations		124,834,736			(153,034,715	)


Distributions to shareholders:
Class 1		(7,896,338	)		(7,555,429	)
Class 2		(189,976,242	)		(194,090,505	)
Class 4		(4,683,798	)		(4,574,106	)


Total distributions to shareholders		(202,556,378	)		(206,220,040	)


Capital share transactions: (Note 2)
Class 1		5,852,753			2,769,926
Class 2		142,231,285			14,343,221
Class 4		3,721,349			698,981


Total capital share transactions		151,805,387			17,812,128


Net increase (decrease) in net assets		74,083,745			(341,442,627	)
Net assets:
Beginning of period		1,043,910,523			1,385,353,150


End of period		$1,117,994,268			$1,043,910,523

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

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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

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.

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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, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

b. Foreign Currency Translation

c. Income and Deferred Taxes

d. Security Transactions, Investment Income, Expenses and Distributions

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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)

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 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.

e. Accounting Estimates

f. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		126,514			$ 2,078,679			140,744			$ 2,624,857
Shares issued in reinvestment of distributions		578,063			7,896,338			419,746			7,555,429
Shares redeemed		(261,103	)		(4,122,264	)		(384,144	)		(7,410,360)


Net increase (decrease)		443,474			$ 5,852,753			176,346			$ 2,769,926


Class 2 Shares:
Shares sold		2,436,409			$ 39,190,494			3,241,202			$ 57,622,650
Shares issued in reinvestment of distributions		14,513,082			189,976,242			11,167,463			194,090,505
Shares redeemed		(5,461,873	)		(86,935,451	)		(13,111,818	)		(237,369,934)


Net increase (decrease)		11,487,618			$142,231,285			1,296,847			$ 14,343,221

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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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 4 Shares:
Shares sold		102,833			$ 1,623,500			142,312			$ 2,499,385
Shares issued in reinvestment of distributions		346,948			4,683,798			256,684			4,574,106
Shares redeemed		(161,332	)		(2,585,949	)		(340,602	)		(6,374,510)


Net increase (decrease)		288,449			$ 3,721,349			58,394			$ 698,981

3. Transactions with Affiliates



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, 2019, the annualized gross effective investment management fee rate was 0.642% of the Fund’s average daily net assets.

b. Administrative Fees

c. Distribution Fees

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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



	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, 2.05%		$45,444,842		$140,817,135		$(172,396,165	)		$ —		$ —		$13,865,812		13,865,812		$314,268

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	1,008,223,398


Unrealized appreciation	$	140,598,525
Unrealized depreciation		(39,872,430)


Net unrealized appreciation (depreciation)	$	100,726,095

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 $317,584,251 and $337,659,609, respectively.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small Cap Value VIP Fund (continued)

7. Credit Facility

8. Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources

•

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, 2019, 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	$	1,090,114,176	$	—	$	—	$	1,090,114,176
Corporate Bonds		—		4,969,505		—		4,969,505
Short Term Investments		13,865,812		—		—		13,865,812

Total Investments in Securities	$	1,103,979,988	$	4,969,505	$	—	$	1,108,949,493

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

9. 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.

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Franklin Small-Mid Cap Growth VIP Fund

This semiannual report for Franklin Small-Mid Cap Growth VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +26.65% total return* for the six-month period ended June 30, 2019.

Semiannual Report

FSC-1

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. 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.

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 +26.08% total return, and its broad benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®) posted a +18.54% total return for the same period.²

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

Economic and Market Overview

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

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.

3. 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).

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

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.

Manager’s Discussion

During the period under review, all sectors represented in the Fund’s portfolio posted positive returns and contributed to

Top 10 Holdings

6/30/19



Company *Sector/Industry*	% of Total Net Assets
SBA Communications Corp. Real Estate		1.9%
Verisk Analytics Inc. Industrials		1.7%
CoStar Group Inc. Industrials		1.7%
Microchip Technology Inc. Information Technology		1.7%
Mettler-Toledo International Inc. Health Care		1.6%
IDEX Corp. Industrials		1.6%
MSCI Inc. Financials		1.5%
Fortive Corp. Industrials		1.5%
MarketAxess Holdings Inc. Financials		1.4%
Amphenol Corp. Information Technology		1.4%

absolute performance. Relative to the Russell Midcap^® Growth Index, key contributors to the Fund’s performance included stock selection in the industrials, information technology (IT) and health care sectors.

In the industrials sector, commercial real estate information, analytics and marketing services company CoStar Group performed well as all business segments exhibited strong growth. We expect CoStar to continue to achieve robust growth with the help of its Apartments.com and LoopNet.com businesses, which concentrate on apartment rental listings and commercial property marketplaces, respectively.

In the IT sector, our investments in cloud-based internet security platform firm Zscaler (not part of the index), Canada-based e-commerce platform operator Shopify (not part of the index) and Israel-based web development and management solutions provider Wix.com (not part of the index) contributed to relative results. Zscaler generated strong revenue and billings growth for its fiscal-year 2019 second and third quarters. We believe Zscaler’s user-centric approach to cybersecurity provides lower costs, better user experience and more effective security than traditional network-centric solutions.

Semiannual Report

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

In the health care sector, cancer specialist Array BioPharma’s (not part of the index; not held at period-end) share price surged higher after the firm received a buyout offer from a pharmaceuticals competitor.

Other notable contributors to relative results included our positions in index and portfolio risk and performance analytics provider MSCI and electronic trading platform MarketAxess Holdings.

In contrast, stock selection in the consumer discretionary sector detracted from the Fund’s relative performance. Within the sector, apparel and home products retailer Burlington Stores posted positive returns that lagged the benchmark index, and our overweighted position hurt relative results. Fast-casual restaurant operator Chipotle Mexican Grill performed well, and our underweighted position hindered relative results.

Other key individual detractors included our positions in education technology company 2U, medical devices manufacturer ABIOMED, frozen potato products company Lamb Weston Holdings (not part of the index), biotechnology firm Heron Therapeutics (not part of the index) and software-as-a-service provider New Relic (not part of the index). 2U’s share price declined after the company reduced near-term guidance for revenue growth. ABIOMED’s shares declined after an investigation by the U.S. Food and Drug Administration suggested higher mortality rates of patients using the firm’s Impella RP heart pump. ABIOMED is beginning a launch of Impella CP, its most widely used pump model, in Japan, which could support growth. Lamb Weston’s shares declined due to investor concerns about modestly higher capacity coming online. However, the company continued to see strong growth, driven by robust sales trends and strong pricing power.

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

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Semiannual Report

FRANKLIN SMALL-MID CAP GROWTH VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending

Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,266.50

$6.07

$1,019.44

$5.41

1.08%

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Small-Mid Cap Growth VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.04			$19.71			$17.77			$19.09			$24.95			$28.38


Income from investment operations^a:

Net investment income (loss)^b		(0.02	)		(0.05	)		(0.04	)		(0.03	)		—	^c,d		(0.07)

Net realized and unrealized gains (losses)		4.55			(0.70	)		3.74			0.77			(0.03	)		2.04


Total from investment operations		4.53			(0.75	)		3.70			0.74			(0.03	)		1.97


Less distributions from:

Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)		(5.40)


Net asset value, end of period		$19.00			$17.04			$19.71			$17.77			$19.09			$24.95


Total return^e		26.86%			(5.15)%			21.75%			4.40%			(2.44)%			7.78%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		0.84%			0.86%			0.85%			0.84%			0.81%			0.80%

Expenses net of waiver and payments by affiliates		0.83%	^g		0.85%	^g		0.84%	^g		0.82%	^g		0.81%	^h		0.80%	^h

Net investment income (loss)		(0.17)%			(0.24)%			(0.24)%			(0.16)%			0.01%	^d		(0.29)%

Supplemental data

Net assets, end of period (000’s)		$42,625			$33,518			$36,864			$31,756			$87,866			$99,803

Portfolio turnover rate		31.38%			44.78%			40.49%			32.23%	ⁱ		37.85%			48.73%

^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.

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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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.22			$17.83			$16.27			$17.69			$23.56			$27.16


Income from investment operations^a:

Net investment income (loss)^b		(0.04	)		(0.09	)		(0.08	)		(0.07	)		(0.05	)^c		(0.13)

Net realized and unrealized gains (losses)		4.06			(0.60	)		3.40			0.71			0.01			1.93


Total from investment operations		4.02			(0.69	)		3.32			0.64			(0.04	)		1.80


Less distributions from:

Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)		(5.40)


Net asset value, end of period		$16.67			$15.22			$17.83			$16.27			$17.69			$23.56


Total return^d		26.65%			(5.37)%			21.40%			4.17%			(2.66)%			7.47%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		1.09%			1.11%			1.10%			1.09%			1.06%			1.05%

Expenses net of waiver and payments by affiliates		1.08%	^f		1.10%	^f		1.09%	^f		1.07%	^f		1.06%	^g		1.05%	^g

Net investment income (loss)		(0.42)%			(0.49)%			(0.49)%			(0.41)%			(0.24)%	^c		(0.54)%

Supplemental data

Net assets, end of period (000’s)		$386,369			$310,300			$390,094			$392,777			$478,649			$582,772

Portfolio turnover rate		31.38%			44.78%			40.49%			32.23%	^h		37.85%			48.73%

^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)%.

^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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small-Mid Cap Growth VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$15.81			$18.47			$16.81			$18.23			$24.14			$27.72


Income from investment operations^a:

Net investment income (loss)^b		(0.05	)		(0.11	)		(0.10	)		(0.09	)		(0.07	)^c		(0.16)

Net realized and unrealized gains (losses)		4.21			(0.63	)		3.52			0.73			(0.01	)		1.98


Total from investment operations		4.16			(0.74	)		3.42			0.64			(0.08	)		1.82


Less distributions from:

Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)		(5.40)


Net asset value, end of period		$17.40			$15.81			$18.47			$16.81			$18.23			$24.14


Total return^d		26.61%			(5.46)%			21.30%			4.04%			(2.77)%			7.39%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates		1.19%			1.21%			1.20%			1.19%			1.16%			1.15%

Expenses net of waiver and payments by affiliates		1.18%	^f		1.20%	^f		1.19%	^f		1.17%	^f		1.16%	^g		1.15%	^g

Net investment income (loss)		(0.52)%			(0.59)%			(0.59)%			(0.51)%			(0.34)%	^c		(0.64)%

Supplemental data

Net assets, end of period (000’s)		$17,322			$13,759			$15,829			$13,825			$15,105			$16,384

Portfolio turnover rate		31.38%			44.78%			40.49%			32.23%	^h		37.85%			48.73%

^bBased on average daily shares outstanding.

^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.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)


Franklin Small-Mid Cap Growth VIP Fund

	Shares		Value

Common Stocks 96.3%

Communication Services 2.1%
^a IAC/InterActiveCorp		20,500	$	4,459,365
^a Pinterest Inc., A		85,500		2,327,310
^a Spotify Technology SA		17,000		2,485,740


				9,272,415


Consumer Discretionary 16.3%
Aptiv PLC		59,777		4,831,775
^a Burlington Stores Inc.		35,500		6,040,325
^a Chipotle Mexican Grill Inc.		2,200		1,612,336
^a Dollar Tree Inc.		28,411		3,051,057
Domino’s Pizza Inc.		18,800		5,231,664
^a,b,c DraftKings Inc.		733,541		1,930,710
Expedia Group Inc.		44,000		5,853,320
^a Five Below Inc.		19,000		2,280,380
^a Grand Canyon Education Inc.		47,057		5,506,610
^a Levi Strauss & Co., A		104,000		2,171,520
MGM Resorts International		126,000		3,599,820
^a NVR Inc.		1,282		4,320,661
^a O’Reilly Automotive Inc.		11,107		4,102,037
^a,d Revolve Group Inc.		10,200		351,900
Tractor Supply Co.		46,237		5,030,586
^a Ulta Beauty Inc.		10,700		3,711,723
^a Under Armour Inc., A		64,000		1,622,400
Vail Resorts Inc.		17,000		3,794,060
VF Corp.		51,500		4,498,525
Wingstop Inc.		30,500		2,889,875


				72,431,284


Consumer Staples 2.5%
Brown-Forman Corp., B		58,500		3,242,655
Church & Dwight Co. Inc.		34,000		2,484,040
Lamb Weston Holdings Inc.		47,000		2,977,920
McCormick & Co. Inc.		14,200		2,201,142


				10,905,757


Energy 1.1%
Concho Resources Inc.		23,000		2,373,140
Diamondback Energy Inc.		24,000		2,615,280


				4,988,420


Financials 7.5%
Ares Management Corp., A		80,000		2,093,600
CBOE Global Markets Inc.		42,000		4,352,460
Chemical Financial Corp.		50,000		2,055,500
MarketAxess Holdings Inc.		20,296		6,523,540
MSCI Inc.		28,000		6,686,120
SEI Investments Co.		62,000		3,478,200
^a SVB Financial Group		12,878		2,892,270
Tradeweb Markets Inc.		61,000		2,672,410

Semiannual Report

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)



	Shares		Value

Common Stocks (continued)

Financials (continued)
^a Western Alliance Bancorp		61,000	$	2,727,920


				33,482,020


Health Care 13.4%
^a ABIOMED Inc.		20,300		5,287,947
^a Align Technology Inc.		13,000		3,558,100
^a Argenx SE, ADR (Netherlands)		5,000		707,900
^a Avantor Inc.		95,000		1,813,550
^a BioMarin Pharmaceutical Inc.		24,308		2,081,980
^a DexCom Inc.		25,288		3,789,154
^a GW Pharmaceuticals PLC, ADR (United Kingdom)		14,000		2,413,460
^a HealthEquity Inc.		46,500		3,041,100
^a Heron Therapeutics Inc.		123,000		2,286,570
^a IDEXX Laboratories Inc.		22,000		6,057,260
^a Incyte Corp.		24,469		2,078,886
^a iRhythm Technologies Inc.		25,500		2,016,540
^a Masimo Corp.		4,500		669,690
^a Mettler-Toledo International Inc.		8,455		7,102,200
^a Neurocrine Biosciences Inc.		20,644		1,742,973
^a Penumbra Inc.		26,748		4,279,680
^a Precision BioSciences Inc.		37,000		490,250
^a PTC Therapeutics Inc.		31,500		1,417,500
^a Reata Pharmaceuticals Inc.		18,894		1,782,649
^a Revance Therapeutics Inc.		70,801		918,289
^a Sage Therapeutics Inc.		7,500		1,373,175
^a Sarepta Therapeutics Inc.		9,000		1,367,550
^a Veeva Systems Inc.		22,500		3,647,475


				59,923,878


Industrials 17.5%
BWX Technologies Inc.		86,000		4,480,600
^a CoStar Group Inc.		13,535		7,499,202
Fortive Corp.		81,000		6,603,120
IDEX Corp.		41,000		7,057,740
^a IHS Markit Ltd.		44,915		2,861,984
L3Harris Technologies Inc.		30,500		5,768,465
^a,d Lyft Inc., A		34,000		2,234,140
^a Mercury Systems Inc.		30,500		2,145,675
Old Dominion Freight Line Inc.		27,500		4,104,650
Republic Services Inc.		51,000		4,418,640
Rockwell Automation Inc.		34,000		5,570,220
Roper Technologies Inc.		12,243		4,484,121
^a Spirit Airlines Inc.		22,500		1,073,925
Stanley Black & Decker Inc.		25,296		3,658,055
TransUnion		44,000		3,234,440
^a Univar Inc.		137,800		3,037,112
^a Upwork Inc.		150,000		2,412,000

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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)

Industrials (continued)
Verisk Analytics Inc.		51,361	$	7,522,332


				78,166,421


Information Technology 32.3%
^a 2U Inc.		74,547		2,805,949
^a Advanced Micro Devices Inc.		82,000		2,490,340
^a Adyen NV (Netherlands)		3,500		2,700,133
^a Alteryx Inc.		9,500		1,036,640
Amphenol Corp., A		66,000		6,332,040
^a Arista Networks Inc.		13,700		3,556,794
^a Atlassian Corp. PLC		39,500		5,168,180
^a Black Knight Inc.		82,500		4,962,375
Cognex Corp.		32,996		1,583,148
^a Cree Inc.		19,500		1,095,510
^a Crowdstrike Holdings Inc., A		11,100		758,019
^a DocuSign Inc.		87,000		4,324,770
^a Elastic NV		40,500		3,023,730
^a EPAM Systems Inc.		24,000		4,154,400
Global Payments Inc.		36,000		5,764,680
^a GoDaddy Inc., A		88,617		6,216,483
^a Guidewire Software Inc.		41,000		4,156,580
KLA-Tencor Corp.		30,187		3,568,103
Lam Research Corp.		12,616		2,369,789
^a Lattice Semiconductor Corp.		78,195		1,140,865
Microchip Technology Inc.		86,127		7,467,211
Monolithic Power Systems		34,000		4,616,520
^a New Relic Inc.		37,500		3,244,125
^a Nutanix Inc., A		40,000		1,037,600
^a,d Pagerduty Inc.		31,100		1,463,255
^a Paylocity Holding Corp.		29,000		2,720,780
^a Pluralsight Inc., A		88,000		2,668,160
^a PTC Inc.		62,500		5,610,000
^a Q2 Holdings Inc.		48,196		3,680,247
^a Semtech Corp.		4,600		221,030
^a Shopify Inc., A (Canada)		5,300		1,590,795
^a Silicon Laboratories Inc.		37,500		3,877,500
^a,d Slack Technologies Inc.		23,980		899,250
^a Square Inc., A		82,500		5,983,725
^a Synopsys Inc.		36,500		4,697,185
^a Trimble Inc.		66,500		2,999,815
^a Twilio Inc., A		34,500		4,704,075
^a ViaSat Inc.		43,866		3,545,250
^a WEX Inc.		17,500		3,641,750
^a Wix.com Ltd. (Israel)		18,800		2,671,480
^a Workday Inc., A		19,843		4,079,324
Xilinx Inc.		28,500		3,360,720

Semiannual Report

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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 Zscaler Inc.		28,000	$	2,145,920


				144,134,245


Materials 1.7%
^a Ingevity Corp.		40,341		4,242,663
Martin Marietta Materials Inc.		15,000		3,451,650


				7,694,313


Real Estate 1.9%
^a SBA Communications Corp., A		38,057		8,556,736


Total Common Stocks (Cost $317,240,492)				429,555,489


Preferred Stocks (Cost $799,998) 0.2%
Financials 0.2%
^a,b,c Bill.com, pfd., H		96,296		902,942


Total Investments before Short Term Investments (Cost $318,040,490)				430,458,431


Short Term Investments 4.2%

Money Market Funds (Cost $15,958,950) 3.6%
^e,f Institutional Fiduciary Trust Money Market Portfolio, 2.05%		15,958,950		15,958,950


^g Investments from Cash Collateral Received for Loaned Securities 0.6%
Money Market Funds (Cost $2,916,125) 0.6%
^e,f Institutional Fiduciary Trust Money Market Portfolio, 2.05%		2,916,125		2,916,125


Total Investments (Cost $336,915,565) 100.7%				449,333,506

Other Assets, less Liabilities (0.7)%				(3,017,431	)


Net Assets 100.0%			$	446,316,075

^aNon-income producing.

^bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.

^cSee Note 7 regarding restricted securities.

^dA portion or all of the security is on loan at June 30, 2019. See Note 1(c).

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

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

^gSee Note 1(c) regarding securities on loan.

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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, 2019 (unaudited)



	Franklin Small-Mid Cap Growth VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$318,040,490
Cost - Non-controlled affiliates (Note 3e)		18,875,075

Value - Unaffiliated issuers⁺		$430,458,431
Value - Non-controlled affiliates (Note 3e)		18,875,075
Receivables:
Capital shares sold		494,872
Dividends and interest		154,740
Due from custodian		1,863,720
Other assets		278


Total assets		451,847,116

Liabilities:
Payables:
Capital shares redeemed		182,224
Management fees		280,628
Distribution fees		168,144
Trustees’ fees and expenses		274
Payable upon return of securities loaned		4,779,845
Accrued expenses and other liabilities		119,926


Total liabilities		5,531,041


Net assets, at value		$446,316,075

Net assets consist of:
Paid-in capital		$289,246,959
Total distributable earnings (loss)		157,069,116


Net assets, at value		$446,316,075

Class 1:
Net assets, at value		$ 42,625,314

Shares outstanding		2,243,327

Net asset value and maximum offering price per share		$19.00

Class 2:
Net assets, at value		$386,369,085

Shares outstanding		23,184,310

Net asset value and maximum offering price per share		$16.67

Class 4:
Net assets, at value		$ 17,321,676

Shares outstanding		995,474

Net asset value and maximum offering price per share		$17.40


⁺Includes securities loaned		$ 4,727,537

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin Small-Mid Cap Growth VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 1,205,566
Non-controlled affiliates (Note 3e)		141,303
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		18,364
Non-controlled affiliates (Note 3e)		16,954


Total investment income		1,382,187

Expenses:
Management fees (Note 3a)		1,673,806
Distribution fees: (Note 3c)
Class 2		454,581
Class 4		27,941
Custodian fees (Note 4)		1,684
Reports to shareholders		66,437
Professional fees		22,794
Trustees’ fees and expenses		1,515
Other		6,611

Total expenses		2,255,369
Expense reductions (Note 4)		(52	)
Expenses waived/paid by affiliates (Note 3e)		(26,516	)


Net expenses		2,228,801


Net investment income (loss)		(846,614	)

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		45,965,449
Foreign currency transactions		(740	)


Net realized gain (loss)		45,964,709

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		49,984,210


Net realized and unrealized gain (loss)		95,948,919


Net increase (decrease) in net assets resulting from operations		$95,102,305


*Foreign taxes withheld on dividends		$ 25

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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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income (loss)		$ (846,614	)		$ (2,030,124	)
Net realized gain (loss)		45,964,709			59,101,775
Net change in unrealized appreciation (depreciation)		49,984,210			(74,199,939	)


Net increase (decrease) in net assets resulting from operations		95,102,305			(17,128,288	)


Distributions to shareholders:
Class 1		(5,113,428	)		(3,540,738	)
Class 2		(51,808,967	)		(39,501,499	)
Class 4		(2,209,122	)		(1,517,449	)

Total distributions to shareholders		(59,131,517	)		(44,559,686	)


Capital share transactions: (Note 2)
Class 1		5,162,668			1,966,782
Class 2		45,439,605			(25,664,064	)
Class 4		2,165,936			175,962

Total capital share transactions		52,768,209			(23,521,320	)


Net increase (decrease) in net assets		88,738,997			(85,209,294	)
Net assets:
Beginning of period		357,577,078			442,786,372

End of period		$446,316,075			$357,577,078

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

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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, 2019, 44.5% 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

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

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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

c. Securities Lending

d. Income and Deferred Taxes

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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)

d. Income and Deferred Taxes (continued)

e. Security Transactions, Investment Income, Expenses and Distributions

f. Accounting Estimates

g. Guarantees and Indemnifications



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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 1 Shares:
Shares sold		167,375			$ 3,360,009			148,944			$ 2,929,602
Shares issued in reinvestment of distributions		273,885			5,113,428			179,278			3,540,738
Shares redeemed		(164,444	)		(3,310,769	)		(231,919	)		(4,503,558	)


Net increase (decrease)		276,816			$ 5,162,668			96,303			$ 1,966,782


Class 2 Shares:
Shares sold		1,402,075			$ 24,991,042			706,305			$ 12,308,866
Shares issued in reinvestment of distributions		3,162,941			51,808,967			2,236,778			39,501,499
Shares redeemed		(1,768,694	)		(31,360,404	)		(4,433,380	)		(77,474,429	)


Net increase (decrease)		2,796,322			$ 45,439,605			(1,490,297	)		$(25,664,064	)


Class 4 Shares:
Shares sold		82,090			$ 1,530,261			136,649			$ 2,474,956
Shares issued in reinvestment of distributions		129,188			2,209,122			82,695			1,517,449
Shares redeemed		(86,166	)		(1,573,447	)		(205,969	)		(3,816,443	)


Net increase (decrease)		125,112			$ 2,165,936			13,375			$ 175,962

3. Transactions with Affiliates



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 Small-Mid Cap Growth 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

0.800%		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

c. Distribution Fees

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 Small-Mid Cap Growth VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies



	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, 2.05%		$12,085,918		$59,649,353		$(55,776,321)			$ —		$ —		$15,958,950		15,958,950		$141,303
																	Income from securities loaned

Institutional Fiduciary Trust Money Market Portfolio, 2.05%		—		23,271,023		(20,354,898	)		—		—		2,916,125		2,916,125		16,954

Total Affiliated Securities		$12,085,918		$82,920,376		$(76,131,219)			$ —		$ —		$18,875,075				$158,257

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	337,358,579


Unrealized appreciation	$	118,994,886
Unrealized depreciation		(7,019,959)


Net unrealized appreciation (depreciation)	$	111,974,927

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 $127,243,150 and $139,600,415, respectively.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

6. Investment Transactions (continued)

At June 30, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $4,779,845 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. Restricted Securities

At June 30, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:



Shares		Issuer	Acquisition Date		Cost		Value

	96,296	Bill.com, pfd., H		12/21/18		$ 799,998		$ 902,942
	733,541	DraftKings Inc.		8/07/15		2,800,003		1,930,710


		Total Restricted Securities (Value is 0.6% of Net Assets)				$3,600,001		$2,833,652

8. Credit Facility

9. Fair Value Measurements

•

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.)

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin Small-Mid Cap Growth VIP Fund (continued)

•

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, 2019, 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
Consumer Discretionary		$ 70,500,574		$ —		$ 1,930,710		$ 72,431,284
Financials		33,482,020		—		902,942		34,384,962
All Other Equity Investments		323,642,185		—		—		323,642,185
Short Term Investments		18,875,075		—		—		18,875,075


Total Investments in Securities		$ 446,499,854		$ —		$ 2,833,652		$ 449,333,506

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

^bIncludes common and preferred stocks.

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

10. 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.

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Franklin Strategic Income VIP Fund

This semiannual report for Franklin Strategic Income VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +6.72% total return* for the six-month period ended June 30, 2019.

*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 4/30/20. Fund investment results reflect the fee waiver; without this reduction, the results would have been lower.

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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. 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 Index, posted a +6.11% 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 +6.96% return.²

Economic and Market Overview

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

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.

3. 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).

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FRANKLIN STRATEGIC INCOME VIP FUND

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.

What is the yield curve?

A yield curve is a line that plots the yield to maturity of bonds having equal credit quality against their maturity dates.

Manager’s Discussion

The Fund allocated assets across the broad fixed income markets with an emphasis on spread sectors, both corporate and securitized. Our largest allocation was in corporate credit (inclusive of high-yield and investment-grade corporate credit, senior secured floating-rate bank loans and collateralized loan obligations (CLOs)), with a majority of credit exposure in below investment-grade corporate securities. Over the period we pared exposure to high-yield and investment-grade corporate credit as well as senior secured floating-rate loans, while we increased our CLO exposure. The Fund added to non-agency residential mortgage-backed securities (RMBS) over the period. For our RMBS exposure we preferred to remain allocated to the seasoned credit risk transfer where fundamental and technical forces remained positive. Our foreign-currency exposure was held through a basket of developed-market shorts with major positions in the Australian dollar, Canadian dollar, Swedish Krona and South Korean won versus a basket of emerging-market longs with major positions in the Norwegian krone, Indonesian rupiah, Brazilian real, Colombian and Mexican peso.

The Fund’s U.S. dollar yield curve positioning was the most significant contributor to performance. Allocations across corporate credit provided sizable contributions to results over the period, including high yield and investment-grade corporate bonds, senior secured floating-rate bank loans and CLOs. Foreign currency exposure contributed overall to


Portfolio Composition*
Based on Consolidated Net Assets

	6/30/19

High-Yield Corporate Bonds		24.39%

Floating Rate Loans		16.92%

Residential Mortgage-Backed Securities		12.34%

Interest-Rate Derivatives		12.21%

International Government & Agency Bonds		11.13%

Investment-Grade Corporate Bonds		10.80%

Collateralized Loan Obligations		10.46%

Agency Mortgage-Backed Securities		9.58%

Treasury Inflation-Protected Securities		2.63%

U.S. Treasury Securities		2.61%

Municipal Bonds		2.46%

Commercial Mortgage-Backed Securities		1.81%

Asset-Backed Securities		1.69%

Other		0.33%

Covered Bonds		0.12%

Short-Term Investments & Other Net Assets		-1.54%

*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% and 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.

returns with performance gains mainly from our Mexican peso and Norwegian krone exposures, which more than offset negative returns from short Swedish krona and Canadian dollar positions. In contrast, the Fund’s exposure to fixed-rate agency MBS and non-dollar emerging market securities detracted from performance.

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 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.

What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

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FRANKLIN STRATEGIC INCOME VIP FUND

What is a credit derivative?

A credit derivative is a contract agreement between the Fund and a counterparty that is principally used by the Fund to gain or increase exposure to certain financial assets and/or to hedge against credit risk.

What is meant by “hedge”?

To hedge an investment is to take a position intended to offset potential losses/gains that may be incurred by a companion financial instrument.

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

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FRANKLIN STRATEGIC INCOME VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending
Account
Value 6/30/19

Fund-Level
Expenses

Paid During

Period
1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,067.20

$4.72

$1,020.23

$4.61

0.92%

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

Consolidated Financial Highlights

Franklin Strategic Income VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$10.65			$11.15			$11.01			$10.55			$11.90			$12.64


Income from investment operations^a:

Net investment income^b		0.24			0.47			0.45			0.48			0.53			0.54

Net realized and unrealized gains (losses)		0.49			(0.65	)		0.04			0.37			(0.91	)		(0.25)


Total from investment operations		0.73			(0.18	)		0.49			0.85			(0.38	)		0.29


Less distributions from:

Net investment income and net foreign currency gains		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.77	)		(0.78)

Net realized gains		—			—			—			—			(0.20	)		(0.25)


Total distributions		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.97	)		(1.03)


Net asset value, end of period		$10.78			$10.65			$11.15			$11.01			$10.55			$11.90


Total return^c		6.92%			(1.65)%			4.46%			8.25%			(3.62)%			2.12%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.70%			0.67%			0.68%			0.67%			0.63%			0.63%

Expenses net of waiver and payments by affiliates^e		0.67%			0.63%			0.63%			0.60%			0.62%			0.62%

Net investment income		4.33%			4.28%			4.00%			4.42%			4.71%			4.34%

Supplemental data

Net assets, end of period (000’s)		$302,061			$302,610			$361,465			$396,170			$441,658			$574,850

Portfolio turnover rate		66.30%^f			107.90%^g			108.73%			128.51%			85.85%			55.64%

Portfolio turnover rate excluding mortgage dollar rolls^h		37.89%^f			40.38%^g			48.11%			77.93%			51.47%			48.86%

^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.

^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. See Note 6.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

^hSee Note 1(h) regarding mortgage dollar rolls.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin Strategic Income VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$10.28			$10.76			$10.64			$10.21			$11.55			$12.30


Income from investment operations^a:

Net investment income^b		0.22			0.42			0.40			0.43			0.49			0.49

Net realized and unrealized gains (losses)		0.47			(0.61	)		0.04			0.36			(0.89	)		(0.24)


Total from investment operations		0.69			(0.19	)		0.44			0.79			(0.40	)		0.25


Less distributions from:

Net investment income and net foreign currency gains		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.74	)		(0.75)

Net realized gains		—			—			—			—			(0.20	)		(0.25)


Total distributions		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.94	)		(1.00)


Net asset value, end of period		$10.42			$10.28			$10.76			$10.64			$10.21			$11.55


Total return^c		6.72%			(1.77)%			4.17%			7.94%			(3.87)%			1.86%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		0.95%			0.92%			0.93%			0.92%			0.88%			0.88%

Expenses net of waiver and payments by affiliates^e		0.92%			0.88%			0.88%			0.85%			0.87%			0.87%

Net investment income		4.08%			4.03%			3.75%			4.17%			4.46%			4.09%

Supplemental data

Net assets, end of period (000’s)		$92,191			$89,264			$214,271			$203,418			$202,192			$206,571

Portfolio turnover rate		66.30%^f			107.90%^g			108.73%			128.51%			85.85%			55.64%

Portfolio turnover rate excluding mortgage dollar rolls^h		37.89%^f			40.38%^g			48.11%			77.93%			51.47%			48.86%

^bBased on average daily shares outstanding.

^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. See Note 6.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

^hSee Note 1(h) 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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$10.56			$11.04			$10.90			$10.44			$11.78			$12.51


Income from investment operations^a:

Net investment income^b		0.22			0.43			0.40			0.43			0.49			0.49

Net realized and unrealized gains (losses)		0.49			(0.64	)		0.04			0.38			(0.91	)		(0.25)


Total from investment operations		0.71			(0.21	)		0.44			0.81			(0.42	)		0.24


Less distributions from:

Net investment income and net foreign currency gains		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.72	)		(0.72)

Net realized gains		—			—			—			—			(0.20	)		(0.25)


Total distributions		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.92	)		(0.97)


Net asset value, end of period		$10.71			$10.56			$11.04			$10.90			$10.44			$11.78


Total return^c		6.74%			(1.88)%			4.08%			7.86%			(3.98)%			1.75%

Ratios to average net assets^d

Expenses before waiver and payments by affiliates		1.05%			1.02%			1.03%			1.02%			0.98%			0.98%

Expenses net of waiver and payments by affiliates^e		1.02%			0.98%			0.98%			0.95%			0.97%			0.97%

Net investment income		3.98%			3.93%			3.65%			4.07%			4.36%			3.99%

Supplemental data

Net assets, end of period (000’s)		$59,274			$60,763			$74,013			$80,175			$92,965			$113,986

Portfolio turnover rate		66.30%^f			107.90%^g			108.73%			128.51%			85.85%			55.64%

Portfolio turnover rate excluding mortgage dollar rolls^h		37.89%^f			40.38%^g			48.11%			77.93%			51.47%			48.86%

^bBased on average daily shares outstanding.

^dRatios are annualized for periods less than one year.

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

^fExcludes the value of portfolio activitiy as a result of in-kind transactions. See Note 6.

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

^hSee Note 1(h) 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, 2019 (unaudited)

Franklin Strategic Income VIP Fund



	Country		Shares/ Warrants			Value
Common Stocks and Other Equity Interests 0.3%
Commercial & Professional Services 0.0%^†
^aRemington Outdoor Co. Inc.		United States		74,576		$	111,864

Consumer Services 0.0%^†
^a,b,cTurtle Bay Resort		United States		1,901,449			41,832


Energy 0.1%
^aBirch Permian Holdings Inc.		United States		39,385			438,158
^aHalcon Resources Corp.		United States		78,920			13,953
^aHalcon Resources Corp., wts., 9/09/20		United States		6,591			53
^aMidstates Petroleum Co. Inc.		United States		415			2,444
^a,cMidstates Petroleum Co. Inc., wts., 4/21/20		United States		4,005			9
^aRiviera Resources Inc.		United States		6,922			87,910
^aRoan Resources Inc.		United States		6,922			12,044

							554,571


Materials 0.1%
^a,c,dAppvion Operations Inc.		United States		18,684			287,369
^aVerso Corp., A		United States		5,620			107,061
^aVerso Corp., wts., 7/25/23		United States		592			2,368

							396,798


Media & Entertainment 0.1%
^aClear Channel Outdoor Holdings Inc.		United States		20,804			98,195
^a,c,diHeartMedia Inc., A		United States		8,384			121,696
^a,c,diHeartMedia Inc., B		United States		142			2,061

							221,952


Retailing 0.0%^†
^a,c,dK2016470219 South Africa Ltd., A		South Africa		14,792,309			10,500
^a,c,dK2016470219 South Africa Ltd., B		South Africa		1,472,041			1,045

							11,545

Total Common Stocks and Other Equity Interests (Cost $6,779,510)							1,338,562


Management Investment Companies (Cost $13,450,545) 2.6%
Diversified Financials 2.6%
^eFranklin Floating Rate Income Fund		United States		1,358,951			11,727,751


				Principal Amount	*
Corporate Bonds 35.4%
Automobiles & Components 0.2%
Fiat Chrysler Automobiles NV, senior note, 5.25%, 4/15/23		United Kingdom		970,000			1,025,324


Banks 3.4%
^fAkbank T.A.S., senior note, 144A, 5.125%, 3/31/25		Turkey		800,000			739,744
Bank of America Corp.,
senior bond, 3.248%, 10/21/27		United States		647,000			663,171
senior note, 3.50%, 4/19/26		United States		2,480,000			2,598,197

Semiannual Report

FSI-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*			Value
Corporate Bonds (continued)
Banks (continued)
CIT Group Inc., senior bond, 5.00%, 8/15/22		United States		809,000		$	857,540
Citigroup Inc.,
senior note, 3.30%, 4/27/25		United States		243,000			251,476
senior note, 3.40%, 5/01/26		United States		1,106,000			1,145,474
senior note, 3.20%, 10/21/26		United States		2,425,000			2,476,494
sub. bond, 5.50%, 9/13/25		United States		405,000			458,831
sub. note, 4.05%, 7/30/22		United States		243,000			253,561
^fIntesa Sanpaolo SpA, senior note, 144A, 6.50%, 2/24/21		Italy		200,000			210,269
JPMorgan Chase & Co.,
^gjunior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		213,000			224,069
senior bond, 3.20%, 6/15/26		United States		1,213,000			1,248,869
sub. note, 3.375%, 5/01/23		United States		809,000			832,031
sub. note, 3.875%, 9/10/24		United States		809,000			850,679
^hTurkiye Vakiflar Bankasi TAO, secured note, Reg S, 2.375%, 11/04/22		Turkey		500,000	EUR		563,812
Wells Fargo & Co., senior note, 3.00%, 4/22/26		United States		2,021,000			2,045,409


							15,419,626


Capital Goods 1.3%
^fBeacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		1,294,000			1,285,912
CNH Industrial NV, senior bond, 3.85%, 11/15/27		United Kingdom		566,000			569,206
^f,iHerc Holdings Inc., senior note, 144A, 5.50%, 7/15/27		United States		500,000			504,375
Legrand France SA, senior bond, 8.50%, 2/15/25		France		100,000			129,927
^jOnsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23		Australia		262,519			203,452
Tennant Co., senior note, 5.625%, 5/01/25		United States		809,000			839,338
^fTerex Corp., senior note, 144A, 5.625%, 2/01/25		United States		1,617,000			1,639,234
^fVertiv Group Corp., senior note, 144A, 9.25%, 10/15/24		United States		994,000			956,725


							6,128,169


Commercial & Professional Services 0.7%
United Rentals North America Inc., senior bond, 5.875%, 9/15/26		United States		1,294,000			1,382,962
^fWest Corp., senior note, 144A, 8.50%, 10/15/25		United States		1,821,000			1,602,480


							2,985,442


Consumer Durables & Apparel 0.9%
^fHanesbrands Inc., senior bond, 144A, 4.875%, 5/15/26		United States		1,682,000			1,753,300
KB Home, senior note, 7.00%, 12/15/21		United States		970,000			1,044,690
PulteGroup Inc., senior bond, 5.00%, 1/15/27		United States		309,000			325,163
Toll Brothers Finance Corp., senior bond, 5.625%, 1/15/24		United States		889,000			959,009


							4,082,162


Consumer Services 1.7%
^f1011778 BC ULC/New Red Finance Inc.,
secured note, second lien, 144A, 5.00%, 10/15/25		Canada		970,000			979,991
senior secured note, first lien, 144A, 4.25%, 5/15/24		Canada		728,000			737,038

FSI-10

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Corporate Bonds (continued)
Consumer Services (continued)
^fGolden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		1,132,000	$	1,168,790
^fInternational Game Technology PLC, senior secured bond, 144A, 6.50%, 2/15/25		United States		1,051,000		1,154,787
^fKFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC,
senior note, 144A, 5.00%, 6/01/24		United States		728,000		753,480
senior note, 144A, 5.25%, 6/01/26		United States		851,000		894,605
^fStars Group Holdings BV/Stars Group U.S. Co-Borrower LLC, senior note, 144A, 7.00%, 7/15/26		Canada		566,000		599,960
^fWynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
senior bond, 144A, 5.50%, 3/01/25		United States		970,000		1,004,241
senior bond, 144A, 5.25%, 5/15/27		United States		200,000		201,000


						7,493,892

Diversified Financials 2.2%
Capital One Financial Corp., senior note, 3.20%, 2/05/25		United States		1,617,000		1,649,084
The Goldman Sachs Group Inc.,
senior note, 3.50%, 1/23/25		United States		1,725,000		1,784,898
senior note, 3.75%, 2/25/26		United States		1,213,000		1,266,693
Morgan Stanley,
senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28		United States		809,000		842,669
senior note, 3.875%, 1/27/26		United States		2,395,000		2,547,030
Navient Corp., senior note, 7.25%, 9/25/23		United States		921,000		986,621
Springleaf Finance Corp., senior note, 6.625%, 1/15/28		United States		1,000,000		1,052,500


						10,129,495

Energy 3.5%
^fAker BP ASA, senior note, 144A, 4.75%, 6/15/24		Norway		600,000		618,000
^fCalifornia Resources Corp., secured note, second lien, 144A, 8.00%, 12/15/22		United States		579,000		439,316
Cheniere Corpus Christi Holdings LLC,
senior secured note, first lien, 7.00%, 6/30/24		United States		647,000		745,732
senior secured note, first lien, 5.875%, 3/31/25		United States		566,000		631,797
Cheniere Energy Partners LP, senior secured note, first lien, 5.25%, 10/01/25		United States		970,000		1,006,375
CONSOL Energy Inc., senior note, 5.875%, 4/15/22		United States		1,317,000		1,284,075
Energy Transfer Operating LP,
senior bond, 4.05%, 3/15/25		United States		200,000		208,581
senior note, 7.50%, 10/15/20		United States		1,536,000		1,629,569
^f,jEnQuest PLC, senior note, 144A, PIK, 7.00%, 4/15/22		United Kingdom		1,020,556		832,498
Exxon Mobil Corp., senior note, 2.222%, 3/01/21		United States		324,000		324,821
^f,kGaz Capital SA, (OJSC Gazprom), loan participation, senior note, 144A, 3.85%, 2/06/20		Russia		1,213,000		1,220,029
Kinder Morgan Inc.,
senior bond, 4.30%, 6/01/25		United States		1,617,000		1,728,433
senior note, 3.15%, 1/15/23		United States		1,213,000		1,234,318

