N-CSRS

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: 6/30/21

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

Semiannual

Report

Franklin

Templeton

Variable

Insurance

Products

Trust

June

30,

2021

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

MASTER

CLASS

-

1

Franklin

Templeton

Variable

Insurance

Products

Trust

Semiannual

Report

Table

of

Contents

Important

Notes

to

Performance

Information

...........

i

Fund

Summaries

Franklin

Allocation

VIP

Fund

...................

FA-1

*Prospectus

Supplement

....................

FA-6

Franklin

Global

Real

Estate

VIP

Fund

.............

FGR-1

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

*Prospectus

Supplement

....................

FSV-6

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

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

semi

annual

report.

Retain

for

your

records

.

i

Semiannual

Report

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.

FA-1

Semiannual

Report

Franklin

Allocation

VIP

Fund

This

semiannual

report

for

Franklin

Allocation

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+7.17%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

4/30/22.

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

1

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.

FA-2

Semiannual

Report

1.

Source:

Morningstar.

2.

Source:

FactSet.

The

Linked

Allocation

VIP

Fund

benchmark

was

calculated

internally

and

was

composed

of

40%

S&P

500,

40%

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

and

20%

MSCI

World

ex

USA

Index-NR.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

investment

manager’s

allocation

of

Fund

assets

among

different

asset

classes

and

strategy

sleeves

may

not

prove

beneficial

in

light

of

subsequent

market

events.

There

can

be

no

guarantee

that

these

techniques

or

the

investment

manager’s

or

subadvisors’

investment

decisions

will

produce

the

desired

results.

To

the

extent

the

Fund

invests

in

underlying

investment

companies,

including

exchange-

traded

funds,

the

Fund’s

performance

is

related

to

the

performance

of

the

underlying

investment

companies

held

by

it.

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.

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.

Foreign

investing

carries

additional

risks

such

as

currency

and

market

volatility

and

political

or

social

instability,

risks

that

are

heightened

in

developing

countries.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues,

and

can,

therefore,

fall

dramatically

if

the

company

fails

to

meet

those

projections.

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

+15.25%

total

return.

1

The

Fund’s

other

benchmarks

performed

as

follows:

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

posted

a

-1.60%

total

return,

the

MSCI

World

ex

USA

Index-NR

posted

a

+9.16%

total

return

and

the

Linked

Allocation

VIP

Fund

Benchmark

posted

a

+7.26%

total

return.

1,2

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR,

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Common

Stocks

57.7%

U.S.

Government

and

Agency

Securities

13.1%

Corporate

Bonds

10.7%

Mortgage-Backed

Securities

9.9%

Management

Investment

Companies

3.0%

Other

2.1%

Short-Term

Investments

&

Other

Net

Assets

3.5%

Franklin

Allocation

VIP

Fund

FA-3

Semiannual

Report

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

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

Growth

Strategy,

Templeton

Foreign

Strategy,

Franklin

International

Growth

Strategy,

Franklin

U.S.

Government

Securities

Strategy,

Franklin

Rising

Dividends

Strategy,

Franklin

Investment

Grade

Corporate

Strategy,

Templeton

Global

Bond

VIP

Fund,

Franklin

International

Core

Equity

Strategy,

Franklin

U.S.

Core

Equity

Strategy,

Franklin

Emerging

Market

Core

Equity

Strategy,

Franklin

U.S.

Core

Bond

Strategy

and

Franklin

U.S.

Treasury

Securities

Strategy.

The

Fund

is

structured

as

a

multi-manager

fund

(meaning

the

Fund’s

assets

are

managed

by

multiple

subadvisors),

with

the

investment

manager

having

overall

responsibility

for

the

Fund’s

investments.

The

investment

manager

allocates

assets

among

various

asset

classes

and

strategy

sleeves

to

seek

to

diversify

the

Fund’s

portfolio,

to

add

incremental

return

and

to

reduce

the

Fund’s

risk

of

being

significantly

impacted

by

changes

in

a

specific

asset

class

or

by

changing

market

conditions.