Semiannual Report

FSI-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Corporate Bonds (continued)
Energy (continued)
Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 2/15/21		United States		1,617,000	$	1,610,855
Oceaneering International Inc., senior note, 4.65%, 11/15/24		United States		200,000		197,000
Sanchez Energy Corp., senior note, 6.125%, 1/15/23		United States		243,000		12,150
Sunoco LP/Sunoco Finance Corp., senior note, 4.875%, 1/15/23		United States		485,000		496,519
^lWeatherford International Ltd.,
senior note, 7.75%, 6/15/21		United States		647,000		344,528
senior note, 8.25%, 6/15/23		United States		809,000		426,748
^fWoodside Finance Ltd.,
senior bond, 144A, 3.70%, 3/15/28		Australia		647,000		647,708
senior note, 144A, 3.70%, 9/15/26		Australia		405,000		411,394


						16,050,446


Food & Staples Retailing 0.8%
^fAramark Services Inc., senior bond, 144A, 5.00%, 2/01/28		United States		1,247,000		1,285,969
Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24		United States		2,087,000		2,171,414


						3,457,383


Food, Beverage & Tobacco 1.1%
Bunge Ltd. Finance Corp., senior note, 3.25%, 8/15/26		United States		200,000		193,445
^fImperial Brands Finance PLC, senior note, 144A, 3.50%, 2/11/23		United Kingdom		1,698,000		1,729,867
^fLamb Weston Holdings Inc.,
senior note, 144A, 4.625%, 11/01/24		United States		485,000		505,006
senior note, 144A, 4.875%, 11/01/26		United States		1,132,000		1,182,940
^fPost Holdings Inc.,
senior bond, 144A, 5.625%, 1/15/28		United States		405,000		417,656
senior note, 144A, 5.50%, 3/01/25		United States		809,000		838,326
Reynolds American Inc., senior note, 4.45%, 6/12/25		United Kingdom		200,000		212,131


						5,079,371


Health Care Equipment & Services 1.6%
Centene Corp.,
senior note, 4.75%, 5/15/22		United States		1,374,000		1,408,350
^fsenior note, 144A, 5.375%, 6/01/26		United States		324,000		341,415
CHS/Community Health Systems Inc.,
senior note, 6.875%, 2/01/22		United States		183,000		124,440
senior secured note, first lien, 6.25%, 3/31/23		United States		405,000		391,331
DaVita Inc.,
senior bond, 5.125%, 7/15/24		United States		405,000		406,134
senior bond, 5.00%, 5/01/25		United States		728,000		721,448
senior note, 5.75%, 8/15/22		United States		309,000		312,863
Edwards Lifesciences Corp., senior note, 4.30%, 6/15/28		United States		243,000		262,547
HCA Inc., senior bond, 5.875%, 5/01/23		United States		1,213,000		1,322,024
^fMEDNAX Inc., senior note, 144A, 6.25%, 1/15/27		United States		1,100,000		1,084,875
^f,jPolaris Intermediate Corp., senior note, 144A, PIK, 8.50%, 12/01/22		United States		500,000		443,750
Stryker Corp., senior bond, 3.50%, 3/15/26		United States		405,000		423,967


						7,243,144

FSI-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Corporate Bonds (continued)
Materials 4.9%
ArcelorMittal, senior note, 6.125%, 6/01/25		France		243,000	$	275,349
^fArdagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 2/15/25		Luxembourg		900,000		934,875
^fBWAY Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		1,278,000		1,236,465
^fCemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24		Mexico		500,000		515,907
^fCemex SAB de CV, senior secured bond, first lien, 144A, 5.70%, 1/11/25		Mexico		1,213,000		1,259,961
Crown Americas LLC/Crown Americas Capital Corp. VI, senior note, 4.75%, 2/01/26		United States		566,000		582,980
^fFirst Quantum Minerals Ltd., senior note, 144A, 7.25%, 4/01/23		Zambia		1,294,000		1,264,885
^fFMG Resources (August 2006) Pty. Ltd., senior note, 144A, 5.125%, 3/15/23		Australia		324,000		335,745
senior note, 144A, 5.125%, 5/15/24		Australia		647,000		673,488
Freeport-McMoRan Inc., senior note, 4.55%, 11/14/24		United States		1,217,000		1,247,121
^fGlencore Funding LLC, senior note, 144A, 4.125%, 5/30/23		Switzerland		485,000		504,585
senior note, 144A, 4.625%, 4/29/24		Switzerland		250,000		264,505
^fINVISTA Finance LLC, senior secured note, 144A, 4.25%, 10/15/19		United States		1,536,000		1,552,444
LYB International Finance BV, senior note, 4.00%, 7/15/23		United States		1,698,000		1,789,633
^fNew Gold Inc., senior note, 144A, 6.375%, 5/15/25		Canada		566,000		472,610
^fNorthwest Acquisitions ULC/Dominion Finco Inc., secured note, second lien, 144A, 7.125%, 11/01/22		Canada		324,000		224,370
^fNovelis Corp., senior bond, 144A, 5.875%, 9/30/26		United States		1,359,000		1,379,385
^fOwens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 1/15/22		United States		1,132,000		1,164,545
senior note, 144A, 5.875%, 8/15/23		United States		566,000		612,582
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA, ^fsenior note, 144A, 7.00%, 7/15/24		United States		105,000		108,769
senior secured note, first lien, 5.75%, 10/15/20		United States		548,375		550,432
^fsenior secured note, first lien, 144A, 5.125%, 7/15/23		United States		566,000		578,027
^fSABIC Capital II BV, senior note, 144A, 4.50%, 10/10/28		Saudi Arabia		600,000		643,809
^fSealed Air Corp., senior bond, 144A, 5.125%, 12/01/24		United States		809,000		853,495
senior bond, 144A, 5.50%, 9/15/25		United States		124,000		132,370
senior note, 144A, 4.875%, 12/01/22		United States		485,000		510,463
Steel Dynamics Inc., senior bond, 5.50%, 10/01/24		United States		809,000		840,349
senior note, 5.125%, 10/01/21		United States		609,000		616,107
^fSunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25		United States		1,100,000		1,078,000


						22,203,256

Semiannual Report

FSI-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*			Value

Corporate Bonds (continued)
Media & Entertainment 3.0%
^fAltice Financing SA, secured bond, 144A, 7.50%, 5/15/26		Luxembourg		200,000		$	201,500
CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 9/30/22		United States		889,000			904,091
^fsenior bond, 144A, 5.375%, 5/01/25		United States		728,000			754,390
Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22		United States		809,000			827,202
^fsenior sub. note, 144A, 9.25%, 2/15/24		United States		300,000			326,250
^fCSC Holdings LLC, senior secured note, first lien, 144A, 5.50%, 5/15/26		United States		1,378,000			1,448,554
DISH DBS Corp., senior bond, 6.75%, 6/01/21		United States		405,000			426,262
senior note, 5.875%, 11/15/24		United States		970,000			921,500
iHeartCommunications Inc., 8.375%, 5/01/27		United States		87,378			91,967
secured note, 6.375%, 5/01/26		United States		48,209			51,403
Netflix Inc., senior bond, 5.875%, 2/15/25		United States		1,400,000			1,547,000
^fNexstar Broadcasting Inc., senior note, 144A, 5.625%, 8/01/24		United States		1,417,000			1,471,498
^fSirius XM Radio Inc., senior bond, 144A, 6.00%, 7/15/24		United States		389,000			401,253
senior bond, 144A, 5.375%, 4/15/25		United States		647,000			669,645
Tegna Inc., ^fsenior bond, 144A, 5.50%, 9/15/24		United States		405,000			417,150
senior note, 5.125%, 7/15/20		United States		205,000			205,769
^fUnitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 1/15/25		Germany		1,174,000			1,229,765
^fUnivision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		1,621,000			1,548,055


							13,443,254

Pharmaceuticals, Biotechnology & Life Sciences 1.9%
Allergan Funding SCS, senior bond, 3.80%, 3/15/25		United States		1,778,000			1,844,639
^fAvantor Inc., senior secured note, first lien, 144A, 6.00%, 10/01/24		United States		1,417,000			1,511,230
^fBausch Health Cos. Inc., senior bond, 144A, 6.125%, 4/15/25		United States		243,000			248,468
senior note, 144A, 4.50%, 5/15/23		United States		400,000	EUR		461,761
senior note, 144A, 8.50%, 1/31/27		United States		809,000			891,534
senior note, first lien, 144A, 7.00%, 3/15/24		United States		200,000			213,020
^fBayer U.S. Finance II LLC, senior bond, 144A, 4.375%, 12/15/28		Germany		889,000			937,454
^f,jEagle Holdings Co. II LLC, senior note, 144A, PIK, 7.625%, 5/15/22		United States		566,000			570,245
^fEndo DAC/Endo Finance LLC/Endo Finco Inc., senior bond, 144A, 6.00%, 2/01/25		United States		970,000			654,750
senior note, 144A, 6.00%, 7/15/23		United States		328,000			237,800
^fJaguar Holding Co. II/Pharmaceutical Product Development LLC, senior note, 144A, 6.375%, 8/01/23		United States		970,000			1,006,375


							8,577,276

FSI-14

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Corporate Bonds (continued)
Real Estate 1.1%
American Tower Corp., senior bond, 3.375%, 10/15/26		United States		1,940,000	$	1,974,400
Equinix Inc., senior bond, 5.375%, 4/01/23		United States		1,317,000		1,346,632
senior bond, 5.875%, 1/15/26		United States		100,000		106,125
MPT Operating Partnership LP/MPT Finance Corp., senior bond, 5.25%, 8/01/26		United States		647,000		676,924
senior bond, 5.00%, 10/15/27		United States		889,000		917,893


						5,021,974

Retailing 0.3%
^c,d,jK2016470219 South Africa Ltd., senior secured note, 144A, PIK, 3.00%, 12/31/22		South Africa		947,792		1,185
^d,jK2016470260 South Africa Ltd., senior secured note, 144A, PIK, 25.00%, 12/31/22		South Africa		278,546		8,356
^fParty City Holdings Inc., senior note, 144A, 6.625%, 8/01/26		United States		1,085,000		1,055,163
^fPetSmart Inc., senior secured note, first lien, 144A, 5.875%, 6/01/25		United States		209,000		203,775


						1,268,479

Semiconductors & Semiconductor Equipment 0.0%^†
Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23		United States		100,000		102,104

Software & Services 0.4%
Fiserv Inc., senior bond, 3.85%, 6/01/25		United States		485,000		513,466
^fSymantec Corp., senior note, 144A, 5.00%, 4/15/25		United States		1,378,000		1,413,254


						1,926,720

Technology Hardware & Equipment 0.4%
^fCommScope Technologies LLC, senior bond, 144A, 6.00%, 6/15/25		United States		324,000		304,560
senior bond, 144A, 5.00%, 3/15/27		United States		1,374,000		1,202,250
Juniper Networks Inc., senior bond, 5.95%, 3/15/41		United States		100,000		109,096
Tech Data Corp., senior bond, 4.95%, 2/15/27		United States		200,000		209,394


						1,825,300

Telecommunication Services 1.6%
AT&T Inc., senior note, 2.95%, 7/15/26		United States		2,021,000		2,009,224
^fDigicel Group Two Ltd., senior note, 144A, 8.25%, 9/30/22		Bermuda		486,000		122,919
^fDigicel Ltd., senior note, 144A, 6.00%, 4/15/21		Bermuda		1,000,000		750,000
Hughes Satellite Systems Corp., senior bond, 6.625%, 8/01/26		United States		994,000		1,047,427
Sprint Communications Inc., senior note, 6.00%, 11/15/22		United States		405,000		423,225
^fsenior note, 144A, 7.00%, 3/01/20		United States		647,000		664,793
Sprint Corp., senior bond, 7.875%, 9/15/23		United States		405,000		441,450
T-Mobile USA Inc., senior bond, 6.50%, 1/15/24		United States		405,000		420,188
senior bond, 6.375%, 3/01/25		United States		1,051,000		1,094,091
senior note, 6.00%, 4/15/24		United States		200,000		209,000


						7,182,317

Semiannual Report

FSI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Corporate Bonds (continued)
Transportation 1.0%
^fDAE Funding LLC, senior note, 144A, 5.00%, 8/01/24		United Arab Emirates		1,294,000	$	1,350,612
^fKazakhstan Temir Zholy Finance BV, senior bond, 144A, 6.95%, 7/10/42		Kazakhstan		1,200,000		1,491,366
^fMexico City Airport Trust, secured bond, 144A, 5.50%, 7/31/47		Mexico		1,200,000		1,197,564
^h,kRZD Capital PLC, (Russian Railways), loan participation, senior bond, Reg S, 5.70%, 4/05/22		Russia		400,000		422,332


						4,461,874

Utilities 3.4%
Calpine Corp., senior bond, 5.75%, 1/15/25		United States		970,000		966,362
senior note, 5.375%, 1/15/23		United States		551,000		558,576
^fClearway Energy Operating LLC, senior note, 144A, 5.75%, 10/15/25		United States		1,132,000		1,153,225
Dominion Energy Inc., senior bond, 2.85%, 8/15/26		United States		889,000		882,068
^f,gEDF SA, junior sub. note, 144A, 5.25% to 1/29/23, FRN thereafter, Perpetual		France		2,425,000		2,491,700
Exelon Corp., senior bond, 3.95%, 6/15/25		United States		1,455,000		1,553,984
^fInterGen NV, secured bond, 144A, 7.00%, 6/30/23		Netherlands		700,000		651,438
^fIsrael Electric Corp. Ltd., secured bond, 144A, 4.25%, 8/14/28		Israel		1,000,000		1,044,465
The Southern Co., senior bond, 3.25%, 7/01/26		United States		2,410,000		2,448,606
^fState Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27		China		1,051,000		1,088,431
^fTalen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27		United States		1,300,000		1,335,750
^fThree Gorges Finance I Cayman Islands Ltd., senior note, 144A, 3.15%, 6/02/26		China		1,051,000		1,056,723
Virginia Electric & Power Co., senior bond, 6.35%, 11/30/37		United States		85,000		114,004


						15,345,332


Total Corporate Bonds (Cost $160,497,780)						160,452,340


^m,nSenior Floating Rate Interests 13.0%
Automobiles & Components 0.8%
^o,pAdient US LLC, Initial Term Loans, TBD, 5/06/24		United States		1,170,000		1,142,704
Allison Transmission Inc., Initial Term Loans, 4.475%, (2-month USD LIBOR + 2.00%), 3/29/26		United States		519,785		521,950
Thor Industries Inc., Initial USD Term Loans, 6.25%, (1-month USD LIBOR + 3.75%), 2/01/26		United States		2,128,113		2,101,495


						3,766,149

Capital Goods 0.2%
Altra Industrial Motion Corp., Term Loan, 4.402%, (1-month USD LIBOR + 2.00%), 10/01/25		United States		239,214		235,177
Doncasters U.S. Finance LLC, Second Lien Term Loan, 10.58%, (3-month USD LIBOR + 8.25%), 10/09/20		United States		742,509		222,010
Harsco Corp., Term Loan B-2, 4.688%, (1-month USD LIBOR + 2.25%), 12/10/24		United States		229,110		229,444
Onsite Rental Group Operations Pty. Ltd., Term Loan, 6.904%, (1-month USD LIBOR + 4.50%), 10/25/22		Australia		192,010		188,170


						874,801

FSI-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

^m,nSenior Floating Rate Interests (continued)
Commercial & Professional Services 0.0%^†
KAR Auction Services Inc., Tranche B-5 Term Loans, 4.875%, (3-month USD LIBOR + 2.50%), 3/09/23		United States		178,651	$	178,734


Consumer Services 0.7%
Aristocrat Technologies Inc., Term B-3 Loans, 4.342%, (3-month USD LIBOR + 1.75%), 10/19/24		United States		838,240		831,953
Avis Budget Car Rental LLC, Tranche B Term Loans, 4.41%, (1-month USD LIBOR + 2.00%), 2/13/25		United States		1,013,874		1,012,926
Eldorado Resorts Inc., Initial Term Loan, 4.688%, (1-month USD LIBOR + 2.25%), 4/17/24		United States		345,096		344,734
Las Vegas Sands LLC, Term B Loans, 4.152%, (1-month USD LIBOR + 1.75%), 3/27/25		United States		839,375		834,511


						3,024,124


Diversified Financials 0.4%
Asurion LLC, Second Lien Replacement B-2 Term Loans, 8.902%, (1-month USD LIBOR + 6.50%), 8/04/25		United States		35,919		36,499
^oRussell Investments U.S. Institutional Holdco Inc., Initial Term Loan, 5.652%, (1-month USD LIBOR + 3.25%), 6/01/23		United States		1,169,103		1,160,335
Trans Union LLC, 2017 Replacement Term A-2 Loans, 4.152%, (1-month USD LIBOR + 1.75%), 8/09/22		United States		796,813		795,941


						1,992,775


Energy 2.2%
Fieldwood Energy LLC, Closing Date Loans, 7.652%, (1-month USD LIBOR + 5.25%), 4/11/22		United States		5,136,631		4,789,909
Foresight Energy LLC, Term Loans, 8.272%, (3-month USD LIBOR + 5.75%), 3/28/22		United States		1,452,781		1,196,728
Utex Industries Inc.,
First Lien Initial Term Loan, 6.402%, (1-month USD LIBOR + 4.00%), 5/21/21		United States		518,399		487,295
Second Lien Initial Term Loan, 9.652%, (1-month USD LIBOR + 7.25%), 5/20/22		United States		53,878		49,164
Wolverine Fuels Holding LLC,
First Lien Initial Term Loan, 8.272%, (3-month USD LIBOR + 5.75%), 8/14/20		United States		1,881,662		1,850,300
Second Lien Initial Term Loan, 13.272%, (3-month USD LIBOR + 10.75%), 2/16/21		United States		1,571,328		1,491,779


						9,865,175


Food & Staples Retailing 0.1%
Aramark Corp., U.S. Term B-3 Loan, 4.08%, (3-month USD LIBOR + 1.75%), 3/11/25		United States		359,644		359,080


Food, Beverage & Tobacco 0.1%
CSM Bakery Supplies LLC, Second Lien Term Loan, 10.34%, (3-month USD LIBOR + 7.75%), 7/03/21		United States		584,249		543,838

Semiannual Report

FSI-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

^m,nSenior Floating Rate Interests (continued)
Health Care Equipment & Services 0.8%
DaVita Healthcare Partners Inc., Tranche B Term Loan, 5.135%, (1-week USD LIBOR + 2.75%), 6/24/21		United States		1,102,591	$	1,103,280
HCA Inc., Term Loan B11, 4.08%, (3-month USD LIBOR + 1.75%), 3/18/23		United States		486,404		487,113
IQVIA Inc.,
Term B-2 Dollar Loans, 4.33%, (3-month USD LIBOR + 2.00%), 1/20/25		United States		1,139,325		1,139,122
Term B-3 Dollar Loans, 4.152%, (1-month USD LIBOR + 1.75%), 6/11/25		United States		695,054		692,509


						3,422,024


Household & Personal Products 0.5%
^cFGI Operating Co. LLC (Freedom Group),
^jTerm Loan, PIK, 12.518%, (3-month USD LIBOR + 10.00%), 5/15/22		United States		811,426		780,394
Term Loan FILO, 10.018% - 10.022%, (3-month USD LIBOR + 7.50%), 5/15/21		United States		1,616,351		1,610,309


						2,390,703


Materials 1.1%
Appvion Operations Inc., Term Loan, 8.60%, (3-month USD LIBOR + 6.00%), 6/15/26		United States		424,833		424,833
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 4.08%, (3-month USD LIBOR + 1.75%), 6/01/24		United States		569,571		563,699
Chemours Co., Tranche B-2 US$ Term Loan, 4.16%, (1-month USD
LIBOR + 1.75%), 4/03/25		United States		1,329,939		1,294,473
Crown Americas LLC, Dollar Term B Loan, 4.401%, (1-month USD
LIBOR + 2.00%), 4/03/25		United States		795,370		800,789
Oxbow Carbon LLC,
Second Lien Term Loan, 9.902%, (1-month USD LIBOR + 7.50%), 1/04/24		United States		151,273		151,651
Tranche A Term Loan, 4.902%, (1-month USD LIBOR + 2.50%), 1/04/22		United States		1,147,500		1,141,763
Tranche B Term Loan, 6.152%, (1-month USD LIBOR + 3.75%), 1/04/23		United States		518,000		520,590


						4,897,798


Media & Entertainment 1.4%
Charter Communications Operating LLC, Term A-2 Loan, 3.83%, (3-month USD LIBOR + 1.50%), 3/31/23		United States		868,965		865,489
CSC Holdings LLC, March 2017 Incremental Term Loans, 4.644%, (1-month USD LIBOR + 2.25%), 7/17/25		United States		1,209,516		1,192,696
Gray Television Inc.,
Term B-2 Loan, 4.681%, (1-month USD LIBOR + 2.25%), 2/07/24		United States		843,033		840,549
Term C Loan, 4.931%, (1-month USD LIBOR + 2.50%), 1/02/26		United States		628,112		628,269

FSI-18

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

^m,nSenior Floating Rate Interests (continued)
Media & Entertainment (continued)
iHeartCommunications Inc., Term Loan, 6.579%, (3-month USD LIBOR + 4.00%), 5/04/26		United States		210,913	$	211,424
Lions Gate Capital Holdings LLC, Term A Loan, 4.152%, (1-month USD LIBOR + 1.75%), 3/22/23		Canada		252,699		250,962
Live Nation Entertainment Inc., Term B-3 Loans, 4.188%, (1-month USD LIBOR + 1.75%), 10/31/23		United States		571,234		571,056
Mediacom Illinois LLC, Tranche N Term Loan, 4.14%, (1-week USD LIBOR + 1.75%), 2/15/24		United States		1,653,773		1,645,491


						6,205,936


Pharmaceuticals, Biotechnology & Life Sciences 0.8%
Endo Luxembourg Finance Co. I S.A.R.L. and Endo LLC, Initial Term Loans, 6.688%, (1-month USD LIBOR + 4.25%), 4/29/24		United States		2,215,115		2,083,593
Valeant Pharmaceuticals International,
First Incremental Term Loan, 5.162%, (1-month USD LIBOR + 2.75%), 11/27/25		United States		1,406,250		1,399,746
Initial Term Loans, 5.412%, (1-month USD LIBOR + 3.00%), 6/02/25		United States		285,199		285,377


						3,768,716


Retailing 1.2%
^j99 Cents Only Stores,
First Lien Term Loan, PIK, 8.83% - 9.022%, (3-month USD LIBOR + 6.50%), 1/13/22		United States		154,133		141,931
First Lien Term Loan, PIK, 9.151%, (6-month USD LIBOR + 6.50%), 1/13/22		United States		187,199		172,379
Ascena Retail Group Inc., Tranche B Term Loan, 6.938%, (1-month USD LIBOR + 4.50%), 8/21/22		United States		2,103,259		1,383,765
General Nutrition Centers Inc., FILO Term Loan (ABL), 9.41%, (1-month USD LIBOR + 7.00%), 12/31/22		United States		152,644		154,695
General Nutrition Centers, Inc.,
Tranche B-2 Term Loans, 11.16%, (1-month USD LIBOR + 8.75%), 3/04/21		United States		413,269		367,165
Tranche B-2 Term Loans, 11.24%, (2-month USD LIBOR + 8.75%), 3/04/21		United States		410,443		364,654
Harbor Freight Tools USA Inc., Refinancing Loans, 4.902%, (1-month USD LIBOR + 2.50%), 8/19/23		United States		1,963,343		1,916,306
Jo-Ann Stores Inc., Initial Loans, 7.592%, (3-month USD LIBOR + 5.00%), 10/23/23		United States		821,178		730,849
PETCO Animal Supplies Stores Inc., Second Amendment Term Loans, 5.833%, (3-month USD LIBOR + 3.25%), 1/26/23		United States		106,928		83,404
^oPetSmart Inc., Amended Loan, 6.67%, (1-month USD LIBOR + 4.25%), 3/11/22		United States		29,780		29,068


						5,344,216


Semiconductors & Semiconductor Equipment 0.4%
MKS Instruments Inc.,
Tranche B-4 Term Loan, 4.402%, (1-month USD LIBOR + 2.00%), 4/29/23		United States		224,811		225,204
Tranche B-5 Term Loans, 4.652%, (1-month USD LIBOR + 2.25%), 2/01/26		United States		313,475		314,141

Semiannual Report

FSI-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

^m,nSenior Floating Rate Interests (continued)
Semiconductors & Semiconductor Equipment (continued)
ON Semiconductor Corp., 2018 New Replacement Term B-3 Loans, 4.152%, (1-month USD LIBOR + 1.75%), 3/31/23		United States		1,139,956	$	1,126,736


						1,666,081


Software & Services 0.5%
^oCarbonite Inc., Initial Term Loan, 6.152%, (1-month USD LIBOR + 3.75%), 3/26/26		United States		94,118		94,490
LegalZoom.com Inc., 2018 Term Loans, 6.902%, (1-month USD LIBOR + 4.50%), 11/21/24		United States		184,556		185,244
^o,pTIBCO Software Inc., First Lien Term Loan, TBD, 6/15/26		United States		1,170,000		1,173,168
WEX Inc., Term Loan B, 4.652%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		643,353		642,013


						2,094,915


Technology Hardware & Equipment 0.1%
CommScope Inc., Initial Term Loans, 5.652%, (1-month USD LIBOR + 3.25%), 4/04/26		United States		647,567		647,648


Telecommunication Services 0.3%
Global Tel*Link Corp.,
^oFirst Lien Term Loan, 6.652%, (1-month USD LIBOR + 4.25%), 11/29/25		United States		398,997		386,130
Second Lien Term Loan, 10.652%, (1-month USD LIBOR + 8.25%), 11/29/26		United States		183,038		178,690
Securus Technologies Holdings Inc.,
^oInitial Term Loan, 6.83%, (3-month USD LIBOR + 4.50%), 11/01/24		United States		249,367		232,743
Second Lien Initial Loan, 10.58%, (3-month USD LIBOR + 8.25%), 11/01/25		United States		597,127		553,338


						1,350,901


Transportation 0.8%
Allegiant Travel Co., Class B Term Loans, 7.065%, (3-month USD LIBOR + 4.50%), 2/05/24		United States		232,708		232,999
Hertz Corp., Tranche B-1 Term Loan, 5.16%, (1-month USD LIBOR + 2.75%), 6/30/23		United States		1,658,930		1,655,820
International Seaways Operating Corp., Initial Term Loans, 8.44%, (1-month USD LIBOR + 6.00%), 6/22/22		United States		722,471		722,471
Navios Maritime Midstream Partners LP, Initial Term Loan, 6.89%, (3-month USD LIBOR + 4.50%), 6/18/20		Marshall Islands		1,252,931		1,234,137


						3,845,427


Utilities 0.6%
EFS Cogen Holdings I LLC (Linden), Term B Advance, 5.86%, (1-month USD LIBOR + 3.25%), 6/28/23		United States		2,769,083		2,756,622


Total Senior Floating Rate Interests (Cost $60,911,718)						58,995,663

FSI-20

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*				Value

Foreign Government and Agency Securities 5.6%
^f Angolan Government International Bond, senior note, 144A, 8.25%, 5/09/28		Angola		1,600,000			$	1,716,064

^h Banque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24		Tunisia		1,400,000		EUR		1,585,940

^fDominican Republic, senior note, 144A, 8.90%, 2/15/23		Dominican Republic		56,500,000		DOP		1,115,534

^f The Export-Import Bank of India, senior note, 144A, 3.875%, 2/01/28		India		1,455,000				1,497,288

Government of Colombia,

senior bond, 9.85%, 6/28/27		Colombia		4,015,000,000		COP		1,576,903

senior bond, 5.00%, 6/15/45		Colombia		1,300,000				1,438,541

^fGovernment of Gabon, 144A, 6.375%, 12/12/24		Gabon		1,700,000				1,686,578

Government of Indonesia,

senior bond, FR64, 6.125%, 5/15/28		Indonesia		26,500,000,000		IDR		1,736,028

senior bond, FR70, 8.375%, 3/15/24		Indonesia		19,648,000,000		IDR		1,474,765

^fGovernment of Iraq, 144A, 5.80%, 1/15/28		Iraq		1,600,000				1,581,128

^fGovernment of Kazakhstan, senior bond, 144A, 4.875%, 10/14/44		Kazakhstan		700,000				807,362

Government of Mexico,

senior bond, M, 6.50%, 6/10/21		Mexico		293,000	^q	MXN		1,498,101

senior note, 4.15%, 3/28/27		Mexico		1,100,000				1,153,350

Government of South Africa, senior bond, 7.00%, 2/28/31		South Africa		24,100,000		ZAR		1,465,765

^fGovernment of Ukraine,

144A, 7.75%, 9/01/22		Ukraine		200,000				212,265

144A, 7.75%, 9/01/23		Ukraine		369,000				391,574

144A, 7.75%, 9/01/24		Ukraine		369,000				385,605

^a,r144A, VRI, GDP Linked Security, 5/31/40		Ukraine		978,000				701,651

senior bond, 144A, 7.375%, 9/25/32		Ukraine		500,000				491,993

^sGovernment of Uruguay, senior bond, Index Linked, 3.70%, 6/26/37		Uruguay		44,585,302		UYU		1,260,404

Nota do Tesouro Nacional,

10.00%, 1/01/21		Brazil		2,900	^t	BRL		796,231

10.00%, 1/01/23		Brazil		2,800	^t	BRL		801,273



Total Foreign Government and Agency Securities (Cost $24,485,743)								25,374,343



U.S. Government and Agency Securities 5.2%

U.S. Treasury Bond,

7.875%, 2/15/21		United States		728,000				798,155

6.50%, 11/15/26		United States		1,940,000				2,552,237

3.875%, 8/15/40		United States		2,800,000				3,495,078

3.00%, 11/15/45		United States		2,041,000				2,231,427

U.S. Treasury Note,

2.75%, 2/15/24		United States		809,000				844,552

3.125%, 11/15/28		United States		1,700,000				1,863,891

^sIndex Linked, 0.125%, 7/15/24		United States		7,409,448				7,399,616

^sIndex Linked, 0.375%, 7/15/25		United States		4,525,161				4,576,872


Total U.S. Government and Agency Securities (Cost $23,006,727)								23,761,828

Semiannual Report

FSI-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Asset-Backed Securities and Commercial Mortgage- Backed Securities 26.3%

Banks 0.4%

^uCommercial Mortgage Trust, 2006-GG7, AJ, FRN, 5.83%, 7/10/38		United States		425,000	$	393,829

CSAIL Commercial Mortgage Trust, 2015-C1, A4, 3.505%, 4/15/50		United States		740,000		777,576

^uCWABS Asset-Backed Certificates Trust, 2005-11, AF4, FRN, 5.21%, 3/25/34		United States		723,056		733,497

^vMerrill Lynch Mortgage Investors Trust, 2005-A6, 2A3, FRN, 2.784%, (1-month USD LIBOR + 0.38%), 8/25/35		United States		73,795		74,174


						1,979,076


Diversified Financials 25.9%

^vAmerican Express Credit Account Master Trust, 2017-2, A, FRN, 2.844%, (1-month USD LIBOR + 0.45%), 9/16/24		United States		670,000		673,814

^f,vAMMC CLO XI Ltd.,

2012-11A, BR2, 144A, FRN, 4.183%, (3-month USD LIBOR + 1.60%), 4/30/31		United States		350,000		346,272

2012-11A, DR2, 144A, FRN, 5.433%, (3-month USD LIBOR + 2.85%), 4/30/31		United States		300,000		284,049

^f,vAntares CLO Ltd., 2018-1A, B, 144A, FRN, 4.242%, (3-month USD LIBOR + 1.65%), 4/20/31		United States		1,455,000		1,438,937

^f,vAres CLO Ltd., 2018-48A, D, 144A, FRN, 5.292%, (3-month USD LIBOR + 2.70%), 7/20/30		United States		400,000		383,048

^f,uARES L CLO Ltd., 2018-50A, B, 144A, FRN, 4.478%, 1/15/32		United States		500,000		497,965

^f,uARES LII CLO Ltd.,

2019-52A, A2, 144A, FRN, 4.259%, 4/22/31		United States		250,000		250,300

2019-52A, B, 144A, FRN, 4.459%, 4/22/31		United States		500,000		500,770

^f,vAres XLIII CLO Ltd., 2017-43A, A, 144A, FRN, 3.817%, (3-month USD LIBOR + 1.22%), 10/15/29		United States		432,000		431,348

^f,uAtrium XIV LLC, 14A, D, 144A, FRN, 5.551%, 8/23/30		United States		750,000		732,300

Banc of America Commercial Mortgage Trust,

2015-UBS7, A3, 3.441%, 9/15/48		United States		849,000		892,502

2015-UBS7, A4, 3.705%, 9/15/48		United States		946,000		1,008,780

^u2015-UBS7, B, FRN, 4.506%, 9/15/48		United States		615,000		666,586

^f,uBCAP LLC Trust, 2009-RR1, 2A2, 144A, FRN, 4.961%, 5/26/35		United States		224,354		216,794

^f,uBCC Middle Market CLO LLC, 2018-1A, A2, 144A, FRN, 4.742%, 10/20/30		United States		700,000		689,472

^fBetony CLO 2 Ltd.,

^u2018-1A, A1, 144A, FRN, 3.663%, 4/30/31		United States		1,250,000		1,240,600

^v2018-1A, C, 144A, FRN, 5.483%, (3-month USD LIBOR + 2.90%), 4/30/31		United States		400,000		387,096

^f,uBlueMountain CLO Ltd.,

2012-2A, BR2, 144A, FRN, 3.97%, 11/20/28		United States		510,000		507,776

2012-2A, CR2, 144A, FRN, 4.52%, 11/20/28		United States		270,000		266,827

2018-1A, D, 144A, FRN, 5.633%, 7/30/30		United States		1,000,000		974,520

FSI-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Asset-Backed Securities and Commercial Mortgage- Backed Securities (continued)

Diversified Financials (continued)

^f,vBlueMountain Fuji U.S. CLO II Ltd., 2017-2A, A1A, 144A, FRN, 3.792%, (3-month USD LIBOR + 1.20%), 10/20/30		United States		1,455,000	$	1,456,280

^f,vBlueMountain Fuji U.S. CLO III Ltd., 2017-3A, A2, 144A, FRN, 3.747%, (3-month USD LIBOR + 1.15%), 1/15/30		United States		200,000		194,760

^fBRAVO Residential Funding Trust, 2019-1, A1C, 144A, 3.50%, 3/25/58		United States		1,052,916		1,076,018

^fBurnham Park CLO Ltd.,

^v2016-1A, A, 144A, FRN, 4.022%, (3-month USD LIBOR + 1.43%), 10/20/29.		United States		350,000		351,830

^u2016-1A, BR, 144A, FRN, 4.092%, 10/20/29		United States		460,000		454,931

^u2016-1A, CR, 144A, FRN, 4.742%, 10/20/29		United States		460,000		457,833

^f,uButtermilk Park CLO Ltd., 2018-1A, C, 144A, FRN, 4.697%, 10/15/31		United States		1,408,860		1,378,781

^v Capital One Multi-Asset Execution Trust,

2016-A2, A2, FRN, 3.024%, (1-month USD LIBOR + 0.63%), 2/15/24		United States		3,225,000		3,251,847

2016-A7, A7, FRN, 2.904%, (1-month USD LIBOR + 0.51%), 9/16/24		United States		320,000		322,344

^f,vCarlyle Global Market Strategies CLO Ltd., 2014-4RA, C, 144A, FRN, 5.497%, (3-month USD LIBOR + 2.90%), 7/15/30		United States		300,000		286,863

^f,uCarlyle GMS Finance MM CLO LLC, 2015-1A, A2R, 144A, FRN, 4.797%, 10/15/31		United States		1,213,000		1,207,857

^f,vCarlyle U.S. CLO Ltd., 2017-2A, A1B, 144A, FRN, 3.812%, (3-month USD LIBOR + 1.22%), 7/20/31		United States		1,150,000		1,148,827

^f,vCatamaran CLO Ltd., 2014-2A, BR, 144A, FRN, 5.551%, (3-month USD LIBOR + 2.95%), 10/18/26		United States		1,253,000		1,253,514

^f,uCGRBS Commercial Mortgage Trust, 2013-VN05, C, 144A, FRN, 3.703%, 3/13/35		United States		704,000		740,948

^f,uCIM Trust,

2019-INV1, A1, 144A, FRN, 4.00%, 2/25/49		United States		1,547,541		1,590,437

2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49		United States		2,210,859		2,263,028

^uCitibank Credit Card Issuance Trust,

2016-A3, A3, FRN, 2.909%, 12/07/23		United States		350,000		352,533

2017-A7, A7, FRN, 2.782%, 8/08/24		United States		2,685,000		2,694,525

^f,uCole Park CLO Ltd., 2015-1A, BR, 144A, FRN, 4.192%, 10/20/28		United States		270,000		268,798

^fCore Industrial Trust, 2015-CALW, A, 144A, 3.04%, 2/10/34		United States		1,081,627		1,107,012

^uDiscover Card Execution Note Trust, 2017-A7, A7, FRN, 2.754%, 4/15/25		United States		390,000		390,516

^f,uDryden 38 Senior Loan Fund,

2015-38A, CR, 144A, FRN, 4.597%, 7/15/30		United States		863,000		848,950

2015-38A, DR, 144A, FRN, 5.597%, 7/15/30		United States		557,000		544,451

Semiannual Report

FSI-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Principal Amount*		Value

Asset-Backed Securities and Commercial Mortgage- Backed Securities (continued)

Diversified Financials (continued)

^f,vDryden 41 Senior Loan Fund, 2015-41A, AR, 144A, FRN, 3.567%, (3-month USD LIBOR + 0.97%), 4/15/31		United States		1,100,000	$	1,088,483

^f,vDryden 42 Senior Loan Fund, 2016-42A, DR, 144A, FRN, 5.527%, (3-month USD LIBOR + 2.93%), 7/15/30		United States		1,294,000		1,248,658

^f,vDryden 55 CLO Ltd.,

2018-55A, A1, 144A, FRN, 3.617%, (3-month USD LIBOR + 1.02%), 4/15/31		United States		900,000		895,446

2018-55A, D, 144A, FRN, 5.447%, (3-month USD LIBOR + 2.85%), 4/15/31		United States		300,000		288,027

^f,vDryden 64 CLO Ltd., 2018-64A, D, 144A, FRN, 5.251%, (3-month USD LIBOR + 2.65%), 4/18/31		United States		300,000		289,527

^f,uEaton Vance CLO Ltd.,

2014-1RA, C, 144A, FRN, 4.697%, 7/15/30		United States		315,610		310,680

2014-1RA, D, 144A, FRN, 5.647%, 7/15/30		United States		462,825		455,674

^f,uEleven Madison Trust 2015-11MD Mortgage Trust, 2015-11MD, A, 144A, FRN, 3.673%, 9/10/35		United States		1,091,000		1,156,887

FHLMC Structured Agency Credit Risk Debt Notes,

^v2013-DN2, M2, FRN, 6.654%, (1-month USD LIBOR + 4.25%), 11/25/23		United States		1,861,193		2,012,903

^v2014-DN1, M2, FRN, 4.604%, (1-month USD LIBOR + 2.20%), 2/25/24		United States		796,894		810,740

^v2014-DN2, M3, FRN, 6.004%, (1-month USD LIBOR + 3.60%), 4/25/24		United States		2,290,000		2,437,671

^v2014-DN3, M3, FRN, 6.404%, (1-month USD LIBOR + 4.00%), 8/25/24		United States		184,376		196,889

^v2014-DN4, M3, FRN, 6.954%, (1-month USD LIBOR + 4.55%), 10/25/24		United States		1,373,225		1,479,039

^v2014-HQ1, M3, FRN, 6.504%, (1-month USD LIBOR + 4.10%), 8/25/24		United States		355,909		373,946

^v2014-HQ2, M2, FRN, 4.604%, (1-month USD LIBOR + 2.20%), 9/25/24		United States		571,769		581,014

^v2014-HQ3, M3, FRN, 7.154%, (1-month USD LIBOR + 4.75%), 10/25/24		United States		712,776		761,593

^v2015-DNA1, M3, FRN, 5.704%, (1-month USD LIBOR + 3.30%), 10/25/27		United States		250,000		269,264

^v2015-DNA3, M3, FRN, 7.104%, (1-month USD LIBOR + 4.70%), 4/25/28		United States		1,819,000		2,024,130

^v2015-HQ1, M3, FRN, 6.204%, (1-month USD LIBOR + 3.80%), 3/25/25		United States		873,900		899,839

^v2015-HQA1, M3, FRN, 7.104%, (1-month USD LIBOR + 4.70%), 3/25/28		United States		1,835,000		1,989,733

^v2016-DNA2, M3, FRN, 7.054%, (1-month USD LIBOR + 4.65%), 10/25/28		United States		1,673,000		1,808,430

^u2017-DNA1, M2, FRN, 5.654%, 7/25/29		United States		990,000		1,047,496

^u2017-DNA2, M2, FRN, 5.854%, 10/25/29		United States		1,340,000		1,434,417

^v2017-DNA3, M2, FRN, 4.904%, (1-month USD LIBOR + 2.50%), 3/25/30		United States		2,920,000		2,988,942

^u2017-HQA1, M2, FRN, 5.954%, 8/25/29		United States		1,180,000		1,260,333

FSI-24

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country	Principal Amount	*		Value

Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
^f,vFlagship CLO VIII Ltd.,
2014-8A, ARR, 144A, FRN, 3.451%, (3-month USD LIBOR + 0.85%), 1/16/26	United States	501,760		$	501,258
2014-8A, DR, 144A, FRN, 5.651%, (3-month USD LIBOR + 3.05%), 1/16/26	United States	350,000			338,037
FNMA Connecticut Avenue Securities,
^v2013-C01, M2, FRN, 7.654%, (1-month USD LIBOR + 5.25%), 10/25/23	United States	336,022			373,556
^v2014-C01, M2, FRN, 6.804%, (1-month USD LIBOR + 4.40%), 1/25/24	United States	498,000			544,759
^v2014-C02, 1M2, FRN, 5.004%, (1-month USD LIBOR + 2.60%), 5/25/24	United States	1,414,047			1,462,571
^v2014-C02, 2M2, FRN, 5.004%, (1-month USD LIBOR + 2.60%), 5/25/24	United States	727,098			745,047
^v2014-C03, 1M2, FRN, 5.404%, (1-month USD LIBOR + 3.00%), 7/25/24	United States	2,868,442			3,010,131
^v2014-C03, 2M2, FRN, 5.304%, (1-month USD LIBOR + 2.90%), 7/25/24	United States	144,781			151,054
^v2015-C01, 1M2, FRN, 6.704%, (1-month USD LIBOR + 4.30%), 2/25/25	United States	955,095			1,022,414
^v2015-C01, 2M2, FRN, 6.954%, (1-month USD LIBOR + 4.55%), 2/25/25	United States	870,071			916,168
^v2015-C02, 1M2, FRN, 6.404%, (1-month USD LIBOR + 4.00%), 5/25/25	United States	2,094,284			2,233,397
^v2015-C02, 2M2, FRN, 6.404%, (1-month USD LIBOR + 4.00%), 5/25/25	United States	1,009,199			1,050,810
^v2015-C03, 1M2, FRN, 7.404%, (1-month USD LIBOR + 5.00%), 7/25/25	United States	3,071,858			3,364,218
^v2015-C03, 2M2, FRN, 7.404%, (1-month USD LIBOR + 5.00%), 7/25/25	United States	1,478,527			1,582,395
^u2016-C04, 1M2, FRN, 6.654%, 1/25/29	United States	1,590,000			1,708,924
^v2017-C01, 1M2, FRN, 5.954%, (1-month USD LIBOR + 3.55%), 7/25/29	United States	1,858,000			1,968,476
^u2017-C03, 1M2, FRN, 5.404%, 10/25/29	United States	2,720,000			2,841,761
^u2017-C03, 2M2, FRN, 5.254%, 11/25/29	United States	450,000			464,174
^u2016-C02, 1M2, FRN, 8.404%, 9/25/28	United States	872,467			965,143
^u2017-C05, 1M2, FRN, 4.604%, 1/25/30	United States	1,020,000			1,030,627
^fGalaxy XVIII CLO Ltd.,
^u2018-28A, A2, 144A, FRN, 3.667%, 7/15/31	United States	900,000			900,198
^v2018-28A, C, 144A, FRN, 4.547%, (3-month USD LIBOR + 1.95%), 7/15/31	United States	250,000			241,555
^f,uGalaxy XXV CLO Ltd., 2018-25A, D, 144A, FRN, 5.68%, 10/25/31	United States	852,270			839,980
^f,uGalaxy XXVI CLO Ltd., 2018-26A, A, 144A, FRN, 3.723%, 11/22/31	United States	700,000			698,327
^f,vGalaxy XXVII CLO Ltd.,
2018-27A, C, 144A, FRN, 4.325%, (3-month USD LIBOR + 1.80%), 5/16/31	United States	400,000			386,984
2018-27A, C, 144A, FRN, 5.275%, (3-month USD LIBOR + 2.75%), 5/16/31	United States	600,000			565,164

Semiannual Report

FSI-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country	Principal Amount	*			Value

Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
GS Mortgage Securities Trust,
^u2016-GS3, B, FRN, 3.395%, 10/10/49	United States	728,000			$	742,486
2017-GS6, B, 3.869%, 5/10/50	United States	704,000				738,600
^f,vLCM 26 Ltd., 26A, B, 144A, FRN, 3.992%, (3-month USD LIBOR + 1.40%), 1/20/31	United States	250,000				245,228
^f,uLCM XVI LP, 2016A, BR2, 144A, FRN, 4.347%, 10/15/31	United States	351,320				351,236
^f,uLCM XVII LP,
2017A, BRR, 144A, FRN, 4.197%, 10/15/31	United States	350,000				347,154
2017A, CRR, 144A, FRN, 4.697%, 10/15/31	United States	320,000				315,283
^f,vLCM XVIII LP, 2018A, DR, 144A, FRN, 5.392%, (3-month USD LIBOR + 2.80%), 4/20/31	United States	770,000				737,660
^f,vLCM XXIV Ltd., 24A, A, 144A, FRN, 3.902%, (3-month USD LIBOR + 1.31%), 3/20/30	United States	480,000				480,480
^f,i,wMadison Park Euro Funding XIV DAC, 14A, A1N, 144A, FRN, 7/15/32	Ireland	1,000,000		EUR		1,136,850
^f,vMadison Park Funding XXIII Ltd.,
2017-23A, B, 144A, FRN, 4.282%, (3-month USD LIBOR + 1.70%), 7/27/30	United States	400,000				399,300
2017-23A, C, 144A, FRN, 4.932%, (3-month USD LIBOR + 2.35%), 7/27/30	United States	500,000				500,725
^f,uMill City Mortgage Loan Trust, 2018-4, A1B, 144A, FRN, 3.50%, 4/25/66	United States	1,470,000				1,509,700
^vMortgageIT Trust, 2004-1, A2, FRN, 3.304%, (1-month USD LIBOR + 0.90%), 11/25/34	United States	134,695				135,582
^f,uMountain View Funding CLO XIV Ltd.,
2019-1A, A1, 144A, FRN, 4.058%, 4/15/29	United States	500,000				501,165
2019-1A, C, 144A, FRN, 5.518%, 4/15/29	United States	500,000				501,535
^f,vNZCG Funding Ltd., 2015-1A, A2R, 144A, FRN, 4.071%, (3-month USD LIBOR + 1.55%), 2/26/31	United States	2,182,000				2,150,186
^f,uOctagon Investment Partners 24 Ltd., 2015-1A, BS, 144A, FRN, 4.529%, 4/21/31	United States	390,000				390,835
^f,uOctagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 4.381%, 10/24/30	United States	250,000				250,368
^f,vOctagon Investment Partners 30 Ltd., 144A, FRN, 3.912%, (3-month USD LIBOR + 1.32%), 3/17/30	United States	480,000				481,517
^f,vOctagon Investment Partners 36 Ltd., 2018-1A, A1, 144A, FRN, 3.567%, (3-month USD LIBOR + 0.97%), 4/15/31	United States	500,000				496,725
^f,vOctagon Investment Partners 37 Ltd., 2018-2A, C, 144A, FRN, 5.43%, (3-month USD LIBOR + 2.85%), 7/25/30	United States	400,000				386,892
^f,uOctagon Investment Partners 38 Ltd., 2018-1A, C, 144A, FRN, 5.542%, 7/20/30	United States	1,000,000				974,240
^f,vOctagon Investment Partners XVI Ltd., 2013-1A, DR, 144A, FRN, 5.588%, (3-month USD LIBOR + 3.00%), 7/17/30	United States	400,000				387,964
^f,vOctagon Investment Partners XXIII Ltd.,
2015-1A, BR, 144A, FRN, 3.797%, (3-month USD LIBOR + 1.20%), 7/15/27	United States	400,000				395,764
2015-1A, DR, 144A, FRN, 5.147%, (3-month USD LIBOR + 2.55%), 7/15/27	United States	800,000				792,376

FSI-26

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country	Principal Amount	*		Value

Asset-Backed Securities and Commercial Mortgage- Backed Securities (continued)
Diversified Financials (continued)
^vOpteum Mortgage Acceptance Corp. Trust, 2005-4, 1APT, FRN, 2.714%, (1-month USD LIBOR + 0.31%), 11/25/35	United States	160,754		$	161,184
^f,vRace Point IX CLO Ltd., 2015-9A, A1AR, 144A, FRN, 3.807%, (3-month USD LIBOR + 1.21%), 10/15/30	United States	400,000			400,064
^f,uStrata CLO I Ltd., 2018-1A, B, 144A, FRN, 5.016%, 1/15/31	United States	1,300,000			1,308,996
^vStructured Asset Securities Corp., 2005-2XS, 2A2, FRN, 3.94%, (1-month USD LIBOR + 1.50%), 2/25/35	United States	142,393			143,354
^uThornburg Mortgage Securities Trust, 2005-1, A3, FRN, 4.616%, 4/25/45	United States	110,943			113,874
^fVoya CLO Ltd.,
^v2013-2A, BR, 144A, FRN, 4.43%, (3-month USD LIBOR + 1.85%), 4/25/31	United States	780,000			754,221
^v2014-1A, CR2, 144A, FRN, 5.401%, (3-month USD LIBOR + 2.80%), 4/18/31	United States	1,000,000			957,020
^u2015-2A, BR, 144A, FRN, 4.092%, 7/23/27	United States	820,000			814,891
^u2016-3A, A1R, 144A, FRN, 3.791%, 10/18/31	United States	900,000			898,425
^v2017-2A, B, 144A, FRN, 4.947%, (3-month USD LIBOR + 2.35%), 6/07/30	United States	1,455,000			1,455,567
^u2018-2A, A1, 144A, FRN, 3.597%, 7/15/31	United States	400,000			397,564
^v2018-2A, D, 144A, FRN, 5.347%, (3-month USD LIBOR + 2.75%), 7/15/31	United States	300,000			288,054
Wells Fargo Mortgage Backed Securities Trust,
^u2004-W, A9, FRN, 4.855%, 11/25/34	United States	252,829			263,709
2007-3, 3A1, 5.50%, 4/25/22	United States	46,075			47,041


					117,403,343

Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $120,760,595)					119,382,419

Mortgage-Backed Securities 9.6%
^xFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 0.0%^†
FHLMC, 4.929%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/33	United States	8,697			9,007


Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 1.6%
FHLMC Gold 30 Year, 3.50%, 5/01/49	United States	6,519,759			6,669,322
FHLMC Gold 30 Year, 5.00%, 4/01/34 - 8/01/35	United States	193,140			210,937
FHLMC Gold 30 Year, 5.50%, 3/01/33 - 1/01/35	United States	144,030			156,469
FHLMC Gold 30 Year, 6.00%, 4/01/33 - 2/01/36	United States	91,167			101,902
FHLMC Gold 30 Year, 6.50%, 11/01/27 - 7/01/32	United States	18,121			20,327
FHLMC Gold 30 Year, 7.00%, 9/01/21 - 4/01/30	United States	7,177			7,631
FHLMC Gold 30 Year, 7.50%, 8/01/30 - 7/01/31	United States	903			949


					7,167,537

^xFederal National Mortgage Association (FNMA) Adjustable Rate 0.0%^†
FNMA, 4.622%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34	United States	68,028			71,697

Semiannual Report

FSI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country	Principal Amount	*		Value

Mortgage-Backed Securities (continued)
Federal National Mortgage Association (FNMA) Fixed Rate 7.0%
FNMA 15 Year, 2.50%, 7/01/22 - 6/01/27	United States	196,413		$	198,135
FNMA 15 Year, 4.50%, 3/01/20	United States	713			728
FNMA 30 Year, 3.00%, 9/01/48	United States	3,509,872			3,555,004
FNMA 30 Year, 3.00%, 11/01/48	United States	4,332,392			4,381,622
FNMA 30 Year, 3.50%, 11/01/47	United States	2,763,193			2,846,360
FNMA 30 Year, 3.50%, 6/01/49	United States	3,959,511			4,053,516
^yFNMA 30 Year, 3.50%, 7/01/49	United States	1,100,000			1,124,320
^yFNMA 30 Year, 4.00%, 6/01/49	United States	9,380,000			9,693,094
FNMA 30 Year, 4.50%, 5/01/48	United States	5,519,488			5,863,947
FNMA 30 Year, 5.00%, 4/01/30	United States	44,865			47,462
FNMA 30 Year, 6.50%, 6/01/28 - 10/01/37	United States	124,061			142,612


					31,906,800

Government National Mortgage Association (GNMA) Fixed Rate 1.0%
GNMA I SF 30 Year, 5.00%, 11/15/33 - 7/15/34	United States	197,167			214,049
GNMA I SF 30 Year, 7.00%, 10/15/28 - 6/15/32	United States	13,958			14,099
GNMA I SF 30 Year, 7.50%, 9/15/30	United States	1,163			1,349
GNMA II SF 30 Year, 4.50%, 5/20/49	United States	3,751,202			3,933,186
GNMA II SF 30 Year, 5.00%, 9/20/33 - 11/20/33	United States	51,080			54,950
GNMA II SF 30 Year, 6.00%, 11/20/34	United States	67,712			77,682
GNMA II SF 30 Year, 6.50%, 4/20/31 - 2/20/34	United States	34,703			40,105
GNMA II SF 30 Year, 7.50%, 1/20/28 - 4/20/32	United States	8,734			9,891


					4,345,311


Total Mortgage-Backed Securities (Cost $43,011,753)					43,500,352


Municipal Bonds 1.5%
California State GO, Various Purpose, Refunding, 5.00%, 9/01/29	United States	1,335,000			1,643,225
New York City HDC Capital Fund Grant Program Revenue, New York City Housing Authority Program, Series B1, 5.00%, 7/01/33	United States	405,000			446,780
Orlando Health Obligated Group, 3.777%, 10/01/28	United States	330,000			351,823
Port Authority of New York and New Jersey Revenue, Consolidated, One Hundred Ninety-First Series, 4.823%, 6/01/45	United States	1,205,000			1,326,283
^lPuerto Rico Electric Power Authority Power Revenue,
Series A-RSA-1, 6.75%, 7/01/36	United States	2,805,000			2,258,025
Series XX-RSA-1, 5.25%, 7/01/40	United States	165,000			129,938
San Jose RDA Successor Agency Tax Allocation, Senior, Refunding, Series A-T, 3.25%, 8/01/29	United States	440,000			454,709


Total Municipal Bonds (Cost $6,657,154)					6,610,783

FSI-28

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)



	Country		Shares/ Units		Value

Escrows and Litigation Trusts 0.0%^†
^a,cClear Channel Communications Inc., Escrow Account		United States		485,000	$	—
^a,ciHeartCommunications Inc., Escrow Account		United States		324,000		—
^a,cMidstates Petroleum Co. Inc./Midstates Petroleum Co. LLC, Escrow Account		United States		1,500,000		—
^a,cNewPage Corp., Litigation Trust		United States		2,500,000		—
^a,c,dRemington Outdoor Co. Inc., Litigation Units		United States		7,021		—
^a,cT-Mobile USA Inc., Escrow Account		United States		1,654,665		—
^aVistra Energy Corp., Escrow Account		United States		3,000,000		7,500


Total Escrows and Litigation Trusts (Cost $82,648)						7,500


Total Investments before Short Term Investments (Cost $459,644,173)						451,151,541


				Shares
Short Term Investments (Cost $7,294,034) 1.6%

Money Market Funds 1.6%
^e,zInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		United States		7,294,034		7,294,034


Total Investments (Cost $466,938,207) 101.1%						458,445,575
Other Assets, less Liabilities (1.1)%						(4,920,351	)


Net Assets 100.0%					$	453,525,224

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.

^bThe security is owned by FT Holdings Corporation III, a wholly-owned subsidiary of the Fund. See Note 1(g).

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

^dSee Note 8 regarding restricted securities.

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

^fSecurity 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019 , the aggregate value of these securities was $145,843,754, representing 32.2% of net assets.

^gPerpetual security with no stated maturity date.

^hSecurity 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019, the aggregate value of these securities was $2,572,084, representing 0.6% of net assets.

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

^jIncome may be received in additional securities and/or cash.

^kSee Note 1(f) regarding loan participation notes.

^lSee Note 7 regarding defaulted securities.

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

ⁿSee Note 1(i) regarding senior floating rate interests.

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

^pA 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.

^qPrincipal amount is stated in 100 Mexican Peso Units.

^rThe principal represents the notional amount. See Note 1(d) regarding value recovery instruments.

^sPrincipal amount of security is adjusted for inflation. See Note 1(k).

^tPrincipal amount is stated in 1,000 Brazilian Real Units.

^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.

^wThe coupon rate will be determined at time of issue.

^xAdjustable 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).

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

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

At June 30, 2019, 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

U.S. Treasury 5 Yr. Note

Long

8,270,937

9/30/19

$ 17,355

U.S. Treasury 10 Yr. Note

Long

4,222,969

9/19/19

48,658

Ultra 10 Yr. U.S. Treasury Note

Long

341

47,100,625

9/19/19

1,008,147

Total Futures Contracts

$ 1,074,160

*As of 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, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts



Currency	Counterparty	^a	Type	Quantity		Contract Amount	Settlement Date	Unrealized Appreciation	Unrealized Depreciation


OTC Forward Exchange Contracts
Australian Dollar	JPHQ		Sell	3,050,000	$	2,185,432	7/26/19	$ 42,321	$ —
Canadian Dollar	JPHQ		Sell	4,000,000		3,024,323	7/26/19	—	(31,779	)
Australian Dollar	JPHQ		Sell	1,350,000		946,889	8/08/19	—	(2,075	)
Canadian Dollar	JPHQ		Buy	600,000		448,229	9/18/19	10,556	—
Canadian Dollar	JPHQ		Sell	1,500,000		1,127,997	9/18/19	—	(18,966	)
Euro	DBAB		Sell	650,000		733,863	9/18/19	—	(9,956	)
Euro	JPHQ		Buy	2,936,600		3,341,366	9/18/19	19,092	—
Euro	JPHQ		Sell	4,242,409		4,834,384	9/18/19	—	(20,357	)
Norwegian Krone	JPHQ		Buy	25,500,000		2,923,440	9/18/19	71,573	—
Swedish Krona	JPHQ		Buy	13,400,000		1,440,605	9/18/19	11,035	—
Swedish Krona	JPHQ		Sell	13,400,000		1,463,202	9/18/19	11,562	—
Swedish Krona	JPHQ		Sell	27,800,000		2,933,727	9/18/19	—	(77,884	)
Swiss Franc	JPHQ		Buy	200,000		199,169	9/18/19	7,200	—
Swiss Franc	JPHQ		Sell	200,000		202,018	9/18/19	—	(4,351	)
Chinese Yuan Renminbi	JPHQ		Buy	6,600,000		983,418	9/27/19	—	(23,529	)
Chinese Yuan Renminbi	JPHQ		Sell	12,750,000		1,897,773	9/27/19	43,443	—
Chinese Yuan Renminbi	JPHQ		Sell	15,500,000		2,244,325	9/27/19	—	(9,959	)
Australian Dollar	JPHQ		Sell	1,300,000		895,817	10/11/19	—	(19,476	)
Australian Dollar	JPHQ		Sell	2,000,000		1,438,914	10/11/19	30,772	—
Turkish Lira	JPHQ		Buy	5,800,000		892,239	10/18/19	52,463	—
Indonesian Rupiah	JPHQ		Sell	7,200,000,000		491,199	12/13/19	—	(7,667	)
Mexican Peso	JPHQ		Buy	1,300,000		65,853	12/16/19	—	(85	)
South Korean Won	JPHQ		Sell	1,700,000,000		1,453,054	12/16/19	—	(23,994	)


Total Forward Exchange Contracts								$ 300,017	$ (250,078	)


Net unrealized appreciation (depreciation)								$ 49,939

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

At June 30, 2019, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts

Description

Periodic
Payment Rate
Received
(Paid)

Payment
Frequency

Counter-
party

Maturity
Date

Notional
Amount

Value

Unamortized
Upfront
Payments
(Receipts)

Unrealized
Appreciation
(Depreciation)

Rating^b

Centrally Cleared Swap Contracts

Contracts to Sell Protection^c,d

Traded Index

CDX.EM.30

1.00%

Quarterly

12/20/23

$5,200,000

$(147,820)

$(199,488)

$ 51,668

Investment

Grade

OTC Swap Contracts

Contracts to Buy Protection^c

Single Name

Ally Financial Inc.

(5.00)%

Quarterly

JPHQ

6/20/24

$1,810,000

$(329,739)

$(284,905)

$(44,834)

Semiannual Report

FSI-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

Credit Default Swap Contracts (continued)



Description	Periodic Payment Rate Received (Paid)		Payment Frequency	Counter- party	Maturity Date		Notional Amount	^a		Value	Unamortized Upfront Payments (Receipts)	Unrealized Appreciation (Depreciation)	Rating^b

OTC Swap Contracts (continued)
Contracts to Buy Protection^c(continued)
Single Name (continued)
Government of Italy	(1.00)	%	Quarterly	BZWS	6/20/23	$	1,500,000		$	10,721	$ 12,984	$ (2,263)
Government of Turkey	(1.00)	%	Quarterly	BZWS	12/20/19		966,667			4,905	21,398	(16,493)
Contracts to Sell Protection^c,d
Single Name
Government of Argentina	5.00	%	Quarterly	MSCO	6/20/23		4,300,000			(621,435)	341,249	(962,684)	B
Government of Indonesia	1.00	%	Quarterly	CITI	6/20/24		2,300,000			10,819	(7,458)	18,277	BBB
Government of Italy	1.00	%	Quarterly	BZWS	6/20/23		1,500,000			(42,487)	(56,937)	14,450	NR
Government of Russia	1.00	%	Quarterly	BNDP	6/20/24		1,300,000			(8,045)	(16,773)	8,728	BBB-
Traded Index
^eBNP Paribas Bespoke Bordeaux Index, Mezzanine Tranche 7-10%	2.10	%	Quarterly	BNDP	6/20/20		750,000			5,132	—	5,132	Non-
													Investment
													Grade
^eBNP Paribas Bespoke Rodez2 Index, Mezzanine Tranche 5-7%	3.20	%	Quarterly	BNDP	12/20/20		300,000			5,467	—	5,467	Non-
													Investment
													Grade
^eCitibank Bespoke Bogota Index, Mezzanine Tranche 7-10%	1.35	%	Quarterly	CITI	6/20/20		750,000			1,790	—	1,790	Non-
													Investment
													Grade
^eCitibank Bespoke Cambridge Index, Equity Tranche 0-3%	0.00	%	Quarterly	CITI	12/20/19		2,900,000			(682,788)	(112,511)	(570,277)	Non-
													Investment
													Grade
^eCitibank Bespoke Palma Index, Mezzanine Tranche 5-7%	2.30	%	Quarterly	CITI	6/20/21		620,000			3,957	—	3,957	Non-
													Investment
													Grade
^eCitibank Bespoke Singapore Index, Equity Tranche 0-3%	0.00	%	Quarterly	CITI	6/20/20		300,000			(49,137)	(40,828)	(8,309)	Non-
													Investment
													Grade
^eCitibank Bespoke Sydney Index, Equity Tranche 0-3%	0.00	%	Quarterly	CITI	6/20/20		450,000			(140,317)	(69,915)	(70,402)	Non-
													Investment
													Grade
^eCitibank Bespoke Verona Index, Equity Tranche 0-3%	0.00	%	Quarterly	CITI	12/20/19		1,100,000			(227,784)	(52,386)	(175,398)	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	Periodic Payment Rate Received (Paid)	Payment Frequency	Counter- party	Maturity Date		Notional Amount	^a		Value		Unamortized Upfront Payments (Receipts)		Unrealized Appreciation (Depreciation)	Rating^b

OTC Swap Contracts (continued)
Contracts to Sell Protection^c,d(continued)
Traded Index (continued)
^eCitibank Bespoke Verona Index, Mezzanine Tranche 7-15%	0.40%	Quarterly	CITI	12/20/19	$	3,100,000		$	2,857	$	—	$	2,857	Non-
														Investment
														Grade
MCDX.NA.31	1.00%	Quarterly	CITI	12/20/23		2,270,000			44,185		20,573		23,612	Investment
														Grade
^eMorgan Stanley Bespoke Pecan Index, Mezzanine Tranche 5-10%	4.10%	Quarterly	MSCO	12/20/21		850,000			13,073		—		13,073	Non-
														Investment
														Grade
^eMorgan Stanley Bespoke Pecan Index, Mezzanine Tranche 5-10%	3.98%	Quarterly	MSCO	12/20/21		850,000			13,713		—		13,713	Non-

														Investment
														Grade
Total OTC Swap Contracts								$	(1,985,113)	$	(245,509)	$	(1,739,604)


Total Credit Default Swap Contracts								$	(2,132,933)	$	(444,997)	$	(1,687,936)

^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.

^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, 2019, 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

$9,751

Semiannual Report

FSI-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

At June 30, 2019, 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

Long^a

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

JPHQ

12/20/19

$ 600,000

$ 824

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

MSCO

12/20/19

700,000

5,399

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

FBCO

3/20/20

750,000

3,381

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

GSCO

3/20/20

1,100,000

9,385

Total Total Return Swap Contracts

$18,989

^aThe Fund receives the total return on the underlying instrument and pays a variable financing rate.

See Note 9 regarding other derivative information.

See Abbreviations on page FSI-54.

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, 2019 (unaudited)


	Franklin Strategic Income VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$446,193,628
Cost - Non-controlled affiliates (Note 3e)		20,744,579


Value - Unaffiliated issuers		$439,423,790
Value - Non-controlled affiliates (Note 3e)		19,021,785

Cash		7,697,525
Restricted cash for OTC derivative contracts (Note 1e)		110,000
Foreign currency, at value (cost $52,370)		52,370
Receivables:
Investment securities sold		173,988
Capital shares sold.		173,398
Dividends and interest		3,861,100
Deposits with brokers for:
OTC derivative contracts		1,680,000
Futures contracts		524,150
Centrally cleared swap contracts		839,188
Variation margin on futures contracts		11,688
Variation margin on centrally cleared swap contracts		2,422
OTC swap contracts (upfront payments $551,403)		396,204
Unrealized appreciation on OTC forward exchange contracts		300,017
Unrealized appreciation on OTC swap contracts		139,796
FT Subsidiary deferred tax benefit (Note 1g)		181,227
Other assets		316


Total assets		474,588,964


Liabilities:
Payables:
Investment securities purchased		16,883,959
Capital shares redeemed		839,398
Management fees		224,965
Distribution fees		72,794
Trustees’ fees and expenses		857
Deposits from brokers for:
OTC derivative contracts		110,000
OTC swap contracts (upfront receipts $1,299,682)		641,713
Unrealized depreciation on OTC forward exchange contracts		250,078
Unrealized depreciation on OTC swap contracts		1,850,660
Deferred tax		22,442
Accrued expenses and other liabilities		166,874


Total liabilities		21,063,740


Net assets, at value		$453,525,224


Net assets consist of:
Paid-in capital		$487,808,916
Total distributable earnings (loss)		(34,283,692	)


Net assets, at value		$453,525,224

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, 2019 (unaudited)


	Franklin Strategic Income VIP Fund

Class 1:
Net assets, at value		$302,060,958

Shares outstanding		28,008,421

Net asset value and maximum offering price per share		$10.78

Class 2:
Net assets, at value		$ 92,190,615

Shares outstanding		8,844,521

Net asset value and maximum offering price per share		$10.42

Class 4:
Net assets, at value		$ 59,273,651

Shares outstanding		5,535,613

Net asset value and maximum offering price per share		$10.71

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, 2019 (unaudited)


	Franklin Strategic Income VIP Fund

Investment income:
Dividends:
Non-controlled affiliates (Note 3e)		$ 950,855
Interest: (net of foreign taxes)~
Unaffiliated issuers		10,282,607


Total investment income		11,233,462


Expenses:
Management fees (Note 3a)		1,404,208
Distribution fees: (Note 3c)
Class 2		111,460
Class 4		102,523
Custodian fees (Note 4)		5,708
Reports to shareholders		73,872
Professional fees		55,275
Trustees’ fees and expenses		2,274
Other		34,623


Total expenses		1,789,943
Expense reductions (Note 4)		(4,401	)
Expenses waived/paid by affiliates (Note 3e)		(71,107	)


Net expenses		1,714,435


Net investment income		9,519,027


Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(424,838	)
Non-controlled affiliates (Note 3e)		(1,769,646	)
Foreign currency transactions		11,307
Forward exchange contracts		316,816
Futures contracts		1,609,018
Swap contracts		1,771,132


Net realized gain (loss)		1,513,789


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		17,908,048
Non-controlled affiliates (Note 3e)		586,351
Translation of other assets and liabilities denominated in foreign currencies		(20,151	)
Forward exchange contracts		(212,811	)
Futures contracts		382,479
Swap contracts		408,595
Change in deferred taxes on unrealized appreciation		(14,081	)


Net change in unrealized appreciation (depreciation)		19,038,430


Net realized and unrealized gain (loss)		20,552,219


Net increase (decrease) in net assets resulting from operations		$30,071,246


^~Foreign taxes withheld on interest		$ 12,493

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, 2019 (unaudited)


	Franklin Strategic Income VIP Fund
	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 9,519,027			$ 24,508,744
Net realized gain (loss)		1,513,789			(9,616,538	)
Net change in unrealized appreciation (depreciation)		19,038,430			(23,561,419	)


Net increase (decrease) in net assets resulting from operations		30,071,246			(8,669,213	)


Distributions to shareholders:
Class 1		(16,055,733	)		(9,703,924	)
Class 2		(4,608,498	)		(5,724,625	)
Class 4		(2,951,572	)		(1,690,861	)


Total distributions to shareholders		(23,615,803	)		(17,119,410	)


Capital share transactions: (Note 2)
Class 1		(4,794,924	)		(43,986,518	)
Class 2		1,616,075			(117,066,128	)
Class 4		(2,387,529	)		(10,271,574	)


Total capital share transactions		(5,566,378	)		(171,324,220	)


Net increase (decrease) in net assets		889,065			(197,112,843	)
Net assets:
Beginning of period		452,636,159			649,749,002


End of period		$453,525,224			$452,636,159

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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, 2019, 80.6% 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

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

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.

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.

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

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

FSI-40

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

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 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.

$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.

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)

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 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 interest rate risk and 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 OTC total return swap contracts primarily to manage and/or gain exposure to interest rate 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.

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 9 regarding other derivative information.

e. Restricted Cash

At June 30, 2019, 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 Consolidated Statement of Assets and Liabilities.

f. 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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

g. 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, 2019, 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, 2019, 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 which can be carried-back to offset prior year capital gains, resulting 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, 2019, the net assets of FT Subsidiary were $6,398,598, representing 1.4% of the Fund’s consolidated net assets. The Fund’s investment in FT Subsidiary is limited to 25% of consolidated assets.

h. Mortgage Dollar Rolls

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.

i. Senior Floating Rate Interests

j. Income and Deferred Taxes

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FSI-43

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)

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 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.

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.

l. Accounting Estimates

m. Guarantees and Indemnifications

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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

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 1 Shares:
Shares sold		381,210		$	4,201,734			529,935		$	5,819,800
Shares issued in reinvestment of distributions		1,499,135			16,055,733			904,373			9,703,924
Shares redeemed		(2,273,100	)		(25,052,391	)		(5,463,142	)		(59,510,242	)

Net increase (decrease)		(392,755	)	$	(4,794,924	)		(4,028,834	)	$	(43,986,518	)

Class 2 Shares:
Shares sold		859,552		$	9,193,927			1,939,103		$	20,473,500
Shares issued in reinvestment of distributions		445,266			4,608,498			552,570			5,724,625
Shares redeemed in-kind (Note 11)		—			—			(10,844,970	)		(113,023,023	)
Shares redeemed		(1,145,506	)		(12,186,350	)		(2,870,064	)		(30,241,230	)

Net increase (decrease)		159,312		$	1,616,075			(11,223,361	)	$	(117,066,128	)

Class 4 Shares:
Shares sold		282,205		$	3,113,729			351,399		$	3,829,733
Shares issued in reinvestment of distributions		277,403			2,951,572			158,766			1,690,861
Shares redeemed		(778,798	)		(8,452,830	)		(1,457,847	)		(15,792,168	)

Net increase (decrease)		(219,190	)	$	(2,387,529	)		(947,682	)	$	(10,271,574	)

3. Transactions with Affiliates


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

FSI-45

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic 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 $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

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, 2019, 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^a	$	12,230,563	$	—	$	—	$	—	$	(502,812	)	$	11,727,751		1,358,951	$	485,775

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (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		Dividend Income


Non-Controlled Affiliates (continued)
Franklin Lower Tier Floating Rate Fund	$	13,000,405	$	—	$	(12,319,922	)^b	$	(1,769,646	)	$	1,089,163	$	—		—	$	359,788
Institutional Fiduciary Trust Money Market Portfolio, 2.05%		10,265,231		78,898,452		(81,869,649	)		—		$	—		7,294,034		7,294,034		105,292


Total Affiliated Securities	$	35,496,199	$	78,898,452	$	(94,189,571	)	$	(1,769,646	)	$	586,351	$	19,021,785			$	950,855

^aEffective May 31, 2019, Franklin Middle Tier Floating Rate Fund was renamed Franklin Floating Rate Income Fund.

^bThe Fund sold shares of the affiliate through an in-kind transfer of common stocks and other equity interests, corporate bonds and senior floating rate interests securities and cash. See Note 6.

4. Expense Offset Arrangement

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2018, the capital loss carryforwards were as follows:


Capital loss carryforwards not subject to expiration:
Short term	$	3,186,035
Long term		36,761,926


Total capital loss carryforwards	$	39,947,961^a

^aSubject to certain limitations under Internal Revenue Code Section 382.

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	469,675,559


Unrealized appreciation	$	9,535,735
Unrealized depreciation		(21,758,733	)


Net unrealized appreciation (depreciation)	$	(12,222,998	)

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, bond discounts and premiums, swaps and financial futures transactions.

Semiannual Report

FSI-47

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $309,092,020 and $336,241,726, respectively. Purchases and sales of investments excludes in-kind transactions of $10,271,362 and $12,319,922, respectively.

7. Credit Risk and Defaulted Securities

At June 30, 2019, the Fund had 51.4% 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, 2019, the aggregate value of these securities was $3,159,239, representing 0.7% 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. Restricted Securities

At June 30, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:


Principal Amount/ Shares/ Units	Issuer	Acquisition Date	Cost		Value

18,684	^aAppvion Operations Inc.	4/12/19	$	252,711	$	287,369
8,384	iHeartMedia Inc., A	6/09/11 - 9/05/14		194,247		121,696
142	iHeartMedia Inc., B	6/09/11 - 9/05/14		3,268		2,061
14,792,309	K2016470219 South Africa Ltd., A	2/08/13 - 2/01/17		114,768		10,500
1,472,041	K2016470219 South Africa Ltd., B	2/01/17		1,093		1,045
947,792	K2016470219 South Africa Ltd., senior secured note, 144A, PIK, 3.00%, 12/31/22	2/08/13 - 6/30/19		1,330,313		1,185
278,546	K2016470260 South Africa Ltd., senior secured note, 144A, PIK, 25.00%, 12/31/22	2/01/17 - 6/30/19		199,465		8,356
7,021	^bRemington Outdoor Co. Inc., Litigation Units	4/12/19		—		—

	Total Restricted Securities (Value is 0.1% of Net Assets)		$	2,095,865	$	432,212

^aThe Fund also invests in unrestricted securities of the issuer, valued at $424,833 as of June 30, 2019.

^bThe Fund also invests in unrestricted securities of the issuer, valued at $111,864 as of June 30, 2019.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

9. Other Derivative Information

At June 30, 2019, 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	$	1,074,160	^a	Variation margin on futures contracts	$	—

	Unrealized appreciation on OTC swap contracts		28,740		Unrealized depreciation on OTC swap contracts		—

Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts		300,017		Unrealized depreciation on OTC forward exchange contracts		250,078

Credit contracts	Variation margin on centrally cleared swap contracts		51,668	^a	Variation margin on centrally cleared swap contracts		—

	OTC swap contracts (upfront payments)		396,204		OTC swap contracts (upfront receipts)		641,713

	Unrealized appreciation on OTC swap contracts		111,056		Unrealized depreciation on OTC swap contracts		1,850,660

Value recovery instruments	Investments in securities, at value		701,651	^b


Totals		$	2,663,496			$	2,742,451

^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, 2019, 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

Futures contracts

$1,609,018

Futures contracts

$ 382,479

Swap contracts

925,071

Swap contracts

451,264

Foreign exchange contracts

Forward exchange contracts

316,816

Forward exchange contracts

(212,811)

Credit contracts

Swap contracts

846,061

Swap contracts

(42,669)

Value recovery instruments

Investments

98,000

Investments

65,778

Totals

$3,794,966

$644,041

^aVRI 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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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

9. Other Derivative Information (continued)

For the period ended June 30, 2019, the average month end notional amount of futures contracts and swap contracts and the average month end contract value for forward exchange contracts, and average month end fair value of VRI, were as follows:


Futures contracts	$	32,829,607
Swap contracts		56,808,610
Forward exchange contracts		37,064,038
VRI		729,187


	Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
	Assets^a		Liabilities^a

Derivatives
Forward exchange contracts		$300,017		$ 250,078
Swap contracts		536,000		2,492,373

Total		$836,017		$2,742,451

^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, 2019, 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^a			Net Amount (Not less than zero)

Counterparty
BNDP		$ 19,327		$ (16,773)			$ —		$ —			$2,554
BZWS		48,832		(48,832	)		—		—			—
CITI		80,817		(80,817	)		—		—			—
DBAB		—		—			—		—			—
FBCO		3,381		—			—		—			3,381
GSCO		9,385		—			—		(9,385	)		—
JPHQ		300,841		(300,841	)		—		—			—
MSCO		373,434		(373,434	)		—		—			—

Total		$836,017		$(820,697	)		$ —		$(9,385	)		$5,935

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

At June 30, 2019, 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 Pledged^a			Net Amount (Not less than zero)

Counterparty
BNDP		$ 16,773		$ (16,773	)		$ —		$ —			$ —
BZWS		75,693		(48,832	)		—		—			26,861
CITI		1,107,484		(80,817	)		—		(1,020,000	)		6,667
DBAB		9,956		—			—		—			9,956
FBCO		—		—			—		—			—
GSCO		—		—			—		—			—
JPHQ		569,861		(300,841	)		—		—			269,020
MSCO		962,684		(373,434	)		—		(589,250	)		—

Total		$2,742,451		$(820,697	)		$ —		$(1,609,250	)		$312,504

^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.

See Note 1(d) regarding derivative financial instruments.

See Abbreviations on page FSI-54.

10. Credit Facility

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, 2019, the Fund did not use the Global Credit Facility.

11. Redemption In-Kind

During the year ended December 31, 2018, the Fund realized $2,963,426 of net losses resulting from a redemption in-kind in which a shareholder redeemed fund shares for cash and securities held by the Fund. Because such losses are not taxable to the Fund, are not netted with capital gains that are distributed to remaining shareholders, they are reclassified from accumulated net realized losses to paid-in capital.

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FSI-51

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

12. Fair Value Measurements

•

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.

FSI-52

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

A summary of inputs used as of June 30, 2019, 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	$	—	$	111,864	$	—		$	111,864
Consumer Services		—		—		41,832			41,832
Energy		116,404		438,158		9			554,571
Materials		109,429		—		287,369			396,798
Media & Entertainment		98,195		—		123,757			221,952
Retailing		—		—		11,545			11,545
All Other Equity Investments		11,727,751		—		—			11,727,751
Corporate Bonds:
Retailing		—		1,267,294		1,185			1,268,479
All Other Corporate Bonds		—		159,183,861		—			159,183,861
Senior Floating Rate Interests:
Household & Personal Products		—		—		2,390,703			2,390,703
All Other Senior Floating Rate Interests		—		56,604,960		—			56,604,960
Foreign Government and Agency Securities		—		25,374,343		—			25,374,343
U.S. Government and Agency Securities		—		23,761,828		—			23,761,828
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		119,382,419		—			119,382,419
Mortgage-Backed Securities		—		43,500,352		—			43,500,352
Municipal Bonds		—		6,610,783		—			6,610,783
Escrows and Litigation Trusts		—		7,500		—	^c		7,500
Short Term Investments		7,294,034		—		—			7,294,034


Total Investments in Securities	$	19,345,813	$	436,243,362	$	2,856,400		$	458,445,575


Other Financial Instruments:
Futures Contracts	$	1,074,160	$	—	$	—		$	1,074,160
Forward Exchange Contracts		—		300,017		—			300,017
Swap Contracts		—		191,464		—			191,464


Total Other Financial Instruments	$	1,074,160	$	491,481	$	—		$	1,565,641


Liabilities:
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	250,078	$	—		$	250,078
Swap Contracts		—		1,850,660		—			1,850,660


Total Other Financial Instruments	$	—	$	2,100,738	$	—		$	2,100,738

^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, 2019.

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

Semiannual Report

FSI-53

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Franklin Strategic Income VIP Fund (continued)

13. 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.

Abbreviations


Counterparty		Currency		Selected Portfolio

BNDP	BNP Paribas SA	BRL	Brazilian Real	ARM	Adjustable Rate Mortgage
BZWS	Barclays Bank PLC	COP	Colombian Peso	CLO	Collateralized Loan Obligation
CITI	Citigroup, Inc.	DOP	Dominican Peso	CMT	1 year Constant Maturity Treasury Index
DBAB	Deutsche Bank AG	EUR	Euro	FHLMC	Federal Home Loan Mortgage Corp.
FBCO	Credit Suisse International	IDR	Indonesian Rupiah	FNMA	Federal National Mortgage Association
GSCO	The Goldman Sachs Group, Inc.	MXN	Mexican Peso	FRN	Floating Rate Note
JPHQ	JP Morgan Chase & Co.	USD	United States Dollar	GDP	Gross Domestic Product
MSCO	Morgan Stanley	UYU	Uruguayan peso	GNMA	Government National Mortgage Association
		ZAR	South African rand	HDC	Housing Development Corp.
				LIBOR	London InterBank Offered Rate
				MBS	Mortgage-Backed Security
				PIK	Payment-In-Kind
				RDA	Redevelopment Agency/Authority
				SF	Single Family
				T-Note	Treasury Note
				VRI	Value Recovery Instrument


Index

CDX.EM.Series number		CDX Emerging Markets Index
MCDX.NA.Series number		MCDX North America Index

FSI-54

Semiannual Report

Franklin U.S. Government Securities VIP Fund

This semiannual report for Franklin U.S. Government Securities VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +3.83% total return for the six-month period ended June 30, 2019.

Semiannual Report

FUS-1

FRANKLIN U.S. GOVERNMENT SECURITIES VIP FUND

Fund Goal and Main Investments

The Fund seeks income. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. government securities.

Fund Risks

All investments involve risks, including possible loss of principal. The Fund’s share price and yield will be affected by interest rate movements and mortgage prepayments. 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. 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 Bloomberg Barclays U.S. Government Index: Intermediate Component, posted a +3.96% total return.¹ The Fund’s secondary benchmark, the Lipper VIP General U.S. Government Funds Classification Average, posted a +4.39% total return.² Funds in the Lipper average may allocate as much as 35% of their investments in asset types other than U.S. government and agency mortgage-backed securities.

Economic and Market Overview

Portfolio Composition

Based on Total Net Assets as of 6/30/19

LOGO

decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

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.

3. 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).

FUS-2

Semiannual Report

FRANKLIN U.S. GOVERNMENT SECURITIES VIP FUND

Investment Strategy

Using our straightforward investment approach, we seek to produce current income with a high degree of credit safety from a conservatively managed portfolio of U.S. government securities. Analyzing securities using proprietary and nonproprietary research, we seek to identify attractive investment opportunities.