The

investment

manager

may,

at

times,

implement

a

risk

overlay

strategy,

which

seeks

to

neutralize

certain

market

risks

that

may

exist

in

the

Fund

primarily

through

the

use

of

equity

and

interest

rate/bond

futures.

Allocations

to

the

individually

managed

sleeves

typically

will

not

exceed

20%,

but

will

vary

with

market

conditions;

however,

under

normal

market

conditions,

no

sleeve

constitutes

a

majority

of

the

Fund’s

assets.

Manager’s

Discussion

The

Fund’s

performance

can

be

attributed

largely

to

its

allocation

among

the

underlying

sleeves

and

their

investments

in

domestic

and

foreign

equity

securities,

fixed

income

securities,

equity

index

and

U.S.

Treasury

futures,

and

short-term

investments

and

other

net

assets.

During

the

12

months

under

review,

on

the

equity

side,

the

Franklin

International

Core

Equity

Strategy

and

the

Templeton

Foreign

Strategy

outperformed

the

Fund’s

foreign

equity

benchmark,

the

MSCI

World

ex

USA

Index-NR,

while

the

Franklin

International

Growth

Strategy

underperformed

the

index.

The

Franklin

U.S.

Core

Equity

Strategy

outperformed

the

Fund’s

domestic

equity

benchmark,

the

S&P

500,

while

the

Franklin

Growth

Strategy,

the

Franklin

Rising

Dividends

Strategy

and

the

Franklin

U.S.

Smart

Beta

Equity

Strategy

underperformed

the

index.

On

the

fixed

income

side,

the

Franklin

U.S.

Government

Securities

Strategy,

the

Franklin

Investment

Grade

Corporate

Strategy

and

the

Franklin

U.S.

Core

Bond

Strategy

performed

better

than

the

Fund’s

fixed

income

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

while

Templeton

Global

Bond

VIP

Fund

and

the

Franklin

U.S.

Treasury

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

North

America

74.3%

Europe

13.3%

Asia

6.6%

Latin

America

&

Caribbean

1.1%

Other

1.2%

Short-Term

Investments

&

Other

Net

Assets

3.5%

Franklin

Allocation

VIP

Fund

FA-4

Semiannual

Report

Securities

Strategy

underperformed

the

index.

The

Fund’s

risk

overlay

strategy,

which

utilized

U.S.

Treasury

and

equity

index

futures

to

seek

to

neutralize

certain

market

risks

that

we

believed

existed

in

the

Fund

during

the

period,

outperformed

the

Fund’s

fixed

income

benchmark

but

underperformed

the

Fund’s

equity

benchmarks.

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,

2021

,

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.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

U.S.

Treasury

Notes

9.9%

Diversified

Financial

Services,

United

States

GNMA

II,

Single-family,

30

Year

4.2%

Diversified

Financial

Services,

United

States

U.S.

Treasury

Bonds

2.7%

Diversified

Financial

Services,

United

States

FNMA,

30

Year

2.4%

Thrifts

&

Mortgage

Finance,

United

States

Microsoft

Corp.

2.1%

Software,

United

States

Schwab

U.S.

TIPS

ETF

2.0%

Capital

Markets,

United

States

FHLMC

Pool,

30

Year

2.0%

Diversified

Financial

Services,

United

States

Alphabet,

Inc.

1.4%

Interactive

Media

&

Services,

United

States

Apple,

Inc.

1.3%

Technology

Hardware,

Storage

&

Peripherals,

United

States

Amazon.com,

Inc.

1.2%

Internet

&

Direct

Marketing

Retail,

United

States

Class

1

Fund

Expenses

Franklin

Allocation

VIP

Fund

FA-5

Semiannual

Report

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.

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

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,071.70

$2.85

$1,022.04

$2.78

0.55%

FA-6

Semiannual

Report

Please

keep

this

supplement

with

your

prospectus

for

future

reference.

FFA

P1

P2

P4

04/21

SUPPLEMENT

DATED

APRIL

16,

2021

TO

THE

PROSPECTUSES

DATED

MAY

1,

2020

OF

FRANKLIN

ALLOCATION

VIP

FUND

(a

series

of

Franklin

Templeton

Variable

Insurance

Products

Trust)

The

Prospectus

is

amended

as

follows:

I.