Manager’s Discussion

Performance for the fixed income sectors in which this portfolio invests was mixed. From a perspective of excess returns over Treasuries, as measured by Bloomberg Barclays indexes, commercial mortgage-backed securities (CMBS), asset-backed securities (ABS) and U.S. agency bonds all posted positive excess returns. Agency mortgage-backed securities (MBS) posted positive total returns but underperformed similar duration U.S. Treasuries and produced negative excess returns. Within the agency mortgage pass-through (MBS) sector, although all produced negative basis points (bps) of excess returns, Freddie Mac (FHLMC) MBS and Ginnie Mae (GNMA) MBS were the best performers, versus Fannie Mae (FNMA) which produced negative 18 bps of excess returns. For the GNMA coupon stack, GNMA II 3.0 and 3.5% were the best performers while GNMA I 4.5% and 5.0% coupons lagged.

The Fund maintains a consistent and disciplined approach to our investment strategy. The Fund’s investment process and strategy have not changed, and the team continues to look for strong cash flow fundamentals and valuations seeking to uncover opportunities across the agency mortgage and agency debenture universe. The Fund emphasizes agency pass-throughs and invests in other agency securities for diversification purposes.

The portfolio’s largest allocation remains in fixed-rate MBS and primarily in 30-year GNMA II securities. The Fund’s largest absolute allocation remained in 3.5% and 4.0% coupons. Over the period, we increased exposure to GNMA II 3.0% coupons, while reducing exposure to 4.0% coupons.

The Fund’s allocation to fixed-rate agency MBS detracted from performance, but significant performance from security selection more than offset the negative impact. The Fund’s exposures to adjustable-rate mortgage securities and U.S. agency bonds also contributed during the period. In contrast, the Fund’s U.S. yield curve positioning was a detractor during the period as yield curve movements had a negative impact relative to the benchmark.

Thank you for your participation in Franklin U.S. Government Securities VIP Fund. We look forward to serving your future investment needs.

Semiannual Report

FUS-3

FRANKLIN U.S. GOVERNMENT SECURITIES VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending

Account
Value 6/30/19

Fund-Level
Expenses
Paid During Period
1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,038.30

$3.79

$1,021.08

$3.76

0.75%

2. Does not include any ongoing expenses of the Contract for which the Fund is an investment option or acquired fund fees and expenses.

FUS-4

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin U.S. Government Securities VIP Fund


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014

Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.07			$12.36			$12.51			$12.74			$13.00			$12.91


Income from investment operations^a:

Net investment income^b		0.15			0.29			0.25			0.22			0.21			0.24

Net realized and unrealized gains (losses)		0.32			(0.22	)		(0.04	)		(0.10	)		(0.12	)		0.22


Total from investment operations		0.47			0.07			0.21			0.12			0.09			0.46


Less distributions from:

Net investment income		(0.38	)		(0.36	)		(0.36	)		(0.35	)		(0.35	)		(0.37)


Net asset value, end of period		$12.16			$12.07			$12.36			$12.51			$12.74			$13.00


Total return^c		3.93%			0.60%			1.66%			0.90%			0.71%			3.64%

Ratios to average net assets^d

Expenses^e		0.50%			0.50%			0.50%			0.50%			0.50%			0.49%

Net investment income		2.43%			2.38%			2.00%			1.75%			1.64%			1.84%

Supplemental data

Net assets, end of period (000’s)		$56,770			$59,213			$66,404			$73,695			$79,620			$90,656

Portfolio turnover rate		14.59%			22.25%			80.49%			86.28%			61.91%			42.88%

^bBased on average daily shares outstanding.

^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

FUS-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin U.S. Government Securities VIP Fund (continued)


	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014

Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$11.79			$12.09			$12.24			$12.47			$12.73			$12.65


Income from investment operations^a:

Net investment income^b		0.13			0.25			0.21			0.19			0.18			0.20

Net realized and unrealized gains (losses)		0.32			(0.22	)		(0.04	)		(0.10	)		(0.12	)		0.22


Total from investment operations		0.45			0.03			0.17			0.09			0.06			0.42


Less distributions from:

Net investment income		(0.35	)		(0.33	)		(0.32	)		(0.32	)		(0.32	)		(0.34)


Net asset value, end of period		$11.89			$11.79			$12.09			$12.24			$12.47			$12.73


Total return^c		3.83%			0.34%			1.34%			0.66%			0.47%			3.38%

Ratios to average net assets^d

Expenses^e		0.75%			0.75%			0.75%			0.75%			0.75%			0.74%

Net investment income		2.18%			2.13%			1.75%			1.50%			1.39%			1.59%

Supplemental data

Net assets, end of period (000’s)		$1,086,681			$1,105,627			$1,223,491			$1,268,963			$1,311,974			$1,369,037

Portfolio turnover rate		14.59%			22.25%			80.49%			86.28%			61.91%			42.88%

^bBased on average daily shares outstanding.

^dRatios are annualized for periods less than one year.

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

FUS-6

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Franklin U.S. Government Securities VIP Fund



	Principal Amount		Value

Mortgage-Backed Securities 79.1%
^aFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 1.0%
FHLMC, 4.681%, (12-month USD LIBOR +/- MBS Margin), 4/01/40	$	5,219,363	$	5,500,463
FHLMC, 4.66% - 4.762%, (12-month USD LIBOR +/- MBS Margin), 3/01/36 - 5/01/38		5,325,810		5,600,079
FHLMC, 4.764%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/37		408,860		430,455


				11,530,997

Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 9.4%
FHLMC 30 Year, 3.50%, 12/01/47		7,133,252		7,354,713
FHLMC 30 Year, 8.50%, 9/01/20		17		17
FHLMC Gold 15 Year, 4.50%, 3/01/25 - 4/01/25		692,048		717,428
FHLMC Gold 30 Year, 3.00%, 5/01/43		416,061		423,428
FHLMC Gold 30 Year, 3.00%, 6/01/46		33,568,620		34,029,939
FHLMC Gold 30 Year, 3.00%, 10/01/46		23,747,425		24,068,886
FHLMC Gold 30 Year, 3.50%, 3/01/32 - 5/01/43		3,214,500		3,336,085
FHLMC Gold 30 Year, 3.50%, 1/01/48		13,418,819		13,817,262
FHLMC Gold 30 Year, 4.00%, 9/01/40 - 1/01/48		10,501,763		11,024,993
FHLMC Gold 30 Year, 4.00%, 5/01/48		3,593,790		3,740,506
FHLMC Gold 30 Year, 4.50%, 5/01/40 - 7/01/41		2,011,714		2,162,781
FHLMC Gold 30 Year, 5.00%, 9/01/33 - 4/01/40		4,415,562		4,799,773
FHLMC Gold 30 Year, 5.50%, 7/01/33 - 5/01/38		1,003,312		1,108,568
FHLMC Gold 30 Year, 6.00%, 1/01/24 - 8/01/35		710,746		790,080
FHLMC Gold 30 Year, 6.50%, 12/01/23 - 5/01/35		329,642		366,626
FHLMC Gold 30 Year, 7.00%, 4/01/24 - 9/01/31		109,545		119,975
FHLMC Gold 30 Year, 7.50%, 12/01/22		320		322
FHLMC Gold 30 Year, 8.00%, 9/01/21 - 5/01/22		1,563		1,637
FHLMC Gold 30 Year, 8.50%, 7/01/31		214,736		246,589


				108,109,608

^aFederal National Mortgage Association (FNMA) Adjustable Rate 3.4%
FNMA, 3.994% - 4.499%, (12-month USD LIBOR +/- MBS Margin), 5/01/33 - 1/01/40		8,409,429		8,777,735
FNMA, 4.739%, (12-month USD LIBOR +/- MBS Margin), 9/01/37		12,087,544		12,771,321
FNMA, 4.501% - 5.005%, (12-month USD LIBOR +/- MBS Margin), 1/01/32 - 3/01/47		5,698,232		5,962,612
FNMA, 3.704% - 5.348%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/19 - 10/01/44		9,360,342		9,811,140
FNMA, 2.208% - 5.383%, (11th District COF +/- MBS Margin), 6/01/25 - 6/01/38		130,046		131,391
FNMA, 3.21% - 5.758%, (US 3 Year CMT T-Note +/- MBS Margin), 3/01/20 - 3/01/29		25,006		25,916
FNMA, 3.677% - 5.918%, (6-month USD LIBOR +/- MBS Margin), 6/01/21 - 7/01/37		871,988		893,792


				38,373,907

Federal National Mortgage Association (FNMA) Fixed Rate 13.2%
FNMA 15 Year, 2.64%, 7/01/25		2,460,899		2,511,443
FNMA 15 Year, 2.77%, 4/01/25		3,500,000		3,597,062
FNMA 15 Year, 2.99%, 11/01/24		2,922,455		3,034,361
FNMA 15 Year, 3.14%, 10/01/25		4,000,000		4,162,366
FNMA 15 Year, 3.28%, 7/01/27		4,000,000		4,241,833
FNMA 15 Year, 3.51%, 8/01/23		3,000,000		3,160,541
FNMA 15 Year, 5.50%, 1/01/25		645,514		674,141
FNMA 30 Year, 3.00%, 12/01/42		175,537		178,058
FNMA 30 Year, 3.00%, 9/01/47		18,189,644		18,373,017

Semiannual Report

FUS-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)



	Principal Amount		Value

Mortgage-Backed Securities (continued)
Federal National Mortgage Association (FNMA) Fixed Rate (continued)
FNMA 30 Year, 3.50%, 7/01/45	$	31,020,969	$	31,993,703
FNMA 30 Year, 4.00%, 1/01/41 - 8/01/41		6,828,979		7,203,753
FNMA 30 Year, 4.00%, 10/01/47		12,308,556		12,867,293
FNMA 30 Year, 4.00%, 4/01/48		39,996,522		41,593,825
FNMA 30 Year, 4.50%, 8/01/40 - 6/01/41		7,065,321		7,590,940
FNMA 30 Year, 5.00%, 3/01/34 - 7/01/41		3,789,816		4,120,995
FNMA 30 Year, 5.50%, 12/01/32 - 8/01/35		1,588,019		1,739,638
FNMA 30 Year, 6.00%, 1/01/24 - 8/01/38		1,709,091		1,905,809
FNMA 30 Year, 6.50%, 1/01/24 - 9/01/36		250,392		284,492
FNMA 30 Year, 7.50%, 4/01/23 - 8/01/25		13,652		13,900
FNMA 30 Year, 8.00%, 3/01/22 - 12/01/24		59,577		60,320
FNMA 30 Year, 8.50%, 3/01/20 - 6/01/21		121		122
FNMA 30 Year, 9.00%, 10/01/26		45,981		46,913
FNMA PL 30 Year, 5.50%, 4/01/34		1,032,782		1,112,119


				150,466,644

Government National Mortgage Association (GNMA) Fixed Rate 52.1%
GNMA I SF 30 Year, 3.00%, 7/15/42		445,253		455,978
GNMA I SF 30 Year, 4.00%, 10/15/40 - 8/15/46		9,610,909		10,194,777
GNMA I SF 30 Year, 4.50%, 1/15/39 - 6/15/40		9,456,034		10,219,065
GNMA I SF 30 Year, 4.50%, 7/15/40 - 6/15/41		3,817,497		4,118,238
GNMA I SF 30 Year, 5.00%, 6/15/30 - 11/15/39		9,670,957		10,566,711
GNMA I SF 30 Year, 5.00%, 11/15/39 - 9/15/40		9,605,057		10,560,185
GNMA I SF 30 Year, 5.50%, 12/15/28 - 10/15/39		4,823,298		5,313,170
GNMA I SF 30 Year, 6.00%, 11/15/23 - 11/15/38		2,271,612		2,552,703
GNMA I SF 30 Year, 6.50%, 6/15/23 - 9/15/38		1,217,526		1,353,277
GNMA I SF 30 Year, 7.00%, 9/15/22 - 1/15/32		260,311		269,258
GNMA I SF 30 Year, 7.50%, 2/15/22 - 8/15/33		336,272		379,803
GNMA I SF 30 Year, 8.00%, 12/15/21 - 7/15/23		63,898		65,160
GNMA I SF 30 Year, 8.50%, 6/15/22 - 12/15/24		25,650		26,110
GNMA I SF 30 Year, 9.00%, 3/15/20		119		119
GNMA I SF 30 Year, 9.50%, 4/15/20 - 12/15/20		6,038		6,062
GNMA I SF 30 Year, 10.00%, 2/15/20 - 8/15/21		1,067		1,070
GNMA II SF 30 Year, 3.00%, 12/20/42 - 2/20/45		2,158,996		2,217,115
GNMA II SF 30 Year, 3.00%, 9/20/45		8,892,443		9,101,390
GNMA II SF 30 Year, 3.00%, 4/20/46		25,602,231		26,202,870
GNMA II SF 30 Year, 3.00%, 7/20/47		20,220,498		20,684,528
^bGNMA II SF 30 Year, 3.00%, 6/01/49		11,000,000		11,235,899
GNMA II SF 30 Year, 3.00%, 6/20/49		15,000,000		15,344,227
GNMA II SF 30 Year, 3.50%, 12/20/40 - 8/20/43		2,196,785		2,293,152
GNMA II SF 30 Year, 3.50%, 8/20/42		6,138,977		6,407,170
GNMA II SF 30 Year, 3.50%, 9/20/42		17,922,608		18,703,762
GNMA II SF 30 Year, 3.50%, 10/20/42		5,458,758		5,696,183
GNMA II SF 30 Year, 3.50%, 11/20/42		10,748,110		11,215,563
GNMA II SF 30 Year, 3.50%, 12/20/42		8,132,824		8,485,640
GNMA II SF 30 Year, 3.50%, 1/20/43		13,651,498		14,243,815
GNMA II SF 30 Year, 3.50%, 3/20/43		4,878,785		5,088,937

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)


	Principal Amount		Value


Mortgage-Backed Securities (continued)
Government National Mortgage Association (GNMA) Fixed Rate (continued)
GNMA II SF 30 Year, 3.50%, 4/20/43	$	6,106,980	$	6,369,607
GNMA II SF 30 Year, 3.50%, 5/20/43		11,254,367		11,737,994
GNMA II SF 30 Year, 3.50%, 6/20/43		5,142,856		5,362,416
GNMA II SF 30 Year, 3.50%, 9/20/47		84,377,742		87,233,959
GNMA II SF 30 Year, 3.50%, 10/20/47		6,941,210		7,175,424
GNMA II SF 30 Year, 3.50%, 11/20/47		125,377,593		129,597,386
GNMA II SF 30 Year, 4.00%, 11/20/39 - 9/20/41		10,486,421		11,106,880
GNMA II SF 30 Year, 4.00%, 11/20/41		5,949,433		6,303,464
GNMA II SF 30 Year, 4.00%, 12/20/41 - 2/20/44		2,832,461		2,978,877
GNMA II SF 30 Year, 4.00%, 11/20/48		21,308,360		22,097,783
GNMA II SF 30 Year, 4.00%, 5/20/49		45,244,643		47,112,266
GNMA II SF 30 Year, 4.50%, 10/20/39 - 6/20/41		9,117,716		9,730,944
GNMA II SF 30 Year, 4.50%, 7/20/41 - 2/20/44		9,109,638		9,713,847
GNMA II SF 30 Year, 4.50%, 9/20/41		4,695,973		5,012,391
GNMA II SF 30 Year, 4.50%, 10/20/44		2,469,384		2,620,812
GNMA II SF 30 Year, 5.00%, 9/20/33 - 6/20/44		10,064,740		11,018,336
GNMA II SF 30 Year, 5.50%, 5/20/34 - 6/20/38		3,914,261		4,289,933
GNMA II SF 30 Year, 6.00%, 11/20/23 - 7/20/39		2,492,892		2,851,915
GNMA II SF 30 Year, 6.50%, 12/20/27 - 4/20/34		389,198		442,153
GNMA II SF 30 Year, 7.00%, 5/20/32		7,074		8,322
GNMA II SF 30 Year, 7.50%, 9/20/22 - 11/20/26		57,218		62,505
GNMA II SF 30 Year, 8.00%, 8/20/26		3,911		4,450
GNMA II SF 30 Year, 9.50%, 4/20/25		1,778		1,783


				595,835,384


Total Mortgage-Backed Securities (Cost $903,144,937)				904,316,540


U.S. Government and Agency Securities 17.8%
DY9 Leasing LLC, secured bond, 2.372%, 3/19/27		2,448,007		2,472,126
Federal Agricultural Mortgage Corp.,
1.41%, 3/06/20		10,000,000		9,938,622
2.66%, 4/12/22		7,000,000		7,131,850
FHLB, 2.625%, 9/12/25		20,000,000		20,689,426
FICO, D-P, Strip, 9/26/19		7,605,000		7,564,861
Israel Government Agency for International Development Bond,
5.50%, 9/18/23		12,000,000		13,718,207
7-Z, U.S. Government Guaranteed, Strip, 8/15/22		5,619,000		5,274,356
New Valley Generation IV, secured bond, 4.687%, 1/15/22		1,057,020		1,089,539
Overseas Private Investment Corp.,
A, Strip, 11/15/20		2,575,000		3,261,012
senior bond, 4.01%, 5/15/30		1,785,000		1,946,971
Petroleos Mexicanos, 2.378%, 4/15/25		1,974,000		1,991,529
Private Export Funding Corp.,
secured bond, 2.80%, 5/15/22		9,000,000		9,255,714
secured note, 4.30%, 12/15/21		1,865,000		1,967,709
secured note, LL, 2.25%, 3/15/20		1,700,000		1,700,176
senior secured note, MM, 2.30%, 9/15/20		3,500,000		3,510,901

Semiannual Report

FUS-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)



	Principal Amount		Value


U.S. Government and Agency Securities (continued)
Reliance Industries Ltd.,
senior bond, 2.512%, 1/15/26	$	9,187,500	$	9,296,659
senior note, 2.06%, 1/15/26		4,375,000		4,379,879
Tunisia Government Agency for International Development Bonds, 1.686%, 7/16/19		7,000,000		7,032,965
TVA,
1.875%, 8/15/22		6,000,000		6,003,597
5.88%, 4/01/36		5,000,000		6,894,217
Strip, 6/15/20		6,138,000		6,014,097
U.S. Treasury Bond,
2.50%, 2/15/46		4,000,000		3,974,531
^cIndex Linked, 2.00%, 1/15/26		1,930,974		2,149,480
^cIndex Linked, 1.75%, 1/15/28		9,756,848		10,944,070
^cIndex Linked, 3.625%, 4/15/28		7,898,576		10,145,319
U.S. Treasury Note,
2.375%, 8/15/24		22,000,000		22,635,937
2.25%, 8/15/27		6,000,000		6,142,500
^cIndex Linked, 0.125%, 7/15/24		16,678,738		16,656,606


Total U.S. Government and Agency Securities (Cost $199,322,741)				203,782,856


Total Investments before Short Term Investments (Cost $1,102,467,678)				1,108,099,396


Short Term Investments (Cost $44,335,086) 3.9%

Repurchase Agreements 3.9%
^dJoint Repurchase Agreement, 2.451%, 7/01/19 (Maturity Value $44,344,143)
BNP Paribas Securities Corp. (Maturity Value $32,972,531)
Deutsche Bank Securities Inc. (Maturity Value $9,722,897)
HSBC Securities (USA) Inc. (Maturity Value $1,648,715)
Collateralized by U.S. Government Agency Securities, 4.00% - 4.50%, 7/15/40 - 3/20/49; U.S. Treasury Bonds, 8.00%, 11/15/21; U.S. Treasury Notes, 1.50% - 3.125%, 5/15/21 - 8/15/26; U.S. Treasury Notes, Index Linked, 0.875%, 1/15/29; and U.S. Treasury Strips, 8/15/22 - 6/15/35 (valued at $45,426,256)		44,335,086		44,335,086


Total Investments (Cost $1,146,802,764) 100.8%				1,152,434,482
Other Assets, less Liabilities (0.8)%				(8,983,658	)


Net Assets 100.0%			$	1,143,450,824

See Abbreviations on page FUS-19.

^aAdjustable 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).

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

^cPrincipal amount of security is adjusted for inflation. See Note 1(e).

^dSee Note 1(b) regarding joint repurchase agreement.

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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, 2019 (unaudited)



	Franklin U.S. Government Securities VIP Fund


Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	1,102,467,678
Cost - Unaffiliated repurchase agreements		44,335,086


Value - Unaffiliated issuers	$	1,108,099,396
Value - Unaffiliated repurchase agreements		44,335,086
Receivables:
Investment securities sold		304,585
Capital shares sold		12,196
Interest		3,957,799
Other assets		814


Total assets		1,156,709,876


Liabilities:
Payables:
Investment securities purchased		11,243,117
Capital shares redeemed		961,207
Management fees		442,946
Distribution fees		454,252
Trustees’ fees and expenses		1,302
Accrued expenses and other liabilities		156,228


Total liabilities		13,259,052


Net assets, at value	$	1,143,450,824


Net assets consist of:
Paid-in capital	$	1,222,839,296
Total distributable earnings (loss)		(79,388,472	)


Net assets, at value	$	1,143,450,824


Class 1:
Net assets, at value	$	56,770,037

Shares outstanding		4,669,230

Net asset value and maximum offering price per share	$	12.16


Class 2:
Net assets, at value	$	1,086,680,787

Shares outstanding		91,398,696

Net asset value and maximum offering price per share	$	11.89

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

FUS-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin U.S. Government Securities VIP Fund


Investment income:
Interest:
Unaffiliated issuers:
Paydown gain (loss)		$ (2,590,498	)
Paid in cash		19,200,054


Total investment income		16,609,556


Expenses:
Management fees (Note 3a)		2,672,321
Distribution fees: (Note 3c)
Class 2		1,345,995
Custodian fees (Note 4)		5,111
Reports to shareholders		66,962
Professional fees		30,571
Trustees’ fees and expenses		4,714
Other		64,853


Total expenses		4,190,527
Expense reductions (Note 4)		(4	)


Net expenses		4,190,523


Net investment income		12,419,033


Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(373,626	)


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		30,577,963


Net realized and unrealized gain (loss)		30,204,337


Net increase (decrease) in net assets resulting from operations		$42,623,370

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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 U.S. Government Securities VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income		$ 12,419,033		$	26,174,868
Net realized gain (loss)		(373,626	)		(3,111,667	)
Net change in unrealized appreciation (depreciation)		30,577,963			(20,898,185	)


Net increase (decrease) in net assets resulting from operations		42,623,370			2,165,016


Distributions to shareholders:
Class 1		(1,737,360	)		(1,830,491	)
Class 2		(31,230,563	)		(31,691,784	)


Total distributions to shareholders		(32,967,923	)		(33,522,275	)


Capital share transactions: (Note 2)
Class 1		(2,886,794	)		(5,618,467	)
Class 2		(28,157,581	)		(88,079,314	)


Total capital share transactions		(31,044,375	)		(93,697,781	)


Net increase (decrease) in net assets		(21,388,928	)		(125,055,040	)
Net assets:
Beginning of period		1,164,839,752			1,289,894,792


End of period		$1,143,450,824		$	1,164,839,752

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

FUS-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin U.S. Government Securities 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 U.S. Government Securities 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, 2019, 43.1% of the Fund’s shares were held through one insurance company. The Fund offers two classes of shares: Class 1 and Class 2. 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

Debt securities generally trade in the over-the-counter 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 repurchase agreements are valued at cost, which approximates fair value.

b. Joint Repurchase Agreement

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)

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 28, 2019.

c. Securities Purchased on a TBA Basis

The Fund purchases securities on a 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. Sufficient assets have been segregated for these securities.

d. Income Taxes

e. Security Transactions, Investment Income, Expenses and Distributions

f. Accounting Estimates

g. Guarantees and Indemnifications

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FUS-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

g. Guarantees and Indemnifications (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, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		142,923		$	1,745,272			130,524		$	1,575,698
Shares issued in reinvestment of distributions		143,584			1,737,360			154,472			1,830,491
Shares redeemed		(523,320	)		(6,369,426	)		(750,422	)		(9,024,656)


Net increase (decrease)		(236,813	)	$	(2,886,794	)		(465,426	)	$	(5,618,467)


Class 2 Shares:
Shares sold		2,428,196		$	29,127,162			5,018,026		$	59,241,587
Shares issued in reinvestment of distributions		2,639,946			31,230,563			2,734,407			31,691,784
Shares redeemed		(7,415,990	)		(88,515,306	)		(15,242,864	)		(179,012,685)


Net increase (decrease)		(2,347,848	)	$	(28,157,581	)		(7,490,431	)	$	(88,079,314)

3. Transactions with Affiliates



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

FUS-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin U.S. Government Securities 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

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, 2019, the annualized gross effective investment management fee rate was 0.472% of the Fund’s average daily net assets.

b. Administrative Fees

c. Distribution Fees

The Board has adopted distribution plans for Class 2 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. 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.

4. Expense Offset Arrangement

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

Semiannual Report

FUS-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin U.S. Government Securities VIP Fund (continued)

5. Income Taxes (continued)

At December 31, 2018, capital loss carryforwards were as follows:


Capital loss carryforwards not subject to expiration:
Short term	$	38,715,602

Long term		54,934,163


Total capital loss carryforwards	$	93,649,765

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	1,150,451,324


Unrealized appreciation	$	13,013,806
Unrealized depreciation		(11,030,648)


Net unrealized appreciation (depreciation)	$	1,983,158

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 and bond discounts and premiums.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $162,438,429 and $216,456,934, respectively.

7. 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 7, 2020. 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.

8. Fair Value Measurements

•

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

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin U.S. Government Securities 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.

At June 30, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.

9. 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


Currency		Selected Portfolio

USD	United States Dollar	CMT	Constant Maturity Treasury Index

		COF	Cost of Funds

		FHLB	Federal Home Loan Bank

		FICO	Financing Corp.

		LIBOR	London InterBank Offered Rate

		MBS	Mortgage-Backed Security

		PL	Project Loan

		SF	Single Family

		T-Note	Treasury Note

		TVA	Tennessee Valley Authority

Semiannual Report

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Franklin VolSmart Allocation VIP Fund

This semiannual report for Franklin VolSmart Allocation VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +12.87% total return* for the six-month period ended June 30, 2019.

Semiannual Report

FVA-1

FRANKLIN VOLSMART ALLOCATION VIP FUND

Fund Goal and Main Investments

The Fund seeks total return (including income and capital gains) while seeking to manage volatility. The Fund is structured as a limited “fund-of-funds” that seeks to achieve its investment goal by investing its assets partially in other mutual funds, which include other Franklin Templeton mutual funds as well as Franklin Templeton and third-party exchange-traded funds (ETFs) (underlying funds). Each underlying fund is allocated to the equity, fixed income, multi-class or cash asset class based on its predominant asset class and strategies. These underlying funds, in turn, invest in a variety of U.S. and foreign equity, fixed-income and money market securities. The Fund also obtains exposure to certain strategies and investments in its core portfolio by directly investing in the securities and instruments in that strategy.

Fund Risks

All investments involve risks, including possible loss of principal. There can be no guarantee that the Fund will stay within its target volatility. Also, the managed volatility and tail risk protection strategies could negatively impact the Fund’s return and expose the Fund to additional costs. Generally, investors should be comfortable with fluctuation in the value of their investments, especially over the short term. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Derivatives 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 gains) in 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. Because the Fund allocates assets to a variety of investment strategies, ETFs and other mutual funds, which involve certain risks, it may be subject to those same 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.

Performance Overview

You can find the Fund’s six-month total return in the Performance Summary. For comparison, the Fund’s equity benchmark, the Standard & Poor’s^® 500 Index (S&P 500^®), posted a +18.54% total return, while the Fund’s fixed income benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, posted a +6.11% total return for the period under review.¹ The Fund’s Blended Benchmark, a combination of leading stock and bond indexes that better reflects the asset allocation of the Fund’s portfolio, posted a +13.07% total return for the same period.²

Economic and Market Overview

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The manufacturing and services sectors expanded during the period. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.³ The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.³

1. Source: Morningstar.

2. Source: FactSet. The Fund’s Blended Benchmark was calculated internally and rebalanced monthly and was composed of 60% S&P 500, 30% Bloomberg Barclays U.S. Aggregate Bond Index and 10% Bloomberg Barclays 1-3 Month U.S. Treasury Bill 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.

3. 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).

FVA-2

Semiannual Report

FRANKLIN VOLSMART ALLOCATION VIP FUND

Investment Strategy

Under normal market conditions, the Fund seeks to achieve its investment goal by allocating its assets across certain asset classes, sectors and strategies in an attempt to produce a diversified portfolio that will generate returns, while minimizing the expected volatility of the Fund’s returns so that volatility does not exceed a target of 10% per year. (Volatility within the 10% target is referred to as “Target Volatility.”) The Fund’s assets are primarily invested in its “core portfolio,” which is principally composed of various U.S. equity and fixed income investments and strategies, including other mutual funds that provide exposure to such investments and strategies.

In addition, the Fund employs a volatility management strategy, which is designed to manage the expected volatility of the Fund’s returns so that volatility remains within the Fund’s Target Volatility. Thus, the Fund may utilize certain derivative instruments (primarily futures contracts on

Portfolio Composition^*

6/30/19



	% of Total Net Assets

Stocks		53.9%

Capital Goods		12.1%

Health Care Equipment & Services		8.2%

Software & Services		6.5%

Materials		6.3%

Semiconductors & Semiconductor Equipment		3.7%

Energy		3.0%

Food, Beverage & Tobacco		2.3%

Retailing		2.2%

Pharmaceuticals, Biotechnology & Life Sciences		1.9%

Household & Personal Products		1.5%

Consumer Services		1.3%

Commercial & Professional Services		1.1%

Food & Staples Retailing		1.0%

Insurance		1.0%

Consumer Durables & Apparel		1.0%

Transportation		0.5%

Media & Entertainment		0.2%

Diversified Financials		0.1%

Underlying Funds - Equity		9.4%

Franklin DynaTech Fund—Class R6		5.3%

Franklin Income Fund—Class R6		4.1%

Underlying Funds - Fixed Income		33.4%

Franklin Low Duration Total Return Fund—Class R6		17.9%

Franklin Strategic Income Fund—Class R6		11.6%

Franklin Income Fund—Class R6		3.9%

Hedge Strategy		0.3%

Short-Term Investments & Other Net Assets		3.0%

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

indexes) in an effort to adjust the Fund’s expected volatility to within the Target Volatility. There is no guarantee that the Fund will stay within its Target Volatility. The Fund also employs a “tail risk protection strategy,” designed to protect the Fund from risks related to extreme short-term market downturns (tail risk). Thus, the Fund may utilize certain derivatives (primarily total return swap agreements) in an effort to hedge the tail risk of the Fund. There is no guarantee that the Fund’s volatility management or tail risk protection strategies will be successful.

Semiannual Report

FVA-3

FRANKLIN VOLSMART ALLOCATION VIP FUND

What is a futures contract?

A futures contract is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

What is a total return swap agreement?

A swap agreement, such as an equity total return swap, is a contract between the Fund and a counterparty to exchange on a future date the returns, or differentials in rates of return, that would have been earned or realized if a notional amount were invested in specific instruments.

Manager’s Discussion

At the top-down asset allocation level at period-end, equity exposure was close to, but still above, the middle of its allocation range, while fixed income exposure was at the high end of its allocation range. The Fund held a hedge linked to a volatility index (VIX) and nominal exposure to cash at period-end.

Equities

The Fund’s relative performance was strengthened by an equity overweighting relative to the Blended Benchmark throughout the six-month period. Equities were supported by accommodative policies of major central banks, mostly positive signals around U.S.-China trade talks and investor expectations of future cuts in the federal funds target rate.

Also supporting relative results was our selection of underlying equity funds. A significant allocation to Franklin Rising Dividends Strategy lifted returns as the strategy outperformed the equity benchmark. With many central banks growing increasingly dovish during the period, yields pulled back across global bond markets. Investors in search of yield sought out dividend-paying stocks, such as those in Franklin Rising Dividends Strategy, which supported relative results. Franklin DynaTech Fund also benefited returns. In contrast, the equity component of Franklin Income Fund detracted from relative performance.

Fixed Income

The Fund’s overweighted allocation to bonds relative to the Blended Benchmark detracted from relative results. Our preference for low duration exposure in fixed income dampened relative returns as long-term U.S. Treasury yields fell. Investors’ inflation expectations generally remained subdued amid growing concerns about slowing economic activity.

Portfolio Strategy Holdings^*

6/30/19



	% of Total Net Assets

Franklin Rising Dividends Strategy		53.9%

Franklin Low Duration Total Return Fund		17.9%

Franklin Strategic Income Fund		11.6%

Franklin Income Fund		8.0%

Franklin DynaTech Fund		5.3%

Hedge Strategy		0.3%

Short-Term Investments & Other Net Assets		3.0%

*The breakdown may not match the SOI.

What is duration?

Duration is a measure of a bond’s price sensitivity to interest-rate changes. In general, a portfolio of securities with a lower duration can be expected to be less sensitive to interest-rate changes than a portfolio with a higher duration.

In contrast, the Fund’s yield spread exposure in fixed income, including a healthy allocation to high-yield bonds through Franklin Strategic Income Fund, strengthened relative performance. We found that the economic environment was constructive for corporate bonds.

Hedging

The Fund’s tactical hedging comprises two strategies—tail risk protection and volatility management—both of which were active during parts of the six-month review period. The Fund kept its holding of a VIX-linked hedge, which is designed to provide tail risk protection during periods of increased market volatility and drawdowns, active at period-end. The Fund also employed an independent volatility management strategy (implemented using S&P futures), designed to keep overall volatility below 10%. This strategy was not active at period-end, but was engaged intermittently during the period.

Although these hedge strategies helped limit portfolio volatility, they ultimately detracted from the Fund’s relative performance as a risk-on market environment persisted for most of the six-month period. Still, the tail risk protection and volatility management strategies meaningfully supported relative performance in May, as both strategies were active amid a sharp selloff that dragged down returns as deteriorating trade relations between the U.S. and some of its major partners drove heightened market volatility.

FVA-4

Semiannual Report

FRANKLIN VOLSMART ALLOCATION VIP FUND

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

Semiannual Report

FVA-5

FRANKLIN VOLSMART ALLOCATION VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1, 2

Ending

Account
Value 6/30/19

Fund-Level
Expenses
Paid During

Period
1/1/19–6/30/19^{1, 2}

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,128.70

$4.75

$1,020.33

$4.51

0.90%

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.

FVA-6

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin VolSmart Allocation VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$10.82			$11.67			$10.10			$ 9.68			$10.20			$10.07


Income from investment operations^a:

Net investment income^b,c		0.11			0.21			0.16			0.16			0.10			0.11

Net realized and unrealized gains (losses)		1.28			(1.02	)		1.41			0.28			(0.42	)		0.25


Total from investment operations		1.39			(0.81	)		1.57			0.44			(0.32	)		0.36


Less distributions from:

Net investment income and net foreign currency gains		—			(0.04	)		—			(—	)^d		(0.05	)		(0.23)

Net realized gains		(0.14	)		—			—			(0.02	)		(0.15	)		(—)	^d


Total distributions		(0.14	)		(0.04	)		—			(0.02	)		(0.20	)		(0.23)


Net asset value, end of period		$12.07			$10.82			$11.67			$10.10			$ 9.68			$10.20


Total return^e		12.87%			(6.93)%			15.54%			4.39%			(3.12)%			3.60%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates^g		1.12%			1.10%			1.14%			1.25%			1.77%			1.97%

Expenses net of waiver and payments by affiliates^g		0.90%	^h		0.75%	^h		0.73%	^h		0.73%	^h		0.93%			1.08%	^h

Net investment income^c		1.83%			1.85%			1.44%			1.50%			1.30%			1.07%

Supplemental data

Net assets, end of period (000’s)		$37			$33			$36			$31			$8,703			$10,201

Portfolio turnover rate		3.72%			6.28%			5.69%			1.00%			95.15%			22.04%

^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.

^dAmount rounds to less than $0.01 per share.

^fRatios are annualized for periods less than one year.

^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and exchange traded funds was 0.17% for the period ended June 30, 2019.

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

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

FVA-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin VolSmart Allocation VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 5

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$10.80			$11.65			$10.07			$ 9.67			$10.20			$10.07


Income from investment operations^a:

Net investment income^b,c		0.11			0.22			0.17			0.16			0.16			0.13

Net realized and unrealized gains (losses)		1.28			(1.01	)		1.41			0.29			(0.47	)		0.25


Total from investment operations		1.39			(0.79	)		1.58			0.45			(0.31	)		0.38


Less distributions from:

Net investment income and net foreign currency gains		—			(0.06	)		—			(0.03	)		(0.07	)		(0.25)

Net realized gains		(0.14	)		—			—			(0.02	)		(0.15	)		(—)	^d


Total distributions		(0.14	)		(0.06)			—			(0.05	)		(0.22	)		(0.25)


Net asset value, end of period		$12.05			$10.80			$11.65			$10.07			$ 9.67			$10.20


Total return^e		12.89%			(6.85)%			15.69%			4.59%			(3.10)%			3.75%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates^g		1.02%			1.00%			1.04%			1.15%			1.66%			1.82%

Expenses net of waiver and payments by affiliates^g		0.80%^h			0.65%	^h		0.63%	^h		0.63%	^h		0.82%			0.93%	^h

Net investment income^c		1.93%			1.95%			1.54%			1.60%			1.41%			1.22%

Supplemental data

Net assets, end of period (000’s)		$187,528			$171,173			$188,240			$124,581			$54,816			$10,201

Portfolio turnover rate		3.72%			6.28%			5.69%			1.00%			95.15%			22.04%

^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.

^dAmount rounds to less than $0.01 per share.

^fRatios are annualized for periods less than one year.

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

FVA-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, 2019 (unaudited)

Franklin VolSmart Allocation VIP Fund



	Shares		Value

Common Stocks 53.9%
Capital Goods 12.1%
The Boeing Co.		3,100	$	1,128,431
Carlisle Cos. Inc.		6,460		907,049
Donaldson Co. Inc.		12,630		642,362
Dover Corp.		17,044		1,707,809
General Dynamics Corp.		10,300		1,872,746
Honeywell International Inc.		21,800		3,806,062
Johnson Controls International PLC		36,892		1,524,008
nVent Electric PLC		25,100		622,229
Pentair PLC		24,200		900,240
Raytheon Co.		5,000		869,400
^aResideo Technologies Inc.		3,666		80,359
Roper Technologies Inc.		16,900		6,189,794
United Technologies Corp.		14,200		1,848,840
W.W. Grainger Inc.		2,450		657,163


				22,756,492


Commercial & Professional Services 1.1%
Cintas Corp.		6,900		1,637,301
Matthews International Corp., A		11,670		406,700


				2,044,001


Consumer Durables & Apparel 1.0%
NIKE Inc., B		21,300		1,788,135

Consumer Services 1.3%
McDonald’s Corp.		8,880		1,844,021
Yum! Brands Inc.		4,800		531,216


				2,375,237


Diversified Financials 0.1%
State Street Corp.		3,450		193,407


Energy 3.0%
^aApergy Corp.		12,150		407,511
Chevron Corp.		10,190		1,268,043
EOG Resources Inc.		12,730		1,185,927
Exxon Mobil Corp.		11,300		865,919
Occidental Petroleum Corp.		19,100		960,348
Schlumberger Ltd.		21,300		846,462


				5,534,210


Food & Staples Retailing 1.0%
Walgreens Boots Alliance Inc.		8,600		470,162
Walmart Inc.		12,990		1,435,265


				1,905,427

Semiannual Report

FVA-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)



	Shares		Value

Common Stocks (continued)
Food, Beverage & Tobacco 2.3%
Bunge Ltd.		19,100	$	1,064,061
McCormick & Co. Inc.		10,350		1,604,354
PepsiCo Inc.		12,700		1,665,351


				4,333,766

Health Care Equipment & Services 8.2%
Abbott Laboratories		24,060		2,023,446
Becton, Dickinson and Co.		13,600		3,427,336
CVS Health Corp.		10,950		596,665
DENTSPLY SIRONA Inc.		12,400		723,664
Medtronic PLC		29,400		2,863,266
Stryker Corp.		18,900		3,885,462
West Pharmaceutical Services Inc.		14,100		1,764,615


				15,284,454

Household & Personal Products 1.5%
Colgate-Palmolive Co.		18,300		1,311,561
The Procter & Gamble Co.		14,480		1,587,732


				2,899,293

Insurance 1.0%
Aflac Inc.		14,440		791,456
Chubb Ltd.		2,781		409,613
Erie Indemnity Co., A		2,720		691,642


				1,892,711

Materials 6.3%
Air Products and Chemicals Inc.		15,700		3,554,009
Albemarle Corp.		38,500		2,710,785
Ecolab Inc.		6,760		1,334,694
Linde PLC (United Kingdom)		18,200		3,654,560
Nucor Corp.		9,500		523,450


				11,777,498

Media & Entertainment 0.2%
John Wiley & Sons Inc., A		6,000		275,160


Pharmaceuticals, Biotechnology & Life Sciences 1.9%
AbbVie Inc.		8,540		621,029
Johnson & Johnson		14,900		2,075,272
Perrigo Co. PLC		7,440		354,293
Pfizer Inc.		12,810		554,929


				3,605,523

Retailing 2.2%
The Gap Inc.		15,720		282,488
Ross Stores Inc.		19,300		1,913,016
Target Corp.		8,340		722,328
Tiffany & Co.		13,123		1,228,838


				4,146,670

FVA-10

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)



	Shares		Value
Common Stocks (continued)
Semiconductors & Semiconductor Equipment 3.7%
Analog Devices Inc.		29,714	$	3,353,819
Texas Instruments Inc.		28,800		3,305,088
Versum Materials Inc.		5,495		283,432


				6,942,339

Software & Services 6.5%
Accenture PLC, A		19,400		3,584,538
Microsoft Corp.		50,400		6,751,584
Visa Inc., A		11,100		1,926,405


				12,262,527

Transportation 0.5%
Norfolk Southern Corp.		100		19,933
United Parcel Service Inc., B		9,200		950,084


				970,017


Total Common Stocks (Cost $72,380,200)				100,986,867


Investments in Underlying Funds 42.8%
Domestic Equity 5.3%
^a,bFranklin DynaTech Fund, Class R6		113,058		10,032,767


Domestic Fixed Income 29.5%
^bFranklin Low Duration Total Return Fund, Class R6		3,435,835		33,533,754
^bFranklin Strategic Income Fund, Class R6		2,239,123		21,719,493


				55,253,247

Domestic Hybrid 8.0%
^bFranklin Income Fund, Class R6		6,516,497		15,053,108


Total Investments in Underlying Funds (Cost $75,017,612)				80,339,122


Total Investments before Short Term Investments (Cost $147,397,812)				181,325,989


Short Term Investments (Cost $6,426,292) 3.4%

Money Market Funds 3.4%
^b,cInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		6,426,292		6,426,292


Total Investments (Cost $153,824,104) 100.1%				187,752,281
Other Assets, less Liabilities (0.1)%				(187,173	)


Net Assets 100.0%			$	187,565,108

^aNon-income producing.

^bSee Note 3(e) regarding investments in Underlying Funds.

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

Semiannual Report

FVA-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

At June 30, 2019, the Fund had the following total return swap contracts outstanding. See Note 1(c).

Total Return Swap Contracts

Underlying Instruments

Financing
Rate

Payment
Frequency

Counter-
party

Maturity
Date

Notional
Value

Value/
Unrealized
Appreciation

(Depreciation)

OTC Swap Contracts

Long^a

Dynamic VIX Backwardation (BEFSDVB1)

0.00%

At maturity

BZWS

2/21/20

19,100,000

$(3,183)

^aThe fund receives the total return on the underlying instrument.

See Note 7 regarding other derivative information.

See Abbreviations on page FVA-23.



FVA-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, 2019 (unaudited)



	Franklin VolSmart Allocation VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$ 72,380,200
Cost - Non-controlled affiliates (Note 3e)		81,443,904

Value - Unaffiliated issuers		$100,986,867
Value - Non-controlled affiliates (Note 3e)		86,765,414
Receivables:
Investment securities sold		65,505
Capital shares sold		2,352
Dividends and interest		101,015
Other assets		124


Total assets		187,921,277


Liabilities:
Payables:
Investment securities purchased		73,438
Capital shares redeemed		39,402
Management fees		144,063
Distribution fees		46,383
Trustees’ fees and expenses		92
Reports to shareholders		19,919
Professional fees		22,985
Unrealized depreciation on OTC swap contracts		3,183
Accrued expenses and other liabilities		6,704


Total liabilities		356,169


Net assets, at value		$187,565,108


Net assets consist of:
Paid-in capital		$154,499,556
Total distributable earnings (loss)		33,065,552


Net assets, at value		$187,565,108


Class 2:
Net assets, at value		$ 36,951

Shares outstanding		3,061

Net asset value and maximum offering price per share		$ 12.07

Class 5:
Net assets, at value		$187,528,157

Shares outstanding		15,559,327

Net asset value and maximum offering price per share		$12.05

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

FVA-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Franklin VolSmart Allocation VIP Fund
Investment income:
Dividends:
Unaffiliated issuers		$ 930,370
Non-controlled affiliates (Note 3e)		1,528,283


Total investment income		2,458,653


Expenses:
Management fees (Note 3a)		720,448
Distribution fees: (Note 3c)
Class 2		44
Class 5		135,110
Custodian fees (Note 4)		532
Reports to shareholders		19,304
Professional fees		33,840
Trustees’ fees and expenses		665
Other		6,886


Total expenses		916,829
Expense reductions (Note 4)		(365	)
Expenses waived/paid by affiliates (Note 3e and 3f)		(196,081	)


Net expenses		720,383


Net investment income		1,738,270


Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		524,268
Non-controlled affiliates (Note 3e)		303,179
Futures contracts		(3,528,195	)
Swap contracts		(260,544	)


Net realized gain (loss)		(2,961,292	)


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		17,222,401
Non-controlled affiliates (Note 3e)		5,017,419
Futures contracts		1,511,553
Swap contracts		(716,726	)


Net change in unrealized appreciation (depreciation)		23,034,647


Net realized and unrealized gain (loss)		20,073,355


Net increase (decrease) in net assets resulting from operations		$21,811,625

FVA-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 VolSmart Allocation VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 1,738,270			$ 3,643,502
Net realized gain (loss)		(2,961,292	)		(1,216,554	)
Net change in unrealized appreciation (depreciation)		23,034,647			(14,701,565	)


Net increase (decrease) in net assets resulting from operations		21,811,625			(12,274,617	)


Distributions to shareholders:
Class 2		(429	)		(134	)
Class 5		(2,160,339	)		(923,085	)


Total distributions to shareholders		(2,160,768	)		(923,219	)


Capital share transactions: (Note 2)
Class 5		(3,291,463	)		(3,872,250	)


Total capital share transactions		(3,291,463	)		(3,872,250	)


Net increase (decrease) in net assets		16,359,394			(17,070,086	)

Net assets:
Beginning of period		171,205,714			188,275,800


End of period		$187,565,108			$171,205,714

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

FVA-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements (unaudited)

Franklin VolSmart 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 VolSmart Allocation VIP Fund (Fund) is included in this report. The Fund invests primarily in other funds of the Trust (Underlying Funds). 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, 2019, 98.4% 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 two classes of shares: Class 2 and Class 5. 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

Investments in the Underlying Funds are valued at their closing NAV each trading day.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

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, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

b. Foreign Currency Translation

c. Derivative Financial Instruments

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

c. Derivative Financial Instruments (continued)

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, 2019, the Fund had OTC derivatives in a net liability position of $3,183.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to 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 total return swap contracts primarily to manage and/or gain exposure to equity price 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 7 regarding other derivative information.

d. Income and Deferred Taxes

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (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 and capital gain distributions by Underlying Funds 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.

The Fund indirectly bears its proportionate share of expenses from the Underlying Funds and ETFs. Since the Underlying Funds and ETFs have varied expense levels and

the Fund may own different proportions of the Underlying Funds and ETFs at different times, the amount of expenses incurred indirectly by the Fund will vary.

f. Accounting Estimates

g. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, there were an unlimited number of shares authorized (without par value). During the period ended June 30, 2019 and the year ended December 31, 2018, there were no transactions of the Fund’s Class 2 shares. Transactions in the Fund’s Class 5 shares were as follows:



	Six Months Ended June 30, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 5 Shares:

Shares sold		602,580		$	6,955,301			2,484,376		$	28,578,684
Shares issued in reinvestment of distributions		181,847			2,160,339			79,783			923,085
Shares redeemed		(1,072,788	)		(12,407,103	)		(2,879,138	)		(33,374,019	)


Net increase (decrease)		(288,361	)	$	(3,291,463	)		(314,979	)	$	(3,872,250	)

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

3. Transactions with Affiliates



Subsidiary		Affiliation

Franklin Advisers, Inc. (Advisers)		Investment manager

K2/D&S Management Co., LLC (K2 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

a. Management Fees

The Fund pays an investment management fee to Advisers of 0.80% per year of the average daily net assets of the Fund.

Under a subadvisory agreement, K2 Advisors, an affiliate of Advisers, provides 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

c. Distribution Fees

The Board has adopted distribution plans for Class 2 and Class 5 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% and 0.15% per year of its average daily net assets of Class 2 and Class 5, 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 Underlying Funds

The Fund invests in Underlying Funds which are managed by affiliates of the Fund’s administrative manager, Franklin Templeton Services, LLC. The Fund does not invest in Underlying Funds for the purpose of exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the Underlying Funds, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by the Underlying Funds.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

Investments in Underlying Funds for the ended June 30, 2019, were 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 DynaTech Fund, Class R6	$ 8,980,816	$ —		$ (1,501,590	)		$ 500,486		$2,053,055	$10,032,767		113,058		$ —
Franklin Income Fund, Class R6	16,795,196	428,986		(3,562,423	)		(197,307	)	1,588,656	15,053,108		6,516,497		428,986
Franklin Low Duration Total Return Fund, Class R6	28,805,726	4,228,986		—			—		499,042	33,533,754		3,435,835		550,930
Franklin Strategic Income Fund, Class R6	18,529,912	2,312,915		—			—		876,666	21,719,493		2,239,123		490,319
Institutional Fiduciary Trust Money Market Portfolio, 2.05%	1,130,276	16,457,951		(11,161,935	)		—		—	6,426,292		6,426,292		58,048


Total Affiliated Securities	$74,241,926	$23,428,838		$ (16,225,948	)		$ 303,179		$5,017,419	$86,765,414				$1,528,283

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 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 do not exceed 0.65%, based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed long term capital gains for income tax purposes were as follows:


Cost of investments	$	152,730,013


Unrealized appreciation	$	39,398,938
Unrealized depreciation		(4,379,853)


Net unrealized appreciation (depreciation)	$	35,019,085

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of swaps and financial futures transactions.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $6,531,071 and $16,229,793, respectively.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

7. Other Derivative Information

At June 30, 2019, 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

Unrealized appreciation on OTC
swap contracts

$ —

Unrealized depreciation on OTC
swap contracts

$3,183

For the period ended June 30, 2019, 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

Futures contracts

$(3,528,195)

Futures contracts

$1,511,553

Swap contracts

(260,544)

Swap contracts

(716,726)

Totals

$(3,788,739)

$ 794,827

For the period ended June 30, 2019, the average month end notional amount of futures contracts and swap contracts represented $8,453,634 and $19,100,000, respectively.

See Note 1(c) regarding derivative financial instruments.

8. Credit Facility

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 their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their 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, 2019, the Fund did not use the Global Credit Facility.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Franklin VolSmart Allocation VIP Fund (continued)

9. Fair Value Measurements

•

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, 2019, 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	$	100,986,867	$	—	$	—	$	100,986,867
Investments in Underlying Funds		80,339,122		—		—		80,339,122
Short Term Investments		6,426,292		—		—		6,426,292


Total Investments in Securities	$	187,752,281	$	—	$	—	$	187,752,281


Liabilities:
Other Financial Instruments:
Swap Contracts	$	—	$	3,183	$	—	$	3,183


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

10. 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		Selected Portfolio

BZWS Barclays Bank PLC		VIX Market Volatility Index

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Templeton Developing Markets VIP Fund

This semiannual report for Templeton Developing Markets VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +14.16% total return* for the six-month period ended June 30, 2019.

*The Fund has a fee waiver associated with any investments it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

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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. 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 designed for the aggressive portion of a well-diversified portfolio. 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 +10.78% total return, and the Standard & Poor’s^®/International Finance Corporation Investable Composite Index posted a +10.49% 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

Emerging market economic growth moderated during the six months ended June 30, 2019, with many countries’ growth rates dipping to multi-year lows. However, emerging market economies in general continued to grow faster than their developed market counterparts. China’s annual growth rate held steady in the first quarter of 2019 before moderating in

Geographic Composition

Based on Total Net Assets as of 6/30/19

LOGO

the second quarter to its lowest level since 1992. Trade tensions with the U.S. and weak global demand hurt China’s economy, though industrial production growth and strong consumer demand, stimulated by government policies, were bright spots. Elsewhere in Asia, South Korea’s first-quarter annual growth rate was the lowest since 2009, due to weak growth in manufacturing and a contraction in construction. Taiwan’s first-quarter annual growth rate also hit a multi-year low, as the global slowdown hurt the country’s export-driven economy. In India, weak consumer demand and fixed investment drove first-quarter annual growth to its lowest level since 2014. Turning to Europe, Russia’s annual growth rate slowed in the first quarter due to weakness in information, communication, financial and insurance sectors, as well as contractions in other sectors, significantly real estate. In Latin America, Brazil’s first-quarter annual growth moderated due to weak consumer demand and fixed investment.

Monetary policies varied among emerging market central banks. The People’s Bank of China left its benchmark interest rate unchanged during the period, but it took measures to improve financial liquidity to mitigate the negative effects of the U.S.-China trade dispute and support economic growth. South Korea’s and Taiwan’s central banks also held their benchmark interest rates steady, despite concerns about the negative effects of the U.S.-China trade dispute on the countries’ economies. India’s central bank unexpectedly cut its benchmark interest rate in February to

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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boost a slowing economy amid low inflation, and made further cuts in April and June amid continued economic concerns. Russia’s central bank cut its key rate in June due to slowing inflation growth and weaker-than-expected economic growth. In Latin America, Brazil and Mexico’s central banks held their benchmark rates steady.

Emerging market equities rose during the six-month period, though they lagged developed and frontier market stocks. Emerging market equities, led by Asia, posted significant gains in the first quarter of 2019, aided by the U.S. Federal Reserve’s decision to halt interest rate hikes and easing U.S.-China trade tensions. In contrast, emerging market equities posted modest gains in the second quarter, as Asian emerging market equities declined due to a spike in U.S.-China tensions in May (though tensions eased again in late June) that included further tariff impositions and fears China would decrease stimulus policies. For the six-month period, all major regions posted positive returns, although Europe was the only region where emerging market equities outpaced overall developed market equities. Russia benefited from higher oil prices, an appreciating ruble and its perceived relative insulation from the U.S.-China trade dispute. Latin American equities advanced, led by Colombia and Brazil, despite concerns about Brazil’s slowing economic growth. Asian emerging market stocks lagged other regions, though Chinese equities still outpaced overall emerging market stocks. In this environment, global emerging market stocks, as measured by the MSCI EM Index, posted a +10.78% total return for the six-month period.¹

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

During the six months under review, key contributors to absolute performance included Naspers, Brilliance China Automotive and Samsung Electronics.

Top 10 Countries

6/30/19



		% of Total Net Assets

China		24.5%

South Korea		16.0%

Russia		9.2%

Taiwan		8.5%

Brazil		8.2%

India		7.3%

South Africa		6.8%

U.K.		3.0%

U.S.		3.0%

Thailand		2.6%

Naspers is an internet and media group based in South Africa. It also has sizeable investments in some of the world’s leading technology companies, including China-based Tencent and Russia-based Mail.Ru (both Fund holdings). The first quarter of 2019 saw a broad recovery in the information technology (IT) sector driven by improved investor confidence. Sentiment in Naspers further benefited from Tencent’s above-consensus fourth quarter 2018 revenue and earnings. Investors also reacted positively to Naspers’ creation of a new company listing in Amsterdam, which management expects to unlock value and reduce the discount to net asset value.

Brilliance China manufactures and sells automobiles for the Chinese domestic market, predominantly through its joint venture (JV) with German luxury car maker BMW (not a Fund holding). Brilliance China’s share price rebounded in the first half of 2019 as investors saw value emerge following a steep decline in the second half of 2018 after BMW announced plans to increase its JV stake to a majority share. The sale of part of Brilliance’s stake to BMW was approved by shareholders in early 2019, and the company is expected to distribute a special dividend from sale proceeds. However, completion of the deal is pending approval from Chinese regulators in 2022, when a change in regulations on foreign ownership comes into effect. Sentiment in the stock also benefited from Chinese government measures to support car sales.

Samsung is a South Korea-based consumer electronics and semiconductor manufacturer. It is one of the world’s largest smartphone and memory chip producers as well as a key supplier of organic light-emitting diode displays. Following weakness in the second half of 2018, Samsung’s share price rebounded due to improved sentiment in the technology sector in general. Although the company

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reported weak first-quarter operating profits, largely due to weakness in the semiconductor and display segments, management expectations for a recovery in the second half of 2019 provided investors with some comfort.

In contrast, key detractors from absolute performance included Glenmark Pharmaceuticals, Massmart and Naver.

Glenmark Pharmaceuticals is a mid-size Indian pharmaceutical company with a presence in generics and research and development. While fourth-quarter 2018 corporate results generally met market expectations, sentiment was hurt by weaker-than-expected growth in U.S. revenues along with earnings pressure from foreign exchange losses and higher research and development expenditures. A delay in U.S. approval and launch of an investigational product for the treatment of seasonal allergic rhinitis also led to shares falling sharply in June.

Massmart is a leading South African wholesaler, distributor and retailer of food products, general merchandise, alcohol, home improvement equipment and supplies. U.S.-based Walmart (not a Fund holding), the world’s largest retailer, owns a controlling stake in the company. Disappointing 2018 corporate results gave rise to a correction of Massmart’s share price. 2018 earnings declined largely due to weak sales growth and a contraction in the operating margin in two divisions. The company also released a profit decline warning for the first half of 2019. The resignation of the CEO and CFO further impacted sentiment.

Naver is South Korea’s largest web search engine, as well as a global information and communication technology brand that provides services including LINE messenger, currently with more than 200 million users around the world. Although lower marketing costs supported earnings, concerns that competition from U.S. search platforms have impacted key business areas hurt its share price. Losses at Naver’s Japanese subsidiary LINE were due to aggressive efforts to expand the service into fintech and also raised investor concerns.

During the past six months, we increased the Fund’s holdings in China, Brazil and Mexico due to their solid fundamentals. Investments in companies that are listed in the U.S. but have significant exposure to emerging markets were also increased. In terms of sectors, we undertook

Top 10 Holdings

6/30/19



Company *Sector/Industry, Country*		% of Total Net Assets

Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		7.5%

Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan		6.4%

Naspers Ltd. Internet & Direct Marketing Retail, South Africa		5.9%

Alibaba Group Holding Ltd. Internet & Direct Marketing Retail, China		5.0%

ICICI Bank Ltd. Banks, India		3.6%

Brilliance China Automotive Holdings Ltd. Automobiles, China		3.4%

Unilever PLC Personal Products, U.K.		3.0%

Tencent Holdings Ltd. Interactive Media & Services, China		2.9%

Banco Bradesco SA Banks, Brazil		2.6%

LUKOIL PJSC Oil, Gas & Consumable Fuels, Russia		2.5%

additions in IT, industrials and financials.² New purchases included Health & Happiness H&H International, a leading family nutrition product company in China; Petroleo Brasileiro (Petrobras), Brazil’s national energy company; and Argentinian bank BBVA Argentina, which initiated the Fund’s exposure to that country. We increased existing positions in Cognizant Technology, a major global information technology services company, and China Resources Cement.

We reduced the Fund’s investments in Thailand, Peru and Taiwan in favor of stocks we deemed to be more attractively valued within our investment universe. Sectors that experienced the largest sales were materials, consumer discretionary and communication services.³ We made key reductions in the aforementioned Naspers and in Compania De Minas Buenaventura, a Peruvian precious metals company, while we liquidated the Fund’s positions in cement producer Semen Indonesia and Nigerian Breweries, which eliminated the Fund’s exposure to Nigeria.

2. The information technology sector comprises electronic equipment, instruments and components; IT services; semiconductors and semiconductor equipment; software; and technology hardware, storage and peripherals in the SOI. The industrials sector comprises construction and engineering, industrial conglomerates and transportation infrastructure in the SOI. The financials sector comprises banks, capital markets, diversified financial services and insurance in the SOI.

3. The materials sector comprises chemicals, construction materials, and metals and mining in the SOI. The consumer discretionary sector comprises auto components; automobiles; distributors; hotels, restaurants and leisure; internet and direct marketing retail; multiline retail; and textiles, apparel and luxury goods in the SOI. The communication services sector comprises entertainment, interactive media and services, media and wireless telecommunication services in the SOI.

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Thank you for your participation in Templeton Developing Markets VIP Fund. We look forward to serving your future investment needs.

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Class 2 Fund 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

Actual

Hypothetical

(actual return after expenses)

(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending Account

Value 6/30/19

Fund-Level
Expenses

Paid During

Period

1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,141.60

$7.43

$1,017.85

$7.00

1.40%

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 Developing Markets VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 8.62			$10.31			$ 7.42			$ 6.37			$ 9.27			$10.26


Income from investment operations^a:

Net investment income^b		0.07			0.09			0.08			0.05			0.06			0.15^c

Net realized and unrealized gains (losses)		1.15			(1.67	)		2.92			1.08			(1.63	)		(0.97)


Total from investment operations		1.22			(1.58	)		3.00			1.13			(1.57	)		(0.82)


Less distributions from:

Net investment income		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(0.20	)		(0.17)

Net realized gains		—			—			—			—			(1.13	)		—


Total distributions		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(1.33	)		(0.17)


Redemption fees.		—			—			—			—			—			—^d


Net asset value, end of period		$ 9.72			$ 8.62			$10.31			$ 7.42			$ 6.37			$ 9.27


Total return^e		14.23%			(15.44)%			40.65%			17.79%			(19.42)%			(8.09)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		1.15%			1.24%			1.36%			1.38%			1.33%			1.36%

Expenses net of waiver and payments by affiliates		1.15%	^g		1.24%	^g		1.35%	^h		1.36%			1.32%			1.36%	^g

Net investment income		1.42%			0.99%			0.86%			0.79%			0.74%			1.51%	^c

Supplemental data

Net assets, end of period (000’s)		$91,732			$85,397			$105,493			$82,596			$77,000			$114,487

Portfolio turnover rate		8.56%			9.22%			10.76%			26.78%			71.69%			82.87%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.04 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 1.11%.

^dAmount rounds to less than $0.01 per share.

^fRatios are annualized for periods less than one year.

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

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

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

TD-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 8.54			$10.23			$ 7.36			$ 6.32			$ 9.20			$10.19


Income from investment operations^a:

Net investment income^b		0.05			0.07			0.05			0.04			0.04			0.12^c

Net realized and unrealized gains (losses)		1.15			(1.68	)		2.91			1.06			(1.61	)		(0.96)


Total from investment operations		1.20			(1.61	)		2.96			1.10			(1.57	)		(0.84)


Less distributions from:

Net investment income		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(0.18	)		(0.15)

Net realized gains		—			—			—			—			(1.13	)		—


Total distributions		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(1.31	)		(0.15)


Redemption fees		—			—			—			—			—			—	^d


Net asset value, end of period		$ 9.65			$ 8.54			$10.23			$ 7.36			$ 6.32			$ 9.20


Total return^e		14.16%			(15.79)%			40.41%			17.44%			(19.60)%			(8.39)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		1.40%			1.49%			1.61%			1.63%			1.58%			1.61%

Expenses net of waiver and payments by affiliates		1.40%	^g		1.49%	^g		1.60%	^h		1.61%			1.57%			1.61%	^g

Net investment income		1.17%			0.74%			0.61%			0.54%			0.49%			1.26%^c

Supplemental data

Net assets, end of period (000’s)		$221,695			$195,305			$270,433			$205,151			$192,120			$250,813

Portfolio turnover rate		8.56%			9.22%			10.76%			26.78%			71.69%			82.87%

^bBased on average daily shares outstanding.

^dAmount rounds to less than $0.01 per share.

^fRatios are annualized for periods less than one year.

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

^hBenefit 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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$ 8.59			$10.28			$ 7.39			$ 6.34			$ 9.22			$10.20


Income from investment operations^a:

Net investment income^b		0.05			0.06			0.05			0.03			0.03			0.12	^c

Net realized and unrealized gains (losses)		1.15			(1.68	)		2.92			1.06			(1.62	)		(0.97	)


Total from investment operations		1.20			(1.62	)		2.97			1.09			(1.59	)		(0.85	)


Less distributions from:

Net investment income		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(0.16	)		(0.13	)

Net realized gains		—			—			—			—			(1.13	)		—


Total distributions		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(1.29	)		(0.13	)


Redemption fees		—			—			—			—			—			—	^d


Net asset value, end of period		$ 9.71			$ 8.59			$10.28			$ 7.39			$ 6.34			$ 9.22


Total return^e		14.04%			(15.81)%			40.30%			17.32%			(19.70)%			(8.48)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		1.50%			1.59%			1.71%			1.73%			1.68%			1.71%

Expenses net of waiver and payments by affiliates		1.50%	^g		1.59%	^g		1.70%	^h		1.71%			1.67%			1.71%	^g

Net investment income		1.07%			0.64%			0.51%			0.44%			0.39%			1.16%^c

Supplemental data

Net assets, end of period (000’s)		$5,574			$5,203			$7,199			$6,377			$7,109			$11,106

Portfolio turnover rate		8.56%			9.22%			10.76%			26.78%			71.69%			82.87%

^bBased on average daily shares outstanding.

^dAmount rounds to less than $0.01 per share.

^fRatios are annualized for periods less than one year.

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

^hBenefit 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

Statement of Investments, June 30, 2019 (unaudited)

Templeton Developing Markets VIP Fund



	Industry	Shares		Value
Common Stocks 91.8%
Argentina 0.2%
Banco BBVA Argentina SA, ADR	Banks		58,700		$ 664,484


Brazil 2.7%
^aB2W Cia Digital	Internet & Direct Marketing Retail		115,300		981,430
B3 SA - Brasil Bolsa Balcao	Capital Markets		247,800		2,414,825
Lojas Americanas SA	Multiline Retail		169,200		580,139
M. Dias Branco SA	Food Products		136,200		1,380,425
Mahle-Metal Leve SA	Auto Components		136,600		878,447
Totvs SA	Software		200,000		2,287,721


					8,522,987

Cambodia 1.1%
NagaCorp Ltd.	Hotels, Restaurants & Leisure		2,857,800		3,515,480


China 24.5%
^aAlibaba Group Holding Ltd., ADR	Internet & Direct Marketing Retail		93,210		15,794,435
BAIC Motor Corp. Ltd., H	Automobiles		1,686,100		1,057,569
^aBaidu Inc., ADR	Interactive Media & Services		9,411		1,104,475
Brilliance China Automotive Holdings Ltd.	Automobiles		9,831,800		10,873,671
China Construction Bank Corp., H	Banks		7,168,000		6,175,079
China Merchants Bank Co. Ltd., A	Banks		337,500		1,768,400
China Mobile Ltd.	Wireless Telecommunication Services		447,000		4,071,101
China Petroleum & Chemical Corp., H	Oil, Gas & Consumable Fuels		2,500,900		1,699,888
China Resources Cement Holdings Ltd.	Construction Materials		2,338,400		2,265,918
CNOOC Ltd.	Oil, Gas & Consumable Fuels		2,000,500		3,421,168
COSCO Shipping Ports Ltd.	Transportation Infrastructure		847,238		836,160
Dah Chong Hong Holdings Ltd.	Distributors		1,746,100		583,363
Dairy Farm International Holdings Ltd.	Food & Staples Retailing		98,933		707,371
Health & Happiness H&H International Holdings Ltd.	Food Products		335,400		1,904,084
MGM China Holdings Ltd.	Hotels, Restaurants & Leisure		603,200		1,025,389
NetEase Inc., ADR	Entertainment		6,922		1,770,440
Ping An Bank Co. Ltd., A	Banks		2,027,300		4,068,299
Ping An Insurance Group Co. of China Ltd., A	Insurance		273,623		3,530,864
Sands China Ltd.	Hotels, Restaurants & Leisure		338,600		1,618,851
Sunny Optical Technology Group Co. Ltd.	Electronic Equipment, Instruments & Components		161,000		1,663,140
Tencent Holdings Ltd.	Interactive Media & Services		208,500		9,410,610
Uni-President China Holdings Ltd.	Food Products		2,016,700		2,245,898
Weifu High-Technology Co. Ltd., B	Auto Components		334,339		603,014


					78,199,187

Czech Republic 0.4%
Moneta Money Bank AS	Banks		390,403		1,336,799


Hungary 0.9%
Richter Gedeon Nyrt	Pharmaceuticals		161,270		2,970,562


India 7.3%
Bajaj Holdings & Investment Ltd.	Diversified Financial Services		35,390		1,846,876
Biocon Ltd.	Biotechnology		581,104		2,111,611
Coal India Ltd.	Oil, Gas & Consumable Fuels		224,035		824,657
Glenmark Pharmaceuticals Ltd.	Pharmaceuticals		292,323		1,879,643

TD-10

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)



	Industry	Shares		Value

Common Stocks (continued)

India (continued)
ICICI Bank Ltd.	Banks		1,806,409		$ 11,451,506
Infosys Ltd.	IT Services		306,365		3,252,490
Tata Chemicals Ltd.	Chemicals		174,200		1,583,085
^aTata Motors Ltd., A	Automobiles		394,471		455,687


					23,405,555

Indonesia 1.3%
Astra International Tbk PT	Automobiles		8,085,700		4,263,915


Kenya 0.3%
Equity Group Holdings PLC	Banks		2,127,994		810,862


Mexico 2.5%
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santander, ADR	Banks		949,761		7,265,672
Nemak SAB de CV	Auto Components		1,686,600		791,311


					8,056,983

Pakistan 0.3%
Habib Bank Ltd.	Banks		1,460,000		1,002,690


Peru 0.7%
Compania de Minas Buenaventura SA, ADR	Metals & Mining		47,770		796,326
Intercorp Financial Services Inc.	Banks		31,950		1,453,725


					2,250,051

Philippines 0.3%
BDO Unibank Inc.	Banks		327,469		894,899


Russia 9.2%
Gazprom PJSC, ADR	Oil, Gas & Consumable Fuels		622,000		4,556,772
LUKOIL PJSC, ADR	Oil, Gas & Consumable Fuels		95,250		8,041,005
^a,bMail.Ru Group Ltd., GDR, Reg S	Interactive Media & Services		112,799		2,878,630
MMC Norilsk Nickel PJSC, ADR	Metals & Mining		37,800		858,438
Sberbank of Russia PJSC, ADR	Banks		498,847		7,672,267
^aYandex NV, A	Interactive Media & Services		136,818		5,199,084


					29,206,196

Singapore 0.2%
DBS Group Holdings Ltd.	Banks		25,706		493,130


South Africa 6.8%
Massmart Holdings Ltd.	Food & Staples Retailing		465,421		2,054,831
^aMultiChoice Group Ltd.	Media		90,505		860,637
Naspers Ltd., N	Internet & Direct Marketing Retail		77,527		18,817,330


					21,732,798

South Korea 16.0%
Fila Korea Ltd.	Textiles, Apparel & Luxury Goods		59,210		3,925,361
Hankook Technology Group Co. Ltd.	Diversified Financial Services		37,500		555,885
Hankook Tire & Technology Co. Ltd.	Auto Components		21,600		655,315
Hanon Systems	Auto Components		94,741		954,010
HDC Hyundai Development Co-Engineering & Construction	Construction & Engineering		56,247		2,114,841
Hite Jinro Co. Ltd.	Beverages		29,470		518,363

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)

South Korea (continued)
KT Skylife Co. Ltd.	Media		166,071		$ 1,514,382
LG Corp.	Industrial Conglomerates		83,455		5,547,124
Naver Corp.	Interactive Media & Services		62,869		6,194,847
POSCO	Metals & Mining		12,766		2,697,881
Samsung Electronics Co. Ltd.	Technology Hardware, Storage & Peripherals		589,877		23,963,403
SK Hynix Inc.	Semiconductors & Semiconductor Equipment		37,980		2,281,544


					50,922,956

Taiwan 8.5%

Catcher Technology Co. Ltd.	Technology Hardware, Storage & Peripherals		248,000		1,781,264
CTBC Financial Holding Co. Ltd.	Banks		2,244,000		1,546,562
FIT Hon Teng Ltd.	Electronic Equipment, Instruments
	& Components		1,759,800		711,836
Hon Hai Precision Industry Co. Ltd.	Electronic Equipment, Instruments
	& Components		629,200		1,572,086
Largan Precision Co. Ltd.	Electronic Equipment, Instruments
	& Components		7,900		983,101
Taiwan Semiconductor Manufacturing Co. Ltd.	Semiconductors & Semiconductor Equipment		2,658,000		20,506,876


					27,101,725

Thailand 2.6%

Kasikornbank PCL, fgn	Banks		619,500		3,825,196
Kiatnakin Bank PCL, fgn	Banks		1,009,800		2,286,774
Thai Beverage PCL, fgn	Beverages		3,442,500		2,111,417


					8,223,387

United Kingdom 3.0%

Unilever PLC	Personal Products		155,816		9,685,164


United States 3.0%

Cognizant Technology Solutions Corp., A	IT Services		110,315		6,992,868
^aIMAX Corp.	Entertainment		125,255		2,530,151


					9,523,019

Total Common Stocks (Cost $215,575,062)					292,782,829


Preferred Stocks 5.5%

Brazil 5.5%
^cBanco Bradesco SA, 3.053%, ADR, pfd	Banks		828,715		8,137,981
^cItau Unibanco Holding SA, 7.589%, ADR, pfd	Banks		808,743		7,618,359
^cPetroleo Brasileiro SA, 0.599%, ADR, pfd	Oil, Gas & Consumable Fuels		118,600		1,684,120


Total Preferred Stocks (Cost $7,685,628)					17,440,460


Total Investments before Short Term Investments (Cost $223,260,690)					310,223,289

TD-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)



	Shares		Value

Short Term Investments (Cost $8,751,654) 2.7%

Money Market Funds 2.7%
United States 2.7%
^d,eInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		8,751,654		$ 8,751,654


Total Investments (Cost $232,012,344) 100.0%				318,974,943

Other Assets, less Liabilities 0.0%^†				25,081


Net Assets 100.0%				$319,000,024

See Abbreviations on page TD-23.

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

^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. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At June 30, 2019, the value of this security was $2,878,630, representing 0.9% of net assets.

^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, 2019 (unaudited)



	Templeton Developing Markets VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$223,260,690
Cost - Non-controlled affiliates (Note 3e)		8,751,654


Value - Unaffiliated issuers		$310,223,289
Value - Non-controlled affiliates (Note 3e)		8,751,654
Foreign currency, at value (cost $40,969)		41,031
Receivables:
Capital shares sold		320,724
Dividends		1,630,697
Foreign tax refund		22,245
Other assets		221


Total assets		320,989,861


Liabilities:
Payables:
Investment securities purchased		442,375
Capital shares redeemed		254,788
Management fees		263,622
Distribution fees		92,834
Trustees’ fees and expenses		370
Deferred tax		787,108
Accrued expenses and other liabilities		148,740


Total liabilities		1,989,837


Net assets, at value		$319,000,024

Net assets consist of:
Paid-in capital		$236,719,859
Total distributable earnings (loss)		82,280,165


Net assets, at value		$319,000,024


Class 1:
Net assets, at value		$ 91,731,514

Shares outstanding		9,441,896

Net asset value and maximum offering price per share		$9.72

Class 2:
Net assets, at value		$221,694,981

Shares outstanding		22,978,355

Net asset value and maximum offering price per share		$9.65

Class 4:
Net assets, at value		$ 5,573,529

Shares outstanding		574,222

Net asset value and maximum offering price per share		$9.71

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, 2019 (unaudited)



	Templeton Developing Markets VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 3,954,387
Non-controlled affiliates (Note 3e)		62,701


Total investment income		4,017,088

Expenses:
Management fees (Note 3a)		1,638,242
Distribution fees: (Note 3c)
Class 2		269,584
Class 4		9,623
Custodian fees (Note 4)		44,519
Reports to shareholders		79,037
Professional fees		32,077
Trustees’ fees and expenses		1,304
Other		15,131


Total expenses		2,089,517
Expenses waived/paid by affiliates (Note 3e)		(10,484	)


Net expenses		2,079,033


Net investment income		1,938,055

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:^#
Unaffiliated issuers		4,574,914
Foreign currency transactions		(17,931	)


Net realized gain (loss)		4,556,983

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		33,336,434
Translation of other assets and liabilities denominated in foreign currencies		(4,828	)
Change in deferred taxes on unrealized appreciation		(226,625	)


Net change in unrealized appreciation (depreciation)		33,104,981


Net realized and unrealized gain (loss)		37,661,964


Net increase (decrease) in net assets resulting from operations		$39,600,019



*Foreign taxes withheld on dividends			$ 593,574
^#Net of foreign taxes			$ 62,742

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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 1,938,055			$ 2,697,670
Net realized gain (loss)		4,556,983			19,694,258
Net change in unrealized appreciation (depreciation)		33,104,981			(77,137,099	)


Net increase (decrease) in net assets resulting from operations		39,600,019			(54,745,171	)


Distributions to shareholders:
Class 1		(1,134,638	)		(1,013,838	)
Class 2		(2,113,534	)		(1,947,210	)
Class 4		(46,961	)		(46,243	)


Total distributions to shareholders		(3,295,133	)		(3,007,291	)


Capital share transactions: (Note 2)
Class 1		(4,446,567	)		(3,414,259	)
Class 2		1,537,945			(35,130,020	)
Class 4		(301,194	)		(923,409	)


Total capital share transactions		(3,209,816	)		(39,467,688	)


Net increase (decrease) in net assets		33,095,070			(97,220,150	)
Net assets:
Beginning of period		285,904,954			383,125,104


End of period		$319,000,024			$285,904,954

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

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.



		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)

b. Foreign Currency Translation

c. Income and Deferred Taxes

d. Security Transactions, Investment Income, Expenses and Distributions

TD-18

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 1 Shares:
Shares sold		326,922		$	3,144,807			1,801,012		$	17,302,432
Shares issued in reinvestment of distributions		121,873			1,134,638			105,170			1,013,838
Shares redeemed		(918,209	)		(8,726,012	)		(2,222,370	)		(21,730,529	)


Net increase (decrease)		(469,414	)	$	(4,446,567	)		(316,188	)	$	(3,414,259	)


Class 2 Shares:
Shares sold		2,954,596		$	28,019,292			4,771,227		$	45,978,347
Shares issued in reinvestment of distributions		228,490			2,113,534			203,470			1,947,210
Shares redeemed		(3,063,335	)		(28,594,881	)		(8,557,714	)		(83,055,577	)


Net increase (decrease)		119,751		$	1,537,945			(3,583,017	)	$	(35,130,020	)


Class 4 Shares:
Shares sold		21,672		$	206,120			48,260		$	471,887
Shares issued in reinvestment of distributions		5,050			46,961			4,802			46,243
Shares redeemed		(58,336	)		(554,275	)		(147,608	)		(1,441,539	)


Net increase (decrease)		(31,614	)	$	(301,194	)		(94,546	)	$	(923,409	)

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

3. Transactions with Affiliates



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

For the period ended June 30, 2019, the annualized gross effective investment management fee rate was 1.049% of the Fund’s average daily net assets.

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.

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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies


	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, 2.05%	$	5,427,431	$	30,356,496	$	(27,032,273)		$ —		$ —	$	8,751,654		8,751,654		$62,701

4. Expense Offset Arrangement

5. Income Taxes

At December 31, 2018, the capital loss carryforwards were as follows:


Capital loss carryforwards not subject to expiration:
Short term	$	6,657,029

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	237,006,458


Unrealized appreciation	$	101,238,393
Unrealized depreciation		(19,269,908	)


Net unrealized appreciation (depreciation)	$	81,968,485

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, 2019, aggregated $26,350,921 and $35,045,781, respectively.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Developing Markets VIP Fund (continued)

7. Concentration of Risk

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, 2019, the Fund had 9.2% of its net assets invested in Russia.

8. Credit Facility

9. Fair Value Measurements

•

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)

Templeton Developing Markets VIP Fund (continued)

10. 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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Developing Markets VIP Fund

At December 31, 2018, 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 13, 2019, 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		$0.0303		$0.1526

Class 2		$0.0303		$0.1267

Class 4		$0.0303		$0.1143

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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Semiannual Report

Templeton Foreign VIP Fund

This semiannual report for Templeton Foreign VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +6.47% total return* for the six-month period ended June 30, 2019.

^*The Fund has a fee waiver associated with any investments it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

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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 US, including those in emerging markets.

Fund Risks

All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging 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 and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in companies in Europe. 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 USA Index, posted a +13.60% 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

Geographic Composition

Based on Total Net Assets as of 6/30/19

LOGO

were the U.S. Federal Reserve’s (Fed’s) patient approach to its monetary policy in 2019 and recent indication it will act as appropriate to sustain U.S. economic expansion.

However, markets reflected concerns about political uncertainties in the U.S. and the European Union, geopolitical risks in certain regions, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. In this environment, global developed and emerging market stocks, as measured by the MSCI ACWI, posted a +16.60% total return for the six-month period.¹

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

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 FOREIGN VIP FUND

June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low recently, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

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 potential long-term earnings, asset value and cash flow. This includes an assessment by the investment manager of the potential impacts of material environmental, social and governance factors on the long-term risk and return profile of

Top 10 Holdings

6/30/19



Company *Sector/Industry, Country*		% of Total Net Assets

Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		4.1%

BP PLC Oil, Gas & Consumable Fuels, U.K.		3.3%

Standard Chartered PLC Banks, U.K.		3.3%

Roche Holding AG Pharmaceuticals, Switzerland		3.1%

Royal Dutch Shell PLC Oil, Gas & Consumable Fuels, U.K.		3.0%

BNP Paribas SA Banks, France		3.0%

Wheaton Precious Metals Corp. Metals & Mining, Canada		2.7%

KB Financial Group Inc. Banks, South Korea		2.6%

Sanofi Pharmaceuticals, France		2.4%

ING Groep NV Banks, Netherlands		2.2%

a company. We also consider a company’s price/earnings ratio, price/cash flow ratio, profit margins and liquidation value.

Manager’s Discussion

During the six months under review, stock selection in materials contributed to relative performance.³ The sector’s largest contributors were Canadian precious metal firms Alamos Gold (not part of the index) and Wheaton Precious Metals. Wheaton benefited from a favorable settlement related to a Canadian tax audit that had depressed its share price for years. Shares also rallied in May after the firm’s reported earnings and gold production beat consensus expectations. The stock remains an attractive holding, trading at what we view as reasonable valuations on a variety of metrics and providing a capital-light, low-cost streaming model that offers gold exposure with superior economics compared to traditional mining companies.

In other sectors, key relative contributors included China Life Insurance (not held at period-end), a Chinese life insurer, and SBM Offshore (not part of the index), a Dutch oil

3. The materials sector comprises chemicals, construction materials, and metals and mining in the SOI.

Semiannual Report

TF-3

TEMPLETON FOREIGN VIP FUND

services firm. SBM’s shares rallied after it announced a strong order book, raised its dividend and initiated a share buyback program. The stock continued to rally after securing contracts from Exxon Mobil and Petrobras (not Fund holdings). Other relative contributors included Dutch semiconductor manufacturer NXP Semiconductors, South Korean multinational electronics company Samsung Electronics, Swiss smart metering solutions company Landis+Gyr (not part of the index), Canadian integrated oil company Cenovus Energy (not held at period-end), British banking firm Standard Chartered and Singaporean telecommunications firm Singapore Telecommunications.

In contrast, stock selection and an overweighted allocation in the communication services sector detracted from relative results.⁴ Notably, our positions in Chinese internet services company Baidu, German telecommunication services provider Telefonica Deutschland, Luxembourg-based media firm SES and British telecommunications company Vodafone hurt performance. Baidu’s stock price fell amid a cyclical slowdown in China’s economy. We believe Baidu’s core search business remains undervalued, and the company has enjoyed strong growth in active daily users and a high cash position.

Stock selection in the health care and financials sectors also detracted from relative results.⁵ In health care, Israeli pharmaceuticals firm Teva Pharmaceutical Industries and Chinese health care provider Sinopharm were notable detractors. Teva’s share price declined due to weakness in the U.S. generic drug market and slumping sales of one of its aging flagship drugs. A surprising settlement of a U.S. opioid lawsuit, which added to the existing litigation risk surrounding an industry-wide price-fixing scandal, also hurt its share price. While these situations are unlikely to materially impact near-term cash flow—which we believe should improve amid ongoing cost-cutting—they do raise the risk profile of the investment, particularly in light of Teva’s high financial and operating leverage in the competitive, commodity-like generic drug industry. In financials, South Korean banking firm KB Financial Group was a notable relative detractor.

Key relative detractors in other sectors included Japanese food retailer Seven & i Holdings, Japanese household durables company Panasonic and South Korean electric utilities firm Korea Electric Power.