All

references

to

May

Tong,

CFA

have

been

removed

from

the

“Fund

Summaries

-

Portfolio

Managers”

and

the

Fund

Details

–

Portfolio

Managers”

sections

of

the

prospectus.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Allocation

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$5.49

$6.86

$6.37

$7.44

$7.13

$6.80

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.04

0.10

0.11

c

0.23

c

0.21

c

0.21

c

Net

realized

and

unrealized

gains

(losses)

0.35

0.45

1.11

(0.89)

0.63

0.64

Total

from

investment

operations

........

0.39

0.55

1.22

(0.66)

0.84

0.85

Less

distributions

from:

Net

investment

income

..............

(0.11)

(0.12)

(0.27)

(0.24)

(0.22)

(0.29)

Net

realized

gains

.................

—

(1.80)

(0.46)

(0.17)

(0.31)

(0.23)

Total

distributions

...................

(0.11)

(1.92)

(0.73)

(0.41)

(0.53)

(0.52)

Net

asset

value,

end

of

period

..........

$5.77

$5.49

$6.86

$6.37

$7.44

$7.13

Total

return

d

.......................

7.17%

12.19%

20.04%

(9.34)%

12.17%

13.43%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.59%

0.60%

0.44%

0.12%

0.12%

0.11%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.55%

f

0.55%

f

0.39%

0.10%

0.10%

0.10%

Net

investment

income

...............

1.25%

1.79%

1.55%

3.13%

2.75%

3.09%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$809

$811

$842

$984

$1,047

$1,025

Portfolio

turnover

rate

................

29.42%

99.02%

170.79%

2.23%

1.28%

0.10%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

.........................

29.42%

91.62%

g

158.11%

g

2.23%

1.28%

0.10%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Recognition

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.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

See

Note

1(d)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$5.43

$6.81

$6.32

$7.39

$7.08

$6.75

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.03

0.09

0.09

c

0.21

c

0.18

c

0.19

c

Net

realized

and

unrealized

gains

(losses)

0.36

0.43

1.11

(0.89)

0.64

0.64

Total

from

investment

operations

........

0.39

0.52

1.20

(0.68)

0.82

0.83

Less

distributions

from:

Net

investment

income

..............

(0.10)

(0.10)

(0.25)

(0.22)

(0.20)

(0.27)

Net

realized

gains

.................

—

(1.80)

(0.46)

(0.17)

(0.31)

(0.23)

Total

distributions

...................

(0.10)

(1.90)

(0.71)

(0.39)

(0.51)

(0.50)

Net

asset

value,

end

of

period

..........

$5.72

$5.43

$6.81

$6.32

$7.39

$7.08

Total

return

d

.......................

7.19%

11.74%

19.86%

(9.65)%

11.98%

13.18%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.84%

0.85%

0.69%

0.37%

0.37%

0.36%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.80%

f

0.80%

f

0.64%

0.35%

0.35%

0.35%

Net

investment

income

...............

1.00%

1.54%

1.30%

2.88%

2.50%

2.84%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$309,707

$398,620

$403,040

$390,300

$480,402

$474,669

Portfolio

turnover

rate

................

29.42%

99.02%

170.79%

2.23%

1.28%

0.10%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

.........................

29.42%

91.62%

g

158.11%

g

2.23%

1.28%

0.10%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Recognition

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.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

See

Note

1(d)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$5.62

$6.97

$6.46

$7.53

$7.21

$6.87

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.03

0.08

0.08

c

0.20

c

0.18

c

0.19

c

Net

realized

and

unrealized

gains

(losses)

0.36

0.46

1.13

(0.89)

0.64

0.64

Total

from

investment

operations

........

0.39

0.54

1.21

(0.69)

0.82

0.83

Less

distributions

from:

Net

investment

income

..............

(0.09)

(0.09)

(0.24)

(0.21)

(0.19)

(0.26)

Net

realized

gains

.................

—

(1.80)

(0.46)

(0.17)

(0.31)

(0.23)

Total

distributions

...................

(0.09)

(1.89)

(0.70)

(0.38)

(0.50)

(0.49)

Net

asset

value,

end

of

period

..........

$5.92

$5.62

$6.97

$6.46

$7.53

$7.21

Total

return

d

.......................

7.02%

11.75%

19.56%

(9.58)%

11.78%

12.92%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.94%

0.95%

0.79%

0.47%

0.47%

0.46%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.90%

f

0.90%

f

0.74%

0.45%

0.45%

0.45%

Net

investment

income

...............

0.90%

1.44%

1.20%

2.78%

2.40%

2.74%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$419,504

$409,388

$406,693

$393,385

$528,862

$530,403

Portfolio

turnover

rate

................

29.42%

99.02%

170.79%

2.23%

1.28%

0.10%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

.........................

29.42

%

91.62%

g

158.11%

g

2.23%

1.28%

0.10%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Recognition

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.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

See

Note

1(d)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Allocation

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

57.7%

Aerospace

&

Defense

1.4%

BAE

Systems

plc

.....................................

United

Kingdom

84,963

$

613,989

BWX

Technologies,

Inc.

................................

United

States

5,858

340,467

Dassault

Aviation

SA

...................................

France

361

425,288

General

Dynamics

Corp.

................................

United

States

3,963

746,074

Huntington

Ingalls

Industries,

Inc.

.........................

United

States

1,689

355,957

Lockheed

Martin

Corp.

.................................

United

States

3,577

1,353,358

a

Mercury

Systems,

Inc.

..................................

United

States

3,300

218,724

MTU

Aero

Engines

AG

.................................

Germany

5,700

1,413,402

Northrop

Grumman

Corp.

...............................

United

States

5,729

2,082,091

Raytheon

Technologies

Corp.

............................

United

States

26,111

2,227,529

a

Rolls-Royce

Holdings

plc

...............................

United

Kingdom

243,136

332,881

a

TransDigm

Group,

Inc.

.................................

United

States

135

87,384

10,197,144

Air

Freight

&

Logistics

0.6%

CH

Robinson

Worldwide,

Inc.

............................

United

States

1,007

94,326

Deutsche

Post

AG

.....................................

Germany

12,328

839,666

DSV

PANALPINA

A/S

..................................

Denmark

5,700

1,330,734

Expeditors

International

of

Washington,

Inc.

.................

United

States

1,289

163,187

United

Parcel

Service,

Inc.,

B

............................

United

States

11,144

2,317,618

4,745,531

Airlines

0.1%

a

International

Consolidated

Airlines

Group

SA

.................

United

Kingdom

148,274

358,044

a

Southwest

Airlines

Co.

.................................

United

States

1,457

77,352

435,396

Auto

Components

0.2%

Aisin

Corp.

..........................................

Japan

1,800

77,186

a

Aptiv

plc

............................................

United

States

2,500

393,325

Continental

AG

.......................................

Germany

3,659

538,362

Gentex

Corp.

........................................

United

States

1,869

61,845

Toyota

Industries

Corp.

.................................

Japan

3,975

343,770

Valeo

SA

............................................

France

13,525

407,996

1,822,484

Automobiles

0.6%

Bayerische

Motoren

Werke

AG

...........................

Germany

7,792

826,143

Daimler

AG

..........................................

Germany

7,310

653,267

Honda

Motor

Co.

Ltd.

..................................

Japan

27,000

868,486

Isuzu

Motors

Ltd.

.....................................

Japan

57,700

765,728

Stellantis

NV

.........................................

United

States

31,674

623,187

a

Tesla,

Inc.

...........................................

United

States

146

99,236

Toyota

Motor

Corp.

....................................

Japan

8,300

725,602

4,561,649

Banks

2.1%

Associated

Banc-Corp.

.................................

United

States

245

5,018

a

Bank

Leumi

Le-Israel

BM

...............................

Israel

13,913

105,739

Bank

of

America

Corp.

.................................

United

States

3,425

141,213

Barclays

plc

.........................................