No region contributed to relative performance, but overweighting in the Netherlands and stock selection in Singapore and Canada helped relative results. In contrast, stock selection in Asia and Europe detracted from relative results. Notable individual detractors included China, Germany and Israel.

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

4. The communication services sector comprises diversified telecommunication services, entertainment, interactive media and services, media and wireless telecommunication services in the SOI.

5. The health care sector comprises health care equipment and supplies, health care providers and services, and pharmaceuticals in the SOI. The financials sector comprises banks and capital markets in the SOI.

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TEMPLETON FOREIGN VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Ending
Account

Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,064.70

$5.53

$1,019.44

$5.41

1.08%

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Foreign VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$13.01			$15.80			$13.89			$13.46			$15.34			$17.56


Income from investment operations^a:

Net investment income^b		0.33			0.29			0.30			0.33			0.31			0.53^c

Net realized and unrealized gains (losses)		0.52			(2.64	)		2.03			0.62			(1.16	)		(2.39)


Total from investment operations		0.85			(2.35	)		2.33			0.95			(0.85	)		(1.86)


Less distributions from:

Net investment income		(0.27	)		(0.44	)		(0.42	)		(0.29	)		(0.53	)		(0.36)

Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)		—


Total distributions		(0.41	)		(0.44	)		(0.42	)		(0.52	)		(1.03	)		(0.36)


Redemption fees		—			—			—			—			—			—^d


Net asset value, end of period		$13.45			$13.01			$15.80			$13.89			$13.46			$15.34


Total return^e		6.65%			(15.27)%			17.02%			7.49%			(6.31)%			(10.89)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		0.85%			0.83%			0.82%			0.80%			0.78%			0.77%

Expenses net of waiver and payments by affiliates		0.83%			0.81%			0.81%	^g		0.78%			0.78%	^h		0.77%	^h

Net investment income		4.85%			1.96%			1.99%			2.38%			2.05%			3.11%	^c

Supplemental data

Net assets, end of period (000’s)		$119,825			$114,784			$152,684			$133,218			$214,172			$248,355

Portfolio turnover rate		11.70%			21.38%			26.81%			20.93%			15.15%			25.71%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.16 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 2.13%.

^dAmount rounds to less than $0.01 per share.

^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%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.74			$15.47			$13.61			$13.20			$15.05			$17.24


Income from investment operations^a:

Net investment income^b		0.31			0.25			0.26			0.28			0.27			0.48^c

Net realized and unrealized gains (losses)		0.50			(2.58	)		1.98			0.62			(1.13	)		(2.35)


Total from investment operations		0.81			(2.33	)		2.24			0.90			(0.86	)		(1.87)


Less distributions from:

Net investment income		(0.23	)		(0.40	)		(0.38	)		(0.26	)		(0.49	)		(0.32)

Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)		—


Total distributions		(0.37	)		(0.40	)		(0.38	)		(0.49	)		(0.99	)		(0.32)


Redemption fees		—			—			—			—			—			—^d


Net asset value, end of period		$13.18			$12.74			$15.47			$13.61			$13.20			$15.05


Total return^e		6.47%			(15.44)%			16.69%			7.18%			(6.49)%			(11.13)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		1.10%			1.08%			1.07%			1.05%			1.03%			1.02%

Expenses net of waiver and payments by affiliates		1.08%			1.06%			1.06%	^g		1.03%			1.03%	^h		1.02%	^h

Net investment income		4.60%			1.71%			1.74%			2.13%			1.80%			2.86%	^c

Supplemental data

Net assets, end of period (000’s)		$1,087,490			$1,060,101			$1,394,475			$1,436,518			$1,456,854			$1,645,571

Portfolio turnover rate		11.70%			21.38%			26.81%			20.93%			15.15%			25.71%

^bBased on average daily shares outstanding.

^dAmount rounds to less than $0.01 per share.

^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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.96			$15.71			$13.71			$13.29			$15.16			$17.37


Income from investment operations^a:

Net investment income^b		0.30			0.24			0.23			0.26			0.25			0.46^c

Net realized and unrealized gains (losses)		0.53			(2.63	)		2.03			0.63			(1.14	)		(2.36)


Total from investment operations		0.83			(2.39	)		2.26			0.89			(0.89	)		(1.90)


Less distributions from:

Net investment income		(0.21	)		(0.36	)		(0.26	)		(0.24	)		(0.48	)		(0.31)

Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)		—


Total distributions		(0.35	)		(0.36	)		(0.26	)		(0.47	)		(0.98	)		(0.31)


Redemption fees		—			—			—			—			—			—^d


Net asset value, end of period		$13.44			$12.96			$15.71			$13.71			$13.29			$15.16


Total return^e		6.47%			(15.54)%			16.62%			7.09%			(6.65)%			(11.22)%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		1.20%			1.18%			1.17%			1.15%			1.13%			1.12%

Expenses net of waiver and payments by affiliates		1.18%			1.16%			1.16%	^g		1.13%			1.13%	^h		1.12%	^h

Net investment income		4.50%			1.61%			1.64%			2.03%			1.70%			2.76%	^c

Supplemental data

Net assets, end of period (000’s)		$112,652			$125,265			$159,944			$484,763			$472,189			$503,143

Portfolio turnover rate		11.70%			21.38%			26.81%			20.93%			15.15%			25.71%

^bBased on average daily shares outstanding.

^dAmount rounds to less than $0.01 per share.

^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%.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Templeton Foreign VIP Fund



	Country		Shares		Value

Common Stocks 94.6%
Aerospace & Defense 1.1%
BAE Systems PLC		United Kingdom		2,299,513	$	14,467,000


Auto Components 1.3%
Cie Generale des Etablissements Michelin SCA		France		67,168		8,517,953
Sumitomo Rubber Industries Ltd.		Japan		712,200		8,230,395


						16,748,348


Automobiles 0.4%
Hero Motocorp Ltd.		India		154,059		5,767,996


Banks 19.6%
Bangkok Bank PCL, fgn		Thailand		2,290,200		14,850,108
Bank of Ireland Group PLC		Ireland		2,346,131		12,258,447
Barclays PLC		United Kingdom		6,423,850		12,220,636
BNP Paribas SA		France		832,583		39,531,492
Hana Financial Group Inc.		South Korea		494,927		15,999,334
HSBC Holdings PLC		United Kingdom		3,012,800		24,990,488
ING Groep NV		Netherlands		2,515,913		29,162,760
Kasikornbank PCL, fgn		Thailand		1,860,000		11,484,848
KB Financial Group Inc., ADR		South Korea		871,106		34,391,265
Standard Chartered PLC		United Kingdom		4,786,838		43,416,537
Sumitomo Mitsui Financial Group Inc.		Japan		571,800		20,184,296


						258,490,211


Beverages 1.0%
Suntory Beverage & Food Ltd.		Japan		293,800		12,766,212


Building Products 1.1%
Compagnie de Saint-Gobain		France		373,982		14,572,409


Capital Markets 1.2%
UBS Group AG		Switzerland		1,326,231		15,755,317


Chemicals 2.1%
Johnson Matthey PLC		United Kingdom		494,842		20,920,254
Lotte Chemical Corp.		South Korea		29,003		6,329,851


						27,250,105

Construction & Engineering 0.8%
Sinopec Engineering Group Co. Ltd.		China		11,734,000		9,943,368


Construction Materials 1.8%
CRH PLC		Ireland		294,271		9,598,010
Taiheiyo Cement Corp.		Japan		452,700		13,687,646


						23,285,656

Diversified Telecommunication Services 4.0%
China Telecom Corp. Ltd., H		China		40,444,357		20,346,041
Singapore Telecommunications Ltd.		Singapore		8,893,300		23,001,330
Telefonica Deutschland Holding AG		Germany		3,443,999		9,619,918


						52,967,289

Electric Utilities 0.5%
^aKorea Electric Power Corp.		South Korea		267,802		5,914,171



		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)
Electrical Equipment 0.7%
Vestas Wind Systems AS		Denmark		110,255	$	9,521,244


Electronic Equipment, Instruments & Components 0.7%
^bLandis+Gyr Group AG		Switzerland		120,834		9,621,428


Energy Equipment & Services 2.3%
The Drilling Co. of 1972 AS		Denmark		10,416		809,065
SBM Offshore NV		Netherlands		1,147,815		22,157,092
Tenaris SA		Italy		570,849		7,469,641


						30,435,798

Entertainment 0.9%
NetEase Inc., ADR		China		48,100		12,302,537


Food & Staples Retailing 0.9%
Seven & i Holdings Co. Ltd.		Japan		360,100		12,183,684


Food Products 0.5%
Ezaki Glico Co. Ltd.		Japan		143,750		6,399,555


Health Care Equipment & Supplies 0.1%
^aAlcon Inc.		Switzerland		25,784		1,591,745


Health Care Providers & Services 0.7%
Sinopharm Group Co. Ltd., H		China		2,794,800		9,838,137


Household Durables 1.4%
Panasonic Corp.		Japan		2,272,100		18,915,201


Industrial Conglomerates 2.3%
CK Hutchison Holdings Ltd.		Hong Kong		2,353,000		23,192,207
Siemens AG		Germany		63,215		7,517,181


						30,709,388

Interactive Media & Services 1.2%
^aBaidu Inc., ADR		China		138,230		16,222,673


Marine 0.5%
A.P. Moeller-Maersk AS, B		Denmark		5,208		6,458,244


Media 1.0%
SES SA, IDR		Luxembourg		809,562		12,654,820


Metals & Mining 5.3%
Alamos Gold Inc., A		Canada		3,063,752		18,535,700
Sumitomo Metal Mining Co. Ltd.		Japan		553,200		16,515,960
Wheaton Precious Metals Corp.		Canada		1,450,800		35,080,615


						70,132,275

Multi-Utilities 2.5%
E.ON SE		Germany		1,516,092		16,461,809
Veolia Environnement SA		France		671,188		16,344,319


						32,806,128

Oil, Gas & Consumable Fuels 11.5%
BP PLC		United Kingdom		6,337,733		44,154,640
Eni SpA		Italy		1,751,379		29,081,353
^bHusky Energy Inc.		Canada		1,163,600		11,025,216

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)
Oil, Gas & Consumable Fuels (continued)
Royal Dutch Shell PLC, A		United Kingdom		16,803	$	548,945
Royal Dutch Shell PLC, B		United Kingdom		1,205,385		39,509,397
Total SA		France		493,039		27,619,198


						151,938,749

Pharmaceuticals 13.1%
Astellas Pharma Inc.		Japan		1,323,300		18,839,413
Bayer AG		Germany		314,157		21,764,684
Merck KGaA		Germany		121,789		12,732,398
Novartis AG		Switzerland		128,920		11,777,013
Roche Holding AG		Switzerland		143,560		40,379,696
Sanofi		France		370,668		31,988,013
Takeda Pharmaceutical Co. Ltd.		Japan		565,194		20,040,221
^aTeva Pharmaceutical Industries Ltd., ADR		Israel		1,610,544		14,865,321


						172,386,759

Real Estate Management & Development 1.9%
CK Asset Holdings Ltd.		Hong Kong		933,100		7,303,887
Mitsui Fudosan Co. Ltd.		Japan		604,000		14,635,040
Swire Pacific Ltd., A		Hong Kong		201,500		2,476,143


						24,415,070

Semiconductors & Semiconductor Equipment 3.9%
Infineon Technologies AG		Germany		590,665		10,441,786
NXP Semiconductors NV		Netherlands		221,300		21,601,093
Taiwan Semiconductor Manufacturing Co. Ltd.		Taiwan		2,587,000		19,959,100


						52,001,979

Specialty Retail 1.1%
Kingfisher PLC		United Kingdom		5,347,092		14,592,869


Technology Hardware, Storage & Peripherals 4.1%
Samsung Electronics Co. Ltd.		South Korea		1,337,964		54,353,992


Wireless Telecommunication Services 3.1%
China Mobile Ltd.		China		1,821,000		16,584,954
Vodafone Group PLC, ADR		United Kingdom		1,512,103		24,692,642


						41,277,596


Total Common Stocks (Cost $1,188,489,209)						1,248,687,953


Short Term Investments 5.6%

Money Market Funds (Cost $63,314,322) 4.8%
^c,dInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		United States		63,314,322		63,314,322

Semiannual Report

TF-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)



	Country	Shares		Value

Short Term Investments (continued)
^eInvestments from Cash Collateral Received for Loaned Securities 0.8%
Money Market Funds (Cost $11,122,273) 0.8%
^c,d Institutional Fiduciary Trust Money Market Portfolio, 2.05%	United States		11,122,273	$	11,122,273


Total Investments (Cost $1,262,925,804) 100.2%					1,323,124,548
Other Assets, less Liabilities (0.2)%					(3,157,225	)


Net Assets 100.0%				$	1,319,967,323

See Abbreviations on page TF-23.

^aNon-income producing.

^bA portion or all of the security is on loan at June 30, 2019. See Note 1(c).

^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.

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 Assets and Liabilities

June 30, 2019 (unaudited)



	Templeton Foreign VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$1,188,489,209
Cost - Non-controlled affiliates (Note 3e)		74,436,595


Value - Unaffiliated issuers⁺		$1,248,687,953
Value - Non-controlled affiliates (Note 3e)		74,436,595
Cash		25,095
Receivables:
Investment securities sold		9,722
Capital shares sold		2,368,573
Dividends.		8,564,960
European Union tax reclaims		159,053
Other assets		971


Total assets		1,334,252,922

Liabilities:
Payables:
Investment securities purchased		562,239
Capital shares redeemed		892,227
Management fees		826,384
Distribution fees		512,222
Trustees’ fees and expenses		1,925
Payable upon return of securities loaned		11,122,273
Accrued expenses and other liabilities		368,329


Total liabilities		14,285,599


Net assets, at value		$1,319,967,323

Net assets consist of:
Paid-in capital		$1,239,440,919
Total distributable earnings (loss)		80,526,404


Net assets, at value		$1,319,967,323


Class 1:
Net assets, at value		$ 119,825,105

Shares outstanding		8,911,289

Net asset value and maximum offering price per share		$13.45

Class 2:
Net assets, at value		$1,087,490,226

Shares outstanding		82,500,011

Net asset value and maximum offering price per share		$13.18


Class 4:
Net assets, at value		$ 112,651,992

Shares outstanding		8,384,869

Net asset value and maximum offering price per share		$13.44


⁺Includes securities loaned		$ 4,912,344

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

TF-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended June 30, 2019 (unaudited)



	Templeton Foreign VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$37,062,615
Non-controlled affiliates (Note 3e)		454,823
Interest:
Unaffiliated issuers		3,478
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		4,816
Non-controlled affiliates (Note 3e)		234,251


Total investment income		37,759,983

Expenses:
Management fees (Note 3a)		5,329,091
Distribution fees: (Note 3c)
Class 2		1,367,445
Class 4		203,435
Custodian fees (Note 4)		71,309
Reports to shareholders		156,411
Professional fees		48,264
Trustees’ fees and expenses		6,013
Other		25,846


Total expenses		7,207,814
Expenses waived/paid by affiliates (Note 3e)		(116,436	)


Net expenses		7,091,378


Net investment income		30,668,605

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(7,023,946	)
Foreign currency transactions		(179,114	)


Net realized gain (loss)		(7,203,060	)

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		60,778,948

Translation of other assets and liabilities denominated in foreign currencies		(37,118	)


Net change in unrealized appreciation (depreciation)		60,741,830


Net realized and unrealized gain (loss)		53,538,770


Net increase (decrease) in net assets resulting from operations		$84,207,375



*Foreign taxes withheld on dividends			$ 2,795,886



TF-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 Foreign VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 30,668,605			$ 26,739,957
Net realized gain (loss)		(7,203,060	)		97,768,736
Net change in unrealized appreciation (depreciation)		60,741,830			(367,924,342	)


Net increase (decrease) in net assets resulting from operations		84,207,375			(243,415,649	)


Distributions to shareholders:
Class 1		(3,542,825	)		(3,961,619	)
Class 2		(29,727,357	)		(33,465,356	)
Class 4		(2,819,837	)		(3,521,973	)


Total distributions to shareholders		(36,090,019	)		(40,948,948	)


Capital share transactions: (Note 2)
Class 1		988,366			(12,722,479	)
Class 2		(11,544,167	)		(102,793,664	)
Class 4		(17,744,037	)		(7,072,417	)


Total capital share transactions		(28,299,838	)		(122,588,560	)


Net increase (decrease) in net assets		19,817,518			(406,953,157	)
Net assets:
Beginning of period		1,300,149,805			1,707,102,962


End of period		$1,319,967,323			$1,300,149,805

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

TF-15

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

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.

TF-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

b. Foreign Currency Translation

c. Securities Lending

d. Income and Deferred Taxes

Semiannual Report

TF-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

d. Income and Deferred Taxes (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. 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.

f. Accounting Estimates

g. Guarantees and Indemnifications

TF-18

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019				Year Ended December 31, 2018

	Shares		Amount		Shares		Amount


Class 1 Shares:

Shares sold		175,552	$	2,431,425		438,905	$	6,719,723

Shares issued in reinvestment of distributions		273,789		3,542,825		263,056		3,961,619

Shares redeemed		(361,352)		(4,985,884)		(1,543,257)		(23,403,821)


Net increase (decrease)		87,989	$	988,366		(841,296)	$	(12,722,479)


Class 2 Shares:

Shares sold		3,116,026	$	42,274,359		7,214,702	$	104,866,589

Shares issued in reinvestment of distributions		2,342,581		29,727,357		2,265,765		33,465,356

Shares redeemed		(6,178,932)		(83,545,883)		(16,372,436)		(241,125,609)


Net increase (decrease)		(720,325)	$	(11,544,167)		(6,891,969)	$	(102,793,664)


Class 4 Shares:

Shares sold		414,444	$	5,663,852		1,564,942	$	23,205,250

Shares issued in reinvestment of distributions		218,085		2,819,837		234,330		3,521,973

Shares redeemed		(1,913,741)		(26,227,726)		(2,311,503)		(33,799,640)


Net increase (decrease)		(1,281,212)	$	(17,744,037)		(512,231)	$	(7,072,417)

3. Transactions with Affiliates



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

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)

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, 2019, the annualized gross effective investment management fee rate was 0.801% 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.

TF-20

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies


	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, 2.05%		$49,866,794		$156,280,845		$(142,833,317)		$ —		$ —		$63,314,322		63,314,322	$454,823

															Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 2.05%		13,003,937		267,023,676		(268,905,340)		—		—		11,122,273		11,122,273	234,251

Total Affiliated Securities		$62,870,731		$423,304,521		$(411,738,657)		$ —		$ —		$74,436,595			$689,074

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	1,266,955,782


Unrealized appreciation	$	200,220,390
Unrealized depreciation		(144,051,624)


Net unrealized appreciation (depreciation)	$	56,168,766

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of passive foreign investment company shares.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $149,655,770 and $208,609,412, respectively.

Semiannual Report

TF-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

6. Investment Transactions (continued)

At June 30, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $11,122,273 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

8. Credit Facility

9. Fair Value Measurements

•

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.

10. 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.

TF-22

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Foreign VIP Fund (continued)

Abbreviations



Selected Portfolio

ADR		American Depositary Receipt

IDR		International Depositary Receipt

Semiannual Report

TF-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Foreign VIP Fund

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	$0.0348	$0.3349

Class 2	$0.0348	$0.2952

Class 4	$0.0348	$0.2701

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.

TF-24

Semiannual Report

Templeton Global Bond VIP Fund

This semiannual report for Templeton Global Bond VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +3.10% total return* for the six-month period ended June 30, 2019.

Semiannual Report

TGB-1

TEMPLETON GLOBAL BOND VIP FUND

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. 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 +5.37% total return and the FTSE World Government Bond Index (WGBI), posted a +5.38% total return for the same period.¹

Economic and Market Overview

Global financial markets began the six-month period on a positive note, significantly recovering from the heightened volatility in December 2018. Some of the strongest rallies in January were seen across emerging markets, notably in

Geographic Composition*

Based on Total Net Assets as of 6/30/19

LOGO

*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.

Latin America. Most global currencies initially strengthened against a broadly weaker U.S. dollar before the trends reversed in February, March, April and May. However, weakness in the U.S. dollar returned in June, resulting in positive appreciations for a number of currencies against the U.S. dollar over the full six-month period. Additionally, risk assets around the world largely rallied during the period as a whole despite intermittent periods of volatility, with credit spreads broadly tightening across much of the global fixed income markets.

The Federal Open Market Committee (FOMC) shifted its policy stance at its January 2019 meeting, keeping rates unchanged, but removing its prior statement that “some further gradual increases in the target range for the federal funds rate” would be warranted. By March, the U.S. Federal Reserve (Fed) dropped its projected rate hikes for 2019 to zero, from the previous projections for two. In June, the FOMC shifted forward guidance further into dovish territory, notably removing its prior statement on being “patient… on future adjustments” and replacing it with a declaration that it “will act as appropriate to sustain the expansion.” Fed Chair Jay Powell indicated that several FOMC members saw a strengthening case for rate cuts.

In Europe, the European Central Bank (ECB) kept its policy rate unchanged at its January, March, April and June meetings, but moved increasingly into dovish territory

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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TEMPLETON GLOBAL BOND VIP FUND

throughout the period. ECB President Mario Draghi indicated the central bank was prepared to “use all the instruments in its toolbox” to support economic conditions and move inflation closer to its 2.0% target, specifically including the possibility for rate cuts and quantitative easing.

Trade tensions between the U.S. and China presented risks to economic continuity and market sentiment during the period. Negotiations appeared to deteriorate throughout May, but not to a point that we believed would trigger an imminent recession or require acute monetary accommodation. The impasse appeared to thaw at the end of June, as President Trump resumed trade talks with Chinese President Xi Jinping at the G20 summit in Osaka, Japan. Our baseline view was for trade agreements to be reached in the second half of 2019, though the tail risks for “no-deal” scenarios and ongoing tariff tensions remained elevated.

Sovereign bond yields around the world declined during the six-month period, with the yield on the 10-year U.S. Treasury (UST) note finishing 0.68% lower at 2.01%, its lowest level since November 2016, and the yield on the 10-year German bund dropping 0.57% to finish at 0.33%, its lowest level on record. The UST yield curve inverted with the spread between three-month and 10-year USTs reaching a low of -0.25% in early June, its lowest level since 2007. In our view, markets were overvaluing longer-term USTs during the period and overstating the probabilities for a near-term contraction in the U.S. economy. The probability for slower growth in the second half of 2019 increased during the period, but the likelihood for a recession still remained quite low, in our assessment.

On the whole, duration and credit exposures around the world rallied during the period. Additionally, a number of global currencies appreciated against a weakened U.S. dollar, with some notable exceptions including the euro, the Australian dollar, the Argentine peso and the Ghanaian cedi. Overall, long-duration exposures and select currency exposures across global fixed income markets were key drivers of investment returns during the period.

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 and other derivative instruments.

Currency Composition*

6/30/19



	% of Total Net Assets

Americas		128.4%


U.S. Dollar		93.1%



Mexican Peso		17.9%



Brazilian Real		12.1%



Argentine Peso		3.7%



Colombian Peso		1.6%



Canadian Dollar		0.0%	**



Asia Pacific		10.6%



Japanese Yen		16.9%



Indonesian Rupiah		4.1%



Philippine Peso		0.7%



Indian Rupee		0.2%



South Korean Won		0.0%	**



New Zealand Dollar		0.0%	**



Australian Dollar		-11.3%



Middle East & Africa		1.4%



Ghanaian Cedi		1.4%



Europe		-40.4%



Polish Zloty		0.0%	**



Euro		-40.4%

**Rounds to less than 0.1%.

What is a currency forward contract?

A currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date. Currency forward contracts are privately traded in the interbank market, not on a centralized exchange.

What is a futures contract?

Manager’s Discussion

During the period, we held duration exposures in select local-currency markets, notably including Brazil, Colombia, India and Indonesia. We held short-term local-currency bonds in Mexico, Argentina and South Korea. We also continued to hold a net-negative position in the euro, through

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TEMPLETON GLOBAL BOND VIP FUND

currency forward contracts, as a macro hedge against a broadly strengthening U.S. dollar and as a directional view on the currency. We expected the euro to weaken based on rate differentials and growth divergence between Europe and the U.S. The ECB has shifted back toward ongoing stimulus with intentions to not raise rates above the 0% main refinancing rate through at least the first half of 2020. Our short euro position was also designed to hedge against eurosceptic political risks and unresolved structural risks across Europe. We also continued to hold net-negative positioning in the Australian dollar, also through currency forward contracts, based on the Reserve Bank of Australia’s (RBA’s) continued rate accommodation, and as a partial hedge against potential trade risks and tail risks associated with China’s economy. The short Australian dollar position is intended to hedge broad-based beta risk across emerging markets. In May, we closed our net-negative position in the Japanese yen, formerly achieved through currency forward contracts, and transitioned toward a positive exposure to the yen, as our expectations shifted to a positive outlook for yen strength. We continued to hedge our exposures to the Indian rupee and South Korean won but maintained our positions in the local-currency bonds. In credit markets, we continued to see areas of value in some specific sovereign credits. However, we largely preferred the risk-adjusted returns in specific areas of the local-currency bond markets over the more fully valued credit markets. We remained positioned for rising yields by maintaining low overall portfolio duration and holding negative duration exposure to USTs through interest-rate swaps.

What is duration?

What is an interest-rate swap?

An interest-rate swap is an agreement between two parties to exchange interest-rate payment obligations, generally one based on an interest rate fixed to maturity and the other based on an interest rate that changes in accordance with changes in a designated benchmark (for example, LIBOR, prime, commercial paper or other benchmarks).

During the period, the strategy’s positive absolute performance was primarily attributable to currency positions. Interest-rate strategies detracted from absolute performance, while sovereign credit exposures had a largely neutral effect. Among currencies, the Fund’s net-negative positions in the

euro and the Japanese yen contributed to absolute performance. Its position in the Mexican peso also contributed to absolute results, while its position in the Argentine peso detracted. The Fund maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Negative duration exposure to USTs detracted from absolute performance. However, duration exposure in Brazil contributed to absolute results.

The strategy’s relative underperformance during the period was primarily due to interest-rate strategies. Currency positions contributed to relative results while sovereign credit exposures had a largely neutral effect. Underweighted duration exposure in the U.S. detracted from relative performance, as did select underweighted duration exposures in Europe and Japan. However, overweighted duration exposure in Brazil contributed to relative results. Among currencies, the Fund’s underweighted positions in the euro and the Japanese yen contributed to relative results. Its overweighted position in the Mexican peso also contributed to relative performance, while its overweighted position in the Argentine peso detracted.

Thank you for your participation in Templeton Global Bond VIP Fund. We look forward to serving your future investment needs.

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TEMPLETON GLOBAL BOND VIP FUND

Class 2 Fund 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

Actual
(actual return after expenses)

Hypothetical
(5% annual return before expenses)

Share

Class

Beginning
Account
Value 1/1/19

Ending
Account
Value 6/30/19

Fund-Level
Expenses
Paid During
Period
1/1/19–6/30/19^1,2

Ending

Account

Value 6/30/19

Fund-Level
Expenses
Paid During Period

1/1/19–6/30/19^1,²

Net
Annualized
Expense
Ratio²

Class 2

$1,000

$1,031.00

$3.53

$1,021.32

$3.51

0.70%

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

Templeton Global Bond VIP Fund



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.54			$17.17			$16.85			$16.34			$18.56			$19.15


Income from investment operations^a:

Net investment income^b		0.52			0.88			0.83			0.62			0.52			0.58

Net realized and unrealized gains (losses)		0.05			(0.51	)		(0.46	)		(0.10	)		(1.22	)		(0.16)


Total from investment operations		0.57			0.37			0.37			0.52			(0.70	)		0.42


Less distributions from:

Net investment income and net foreign currency gains		(1.26	)		—			—			—			(1.43	)		(1.01)

Net realized gains		—			—			(0.05	)		(0.01	)		(0.09	)		—


Total distributions		(1.26	)		—			(0.05	)		(0.01	)		(1.52	)		(1.01)


Redemption fees.		—			—			—			—			—			—^C


Net asset value, end of period		$16.85			$17.54			$17.17			$16.85			$16.34			$18.56


Total return^d		3.24%			2.15%			2.15%			3.21%			(4.10)%			2.12%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates and expense reduction		0.53%			0.56%			0.53%			0.53%			0.52%			0.51%

Expenses net of waiver and payments by affiliates		0.45%			0.47%			0.46%			0.48%			0.52%^f			0.51%

Expenses net of waiver and payments by affiliates and expense reduction		0.45%	^g		0.45%			0.46%	^g		0.48%^g			0.52%	^f,g		0.51%	^g

Net investment income		5.81%			5.09%			4.81%			3.88%			2.99%			3.08%

Supplemental data

Net assets, end of period (000’s)		$322,895			$285,046			$286,502			$241,792			$292,802			$323,491

Portfolio turnover rate		12.95%			18.22%			37.97%			59.00%			51.58%			39.14%

^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.

^cAmount rounds to less than $0.01 per share.

^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%.

TGB-6

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$16.83			$16.51			$16.25			$15.80			$17.99			$18.60


Income from investment operations^a:

Net investment income^b		0.47			0.81			0.76			0.56			0.46			0.52

Net realized and unrealized gains (losses)		0.05			(0.49	)		(0.45	)		(0.10	)		(1.17	)		(0.17)


Total from investment operations		0.52			0.32			0.31			0.46			(0.71	)		0.35


Less distributions from:

Net investment income and net foreign currency gains		(1.21	)		—			—			—			(1.39	)		(0.96)

Net realized gains		—			—			(0.05	)		(0.01	)		(0.09	)		—


Total distributions		(1.21	)		—			(0.05	)		(0.01	)		(1.48	)		(0.96	)


Redemption fees		—			—			—			—			—			—	^c


Net asset value, end of period		$16.14			$16.83			$16.51			$16.25			$15.80			$17.99


Total return^d		3.10%			1.94%			1.93%			2.94%			(4.30)%			1.83%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates and expense reduction		0.78%			0.81%			0.78%			0.78%			0.77%			0.76%

Expenses net of waiver and payments by affiliates		0.70%			0.72%			0.71%			0.73%			0.77%	^f		0.76%

Expenses net of waiver and payments by affiliates and expense reduction		0.70%	^g		0.70%			0.71%	^g		0.73%	^g		0.77%	^f,g		0.76%	^g

Net investment income		5.56%			4.84%			4.56%			3.63%			2.74%			2.83%

Supplemental data

Net assets, end of period (000’s)		$2,506,399			$2,544,900			$2,730,081			$2,812,535			$2,971,667			$3,177,638

Portfolio turnover rate		12.95%			18.22%			37.97%			59.00%			51.58%			39.14%

^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.

^cAmount rounds to less than $0.01 per share.

^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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Global Bond VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$17.19			$16.88			$16.62			$16.18			$18.38			$18.97


Income from investment operations^a:

Net investment income^b		0.47			0.81			0.76			0.56			0.46			0.51

Net realized and unrealized gains (losses)		0.05			(0.50	)		(0.45	)		(0.11	)		(1.21	)		(0.18)


Total from investment operations		0.52			0.31			0.31			0.45			(0.75	)		0.33


Less distributions from:

Net investment income and net foreign currency gains		(1.19	)		—			—			—			(1.36	)		(0.92)


Net realized gains		—			—			(0.05	)		(0.01	)		(0.09	)		—


Total distributions		(1.19	)		—			(0.05	)		(0.01	)		(1.45	)		(0.92)


Redemption fees.		—			—			—			—			—			—	^c


Net asset value, end of period		$16.52			$17.19			$16.88			$16.62			$16.18			$18.38


Total return^d		3.04%			1.84%			1.76%			2.87%			(4.39)%			1.69%

Ratios to average net assets^e

Expenses before waiver and payments by affiliates and expense reduction		0.88%			0.91%			0.88%			0.88%			0.87%			0.86%

Expenses net of waiver and payments by affiliates		0.80%			0.82%			0.81%			0.83%			0.87%	^f		0.86%

Expenses net of waiver and payments by affiliates and expense reduction		0.80%	^g		0.80%			0.81%	^g		0.83%	^g		0.87%^f	^,g		0.86%	^g

Net investment income		5.46%			4.74%			4.46%			3.53%			2.64%			2.73%

Supplemental data

Net assets, end of period (000’s)		$92,416			$94,312			$98,934			$96,798			$103,045			$111,199

Portfolio turnover rate		12.95%			18.22%			37.97%			59.00%			51.58%			39.14%

^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.

^cAmount rounds to less than $0.01 per share.

^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%.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, June 30, 2019 (unaudited)

Templeton Global Bond VIP Fund


	Principal Amount	*			Value
Foreign Government and Agency Securities 47.3%
Argentina 2.4%
Argentina Treasury Bill,
Strip, 4/30/20	207,735,000		ARS	$	5,558,300
Strip, 7/31/20	48,339,000		ARS		1,101,897
Argentine Bonos del Tesoro,
18.20%, 10/03/21	820,823,000		ARS		13,129,701
16.00%, 10/17/23	844,288,000		ARS		14,301,850
senior note, 15.50%, 10/17/26	1,668,306,000		ARS		27,487,318
Government of Argentina,
^aFRN, 68.466%, (ARPP7DRR), 6/21/20	10,990,000		ARS		252,144
^aFRN, 52.006%, (ARS Badlar + 2.00%), 4/03/22	24,036,000		ARS		486,090
^bIndex Linked, 4.00%, 3/06/20	4,138,000		ARS		133,534
senior note, 4.50%, 2/13/20	9,351,000				8,088,615


					70,539,449

Brazil 10.3%
Letra Tesouro Nacional,
Strip, 7/01/19	102,840^c		BRL		26,746,771
Strip, 7/01/20	118,041^c		BRL		29,011,063
Strip, 7/01/21	24,360^c		BRL		5,631,006
Nota do Tesouro Nacional,
10.00%, 1/01/21	38,520^c		BRL		10,576,145
10.00%, 1/01/23	522,145^c		BRL		149,421,694
10.00%, 1/01/25	69,029^c		BRL		20,277,628
10.00%, 1/01/27	194,573^c		BRL		58,114,855


					299,779,162

Colombia 1.6%
Government of Colombia,
senior bond, 7.75%, 4/14/21	2,386,000,000		COP		777,177
senior bond, 4.375%, 3/21/23	362,000,000		COP		109,464
senior bond, 9.85%, 6/28/27	576,000,000		COP		226,226
Titulos de Tesoreria,
senior bond, B, 11.00%, 7/24/20	9,167,000,000		COP		3,048,135
senior bond, B, 7.00%, 5/04/22	10,237,000,000		COP		3,361,594
senior bond, B, 10.00%, 7/24/24	40,977,000,000		COP		15,439,515
senior bond, B, 7.50%, 8/26/26	35,134,200,000		COP		12,115,832
senior bond, B, 6.00%, 4/28/28	29,113,600,000		COP		9,100,649
senior note, B, 7.00%, 9/11/19	4,056,000,000		COP		1,268,860


					45,447,452

Ghana 1.4%
Government of Ghana,
24.75%, 3/01/21	690,000		GHS		136,680
16.25%, 5/17/21	7,250,000		GHS		1,275,199
24.50%, 6/21/21	80,000		GHS		15,977
24.75%, 7/19/21	1,190,000		GHS		239,092
18.75%, 1/24/22	26,840,000		GHS		4,872,819
17.60%, 11/28/22	370,000		GHS		66,255

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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)
Ghana (continued)
Government of Ghana, (continued)
19.75%, 3/25/24	26,840,000		GHS	$	5,012,541
19.00%, 11/02/26	80,510,000		GHS		14,589,657
senior bond, 19.75%, 3/15/32	80,510,000		GHS		14,670,390
senior note, 21.50%, 3/09/20	1,270,000		GHS		238,727
senior note, 18.50%, 6/01/20	500,000		GHS		91,843
senior note, 18.25%, 9/21/20	480,000		GHS		87,844
senior note, 16.50%, 3/22/21	1,730,000		GHS		306,376


					41,603,400

India 8.4%
Government of India,
senior bond, 8.20%, 2/15/22	500,000,000		INR		7,549,021
senior bond, 8.35%, 5/14/22	212,700,000		INR		3,233,626
senior bond, 8.08%, 8/02/22	1,783,000,000		INR		26,951,616
senior bond, 8.13%, 9/21/22	28,000,000		INR		424,824
senior bond, 9.15%, 11/14/24	2,409,000,000		INR		38,356,381
senior note, 8.27%, 6/09/20	1,222,000,000		INR		18,064,244
senior note, 7.80%, 4/11/21	1,980,300,000		INR		29,430,934
senior note, 8.79%, 11/08/21	653,000,000		INR		9,950,508
senior note, 8.15%, 6/11/22	1,621,000,000		INR		24,542,810
senior note, 6.84%, 12/19/22	98,000,000		INR		1,432,534
senior note, 7.16%, 5/20/23	133,700,000		INR		1,967,261
senior note, 8.83%, 11/25/23	2,983,900,000		INR		46,706,799
senior note, 7.68%, 12/15/23	1,376,000,000		INR		20,741,179
senior note, 6.79%, 5/15/27	1,142,800,000		INR		16,360,789


					245,712,526

Indonesia 4.1%
Government of Indonesia,
senior bond, FR34, 12.80%, 6/15/21	324,406,000,000		IDR		25,564,426
senior bond, FR35, 12.90%, 6/15/22	71,229,000,000		IDR		5,855,124
senior bond, FR39, 11.75%, 8/15/23	5,491,000,000		IDR		455,313
senior bond, FR40, 11.00%, 9/15/25	46,856,000,000		IDR		3,951,127
senior bond, FR43, 10.25%, 7/15/22	147,832,000,000		IDR		11,451,421
senior bond, FR44, 10.00%, 9/15/24	4,454,000,000		IDR		355,374
senior bond, FR46, 9.50%, 7/15/23	226,780,000,000		IDR		17,495,487
senior bond, FR47, 10.00%, 2/15/28	12,000,000		IDR		984
senior bond, FR52, 10.50%, 8/15/30	6,960,000,000		IDR		600,252
senior bond, FR59, 7.00%, 5/15/27	47,752,000,000		IDR		3,334,952
senior bond, FR61, 7.00%, 5/15/22	244,849,000,000		IDR		17,460,500
senior bond, FR63, 5.625%, 5/15/23	258,951,000,000		IDR		17,655,046
senior bond, FR64, 6.125%, 5/15/28	37,000,000		IDR		2,424
senior bond, FR70, 8.375%, 3/15/24	78,915,000,000		IDR		5,923,305
senior bond, FR71, 9.00%, 3/15/29	51,222,000,000		IDR		4,012,194
senior bond, FR73, 8.75%, 5/15/31	60,845,000,000		IDR		4,682,619


					118,800,548

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)
Mexico 13.1%
Government of Mexico,
senior bond, M, 8.00%, 6/11/20				3,814,000^d		MXN	$	19,899,575
senior bond, M, 6.50%, 6/10/21				18,568,200^d		MXN		94,938,684
senior bond, M, 6.50%, 6/09/22				16,179,100^d		MXN		82,219,895
senior bond, M, 8.00%, 12/07/23				41,600^d		MXN		221,479
senior note, M, 5.00%, 12/11/19				18,742,300^d		MXN		96,281,699
senior note, M, 7.25%, 12/09/21				17,097,500^d		MXN		88,702,869
^eMexican Udibonos, Index Linked, 2.50%, 12/10/20				381,661^f		MXN		1,963,943


								384,228,144

Philippines 0.7%
Government of the Philippines, senior note, 3.375%, 8/20/20				1,102,110,000		PHP		21,237,184

South Korea 5.0%
Korea Monetary Stabilization Bond,
senior note, 2.06%, 12/02/19				91,389,000,000		KRW		79,158,429
senior note, 2.14%, 6/02/20				14,858,000,000		KRW		12,912,156
senior note, 2.05%, 10/05/20				31,280,000,000		KRW		27,206,900
Korea Treasury Bond,
senior note, 1.25%, 12/10/19				18,280,000,000		KRW		15,783,599
senior note, 1.75%, 6/10/20				7,615,000,000		KRW		6,596,702
senior note, 3.00%, 3/10/23				3,919,000,000		KRW		3,566,062


								145,223,848


^gSupranational 0.3%
Inter-American Development Bank, senior bond, 7.50%, 12/05/24				200,000,000		MXN		10,375,132


Total Foreign Government and Agency Securities (Cost $1,523,195,112)								1,382,946,845


	Number of Contracts		Notional Amount*

Options Purchased 0.4%
Calls - Over-the-Counter
Currency Options 0.3%
AUD/JPY, Counterparty CITI, February Strike Price 82.35 JPY, Expires 2/12/20		1		2,664,000		AUD		3,804
AUD/JPY, Counterparty CITI, May Strike Price 84.00 JPY, Expires 5/06/20		1		11,838,000		AUD		18,447
AUD/JPY, Counterparty CITI, May Strike Price 86.63 JPY, Expires 5/06/20		1		13,022,000		AUD		11,545
AUD/JPY, Counterparty CITI, May Strike Price 85.50 JPY, Expires 5/07/20		1		47,352,000		AUD		51,187
AUD/JPY, Counterparty CITI, November Strike Price 84.33 JPY, Expires 11/12/20		1		8,878,000		AUD		27,813
AUD/USD, Counterparty HSBK, April Strike Price $0.77, Expires 4/30/20		1		14,798,000		AUD		33,988
AUD/USD, Counterparty HSBK, May Strike Price $0.77, Expires 5/04/20		1		18,644,000		AUD		47,807
AUD/USD, Counterparty HSBK, May Strike Price $0.77, Expires 5/07/20		1		11,838,000		AUD		25,212
USD/MXN, Counterparty CITI, November Strike Price 20.00 MXN, Expires 11/07/19		1		11,701,000				209,577
USD/MXN, Counterparty CITI, December Strike Price 20.50 MXN, Expires 12/05/19		1		36,196,000				548,659
USD/MXN, Counterparty CITI, May Strike Price 20.50 MXN, Expires 5/11/20		1		65,528,000				2,401,929

Semiannual Report

TGB-11

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 CITI, May Strike Price 20.92 MXN, Expires 5/12/20		1		39,005,000		$	1,176,040
USD/MXN, Counterparty CITI, May Strike Price 20.87 MXN, Expires 5/14/20		1		43,998,000			1,374,717
USD/MXN, Counterparty JPHQ, November Strike Price 20.11 MXN, Expires 11/14/19		1		21,999,000			381,551
USD/MXN, Counterparty JPHQ, November Strike Price 20.11 MXN, Expires 11/14/19		1		21,999,000			381,551
USD/MXN, Counterparty JPHQ, November Strike Price 22.35 MXN, Expires 11/14/19		1		21,999,000			77,480
USD/MXN, Counterparty JPHQ, May Strike Price 20.93 MXN, Expires 5/13/20		1		25,142,000			758,182