United

Kingdom

147,333

349,658

BNP

Paribas

SA

......................................

France

16,027

1,005,934

CaixaBank

SA

........................................

Spain

81,512

250,973

Citigroup,

Inc.

........................................

United

States

1,110

78,532

Citizens

Financial

Group,

Inc.

............................

United

States

15,151

694,976

Commonwealth

Bank

of

Australia

.........................

Australia

8,163

611,145

DBS

Group

Holdings

Ltd.

...............................

Singapore

35,600

791,975

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Banks

(continued)

Fifth

Third

Bancorp

....................................

United

States

2,141

$

81,850

a

FinecoBank

Banca

Fineco

SpA

...........................

Italy

72,897

1,272,256

ING

Groep

NV

.......................................

Netherlands

108,740

1,443,575

JPMorgan

Chase

&

Co.

.................................

United

States

8,192

1,274,184

Kasikornbank

PCL

....................................

Thailand

104,292

385,052

KB

Financial

Group,

Inc.

................................

South

Korea

18,904

935,088

KeyCorp

............................................

United

States

25,252

521,454

Mitsubishi

UFJ

Financial

Group,

Inc.

.......................

Japan

39,100

210,622

People's

United

Financial,

Inc.

............................

United

States

750

12,855

PNC

Financial

Services

Group,

Inc.

(The)

...................

United

States

8,787

1,676,208

Shinhan

Financial

Group

Co.

Ltd.

.........................

South

Korea

20,957

754,127

Standard

Chartered

plc

.................................

United

Kingdom

139,495

890,294

Sumitomo

Mitsui

Financial

Group,

Inc.

......................

Japan

23,000

792,927

Sumitomo

Mitsui

Financial

Group,

Inc.,

ADR

.................

Japan

97,200

669,708

Truist

Financial

Corp.

..................................

United

States

1,459

80,974

US

Bancorp

.........................................

United

States

1,462

83,290

Wells

Fargo

&

Co.

.....................................

United

States

6,173

279,575

15,399,202

Beverages

0.9%

Anheuser-Busch

InBev

SA/NV

...........................

Belgium

4,895

352,905

a

Boston

Beer

Co.,

Inc.

(The),

A

............................

United

States

26

26,541

Brown-Forman

Corp.,

A

.................................

United

States

341

24,040

Brown-Forman

Corp.,

B

................................

United

States

7,385

553,432

b

Budweiser

Brewing

Co.

APAC

Ltd.,

144A,

Reg

S

..............

China

16,400

51,639

Coca-Cola

Co.

(The)

...................................

United

States

7,663

414,645

Constellation

Brands,

Inc.,

A

.............................

United

States

2,304

538,883

Kirin

Holdings

Co.

Ltd.

.................................

Japan

14,343

279,941

a

Monster

Beverage

Corp.

................................

United

States

23,070

2,107,444

PepsiCo,

Inc.

........................................

United

States

11,543

1,710,326

Pernod

Ricard

SA

.....................................

France

2,100

466,790

6,526,586

Biotechnology

1.3%

AbbVie,

Inc.

.........................................

United

States

17,056

1,921,188

a

Alexion

Pharmaceuticals,

Inc.

............................

United

States

2,512

461,480

Amgen,

Inc.

.........................................

United

States

5,948

1,449,825

a

Biogen,

Inc.

.........................................

United

States

1,189

411,715

CSL

Ltd.

............................................

Australia

7,544

1,613,101

a

Deciphera

Pharmaceuticals,

Inc.

..........................

United

States

2,400

87,864

a

Exelixis

,

Inc.

.........................................

United

States

1,828

33,306

a

Galapagos

NV

.......................................

Belgium

2,593

179,297

a

Genmab

A/S

.........................................

Denmark

2,600

1,065,442

Gilead

Sciences,

Inc.

..................................

United

States

7,101

488,975

a

Horizon

Therapeutics

plc

................................

United

States

595

55,716

a

Iovance

Biotherapeutics

,

Inc.

.............................

United

States

1,600

41,632

a

Mirati

Therapeutics,

Inc.

................................

United

States

1,100

177,683

a

Neurocrine

Biosciences,

Inc.

.............................

United

States

1,509

146,856

a

PTC

Therapeutics,

Inc.

.................................

United

States

1,500

63,405

a

Regeneron

Pharmaceuticals,

Inc.

.........................

United

States

975

544,576

a

Vertex

Pharmaceuticals,

Inc.

.............................

United

States

2,913

587,348

9,329,409

Building

Products

0.7%

A

O

Smith

Corp.

......................................

United

States

2,728

196,580

AGC,

Inc.

...........................................

Japan

9,500

397,995

Allegion

plc

..........................................

United

States

3,111

433,362

Cie

de

Saint-Gobain

...................................

France

7,935

523,721

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Building

Products

(continued)

Fortune

Brands

Home

&

Security,

Inc.

......................

United

States

869

$

86,561

Geberit

AG

..........................................

Switzerland

1,101

827,040

Johnson

Controls

International

plc

.........................

United

States

16,236

1,114,277

Lennox

International,

Inc.

...............................

United

States

172

60,337

Masco

Corp.

.........................................

United

States

1,493

87,953

Trane

Technologies

plc

.................................

United

States

4,853

893,631

a

Trex

Co.,

Inc.

........................................

United

States

346

35,365

Xinyi

Glass

Holdings

Ltd.

...............................

Hong

Kong

50,000

203,721

4,860,543

Capital

Markets

2.2%

3i

Group

plc

.........................................

United

Kingdom

29,983

486,625

a

Allfunds

Group

plc

.....................................

United

Kingdom

12,147

211,430

Bank

of

New

York

Mellon

Corp.

(The)

......................

United

States

3,232

165,575

BlackRock,

Inc.

.......................................

United

States

1,169

1,022,840

Charles

Schwab

Corp.

(The)

.............................

United

States

12,731

926,944

a

Coinbase

Global,

Inc.,

A

................................

United

States

200

50,660

Deutsche

Boerse

AG

...................................

Germany

5,400

942,629

Evercore

,

Inc.,

A

......................................

United

States

110

15,485

FactSet

Research

Systems,

Inc.

..........................

United

States

286

95,984

Goldman

Sachs

Group,

Inc.

(The)

.........................

United

States

5,483

2,080,963

Hargreaves

Lansdown

plc

...............................

United

Kingdom

8,348

183,706

Hong

Kong

Exchanges

&

Clearing

Ltd.

.....................

Hong

Kong

4,200

250,023

Intercontinental

Exchange,

Inc.

...........................

United

States

5,655

671,248

Intermediate

Capital

Group

plc

...........................

United

Kingdom

44,000

1,294,273

Invesco

Ltd.

.........................................

United

States

15,244

407,472

Jefferies

Financial

Group,

Inc.

............................

United

States

658

22,504

Julius

Baer

Group

Ltd.

.................................

Switzerland

860

56,169

Lazard

Ltd.,

A

........................................

United

States

764

34,571

MarketAxess

Holdings,

Inc.

..............................

United

States

945

438,093

Moody's

Corp.

........................................

United

States

1,137

412,015

Morgan

Stanley

.......................................

United

States

1,029

94,349

Morningstar,

Inc.

......................................

United

States

130

33,424

Nasdaq,

Inc.

.........................................

United

States

3,600

632,880

Partners

Group

Holding

AG

..............................

Switzerland

751

1,138,476

S&P

Global,

Inc.

......................................

United

States

3,904

1,602,397

SEI

Investments

Co.

...................................

United

States

731

45,300

Singapore

Exchange

Ltd.

...............................

Singapore

24,400

203,217

T

Rowe

Price

Group,

Inc.

...............................

United

States

7,306

1,446,369

Tradeweb

Markets,

Inc.,

A

...............................

United

States

4,000

338,240

UBS

Group

AG

.......................................

Switzerland

52,795

808,673

16,112,534

Chemicals

2.4%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

8,768

2,522,378

Albemarle

Corp.

......................................

United

States

7,750

1,305,565

BASF

SE

...........................................