							7,529,489


Puts - Over-the-Counter

Currency Options 0.1%

AUD/JPY, Counterparty CITI, May Strike Price 69.54 JPY, Expires 5/06/20		1		9,470,000	AUD		72,251
AUD/JPY, Counterparty CITI, May Strike Price 70.65 JPY, Expires 5/06/20		1		5,919,000	AUD		54,096
AUD/JPY, Counterparty CITI, May Strike Price 74.48 JPY, Expires 5/06/20		1		43,800,000	AUD		753,385
AUD/JPY, Counterparty CITI, May Strike Price 75.50 JPY, Expires 5/06/20		1		17,757,000	AUD		335,695
AUD/JPY, Counterparty CITI, May Strike Price 65.55 JPY, Expires 5/07/20		1		23,676,000	AUD		96,675
AUD/JPY, Counterparty CITI, May Strike Price 73.25 JPY, Expires 5/07/20		1		23,676,000	AUD		333,085
AUD/JPY, Counterparty CITI, November Strike Price 66.78 JPY, Expires 11/12/20		1		4,439,000	AUD		41,180
AUD/JPY, Counterparty CITI, November Strike Price 69.18 JPY, Expires 11/12/20		1		2,664,000	AUD		33,331
AUD/JPY, Counterparty CITI, November Strike Price 72.78 JPY, Expires 11/12/20		1		11,098,000	AUD		219,342
AUD/JPY, Counterparty CITI, November Strike Price 74.00 JPY, Expires 11/12/20		1		7,990,000	AUD		184,416
AUD/USD, Counterparty HSBK, April Strike Price $0.66, Expires 4/30/20		1		39,460,000	AUD		174,060
AUD/USD, Counterparty HSBK, April Strike Price $0.68, Expires 4/30/20		1		19,730,000	AUD		151,389
AUD/USD, Counterparty HSBK, May Strike Price $0.65, Expires 5/04/20		1		49,720,000	AUD		130,006
AUD/USD, Counterparty HSBK, May Strike Price $0.68, Expires 5/04/20		1		24,662,000	AUD		173,877
AUD/USD, Counterparty HSBK, May Strike Price $0.66, Expires 5/05/20		1		19,730,000	AUD		106,752
AUD/USD, Counterparty HSBK, May Strike Price $0.65, Expires 5/07/20		1		23,676,000	AUD		97,157
AUD/USD, Counterparty HSBK, May Strike Price $0.68, Expires 5/07/20		1		11,838,000	AUD		86,446
AUD/USD, Counterparty MSCO, November Strike Price $0.67, Expires 11/14/19		1		43,000	AUD		122
USD/MXN, Counterparty CITI, October Strike Price 18.25 MXN, Expires 10/08/19		1		18,098,000			45,136
USD/MXN, Counterparty CITI, November Strike Price 18.28 MXN, Expires 11/07/19		1		11,701,000			40,544
USD/MXN, Counterparty CITI, May Strike Price 18.31 MXN, Expires 5/14/20		1		11,000,000			90,706


							3,219,651


Total Options Purchased
(Cost $14,763,158)							10,749,140


Total Investments before Short Term Investments
(Cost $1,537,958,270)							1,393,695,985

TGB-12

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)


		Principal Amount	*			Value


Short Term Investments 39.8%
Foreign Government and Agency Securities 9.2%
Argentina 1.5%
^hArgentina Treasury Bill, 7/19/19 - 2/28/20		1,467,087,600		ARS	$	43,469,653

Mexico 4.4%
^hMexico Treasury Bill,
7/04/19		199,789,187ⁱ		MXN		103,869,279
7/18/19 - 2/27/20		50,835,660ⁱ		MXN		25,388,664


						129,257,943

South Korea 3.3%
Korea Monetary Stabilization Bond, senior note, 1.85%, 10/02/19		59,950,000,000		KRW		51,856,384
senior note, 1.87%, 11/09/19		45,390,000,000		KRW		39,276,235
senior note, 2.16%, 2/02/20		7,615,000,000		KRW		6,605,569


						97,738,188


Total Foreign Government and Agency Securities (Cost $278,628,187)						270,465,784


U.S. Government and Agency Securities (Cost $51,743,504) 1.8%
United States 1.8%
^hU.S. Treasury Bill, 7/18/19 - 12/05/19		52,062,000				51,779,602


Total Investments before Money Market Funds (Cost $1,868,329,961)						1,715,941,371


	Shares
Money Market Funds (Cost $840,987,190) 28.8%
United States 28.8%
^j,kInstitutional Fiduciary Trust Money Market Portfolio, 2.05%		840,987,190				840,987,190


Total Investments (Cost $2,709,317,151) 87.5%						2,556,928,561
Options Written (0.3)%						(8,140,326	)
Other Assets, less Liabilities 12.8%						372,921,281


Net Assets 100.0%					$	2,921,709,516


	Number of Contracts		Notional Amount*
^lOptions Written (0.3)%
Calls - Over-the-Counter
Currency Options (0.2)%
AUD/JPY, Counterparty CITI, November Strike Price 79.77 JPY, Expires 11/06/19		1		28,411,000	AUD	(46,248	)
AUD/JPY, Counterparty CITI, November Strike Price 80.15 JPY, Expires 11/06/19		1		11,838,000	AUD	(16,121	)
AUD/JPY, Counterparty CITI, November Strike Price 80.60 JPY, Expires 11/08/19		1		23,676,000	AUD	(26,674	)
AUD/JPY, Counterparty CITI, February Strike Price 77.28 JPY, Expires 2/12/20		1		8,878,000	AUD	(67,467	)

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


^lOptions Written (continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
AUD/JPY, Counterparty CITI, February Strike Price 78.18 JPY, Expires 2/12/20		1		5,327,000	AUD		$ (30,535)
AUD/JPY, Counterparty CITI, February Strike Price 79.45 JPY, Expires 2/12/20		1		7,991,000	AUD		(30,161	)
AUD/JPY, Counterparty CITI, February Strike Price 80.32 JPY, Expires 2/12/20		1		8,879,000	AUD		(24,999	)
AUD/JPY, Counterparty CITI, May Strike Price 78.60 JPY, Expires 5/06/20		1		18,941,000	AUD		(127,133	)
AUD/JPY, Counterparty CITI, May Strike Price 79.10 JPY, Expires 5/06/20		1		11,838,000	AUD		(69,436	)
AUD/JPY, Counterparty CITI, May Strike Price 77.35 JPY, Expires 5/07/20		1		47,352,000	AUD		(441,776	)
AUD/USD, Counterparty HSBK, April Strike Price $0.71, Expires 4/30/20		1		14,798,000	AUD		(200,467	)
AUD/USD, Counterparty HSBK, May Strike Price $0.71, Expires 5/04/20		1		18,644,000	AUD		(278,024	)
AUD/USD, Counterparty HSBK, November Strike Price $0.71, Expires 11/05/20		1		11,838,000	AUD		(211,515	)
AUD/USD, Counterparty HSBK, November Strike Price $0.80, Expires 11/05/20		1		23,676,000	AUD		(68,472	)
AUD/USD, Counterparty HSBK, April Strike Price $0.81, Expires 4/29/21		1		29,594,000	AUD		(120,943	)
AUD/USD, Counterparty HSBK, May Strike Price $0.80, Expires 5/04/21		1		37,290,000	AUD		(174,147	)
AUD/USD, Counterparty HSBK, May Strike Price $0.78, Expires 5/05/21		1		19,730,000	AUD		(147,552	)
AUD/USD, Counterparty MSCO, November Strike Price $0.72, Expires 11/14/19		1		43,000	AUD		(224	)
USD/MXN, Counterparty CITI, December Strike Price 21.90 MXN, Expires 12/05/19		1		36,196,000			(209,901	)
USD/MXN, Counterparty CITI, May Strike Price 19.55 MXN, Expires 5/11/20		1		21,843,000			(1,266,260	)
USD/MXN, Counterparty CITI, May Strike Price 22.55 MXN, Expires 5/11/20		1		21,843,000			(321,682	)
USD/MXN, Counterparty CITI, May Strike Price 19.82 MXN, Expires 5/12/20		1		15,602,000			(796,794	)
USD/MXN, Counterparty CITI, May Strike Price 23.85 MXN, Expires 5/12/20		1		15,602,000			(141,760	)
USD/MXN, Counterparty CITI, May Strike Price 22.85 MXN, Expires 5/14/20		1		21,999,000			(292,829	)
USD/MXN, Counterparty JPHQ, November Strike Price 21.00 MXN, Expires 11/14/19		1		43,999,000			(379,051	)
USD/MXN, Counterparty JPHQ, May Strike Price 23.76 MXN, Expires 5/13/20		1		12,571,000			(118,482	)


							(5,608,653	)

Puts - Over-the-Counter
Currency Options (0.1)%
USD/MXN, Counterparty CITI, October Strike Price 18.66 MXN, Expires 10/08/19		1		18,098,000			(98,109	)
USD/MXN, Counterparty CITI, October Strike Price 19.60 MXN, Expires 10/08/19		1		13,574,000			(149,124	)
USD/MXN, Counterparty CITI, November Strike Price 18.74 MXN, Expires 11/07/19		1		23,403,000			(172,597	)
USD/MXN, Counterparty CITI, May Strike Price 19.55 MXN, Expires 5/11/20		1		21,843,000			(567,590	)
USD/MXN, Counterparty CITI, May Strike Price 19.69 MXN, Expires 5/12/20		1		7,801,000			(226,627	)
USD/MXN, Counterparty CITI, May Strike Price 19.24 MXN, Expires 5/14/20		1		32,999,000			(661,069	)
USD/MXN, Counterparty JPHQ, November Strike Price 19.44 MXN, Expires 11/13/19		1		12,571,000			(255,933	)
USD/MXN, Counterparty JPHQ, November Strike Price 19.36 MXN, Expires 11/14/19		1		21,999,000			(400,624	)


							(2,531,673	)


Total Options Written (Premiums received $11,159,153)							(8,140,326	)

TGB-14

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

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

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

^bRedemption price at maturity and coupon payment are adjusted for inflation. See Note 1(e).

^cPrincipal amount is stated in 1,000 Brazilian Real Units.

^dPrincipal amount is stated in 100 Mexican Peso Units.

^ePrincipal amount of security is adjusted for inflation. See Note 1(e).

^fPrincipal amount is stated in 100 Unidad de Inversion Units.

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

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

ⁱPrincipal amount is stated in 10 Mexican Peso Units.

^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(c) regarding written options.

At June 30, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(c).

Forward Exchange Contracts



Currency	Counterparty	^a	Type	Quantity	Contract Amount	^*	Settlement Date		Unrealized Appreciation		Unrealized Depreciation

OTC Forward Exchange Contracts
Indian Rupee	BNDP		Sell	845,797,600	12,077,733		7/05/19	$	—	$	(177,687	)
Indian Rupee	HSBK		Buy	721,903,000	10,474,507		7/05/19		—		(14,292	)
Indian Rupee	HSBK		Sell	721,903,000	10,357,288		7/05/19		—		(102,926	)
South Korean Won	HSBK		Sell	42,561,000,000	37,554,265		7/10/19		754,109		—
Indian Rupee	HSBK		Sell	1,015,502,619	14,411,235		7/11/19		—		(291,456	)
Japanese Yen	DBAB		Buy	770,370,000	7,001,670		7/11/19		150,713		—
Japanese Yen	DBAB		Sell	770,370,000	6,983,144		7/11/19		—		(169,239	)
Australian Dollar	JPHQ		Sell	30,315,000	21,688,564		7/15/19		395,900		—
Indian Rupee	CITI		Sell	677,015,000	9,586,120		7/15/19		—		(210,665	)
Japanese Yen	CITI		Buy	893,794,665	8,138,457		7/16/19		163,159		—
Japanese Yen	CITI		Sell	893,794,665	8,077,975		7/16/19		—		(223,641	)
Japanese Yen	DBAB		Buy	1,825,131,000	16,595,660		7/17/19		357,616		—
Japanese Yen	DBAB		Sell	1,825,131,000	16,407,147		7/17/19		—		(546,129	)
Japanese Yen	GSCO		Buy	568,759,434	5,169,177		7/17/19		113,915		—
Japanese Yen	GSCO		Sell	568,759,434	5,112,444		7/17/19		—		(170,648	)
Japanese Yen	HSBK		Buy	536,380,000	4,869,886		7/17/19		112,440		—
Japanese Yen	HSBK		Sell	536,380,000	4,823,583		7/17/19		—		(158,743	)
Japanese Yen	MSCO		Buy	300,000,000	2,732,415		7/17/19		54,225		—
Japanese Yen	MSCO		Sell	300,000,000	2,697,890		7/17/19		—		(88,750	)
Japanese Yen	CITI		Buy	1,372,892,008	12,488,114		7/18/19		265,424		—
Japanese Yen	CITI		Sell	1,372,892,008	12,346,162		7/18/19		—		(407,376	)
Japanese Yen	HSBK		Buy	1,245,390,000	11,307,983		7/18/19		261,120		—
Japanese Yen	HSBK		Sell	1,245,390,000	11,199,581		7/18/19		—		(369,522	)
Japanese Yen	JPHQ		Buy	1,886,055,000	17,143,219		7/18/19		377,368		—
Japanese Yen	JPHQ		Sell	1,886,055,000	16,962,787		7/18/19		—		(557,800	)
South Korean Won	HSBK		Sell	13,984,825,441	12,358,890		7/19/19		263,874		—
Indian Rupee	HSBK		Sell	833,252,000	11,585,538		7/22/19		—		(460,898	)
Indian Rupee	JPHQ		Sell	1,087,029,000	15,329,700		7/22/19		—		(385,625	)
Japanese Yen	HSBK		Buy	471,730,400	4,284,563		7/22/19		98,998		—
Japanese Yen	HSBK		Sell	471,730,400	4,242,180		7/22/19		—		(141,381	)
Euro	DBAB		Sell	8,405,717	9,574,279		7/23/19		—		(2,307	)

Semiannual Report

TGB-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)



Currency	Counterparty	^a	Type	Quantity	Contract Amount	^*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation

OTC Forward Exchange Contracts (continued)
South Korean Won	HSBK		Sell	4,497,174,559	4,034,426			7/24/19	$	144,412	$	—
South Korean Won	HSBK		Sell	35,277,000,000	29,624,622			7/29/19		—		(893,794	)
South Korean Won	HSBK		Sell	24,029,880,977	20,944,723			7/30/19		155,831		—
Euro	BZWS		Sell	22,495,166	25,267,020			7/31/19		—		(378,723	)
Japanese Yen	BZWS		Buy	2,063,184,840	18,810,434			7/31/19		375,119		—
Japanese Yen	BZWS		Sell	2,063,184,840	18,587,921			7/31/19		—		(597,632	)
Japanese Yen	CITI		Buy	1,866,452,000	16,994,566			7/31/19		361,569		—
Japanese Yen	CITI		Sell	1,866,452,000	16,814,353			7/31/19		—		(541,782	)
Japanese Yen	DBAB		Buy	1,148,260,758	10,535,005			7/31/19		142,670		—
Japanese Yen	DBAB		Sell	1,148,260,758	10,345,717			7/31/19		—		(331,959	)
Japanese Yen	GSCO		Buy	944,420,000	8,592,667			7/31/19		189,494		—
Japanese Yen	GSCO		Sell	944,420,000	8,509,285			7/31/19		—		(272,875	)
Euro	JPHQ		Sell	32,859,900	36,939,917			8/02/19		—		(528,145	)
Euro	JPHQ		Sell	6,147,005	6,963,266			8/13/19		—		(51,896	)
Indian Rupee	HSBK		Sell	640,177,000	9,164,369			8/14/19		—		(61,501	)
South Korean Won	DBAB		Sell	13,920,000,000	11,761,724			8/16/19		—		(285,270	)
South Korean Won	HSBK		Sell	75,818,000,000	67,858,230			8/19/19		2,237,665		—
Indian Rupee	JPHQ		Sell	451,390,000	6,336,321			8/20/19		—		(163,425	)
Euro	JPHQ		Sell	26,361,295	29,644,727			8/21/19		—		(458,762	)
Euro	SCNY		Sell	4,975,000	5,600,507			8/21/19		—		(80,734	)
Indian Rupee	SCNY		Sell	945,558,000	13,262,334			8/28/19		—		(338,120	)
Indian Rupee	JPHQ		Sell	1,986,473,600	28,132,836			9/03/19		—		(417,476	)
Indian Rupee	SCNY		Sell	1,135,539,000	16,082,186			9/03/19		—		(238,189	)
Indian Rupee	BNDP		Sell	852,858,400	12,054,025			9/06/19		—		(198,808	)
Indian Rupee	HSBK		Sell	718,737,000	10,188,348			9/06/19		—		(137,591	)
Indian Rupee	SCNY		Sell	2,362,358,000	33,444,581			9/06/19		—		(494,906	)
Japanese Yen	HSBK		Buy	1,385,935,670	12,894,032			9/06/19		28,184		—
Japanese Yen	JPHQ		Buy	1,190,714,470	11,089,521			9/06/19		12,487		—
South Korean Won	DBAB		Sell	13,919,000,000	11,813,784			9/10/19		—		(240,812	)
Indian Rupee	HSBK		Sell	639,544,904	9,046,537			9/11/19		—		(135,731	)
Australian Dollar	JPHQ		Sell	25,330,000	1,905,801,173		JPY	9/12/19		—		(45,258	)
Indian Rupee	BNDP		Sell	237,955,000	3,398,435			9/12/19		—		(17,563	)
Indian Rupee	CITI		Sell	516,565,000	7,360,048			9/16/19		—		(51,746	)
Indian Rupee	HSBK		Sell	320,909,148	4,570,053			9/16/19		—		(34,425	)
Indian Rupee	JPHQ		Sell	842,066,000	11,956,070			9/18/19		—		(122,968	)
South Korean Won	CITI		Sell	4,215,000,000	3,745,102			9/20/19		93,475		—
South Korean Won	HSBK		Sell	7,007,000,000	6,209,402			9/20/19		138,951		—
Euro	GSCO		Sell	1,230,811	1,419,334			9/23/19		10,359		—
Euro	JPHQ		Sell	14,818,028	16,825,426			9/25/19		—		(140,044	)
Euro	BZWS		Sell	11,247,583	12,905,420			9/30/19		22,902		—
Euro	SCNY		Sell	12,544,218	14,327,128			9/30/19		—		(40,503	)
Brazilian Real	CITI		Buy	206,375,000	45,101,403		EUR	10/02/19		1,548,473		—
Indian Rupee	HSBK		Sell	721,903,000	10,344,673			10/03/19		9,100		—
Euro	GSCO		Sell	17,044,025	19,389,965			10/04/19		—		(137,601	)
Euro	BOFA		Sell	17,079,724	19,447,486			10/08/19		—		(127,039	)
Euro	DBAB		Sell	8,136,104	9,264,988			10/08/19		—		(59,540	)

TGB-16

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)



Currency	Counterparty^a	Type	Quantity	Contract Amount	^*	Settlement Date		Unrealized Appreciation		Unrealized Depreciation

OTC Forward Exchange Contracts (continued)
Euro	GSCO	Sell	2,045,000	2,328,437		10/08/19	$	—	$	(15,272	)
Euro	UBSW	Sell	8,311,299	9,466,611		10/09/19		—		(59,440	)
Australian Dollar	JPHQ	Sell	5,243,250	3,763,028		10/11/19		71,406		—
Euro	BZWS	Sell	7,003,000	8,019,030		10/11/19		—		(8,748	)
Euro	HSBK	Sell	33,800,018	38,700,683		10/11/19		—		(45,433	)
Euro	JPHQ	Sell	14,342,996	16,427,177		10/11/19		—		(14,690	)
Australian Dollar	CITI	Sell	19,379,733	13,888,680		10/15/19		242,729		—
Australian Dollar	JPHQ	Sell	30,315,000	21,728,731		10/15/19		382,876		—
Euro	BOFA	Sell	17,769,000	20,333,067		10/15/19		—		(42,455	)
Euro	DBAB	Sell	50,881,000	58,164,615		10/15/19		—		(180,081	)
Euro	GSCO	Sell	1,789,884	2,046,356		10/15/19		—		(6,084	)
Euro	BOFA	Sell	5,251,819	6,036,441		10/16/19		13,770		—
Euro	HSBK	Sell	8,692,000	9,979,546		10/16/19		11,751		—
Euro	SCNY	Sell	657,000	754,624		10/17/19		1,132		—
Japanese Yen	HSBK	Buy	3,480,722,080	32,447,384		10/21/19		115,972		—
Japanese Yen	JPHQ	Buy	2,192,959,130	20,427,169		10/21/19		88,721		—
Euro	GSCO	Sell	1,231,111	1,412,515		10/23/19		—		(62	)
Euro	JPHQ	Sell	28,236,000	32,407,869		10/23/19		9,880		—
Euro	UBSW	Sell	1,922,305	2,208,306		10/23/19		2,653		—
Euro	DBAB	Sell	14,940,282	17,055,826		10/24/19		—		(87,984	)
Euro	UBSW	Sell	11,641,500	13,369,040		10/24/19		10,547		—
Euro	DBAB	Sell	4,518,681	5,143,886		10/25/19		—		(41,653	)
Euro	HSBK	Sell	19,488,000	22,175,005		10/25/19		—		(188,994	)
Euro	BOFA	Sell	33,910,663	38,371,610		10/29/19		—		(555,586	)
Euro	CITI	Sell	77,832,770	88,114,479		10/29/19		—		(1,232,390	)
Euro	GSCO	Sell	2,855,793	3,231,615		10/29/19		—		(46,646	)
Euro	JPHQ	Sell	11,263,000	12,741,607		10/29/19		—		(187,572	)
Euro	SCNY	Sell	12,300,264	13,918,989		10/29/19		—		(200,900	)
Euro	DBAB	Sell	14,776,110	16,726,556		10/30/19		—		(236,755	)
Euro	BOFA	Sell	33,910,663	38,343,803		10/31/19		—		(589,429	)
Euro	GSCO	Sell	13,037,050	14,736,625		10/31/19		—		(231,366	)
Euro	HSBK	Sell	25,974,891	29,415,785		10/31/19		—		(406,295	)
Euro	JPHQ	Sell	9,220,500	10,470,708		11/08/19		—		(122,028	)
Australian Dollar	CITI	Sell	19,311,633	13,514,281		11/13/19		—		(92,661	)
Australian Dollar	JPHQ	Sell	5,243,250	3,674,338		11/13/19		—		(20,046	)
Euro	HSBK	Sell	1,800,000	2,052,882		11/14/19		—		(15,965	)
Australian Dollar	CITI	Sell	19,311,633	13,527,799		11/15/19		—		(79,760	)
Australian Dollar	JPHQ	Sell	50,143,500	35,128,029		11/15/19		—		(204,594	)
Euro	CITI	Sell	37,063,039	42,359,347		11/15/19		—		(242,715	)
Euro	JPHQ	Sell	6,894,178	7,880,597		11/15/19		—		(43,907	)
Euro	BOFA	Sell	10,878,191	12,345,223		11/20/19		—		(163,554	)
Euro	GSCO	Sell	1,898,500	2,153,563		11/20/19		—		(29,512	)
Euro	JPHQ	Sell	30,863,836	35,046,657		11/20/19		—		(443,514	)
Australian Dollar	CITI	Sell	13,307,000	9,202,456		11/21/19		—		(175,334	)
Euro	BOFA	Sell	7,066,000	8,015,176		11/21/19		—		(110,613	)
Euro	GSCO	Sell	1,230,811	1,395,924		11/21/19		—		(19,489	)

Semiannual Report

TGB-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)



Currency	Counterparty^a	Type	Quantity	Contract Amount	^*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation

OTC Forward Exchange Contracts (continued)
Euro	JPHQ	Sell	26,361,295	29,864,448			11/21/19	$	—	$	(450,628	)
Euro	UBSW	Sell	2,600,555	2,947,313			11/21/19		—		(43,284	)
Euro	BZWS	Sell	11,247,583	12,717,642			11/29/19		—		(224,943	)
Euro	DBAB	Sell	14,781,916	16,715,021			11/29/19		—		(294,519	)
Euro	GSCO	Sell	6,309,207	7,137,448			11/29/19		—		(122,552	)
Euro	MSCO	Sell	30,744,500	34,772,644			11/29/19		—		(605,029	)
Australian Dollar	GSCO	Sell	127,700,540	89,008,553			12/04/19		—		(1,011,891	)
Euro	BOFA	Sell	27,627,938	31,296,237			12/04/19		—		(507,568	)
Euro	GSCO	Sell	17,044,025	19,323,152			12/04/19		—		(297,019	)
Euro	GSCO	Sell	8,105,300	9,213,457			12/05/19		—		(117,657	)
Euro	JPHQ	Sell	6,775,311	7,694,213			12/05/19		—		(105,770	)
Euro	SCNY	Sell	17,972,751	20,409,497			12/05/19		—		(281,382	)
Euro	UBSW	Sell	6,231,299	7,068,599			12/05/19		—		(105,097	)
Japanese Yen	JPHQ	Buy	1,151,402,090	10,790,503			12/05/19		19,623		—
Japanese Yen	HSBK	Buy	3,536,432,420	33,156,398			12/06/19		48,602		—
Japanese Yen	JPHQ	Buy	1,197,791,130	11,228,053			12/06/19		18,495		—
Euro	BOFA	Sell	17,090,572	19,557,254			12/09/19		—		(124,149	)
Euro	DBAB	Sell	8,136,104	9,302,170			12/09/19		—		(67,320	)
South Korean Won	GSCO	Sell	44,346,000,000	37,444,904			12/09/19		—		(1,076,192	)
Euro	DBAB	Sell	13,483,000	15,477,810			12/11/19		—		(51,550	)
Australian Dollar	HSBK	Sell	10,030,000	750,855,830		JPY	12/12/19		—		(18,331	)
Australian Dollar	HSBK	Sell	28,650,000	2,151,328,500		JPY	12/12/19		9,270		—
Australian Dollar	JPHQ	Sell	17,540,000	1,314,694,914		JPY	12/12/19		—		(16,717	)
Euro	BOFA	Sell	5,439,095	6,200,569			12/18/19		—		(67,449	)
Euro	DBAB	Sell	5,008,730	5,707,949			12/18/19		—		(64,116	)
Euro	GSCO	Sell	1,789,884	2,038,319			12/18/19		—		(24,344	)
Japanese Yen	HSBK	Buy	3,616,471,000	33,750,629			12/19/19		240,860		—
Japanese Yen	JPHQ	Buy	1,776,469,130	16,587,881			12/20/19		110,612		—
Japanese Yen	HSBK	Buy	1,385,935,670	13,063,576			3/06/20		25,770		—
Japanese Yen	JPHQ	Buy	1,316,291,430	12,420,546			3/06/20		11,051		—
Australian Dollar	JPHQ	Sell	22,880,000	1,707,432,812		JPY	3/12/20		—		(28,888	)
Australian Dollar	HSBK	Sell	9,830,000	730,865,415		JPY	3/13/20		—		(37,671	)
Japanese Yen	HSBK	Buy	5,242,851,400	49,342,826			3/23/20		223,673		—
Japanese Yen	JPHQ	Buy	3,549,117,130	33,375,614			3/23/20		178,133		—
Japanese Yen	JPHQ	Buy	921,145,640	8,744,741			3/24/20		—		(35,601	)
Japanese Yen	HSBK	Buy	1,385,935,690	13,139,372			6/08/20		24,791		—
Japanese Yen	JPHQ	Buy	1,316,291,430	12,493,638			6/08/20		9,016		—
Australian Dollar	HSBK	Sell	10,030,000	743,659,305		JPY	6/12/20		—		(29,809	)
Australian Dollar	JPHQ	Sell	27,360,000	2,029,372,749		JPY	6/12/20		—		(73,650	)
Euro	JPHQ	Sell	6,775,311	7,873,725			6/15/20		—		(29,216	)
Japanese Yen	JPHQ	Buy	1,776,469,130	16,798,461			6/22/20		89,525		—

TGB-18

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency

Counterparty^a

Type

Quantity

Contract
Amount

Settlement
Date

Unrealized
Appreciation

Unrealized
Depreciation

OTC Forward Exchange Contracts (continued)

Japanese Yen

BNDP

Buy

4,489,315,360

42,878,248

6/24/20

$ —

$ (195,420)

Total Forward Exchange Contracts

$10,800,410

$(24,353,192)

Net unrealized appreciation (depreciation)

$(13,552,782)

*In U.S. dollars unless otherwise indicated.

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

At June 30, 2019, the Fund had the following interest rate swap contracts outstanding. See Note 1(c).

Interest Rate Swap Contracts

Description

Payment
Frequency

Counter-
party

Maturity
Date

Notional
Amount

Value/
Unrealized
Appreciation
(Depreciation)

Centrally Cleared Swap Contracts

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.558%

Semi-Annual

3/04/21

3,240,000

(122,000

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.775%

Semi-Annual

10/04/23

13,090,000

(560,798

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.795%

Semi-Annual

10/04/23

13,090,000

(572,186

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.765%

Semi-Annual

10/07/23

13,090,000

(556,489

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.731%

Semi-Annual

7/07/24

34,000,000

(1,830,406

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.914%

Semi-Annual

1/22/25

114,670,000

(1,182,108

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.97%

Semi-Annual

1/23/25

143,340,000

(1,935,166

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.973%

Semi-Annual

1/27/25

84,590,000

(1,169,130

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.937%

Semi-Annual

1/29/25

21,150,000

(247,845

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.942%

Semi-Annual

1/30/25

17,910,000

(214,037

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 1.817%

Semi-Annual

2/03/25

28,210,000

(132,951

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 4.349%

Semi-Annual

2/25/41

7,460,000

(2,957,633

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 4.32%

Semi-Annual

2/28/41

5,600,000

(2,187,593

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 4.299%

Semi-Annual

3/01/41

1,870,000

(724,297

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.668%

Semi-Annual

10/04/43

6,370,000

(1,827,825

)

Receive Floating 3-month USD LIBOR

Quarterly

Semiannual Report

TGB-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Global Bond VIP Fund (continued)

Interest Rate Swap Contracts (continued)

Description

Payment
Frequency

Counter-
party

Maturity
Date

Notional
Amount

Value/
Unrealized
Appreciation
(Depreciation)

Centrally Cleared Swap Contracts (continued)

Pay Fixed 3.687%

Semi-Annual

10/04/43

$ 6,370,000

$ (1,851,049

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.675%

Semi-Annual

10/07/43

6,370,000

(1,836,145

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.378%

Semi-Annual

11/18/46

122,400,000

(4,266,750

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.537%

Semi-Annual

4/13/47

72,700,000

(5,051,107

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.587%

Semi-Annual

7/27/47

36,700,000

(3,208,437

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 2.98%

Semi-Annual

2/20/48

15,638,000

(2,751,703

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.002%

Semi-Annual

2/22/48

15,638,000

(2,829,404

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.019%

Semi-Annual

2/23/48

15,638,000

(2,885,783

)

Total Centrally Cleared Swap Contracts

$(40,900,842

)

OTC Swap Contracts

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 3.523%

Semi-Annual

DBAB

3/28/21

$ 14,630,000

$ (555,316

)

Receive Floating 3-month USD LIBOR

Quarterly

Pay Fixed 4.347%

Semi-Annual

CITI

2/25/41

7,460,000

(2,954,052

)

Total OTC Swap Contracts

$ (3,509,368

)

Total Interest Rate Swap Contracts

$(44,410,210

)

See Note 9 regarding other derivative information.

See Abbreviations on page TGB-36.

TGB-20

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, 2019 (unaudited)



	Templeton Global Bond VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$1,868,329,961
Cost - Non-controlled affiliates (Note 3e)		840,987,190


Value - Unaffiliated issuers		$1,715,941,371
Value - Non-controlled affiliates (Note 3e)		840,987,190
Foreign currency, at value (cost $3,139,800)		3,143,810
Receivables:
Investment securities sold		306,105,949
Capital shares sold		432,766
Interest		28,017,671
Deposits with brokers for:
OTC derivative contracts		13,111,000
Centrally cleared swap contracts		43,812,453
Variation margin on centrally cleared swap contracts		1,750,564
Unrealized appreciation on OTC forward exchange contracts		10,800,410
Other assets		2,077


Total assets		2,964,105,261


Liabilities:
Payables:
Capital shares redeemed		1,873,996
Management fees		871,727
Distribution fees		1,104,022
Trustees’ fees and expenses		2,943
Options written, at value (premiums received $11,159,153)		8,140,326
Unrealized depreciation on OTC forward exchange contracts		24,353,192
Unrealized depreciation on OTC swap contracts		3,509,368
Deferred tax		1,069,598
Accrued expenses and other liabilities		1,470,573


Total liabilities		42,395,745


Net assets, at value		$2,921,709,516

Net assets consist of:
Paid-in capital		$3,013,559,830
Total distributable earnings (loss)		(91,850,314	)


Net assets, at value		$2,921,709,516

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

TGB-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

June 30, 2019 (unaudited)



	Templeton Global Bond VIP Fund

Class 1:
Net assets, at value		$ 322,894,936

Shares outstanding		19,159,539

Net asset value and maximum offering price per share		$16.85

Class 2:
Net assets, at value		$2,506,398,779

Shares outstanding		155,279,892

Net asset value and maximum offering price per share		$16.14

Class 4:
Net assets, at value		$ 92,415,801

Shares outstanding		5,594,502

Net asset value and maximum offering price per share		$16.52

TGB-22

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, 2019 (unaudited)



	Templeton Global Bond VIP Fund


Investment income:
Dividends:
Non-controlled affiliates (Note 3e)		$ 7,272,536
Interest: (net of foreign taxes)~
Unaffiliated issuers		83,677,638


Total investment income		90,950,174


Expenses:
Management fees (Note 3a)		6,664,374
Distribution fees: (Note 3c)
Class 2		3,151,919
Class 4		162,031
Custodian fees (Note 4)		622,636
Reports to shareholders		200,875
Professional fees		52,053
Trustees’ fees and expenses		11,670
Other		258,393


Total expenses		11,123,951
Expense reductions (Note 4)		(99,819	)
Expenses waived/paid by affiliates (Note 3e)		(1,224,809	)


Net expenses		9,799,323


Net investment income		81,150,851


Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:^#
Unaffiliated issuers		(3,116,265	)
Written options		(270,237	)
Foreign currency transactions		59,956
Forward exchange contracts		73,887,062
Swap contracts		1,230,638


Net realized gain (loss)		71,791,154


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		14,559,126
Translation of other assets and liabilities denominated in foreign currencies		230,753
Forward exchange contracts		(18,328,568	)
Written options		3,018,827
Swap contracts		(63,106,879	)
Change in deferred taxes on unrealized appreciation		808,513


Net change in unrealized appreciation (depreciation)		(62,818,228	)


Net realized and unrealized gain (loss)		8,972,926


Net increase (decrease) in net assets resulting from operations		$ 90,123,777


^~Foreign taxes withheld on interest.		$ 1,721,531
^#Net of foreign taxes		$ 356,048

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

TGB-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets


	Templeton Global Bond VIP Fund

	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018


Increase (decrease) in net assets:
Operations:
Net investment income		$ 81,150,851			$ 148,925,933
Net realized gain (loss)		71,791,154			29,395,004
Net change in unrealized appreciation (depreciation)		(62,818,228	)		(118,382,692	)


Net increase (decrease) in net assets resulting from operations		90,123,777			59,938,245


Distributions to shareholders:
Class 1		(22,427,340	)		—
Class 2		(175,601,316	)		—
Class 4		(6,224,019	)		—


Total distributions to shareholders		(204,252,675	)		—

Capital share transactions: (Note 2)
Class 1		51,298,106			(7,760,972	)
Class 2		58,771,690			(237,044,140	)
Class 4		1,510,796			(6,392,585	)


Total capital share transactions		111,580,592			(251,197,697	)


Net increase (decrease) in net assets		(2,548,306	)		(191,259,452	)

Net assets:
Beginning of period		2,924,257,822			3,115,517,274


End of period		$2,921,709,516			$2,924,257,822

TGB-24

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 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

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.

b. Foreign Currency Translation

Semiannual Report

TGB-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

b. Foreign Currency Translation (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.

c. Derivative Financial Instruments

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.

TGB-26

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

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 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.

The Fund invested 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 Statement of Operations. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.

See Note 9 regarding other derivative information.

d. Income and Deferred Taxes

e. Security Transactions, Investment Income, Expenses and Distributions

Semiannual Report

TGB-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

1. Organization and Significant Accounting

Policies (continued)

e. Security Transactions, Investment Income, Expenses and Distributions (continued)

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.

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.

f. Accounting Estimates

g. Guarantees and Indemnifications

2. Shares of Beneficial Interest

At June 30, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		3,257,781		$	58,874,081			3,298,930		$	57,215,991
Shares issued in reinvestment of distributions		1,330,210			22,427,340			—			—
Shares redeemed		(1,676,435	)		(30,003,315	)		(3,741,198	)		(64,976,963)


Net increase (decrease)		2,911,556		$	51,298,106			(442,268	)	$	(7,760,972)

TGB-28

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)


		Six Months Ended June 30, 2019						Year Ended December 31, 2018

	Shares			Amount			Shares			Amount

Class 2 Shares:
Shares sold		3,326,780			$ 57,259,173			10,132,393			$ 169,096,447
Shares issued in reinvestment of distributions		10,873,146			175,601,316			—			—
Shares redeemed		(10,136,099	)		(174,088,799	)		(24,289,543	)		(406,140,587)


Net increase (decrease)		4,063,827			$ 58,771,690			(14,157,150	)		$(237,044,140)


Class 4 Shares:
Shares sold		338,125			$ 5,942,275			816,409			$13,930,984
Shares issued in reinvestment of distributions		376,529			6,224,019			—			—
Shares redeemed		(607,785	)		(10,655,498	)		(1,191,456	)		(20,323,569)


Net increase (decrease)		106,869			$ 1,510,796			(375,047	)		$(6,392,585)

3. Transactions with Affiliates



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, 2019, the annualized gross effective investment management fee rate was 0.459% of the Fund’s average daily net assets.

b. Administrative Fees

Semiannual Report

TGB-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond 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 0.25% 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



	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, 2.05%		$663,563,266		$364,241,589		$(186,817,665	)		$ —		$ —		$840,987,190		840,987,190		$7,272,536

4. Expense Offset Arrangement

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2018, the capital loss carryforwards were as follows:


Capital loss carryforwards not subject to expiration:
Short term	$	1,830,066
Long term		23,760,579


Total capital loss carryforwards	$	25,590,645

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	2,712,504,045


Unrealized appreciation	$	71,578,938
Unrealized depreciation		(290,382,662)


Net unrealized appreciation (depreciation)	$	(218,803,724)

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

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $210,959,199 and $431,222,785, respectively.

7. Credit Risk

At June 30, 2019, the Fund had 15.2% 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

9. Other Derivative Information

At June 30, 2019, 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 centrally

cleared swap contracts

$ —

Variation margin on centrally

cleared swap contracts

$40,900,842

Unrealized appreciation on OTC

swap contracts

—

Unrealized depreciation on OTC

swap contracts

3,509,368

Semiannual Report

TGB-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

9. Other Derivative Information (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
Foreign exchange contracts	Investments in securities, at value	$	10,749,140	^b	Options written, at value	$	8,140,326

	Unrealized appreciation on OTC forward exchange contracts		10,800,410		Unrealized depreciation on OTC forward exchange contracts		24,353,192

Totals		$	21,549,550			$	76,903,728

^aThis amount reflects the cumulative appreciation (depreciation) of 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.

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

For the period ended June 30, 2019, 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

1,230,638

Swap contracts

$(63,106,879)

Foreign exchange contracts

Investments

433,153

Investments

(4,014,018)^a

Written options

(270,237

)

Written options

3,018,827

Forward exchange contracts

73,887,062

Forward exchange contracts

(18,328,568)

Value recovery instruments

Investments

4,142,988

Investments

(3,416,727)^a

Totals

79,423,604

$(85,847,365)

^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 Statement of Operations.

For the period ended June 30, 2019, the average month end notional amount of options and swap contracts, the average month end contract value for forward exchange contracts and average month end fair value of VRI, were as follows:


Options			$ 343,333,182
Swap contracts			$ 821,224,000
Forward exchange contracts			2,993,537,783
VRI			7,181,264

See Note 1(c) regarding derivative financial instruments.

TGB-32

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

At June 30, 2019, OTC derivative assets and liabilities are as follows:


	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities

	Assets^a		Liabilities^a
Derivatives
Forward exchange contracts		$10,800,410		$24,353,192
Options purchased		10,749,140		—
Options written		—		8,140,326
Swap contracts		—		3,509,368


Total		$21,549,550		$36,002,886

^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, 2019, 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 Received^a,b			Cash Collateral Received		Net Amount (Not less than zero)

Counterparty
BNDP		$ —	$	—		$	—			$ —		$ —
BOFA		13,770		(13,770	)		—			—		—
BZWS		398,021		(398,021	)		—			—		—
CITI		10,798,389		(10,798,389	)		—			—		—
DBAB		650,999		(650,999	)		—			—		—
GSCO		313,768		(313,768	)		—			—		—
HSBK		5,932,067		(4,745,878	)		(1,186,189	)		—		—
JPHQ		3,373,857		(3,373,857	)		—			—		—
MSCO		54,347		(54,347	)		—			—		—
SCNY		1,132		(1,132	)		—			—		—
UBSW		13,200		(13,200	)		—			—		—


Total		$21,549,550	$	(20,363,361	)		$(1,186,189	)		$ —		$ —

Semiannual Report

TGB-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

9. Other Derivative Information (continued)

At June 30, 2019, 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 Pledged^b			Net Amount (Not less than zero)

Counterparty
BNDP		$ 589,478		$ —			$ —		$ (520,000	)		$ 69,478
BOFA		2,287,842		(13,770	)		—		(2,274,072	)		—
BZWS		1,210,046		(398,021	)		—		(812,025	)		—
CITI		11,997,014		(10,798,389	)		—		(494,000	)		704,625
DBAB		3,214,550		(650,999	)		—		(2,542,000	)		21,551
GSCO		3,579,210		(313,768	)		—		(2,860,000	)		405,442
HSBK		4,745,878		(4,745,878	)		—		—			—
JPHQ		5,802,310		(3,373,857	)		—		(1,260,000	)		1,168,453
MSCO		694,003		(54,347	)		—		(620,000	)		19,656
SCNY		1,674,734		(1,132	)		—		(1,405,000	)		268,602
UBSW		207,821		(13,200	)		—		(194,621	)		—

Total		$36,002,886		$(20,363,361	)		$ —		$(12,981,718	)		$2,657,807

^aAt June 30, 2019, the Fund received U.K. Treasury Bonds as collateral for derivatives.

^bIn 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.

See Abbreviations on page TGB-36.

10. Credit Facility

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

11. Fair Value Measurements

•

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, 2019, 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	$	—	$	1,382,946,845	$	—	$	1,382,946,845
Options Purchased		—		10,749,140		—		10,749,140
Short Term Investments		892,766,792		270,465,784		—		1,163,232,576


Total Investments in Securities	$	892,766,792	$	1,664,161,769	$	—	$	2,556,928,561


Other Financial Instruments:

Forward Exchange Contracts	$	—	$	10,800,410	$	—	$	10,800,410


Liabilities:

Other Financial Instruments:

Options Written	$	—	$	8,140,326	$	—	$	8,140,326

Forward Exchange Contracts		—		24,353,192		—		24,353,192

Swap Contracts		—		44,410,210		—		44,410,210


Total Other Financial Instruments	$	—	$	76,903,728	$	—	$	76,903,728

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

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

TGB-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

Abbreviations


Counterparty		Currency		Selected Portfolio

BNDP	BNP Paribas SA	ARS	Argentine Peso	ARPP7DRR	Argentina Central Bank 7 Day Repo Rate
BOFA	Bank of America Corp.	AUD	Australian Dollar	BADLAR	Argentina Deposit Rates Badlar Private
BZWS	Barclays Bank PLC	BRL	Brazilian Real		Banks ARS
CITI	Citigroup, Inc.	COP	Colombian Peso	FRN	Floating Rate Note
DBAB	Deutsche Bank AG	EUR	Euro	LIBOR	London InterBank Offered Rate
GSCO	The Goldman Sachs Group, Inc.	GHS	Ghanaian Cedi
HSBK	HSBC Bank PLC	IDR	Indonesian Rupiah
JPHQ	JP Morgan Chase & Co.	INR	Indian Rupee
MSCO	Morgan Stanley	JPY	Japanese Yen
SCNY	Standard Chartered Bank	KRW	South Korean Won
UBSW	UBS AG	MXN	Mexican Peso
		PHP	Philippine Peso
		USD	United States Dollar

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Global Bond VIP Fund

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		$0.0282		$0.8543
Class 2		$0.0282		$0.8235
Class 4		$0.0282		$0.8111

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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TGB-37

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Templeton Growth VIP Fund

This semiannual report for Templeton Growth VIP Fund covers the period ended June 30, 2019.

Class 2 Performance Summary as of June 30, 2019

The Fund’s Class 2 Shares posted a +7.34% total return* for the six-month period ended June 30, 2019.

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. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging 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 and financial uncertainty surrounding the European Union (EU) and the financial instability of some countries in the EU may increase market volatility and the economic risk of investing in companies in Europe. In addition, smaller company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. 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 MSCI All Country World Index (ACWI), posted a +16.60% total return for the period under review.¹

Economic and Market Overview

Geographic Composition

Based on Total Net Assets as of 6/30/19

LOGO

potential U.S.-China trade deal. Further supporting markets were the U.S. Federal Reserve’s (Fed’s) patient approach to its monetary policy in 2019 and recent indication it will act as appropriate to sustain U.S. economic expansion.

However, markets reflected concerns about political uncertainties in the U.S. and the European Union, geopolitical risks in certain regions, and the impact of U.S. trade disputes with China and other trading partners on global growth and corporate earnings. In this environment, global developed and emerging market stocks, as measured by the MSCI ACWI, posted a +16.60% total return for the six-month period.¹

The U.S. economy grew during the six months ended June 30, 2019. After moderating for two consecutive quarters, the economy grew significantly faster in 2019’s first quarter, driven by growth in consumer spending, inventory investment, exports, business investment, and state and local government spending. However, the economy moderated again in the second quarter, due to weakness in inventory investment, exports, business investment and housing investment. The unemployment rate decreased from 3.9% in December 2018 to 3.7% at period-end.² The annual inflation rate, as measured by the Consumer Price Index, decreased from 1.9% in December 2018 to 1.6% at period-end.²

The Fed held its target range for the federal funds rate unchanged, at 2.25%–2.50%, during the reporting period. In March, the Fed mentioned it would end its balance sheet

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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Semiannual Report

TEMPLETON GROWTH VIP FUND

normalization program by the end of September 2019. In June, the Fed indicated increased uncertainties around its views on economic activity and the labor market. With market-based inflation measures remaining low recently, the market has interpreted the Fed’s recent statements to mean it will likely cut rates in 2019’s second half to foster continued economic growth while attempting to achieve its inflation objective.

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. This includes an assessment by the investment manager 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 price/earnings ratio, price/cash flow ratio, profit margins and liquidation value.

Manager’s Discussion

Stock selection in the utilities sector, particularly in multi-utilities, contributed to relative results.³ French transnational company Veolia Environnement was the sector’s top relative contributor. Veolia’s share price continues to rally due to better-than-expected earnings, boosted by strong growth in new hazardous waste treatment and plastics recycling, favorable water tax rulings and new water contracts. The company has also increased its dividend and earnings outlook for 2019.

In other sectors, key relative contributors included multiple American companies: global beauty firm Coty, banking firm Citigroup, pharmaceutical company Allergan, computer technology firm Oracle, truckmaker Navistar International (not part of the index) and pharmaceutical company Perrigo. Swedish health care equipment and supplies firm Getinge (not part of the index, not held at period-end) and Canadian precious metals firm Wheaton Precious Metals also contributed to relative results. Wheaton benefited from a favorable settlement related to a Canadian tax audit that had depressed its share price for years. Shares also rallied in May after the firm’s reported earnings and gold production beat consensus expectations. The stock remains an attractive holding, trading at what we view as reasonable valuations on a variety of metrics and providing a capital-light, low-cost streaming model that offers gold exposure with superior economics compared to traditional mining companies.

In contrast, stock selection in the communication services sector, especially in media, detracted from relative results.⁴ Notable detractors included Luxembourg-based media firm SES, Chinese internet services company Baidu and British telecommunications company Vodafone. Baidu’s stock price fell amid a cyclical slowdown in China’s economy. We believe Baidu’s core search business remains undervalued, and the company has enjoyed strong growth in active daily users and a high cash position.

Stock selection in the consumer staples sector, particularly in food and staples retailing, also detracted from relative

3. The utilities sector comprises gas utilities and multi-utilities in the SOI.

4. The communication services sector comprises diversified telecommunication services, interactive media and services, media and wireless telecommunication services in the SOI.

Semiannual Report

TG-3

TEMPLETON GROWTH VIP FUND

performance.⁵ Key detractors included American companies such as drugstore Walgreens Boots Alliance, supermarket chain The Kroger Co. and food manufacturer Kellogg. Japanese food retailer Seven & i Holdings also hurt relative performance.

In other sectors, key relative detractors included Israeli pharmaceuticals firm Teva Pharmaceutical Industries, Chinese natural gas distributor Kunlun Energy and Japanese household durables firm Panasonic. Teva’s share price declined due to weakness in the U.S. generic drug market and slumping sales of one of its aging flagship drugs. A surprising settlement of a U.S. opioid lawsuit, which added to the existing litigation risk surrounding an industry-wide price-fixing scandal, also hurt its share price. While these situations are unlikely to materially impact near-term cash flow—which we believe should improve amid ongoing cost-cutting—they do raise the risk profile of the investment, particularly in light of Teva’s high financial and operating leverage in the competitive, commodity-like generic drug industry.

From a geographic perspective, no regions contributed to relative performance, but stock selection in Sweden and Singapore did help the Fund’s results. In contrast, stock selection in Europe, particularly in the U.K., detracted from relative performance. An overweighting in Luxembourg also hurt results. Other relative detractors included stock selection in Asia, particularly in China and Japan, and North America, notably in the U.S.

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

Top 10 Holdings

6/30/19



Company *Sector/Industry, Country*	% of Total Net Assets
Allergan PLC Pharmaceuticals, U.S.		2.7%
Singapore Telecommunications Ltd. Diversified Telecommunication Services, Singapore		2.6%
Citigroup Inc. Banks, U.S.		2.6%
BP PLC Oil, Gas & Consumable Fuels, U.K.		2.4%
SES SA Media, Luxembourg		2.3%
Royal Dutch Shell PLC Oil, Gas & Consumable Fuels, U.K.		2.3%
BNP Paribas SA Banks, France		2.2%
Kellogg Co. Food Products, U.S.		2.1%
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan		2.0%
Standard Chartered PLC Banks, U.K.		2.0%

5. The consumer staples sector comprises beverages, food and staples retailing, food products and personal products in the SOI.

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Semiannual Report

TEMPLETON GROWTH VIP FUND

Class 2 Fund 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

Actual

(actual return after expenses)

Hypothetical

(5% annual return before expenses)

Share

Class

Beginning
Account

Value 1/1/19

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During
Period

1/1/19–6/30/19^1,²

Ending

Account

Value 6/30/19

Fund-Level
Expenses

Paid During
Period

1/1/19–6/30/19^1,²

Net

Annualized
Expense

Ratio²

Class 2

$1,000

$1,073.40

$5.65

$1,019.34

$5.51

1.10%

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 1

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.44			$16.24			$13.93			$13.54			$14.85			$15.47


Income from investment operations^a:

Net investment income^b		0.18			0.28			0.29			0.26			0.28			0.38^c

Net realized and unrealized gains (losses)		0.65			(2.42	)		2.30			0.96			(1.17	)		(0.75)


Total from investment operations		0.83			(2.14	)		2.59			1.22			(0.89	)		(0.37)


Less distributions from:

Net investment income		(0.40	)		(0.35	)		(0.28	)		(0.31	)		(0.42	)		(0.25)

Net realized gains		(2.49	)		(1.31	)		—			(0.52	)		—			—


Total distributions		(2.89	)		(1.66	)		(0.28	)		(0.83	)		(0.42	)		(0.25)


Net asset value, end of period		$10.38			$12.44			$16.24			$13.93			$13.54			$14.85


Total return^d		7.46%			(14.61)%			18.77%			9.90%			(6.24)%			(2.53)%

Ratios to average net assets^e

Expenses		0.85%	^f		0.83%	^f		0.82%	^f,g		0.82%	^f		0.80%	^f		0.78%

Net investment income		3.24%			1.90%			1.94%			2.01%			1.96%			2.46%	^c

Supplemental data

Net assets, end of period (000’s)		$95,901			$354,164			$466,207			$453,997			$468,548			$572,860

Portfolio turnover rate		11.43%			29.25%			26.46%			22.88%			20.92%			17.46%

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.09 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%.

^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%.

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, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 2

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.21			$15.97			$13.70			$13.32			$14.61			$15.23


Income from investment operations^a:

Net investment income^b		0.20			0.24			0.25			0.23			0.25			0.34^c

Net realized and unrealized gains (losses)		0.60			(2.38	)		2.26			0.94			(1.16	)		(0.75)


Total from investment operations		0.80			(2.14	)		2.51			1.17			(0.91	)		(0.41)


Less distributions from:

Net investment income		(0.36	)		(0.31	)		(0.24	)		(0.27	)		(0.38	)		(0.21)

Net realized gains		(2.49	)		(1.31	)		—			(0.52	)		—			—


Total distributions		(2.85	)		(1.62	)		(0.24	)		(0.79	)		(0.38	)		(0.21)


Net asset value, end of period		$10.16			$12.21			$15.97			$13.70			$13.32			$14.61


Total return^d		7.34%			(14.85)%			18.50%			9.62%			(6.49)%			(2.81)%

Ratios to average net assets^e

Expenses		1.10%	^f		1.08%	^f		1.07%	^f,g		1.07%	^f		1.05%	^f		1.03%

Net investment income		2.99%			1.65%			1.69%			1.76%			1.71%			2.21%	^c

Supplemental data

Net assets, end of period (000’s)		$641,016			$625,311			$879,521			$876,128			$921,895			$1,171,896

Portfolio turnover rate		11.43%			29.25%			26.46%			22.88%			20.92%			17.46%

^bBased on average daily shares outstanding.

^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

TG-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Growth VIP Fund (continued)



	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31,
	Six Months Ended June 30, 2019 (unaudited)			2018			2017			2016			2015			2014


Class 4

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$12.36			$16.13			$13.83			$13.44			$14.73			$15.35


Income from investment operations^a:

Net investment income^b		0.20			0.23			0.24			0.22			0.23			0.33	^c

Net realized and unrealized gains (losses)		0.60			(2.40	)		2.28			0.94			(1.16	)		(0.76)


Total from investment operations		0.80			(2.17	)		2.52			1.16			(0.93	)		(0.43)


Less distributions from:

Net investment income		(0.35	)		(0.29	)		(0.22	)		(0.25	)		(0.36	)		(0.19)

Net realized gains		(2.49	)		(1.31	)		—			(0.52	)		—			—


Total distributions		(2.84	)		(1.60	)		(0.22	)		(0.77	)		(0.36	)		(0.19)


Net asset value, end of period		$10.32			$12.36			$16.13			$13.83			$13.44			$14.73


Total return^d		7.18%			(14.88)%			18.38%			9.47%			(6.54)%			(2.88)%

Ratios to average net assets^e

Expenses		1.20%^f			1.18%^f			1.17%	^f,g		1.17%^f			1.15%^f			1.13%

Net investment income		2.89%			1.55%			1.59%			1.66%			1.61%			2.11%	^c

Supplemental data

Net assets, end of period (000’s)		$27,768			$28,238			$38,798			$43,286			$47,777			$59,989

Portfolio turnover rate		11.43%			29.25%			26.46%			22.88%			20.92%			17.46%

^bBased on average daily shares outstanding.

^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%.

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, 2019 (unaudited)

Templeton Growth VIP Fund



	Country		Shares		Value

Common Stocks 96.7%

Air Freight & Logistics 1.5%
United Parcel Service Inc., B		United States		108,330	$	11,187,239


Automobiles 0.7%
Hero Motocorp Ltd.		India		141,930		5,313,884


Banks 16.9%
Bangkok Bank PCL, fgn		Thailand		1,250,380		8,107,710
Bank of Ireland Group PLC		Ireland		581,690		3,039,308
BNP Paribas SA		France		349,237		16,581,962
Citigroup Inc.		United States		282,490		19,782,775
Credit Agricole SA		France		745,066		8,931,913
HSBC Holdings PLC		United Kingdom		1,495,704		12,406,523
ING Groep NV		Netherlands		1,228,286		14,237,460
KB Financial Group Inc.		South Korea		280,494		11,116,091
Standard Chartered PLC		United Kingdom		1,703,223		15,448,203
Sumitomo Mitsui Financial Group Inc.		Japan		271,960		9,600,072
Wells Fargo & Co.		United States		203,257		9,618,121

						128,870,138


Beverages 1.2%
Kirin Holdings Co. Ltd.		Japan		102,600		2,211,010
Suntory Beverage & Food Ltd.		Japan		165,960		7,211,302

						9,422,312


Biotechnology 1.8%
Gilead Sciences Inc.		United States		207,830		14,040,995

Building Products 0.7%
Compagnie de Saint-Gobain		France		137,620		5,362,437


Capital Markets 1.1%
UBS Group AG		Switzerland		641,450		7,620,278
Value Partners Group Ltd.		Hong Kong		1,525,640		1,017,464

						8,637,742


Chemicals 0.2%
Akzo Nobel NV		Netherlands		19,702		1,850,989


Communications Equipment 0.6%
^aCommScope Holding Co. Inc.		United States		298,730		4,699,023


Construction Materials 0.5%
Taiheiyo Cement Corp.		Japan		136,800		4,136,227


Consumer Finance 1.6%
Capital One Financial Corp.		United States		137,560		12,482,194


Diversified Telecommunication Services 4.7%
China Telecom Corp. Ltd., ADR		China		98,965		4,951,219
Singapore Telecommunications Ltd.		Singapore		7,759,230		20,068,210
Telefonica SA		Spain		901,225		7,398,331
Verizon Communications Inc.		United States		63,530		3,629,469

						36,047,229

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)

Electrical Equipment 0.6%
Vestas Wind Systems AS		Denmark		49,100	$	4,240,108


Food & Staples Retailing 4.4%
The Kroger Co.		United States		555,660		12,063,379
Seven & i Holdings Co. Ltd.		Japan		215,860		7,303,443
Walgreens Boots Alliance Inc.		United States		257,879		14,098,245

						33,465,067


Food Products 2.1%
Kellogg Co.		United States		300,330		16,088,678


Gas Utilities 1.2%
Kunlun Energy Co. Ltd.		China		10,599,870		9,240,109


Health Care Providers & Services 2.3%
AmerisourceBergen Corp.		United States		123,640		10,541,546
Cardinal Health Inc.		United States		151,930		7,155,903

						17,697,449


Household Durables 1.3%
Panasonic Corp.		Japan		1,181,830		9,838,718


Industrial Conglomerates 3.2%
CK Hutchison Holdings Ltd.		Hong Kong		1,127,940		11,117,475
Siemens AG		Germany		110,732		13,167,642

						24,285,117


Insurance 2.8%
Aegon NV		Netherlands		1,605,016		7,988,372
China Life Insurance Co. Ltd., H		China		5,473,120		13,479,366

						21,467,738


Interactive Media & Services 1.4%
^aAlphabet Inc., A		United States		3,553		3,847,188
^aBaidu Inc., ADR		China		55,840		6,553,383

						10,400,571


Leisure Products 1.2%
^aMattel Inc.		United States		831,780		9,324,254


Machinery 0.9%
^aNavistar International Corp.		United States		210,030		7,235,533


Marine 1.0%
A.P. Moeller-Maersk AS, B		Denmark		6,240		7,737,988


Media 3.9%
Comcast Corp., A		United States		278,447		11,772,739
SES SA, IDR		Luxembourg		1,140,870		17,833,701

						29,606,440


Metals & Mining 1.6%
Wheaton Precious Metals Corp.		Canada		496,476		12,004,883

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)

Multi-Utilities 3.2%
E.ON SE		Germany		843,290	$	9,156,489
Veolia Environnement SA		France		616,570		15,014,298

						24,170,787


Oil, Gas & Consumable Fuels 9.7%
Apache Corp.		United States		369,080		10,692,248
BP PLC		United Kingdom		2,586,571		18,020,499
Eni SpA		Italy		674,349		11,197,452
Exxon Mobil Corp.		United States		157,870		12,097,578
^bHusky Energy Inc.		Canada		527,660		4,999,626
Royal Dutch Shell PLC, B		United Kingdom		529,239		17,347,083

						74,354,486


Personal Products 1.1%
Coty Inc., A		United States		617,051		8,268,483


Pharmaceuticals 12.7%
Allergan PLC		United States		122,834		20,566,097
Bayer AG		Germany		207,926		14,405,039
Merck KGaA		Germany		72,694		7,599,774
Novartis AG		Switzerland		30,740		2,808,140
Perrigo Co. PLC		United States		34,630		1,649,081
Roche Holding AG		Switzerland		42,833		12,047,809
Sanofi		France		177,087		15,282,304
Takeda Pharmaceutical Co. Ltd.		Japan		440,170		15,607,215
^aTeva Pharmaceutical Industries Ltd., ADR		Israel		741,550		6,844,506

						96,809,965


Real Estate Management & Development 1.2%
CK Asset Holdings Ltd.		Hong Kong		59,500		465,739
Mitsui Fudosan Co. Ltd.		Japan		365,950		8,867,041

						9,332,780


Software 2.0%
Oracle Corp.		United States		268,058		15,271,264


Specialty Retail 1.1%
Kingfisher PLC		United Kingdom		3,149,137		8,594,381


Technology Hardware, Storage & Peripherals 2.0%
Samsung Electronics Co. Ltd.		South Korea		373,630		15,178,497


Wireless Telecommunication Services 4.3%
Bharti Airtel Ltd.		India		2,608,534		13,114,551
China Mobile Ltd.		China		1,020,100		9,290,671
Vodafone Group PLC		United Kingdom		6,514,102		10,698,105

						33,103,327

Total Common Stocks (Cost $706,560,370)						739,767,032

Semiannual Report

TG-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

Country

Principal
Amount*

Value

Short Term Investments 2.3%

U.S. Government and Agency Securities (Cost $199,988) 0.0%^†

^cFFCB, 7/01/19

United States

$200,000

$ 200,000

Time Deposits (Cost $12,000,000) 1.6%

Royal Bank of Canada, 2.35%, 7/01/19

Canada

12,000,000

Shares

^dInvestments from Cash Collateral Received for Loaned Securities 0.7%

Money Market Funds (Cost $5,037,834) 0.7%

^e,fInstitutional Fiduciary Trust Money Market Portfolio, 2.05%.

United States

5,037,834

Total Investments (Cost $723,798,192) 99.0%

757,004,866

Other Assets, less Liabilities 1.0%

7,680,655

Net Assets 100.0%

$764,685,521

See Abbreviations on page TG-23.

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

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

^aNon-income producing.

^bA portion or all of the security is on loan at June 30, 2019. See Note 1(c).

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

^dSee Note 1(c) regarding securities on loan.

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

^fThe 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, 2019 (unaudited)



	Templeton Growth VIP Fund

Assets:
Investments in securities:
Cost - Unaffiliated issuers		$718,760,358
Cost - Non-controlled affiliates (Note 3e)		5,037,834


Value - Unaffiliated issuers⁺		$751,967,032
Value - Non-controlled affiliates (Note 3e)		5,037,834
Cash		1,128,814
Receivables:
Investment securities sold		10,048,278
Capital shares sold		647,726
Dividends and interest		2,689,165
European Union tax reclaims		790,686
Other assets		763


Total assets		772,310,298


Liabilities:
Payables:
Investment securities purchased		374,802
Capital shares redeemed		1,040,037
Management fees		497,399
Distribution fees		279,435
Payable upon return of securities loaned		5,037,834
Deferred tax		122,628
Accrued expenses and other liabilities		272,642


Total liabilities		7,624,777


Net assets, at value		$764,685,521


Net assets consist of:
Paid-in capital		$741,775,453
Total distributable earnings (loss)		22,910,068


Net assets, at value		$764,685,521


Class 1:
Net assets, at value		$95,901,005

Shares outstanding		9,240,966

Net asset value and maximum offering price per share		$10.38


Class 2:
Net assets, at value		$641,016,439

Shares outstanding		63,106,979

Net asset value and maximum offering price per share		$10.16


Class 4:
Net assets, at value		$27,768,077

Shares outstanding		2,690,735

Net asset value and maximum offering price per share		$10.32


⁺Includes securities loaned		$4,749,645

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, 2019 (unaudited)



	Templeton Growth VIP Fund

Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$ 19,280,114
Interest:
Unaffiliated issuers		165,380
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		58,874
Non-controlled affiliates (Note 3e)		71,351


Total investment income		19,575,719


Expenses:
Management fees (Note 3a)		3,877,982
Distribution fees: (Note 3c)
Class 2		812,598
Class 4		50,354
Custodian fees (Note 4)		34,573
Reports to shareholders		92,511
Professional fees		45,603
Trustees’ fees and expenses		4,783
Other		20,753


Total expenses		4,939,157
Expenses waived/paid by affiliates (Note 3e)		(12,320	)


Net expenses		4,926,837


Net investment income		14,648,882


Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(19,850,282	)
Foreign currency transactions		87,001


Net realized gain (loss)		(19,763,281	)


Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		85,919,624
Translation of other assets and liabilities denominated in foreign currencies		(48,147	)
Change in deferred taxes on unrealized appreciation		(122,628	)


Net change in unrealized appreciation (depreciation)		85,748,849


Net realized and unrealized gain (loss)		65,985,568


Net increase (decrease) in net assets resulting from operations		$ 80,634,450


*Foreign taxes withheld on dividends.		$ 1,666,230

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, 2019 (unaudited)			Year Ended December 31, 2018

Increase (decrease) in net assets:
Operations:
Net investment income		$ 14,648,882			$ 21,598,649
Net realized gain (loss)		(19,763,281	)		145,036,204
Net change in unrealized appreciation (depreciation)		85,748,849			(344,182,476	)


Net increase (decrease) in net assets resulting from operations		80,634,450			(177,547,623	)


Distributions to shareholders:
Class 1		(20,901,613	)		(44,508,681	)
Class 2		(139,418,589	)		(82,384,314	)
Class 4		(6,044,047	)		(3,542,055	)


Total distributions to shareholders		(166,364,249	)		(130,435,050	)


Capital share transactions: (Note 2)
Class 1		(270,325,446	)		(7,474,527	)
Class 2		109,479,958			(59,234,414	)
Class 4		3,547,382			(2,120,747	)


Total capital share transactions		(157,298,106	)		(68,829,688	)

Net increase (decrease) in net assets		(243,027,905	)		(376,812,361	)

Net assets:
Beginning of period		1,007,713,426			1,384,525,787


End of period		$ 764,685,521			$1,007,713,426

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

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. Investments in time deposits are valued at cost, which approximates fair value.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

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, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

b. Foreign Currency Translation

c. Securities Lending

d. Income and Deferred Taxes

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)

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.

f. Accounting Estimates

g. Guarantees and Indemnifications

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Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

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, 2019, 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, 2019						Year Ended December 31, 2018


	Shares			Amount			Shares			Amount


Class 1 Shares:
Shares sold		34,315		$	434,886			751,581		$	10,285,009
Shares issued in reinvestment of distributions		2,083,910			20,901,613			3,065,336			44,508,681
Shares redeemed		(21,347,643	)		(291,661,945	)		(4,049,692	)		(62,268,217)


Net increase (decrease)		(19,229,418	)	$	(270,325,446	)		(232,775	)	$	(7,474,527)


Class 2 Shares:
Shares sold		1,225,694		$	15,071,351			2,342,753		$	33,884,634
Shares issued in reinvestment of distributions		14,197,412			139,418,589			5,773,252			82,384,314
Shares redeemed		(3,511,422	)		(45,009,982	)		(11,984,334	)		(175,503,362)


Net increase (decrease)		11,911,684		$	109,479,958			(3,868,329	)	$	(59,234,414)


Class 4 Shares:
Shares sold		69,674		$	885,651			154,144		$	2,180,515
Shares issued in reinvestment of distributions		605,616			6,044,047			245,125			3,542,055
Shares redeemed		(270,028	)		(3,382,316	)		(518,871	)		(7,843,317)


Net increase (decrease)		405,262		$	3,547,382			(119,602	)	$	(2,120,747)

3. Transactions with Affiliates



Subsidiary		Affiliation

Templeton Global Advisors Limited (TGAL)		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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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 TGAL 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, 2019, the annualized gross effective investment management fee rate was 0.811% of the Fund’s average daily net assets.

b. Administrative Fees

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

c. Distribution Fees

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies



	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, 2.05%	$12,394,593	$	116,707,362	$	(124,064,121	)		$ —		$ —	$	5,037,834		5,037,834		$71,351

f. Interfund Transactions

4. Expense Offset Arrangement

5. Income Taxes

At June 30, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:


Cost of investments	$	729,534,511


Unrealized appreciation	$	112,120,064
Unrealized depreciation		(84,649,709)


Net unrealized appreciation (depreciation)	$	27,470,355

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

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended June 30, 2019, aggregated $104,839,302 and $432,628,546, respectively.

At June 30, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $5,037,834 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.

Semiannual Report

TG-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

7. Concentration of Risk

8. Credit Facility

9. Fair Value Measurements

•

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, 2019, 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	$	739,767,032	$	—	$	—	$	739,767,032
Short Term Investments		5,037,834		12,200,000		—		17,237,834

Total Investments in Securities	$	744,804,866	$	12,200,000	$	—	$	757,004,866

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Templeton Growth VIP Fund (continued)

10. 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

Semiannual Report

TG-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Growth VIP Fund

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	$0.0380	$0.3897
Class 2	$0.0380	$0.3670
Class 4	$0.0380	$0.3571

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.

TG-24

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Index Descriptions

The indexes are unmanaged and include reinvestment of any income or distributions. 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 1 month and less than 3 months.

Bloomberg Barclays U.S. Aggregate Bond 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 Index: Investment-Grade Component 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. 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.

Consumer Price Index (CPI) is a commonly used measure of the inflation rate.

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 6/30/19, 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 6/30/19, 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.

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 captures large- and mid-capitalization representation across 22 of 23 developed markets countries (excluding the U.S.) and 23 emerging markets countries. The index covers approximately 85% of the global equity opportunity set outside the U.S.

I-1

Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

INDEX DESCRIPTIONS

MSCI EAFE Index is a free float-adjusted market capitalization-weighted index that is 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 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 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 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 lower price-to-book ratios and lower forecasted growth values.

Russell 3000^® Growth Index is market capitalization weighted and measures performance of those Russell 3000^® Index companies with 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 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

Board Approval of Investment Management Agreements

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

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 an in-person meeting held on April 16, 2019 (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 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 K2/D&S Management Co., LLC (Sub-Adviser), an affiliate of FAI, on behalf of Franklin VolSmart Allocation VIP Fund; (iii) the investment management agreement between Franklin Templeton Institutional, LLC (FTIL) and the Trust, on behalf of Franklin Global Real Estate VIP Fund; (iv) 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; (v) the

investment management agreement between Templeton Asset Management Ltd. (TAML) and the Trust, on behalf of Templeton Developing Markets VIP Fund; (vi) the investment management agreement between Templeton Investment Counsel, LLC (TICL) and the Trust, on behalf of Templeton Foreign VIP Fund; and (vii) the investment management agreement between Templeton Global Advisors Limited (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, TGAL and the Sub-Adviser 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. 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 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



SI-1		Semiannual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

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; 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, shareholder services, marketing support payments made to financial intermediaries and third party servicing arrangements; 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 Investments (FTI) or the Funds to financial intermediaries, as well as a memorandum relating to third-party servicing arrangements in response to a guidance update in 2016 from the US Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees. 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 recognized management’s commitment to facilitating Board oversight of liquidity through the designation of a liquidity/risk administrator and the development of reports that highlight the amount of illiquid investments for each Fund.

The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton 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 FTI organization.

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, 2019. 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 Flex Cap Growth VIP Fund - The Performance Universe for this Fund included the Fund and all large-cap growth funds underlying variable insurance products (VIPs). The Board noted that the Fund’s annualized total return for the one-year period was above the median of its Performance Universe, but for the three-, five- and 10-year periods was below the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory, noting the Fund’s one-year first quintile (best) performance. The Board also noted the actions management has taken in an effort to address the Fund’s performance over the past few years, including changes to the Fund’s portfolio management team and enhancements to the team’s security selection process.

Franklin Growth and Income VIP Fund - The Performance Universe for this 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 this Fund included the Fund and all mixed-asset target

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allocation moderate funds underlying VIPs. The Performance Customized Peer Group for this 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 of its Performance Universe and Performance Customized Peer Group. The Board also noted that the Fund’s annualized total return for the one-, three-and 10-year periods was above the median of its Performance Universe, and for the five-year period was equal to the median of its Performance Universe. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods was above the median of its Performance Customized Peer Group. The Board concluded that the Fund’s performance was satisfactory.

Franklin Strategic Income VIP Fund - The Performance Universe for this Fund included the Fund and all general bond funds underlying VIPs. The Board noted that the Fund’s annualized income return for the one- and three-year periods was below the median of its Performance Universe, but for the 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 five- and ten-year periods was below the median of its Performance Universe, but for the three-year period was above the median of its Performance Universe and for the one-year period was equal to the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s relative underperfor-mance for the five-year period was impacted by, among other things, energy related credit investments that were affected by declining oil prices and global non-dollar long positions that were affected by broad US Dollar strength. Management then explained to the Board that it is continuing to enhance the Fund’s investment team and process, emphasizing bottom-up fundamental research, top-down macroeconomic analysis and quantitative modeling. Based on management’s explanation and the Fund’s shorter-term performance, the Board concluded that the Fund’s performance was satisfactory.

Franklin Large 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 one-year period was above the median of its Performance Universe, but for the 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 has historically maintained a higher allocation to smaller and mid-cap companies than the average fund in its Performance Universe. Management further explained that over the three- and five-year periods larger cap companies had outperformed smaller and mid-cap companies, contributing to the Fund’s below median performance. Management also explained that the Fund’s performance was impacted over the three- and five-year periods by security selection in the health care sector and general market rotation out of traditional secular growth sectors into cyclical sectors following the US presidential election in 2016. Based on management’s explanation, management’s recent actions taken to reposition certain portfolio holdings and the Fund’s above median one-year performance, the Board concluded that the Fund’s performance was satisfactory. In doing so, the Board noted and that the Fund’s annualized total return for the three-, five- and 10-year periods, while below the median, exceeded 14.7%, 11.1% and 13.8%, respectively.

Franklin Mutual Global Discovery 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 three-and 10-year periods was below the median of its Performance Universe, but for the one- and five-year periods was above the median and in the first quintile (the best) of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory. In doing so, the Board noted that the Fund’s annualized total return for the three- and 10-year periods, while below the median, exceeded 7.5% and 9.0%, respectively.

Franklin Mutual Shares VIP Fund - The Performance Universe for this 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-year period was above the median of its Performance Universe, but for the 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 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 to the Board the actions it has taken in an effort to address the sources of the Fund’s underperformance, including changes to the Fund’s portfolio management team and enhancements to

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the Fund’s investment process. Based on management’s explanation and the Fund’s above median one-year performance, the Board concluded that the Fund’s performance was satisfactory. In doing so, the Board noted that the Fund’s annualized total return for the three-, five-and 10-year periods, while below the median, were equal to or exceeded 9.0%, 5.5% and 10.7%, respectively.

Franklin Small-Mid Cap Growth VIP Fund - The Performance Universe for this 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-year period was above the median of its Performance Universe, but for the 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 healthcare, consumer, financial and industrial sectors was a primary detractor from relative performance over the three- and five-year periods. Management further explained that overweight exposure to the pharmaceutical industry was the largest detractor from performance, especially in 2016. Management then explained to the Board the actions it has taken in an effort to address the sources of the Fund’s relative underperfor-mance, including changes to the Fund’s portfolio management team and enhancements to the Fund’s investment process. Based on management’s explanation and the Fund’s above median one-year performance, the Board concluded that the Fund’s performance was satisfactory. In doing so, the Board noted that the Fund’s annualized total return for the three-, five- and 10-year periods, while below the median, were equal to or exceeded 13.8%, 7.4% and 14.7%, respectively.

Franklin Global Real Estate VIP Fund, Franklin Rising Dividends VIP Fund and Templeton Developing Markets VIP Fund - The Performance Universe for the Franklin Global Real Estate VIP Fund included the Fund and all global real estate funds underlying VIPs. The Performance Universe for the Franklin Rising Dividends VIP Fund included the Fund and all multi-cap core 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 the Funds’ annualized total returns for the one-, three- and five-year periods were above the medians of their respective Performance Universes, but for the ten-year period were below the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.

Franklin Small Cap Value VIP Fund - The Performance Universe for this Fund included the Fund and a representative class/fund from each portfolio in the small-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 above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Franklin U.S. Government Securities VIP Fund - The Performance Universe for this Fund included the Fund and all general U.S. 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 (the best) of its Performance Universe. The Board also noted that the Fund’s annualized total return for the five- and 10-year periods was below the median of its Performance Universe, but for the one- and three-year periods was above the median and in the second quintile of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Franklin VolSmart Allocation VIP Fund - The Performance Universe for this Fund included the Fund and all flexible portfolio funds underlying VIPs. The Performance Customized Peer Group for this 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 ten years. The Board noted that the Fund’s annualized total return for the one-, three- and five-year periods was below the medians of its Performance Universe and Performance Customized Peer Group. The Board discussed this performance with management and management explained that it is not aware of another fund in the Performance Universe that is a pure comparison to the Fund, noting the Fund’s strategy to seek to achieve its investment goal while attempting to minimize the expected volatility of the Fund’s returns so that volatility does not exceed a target of 10% per year. Management then explained to the Board the actions it has taken in an effort to address the sources of the Fund’s relative underperfor-mance, including changes to the Fund’s equity index short positions, and noted that the portfolio management team continues to monitor the security selection and weightings of the exchange-traded funds and active funds that comprise the Fund’s equity and fixed income sub-strategies in anticipation of future allocation shifts that may be necessary in the coming year due to ongoing market concerns. In light of this explanation, the Board concluded that the Fund’s Management Agreement should be continued for an

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additional one-year period, and the Fund’s performance should continue to be monitored.

Templeton Foreign VIP Fund - The Performance Universe for this 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 five- and ten-year periods was below the median of its Performance Universe, but for the one- and three-year periods was above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Templeton Global Bond VIP Fund - The Performance Universe for this Fund included the Fund and all global income funds underlying VIPs. The Board noted that the Fund’s annualized income return for the one- and three-year periods was below the median of its Performance Universe, but for the 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-, five- and 10-year periods was above the median and in the first (best) and second quintiles of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

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- and five-year periods was below the median of its Performance Universe, but for the three- and 10-year periods was above the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s underweight position in US stocks, overweight position in European holdings and overall stock selection (including in the health care sector) were primary themes that impacted the Fund’s relative performance over the past five years, noting that the Fund’s peers have a larger exposure to US investments and smaller exposure to emerging market investments as compared to the Fund. The Board also noted a number of changes implemented/being implemented by management to address the Fund’s below median annualized total return, in particular, changes to the Fund’s portfolio management team, macroeconomic analysis and portfolio construction. In light of this explanation and the Fund’s above median three- and 10-year performance, the Board concluded that the Fund’s performance was acceptable and that the changes management is implementing will 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; 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 FTI 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, Franklin Mutual Shares VIP Fund and Franklin Strategic Income VIP Fund -The Expense Group for the Franklin Flex Cap Growth VIP Fund included the Fund and twelve other large-cap growth funds underlying VIPs. The Expense Group for the Franklin Mutual Shares VIP Fund included the Fund and eight other multi-cap value funds underlying VIPs. The Expense Group for the Franklin Strategic Income VIP Fund included the Fund and seven other general bond funds underlying VIPs. The Board noted that the Management Rates for these Funds were above (only slightly for Franklin Mutual Shares VIP Fund and the Franklin Strategic Income VIP Fund) the medians of their respective Expense Groups, but their actual total expense ratios were below the medians of their respective Expense Groups. 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. With respect to the Franklin Mutual Shares VIP Fund, the Board further noted management’s explanation that the portfolio management

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team makes investments in distressed securities and merger arbitrage that are specialist in nature and therefore require additional resources that raise management costs, whereas the Fund’s Expense Group generally does not make such investments.

Templeton Growth VIP Fund - The Expense Group for this Fund included the Fund, three other global multi-cap value fund underlying VIPs, two global multi-cap core funds underlying VIPs and three global multi-cap growth funds underlying VIPs. The Board noted that the Management Rate for the Fund was slightly above the median of its Expense Group and its actual total expense ratio was equal to the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable.

Franklin Small-Mid Cap Growth VIP Fund - The Expense Group for the Fund included this Fund and twelve 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 Global Real Estate VIP Fund, Franklin Large Cap Growth VIP Fund, Franklin Mutual Global Discovery VIP Fund and Templeton Developing Markets VIP Fund - The Expense Group for the Franklin Global Real Estate VIP Fund included the Fund and eight other global real estate funds underlying VIPs. The Expense Group for the Franklin Large Cap Growth VIP Fund included the Fund and ten other large-cap growth funds underlying VIPs. The Expense Group for the Franklin Mutual Global Discovery VIP Fund included the Fund, three 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 Expense Group for the Templeton Developing Markets VIP Fund included the Fund and 12 other emerging markets 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 Mutual Global Discovery VIP Fund, the Board noted management’s explanation that the portfolio management team makes investments in distressed securities and merger arbitrage that are specialist in nature and therefore require additional resources that raise management costs, whereas the Fund’s Expense Group generally does not make such investments.

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. With respect to the Franklin Large Cap Growth VIP Fund and the Templeton Developing Markets VIP Fund, the Board noted that the Funds’ Management Rates and actual total expense ratios were only slightly above (approximately 5 basis points or less) the medians of each Fund’s respective Expense Group. The Board concluded that the Management Rates charged to these Funds are reasonable.

Franklin Growth and Income VIP Fund, Franklin Income VIP Fund, Franklin Small Cap Value VIP Fund, Franklin U.S. Government Securities VIP Fund, Templeton Foreign VIP Fund and Templeton Global Bond VIP Fund – The Expense Group for the Franklin Growth and Income VIP Fund included the Fund and seven other equity income funds underlying VIPs. The Expense Group for the Franklin Income VIP Fund included the Fund and seven other mixed-asset target allocation moderate funds underlying VIPs. The Expense Group for the Franklin Small Cap Value VIP Fund included the Fund and seven other small-cap value funds underlying VIPs. The Expense Group for the Franklin U.S. Government Securities VIP Fund included the Fund and ten other general U.S. government 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 multi-cap core funds underlying VIPs. The Expense Group for the Templeton Global Bond VIP Fund included the Fund and eight 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 Rising Dividends VIP Fund - The Expense Group for this Fund included the Fund and 12 other multi-cap core funds underlying VIPs. The Board noted that the Management Rate for the Fund was equal to the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable.

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Franklin VolSmart Allocation VIP Fund – The Expense Group for this Fund included the Fund and four other flexible portfolio funds underlying VIPs. 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 slightly 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 and that the Sub-Adviser was paid by FAI out of the management fee FAI received from the Fund.

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 provided by each Manager that addresses the overall profitability of FTI’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, 2018, 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 Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain Franklin Templeton funds, has been engaged by each Manager to periodically 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. 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 SEC and other regulatory requirements.

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 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 Franklin Templeton 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 that of 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 Small-Mid Cap Growth VIP Fund, Franklin Strategic Income VIP Fund, Franklin U.S. Government Securities VIP Fund and Templeton Foreign 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

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factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.

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.


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Franklin Templeton Variable Insurance Products Trust
Investment Managers	Fund Administrator	Distributor
Franklin Advisers, Inc.	Franklin Templeton Services, LLC	Franklin Templeton Distributors, Inc.
Franklin Mutual Advisers, LLC
Franklin Templeton
Institutional, LLC
Templeton Asset
Management Ltd.
Templeton Global Advisors Limited
Templeton Investment
Counsel, LLC


© 2019 Franklin Templeton Investments. All rights reserved.		VIP2 S 08/19

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 he 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-CSRS, 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 30, 2019

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 30, 2019

By		S\ GASTON GARDEY
		Gaston Gardey
		Chief Financial Officer and
		Chief Accounting Officer
Date August 30, 2019