Germany

1,743

137,604

Celanese

Corp.

.......................................

United

States

1,101

166,912

b

Covestro

AG,

144A,

Reg

S

..............................

Germany

10,762

695,913

a

Danimer

Scientific,

Inc.

.................................

United

States

800

20,040

Dow,

Inc.

...........................................

United

States

10,680

675,830

Eastman

Chemical

Co.

.................................

United

States

780

91,065

Ecolab,

Inc.

..........................................

United

States

6,934

1,428,196

EMS-

Chemie

Holding

AG

...............................

Switzerland

261

256,539

Huntsman

Corp.

......................................

United

States

586

15,541

Koninklijke

DSM

NV

...................................

Netherlands

7,000

1,308,642

Linde

plc

............................................

United

Kingdom

9,285

2,684,293

LyondellBasell

Industries

NV,

A

...........................

United

States

11,322

1,164,694

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Chemicals

(continued)

Mitsubishi

Chemical

Holdings

Corp.

.......................

Japan

18,900

$

159,039

Mitsubishi

Gas

Chemical

Co.,

Inc.

.........................

Japan

7,400

156,819

Mitsui

Chemicals,

Inc.

..................................

Japan

8,800

304,224

NewMarket

Corp.

.....................................

United

States

49

15,777

Nitto

Denko

Corp.

.....................................

Japan

6,700

498,997

Sherwin-Williams

Co.

(The)

..............................

United

States

2,424

660,419

Sumitomo

Chemical

Co.

Ltd.

.............................

Japan

31,700

168,496

Symrise

AG

.........................................

Germany

8,400

1,170,696

Tosoh

Corp.

.........................................

Japan

24,925

429,816

Umicore

SA

.........................................

Belgium

22,000

1,346,032

Valvoline,

Inc.

........................................

United

States

886

28,760

17,412,287

Commercial

Services

&

Supplies

0.3%

Cintas

Corp.

.........................................

United

States

3,285

1,254,870

a

Copart

,

Inc.

..........................................

United

States

1,406

185,353

Downer

EDI

Ltd.

......................................

Australia

56,234

235,533

Republic

Services,

Inc.

.................................

United

States

3,514

386,575

Rollins,

Inc.

..........................................

United

States

8,524

291,521

2,353,852

Communications

Equipment

0.1%

a

Arista

Networks,

Inc.

...................................

United

States

176

63,767

Cisco

Systems,

Inc.

...................................

United

States

11,375

602,875

a

F5

Networks,

Inc.

.....................................

United

States

448

83,624

Motorola

Solutions,

Inc.

.................................

United

States

1,150

249,377

999,643

Construction

&

Engineering

0.1%

Sinopec

Engineering

Group

Co.

Ltd.,

H

.....................

China

547,500

354,367

Taisei

Corp.

.........................................

Japan

17,000

557,997

912,364

Construction

Materials

0.1%

James

Hardie

Industries

plc,

CDI

.........................

United

States

2,306

78,232

Martin

Marietta

Materials,

Inc.

............................

United

States

1,663

585,060

663,292

Consumer

Finance

0.2%

Capital

One

Financial

Corp.

.............................

United

States

5,057

782,267

Discover

Financial

Services

.............................

United

States

733

86,707

Santander

Consumer

USA

Holdings,

Inc.

...................

United

States

642

23,317

Synchrony

Financial

...................................

United

States

6,859

332,799

1,225,090

Containers

&

Packaging

0.0%

†

Ardagh

Group

SA

.....................................

United

States

29

711

Avery

Dennison

Corp.

..................................

United

States

254

53,401

International

Paper

Co.

.................................

United

States

680

41,691

Packaging

Corp.

of

America

.............................

United

States

578

78,273

Sonoco

Products

Co.

..................................

United

States

687

45,960

220,036

Distributors

0.0%

†

Genuine

Parts

Co.

....................................

United

States

678

85,746

a

LKQ

Corp.

..........................................

United

States

1,764

86,824

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-14

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Distributors

(continued)

Pool

Corp.

..........................................

United

States

289

$

132,553

305,123

Diversified

Consumer

Services

0.2%

a

Grand

Canyon

Education,

Inc.

............................

United

States

125

11,246

H&R

Block,

Inc.

.......................................

United

States

22,721

533,489

a

TAL

Education

Group,

ADR

..............................

China

29,000

731,670

1,276,405

Diversified

Financial

Services

0.3%

a

Berkshire

Hathaway,

Inc.,

B

..............................

United

States

2,702

750,940

EXOR

NV

...........................................

Netherlands

3,505

281,312

Investor

AB,

B

........................................

Sweden

35,887

827,268

a

Kinnevik

AB,

B

.......................................

Sweden

8,221

329,224

2,188,744

Diversified

Telecommunication

Services

0.5%

AT&T,

Inc.

...........................................

United

States

13,913

400,416

a

BT

Group

plc

........................................

United

Kingdom

67,054

180,210

b

Cellnex

Telecom

SA,

144A,

Reg

S

.........................

Spain

18,000

1,148,160

Deutsche

Telekom

AG

..................................

Germany

25,784

545,378

Lumen

Technologies,

Inc.

...............................

United

States

1,936

26,310

Nippon

Telegraph

&

Telephone

Corp.

......................

Japan

39,200

1,024,984

Verizon

Communications,

Inc.

............................

United

States

6,527

365,708

3,691,166

Electric

Utilities

0.4%

Alliant

Energy

Corp.

...................................

United

States

1,598

89,105

American

Electric

Power

Co.,

Inc.

.........................

United

States

2,855

241,505

Evergy

,

Inc.

..........................................

United

States

1,217

73,543

Eversource

Energy

....................................

United

States

1,995

160,079

Exelon

Corp.

.........................................

United

States

2,907

128,809

Hawaiian

Electric

Industries,

Inc.

..........................

United

States

755

31,921

NextEra

Energy,

Inc.

...................................

United

States

15,342

1,124,262

PPL

Corp.

...........................................

United

States

7,100

198,587

Southern

Co.

(The)

....................................

United

States

6,910

418,124

Xcel

Energy,

Inc.

......................................

United

States

3,257

214,571

2,680,506

Electrical

Equipment

0.4%

AMETEK,

Inc.

........................................

United

States

2,718

362,853

a

Array

Technologies,

Inc.

................................

United

States

15,100

235,560

Eaton

Corp.

plc

.......................................

United

States

1,265

187,448

Emerson

Electric

Co.

..................................

United

States

6,857

659,918

a

Generac

Holdings,

Inc.

.................................

United

States

452

187,648

GrafTech

International

Ltd.

..............................

United

States

313

3,637

Hubbell,

Inc.

.........................................

United

States

84

15,695

Mitsubishi

Electric

Corp.

................................

Japan

45,700

663,497

nVent

Electric

plc

.....................................

United

States

10,500

328,020

Rockwell

Automation,

Inc.

...............................

United

States

859

245,691

2,889,967

Electronic

Equipment,

Instruments

&

Components

0.4%

Amphenol

Corp.,

A

....................................

United

States

12,066

825,435

Cognex

Corp.

........................................

United

States

1,487

124,982

Keyence

Corp.

.......................................

Japan

400

201,468

a

Keysight

Technologies,

Inc.

..............................

United

States

2,862

441,921

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-15

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Electronic

Equipment,

Instruments

&

Components

(continued)

TE

Connectivity

Ltd.

...................................

United

States

7,749

$

1,047,742

Vontier

Corp.

.........................................

United

States

1,875

61,088

2,702,636

Energy

Equipment

&

Services

0.1%

Halliburton

Co.

.......................................

United

States

3,643

84,226

SBM

Offshore

NV

.....................................

Netherlands

45,729

695,773

a

Tecnicas

Reunidas

SA

.................................

Spain

14,784

187,472

967,471

Entertainment

0.6%

Activision

Blizzard,

Inc.

.................................

United

States

3,991

380,901

a

CTS

Eventim

AG

&

Co.

KGaA

............................

Germany

18,000

1,124,493

Electronic

Arts,

Inc.

....................................

United

States

3,060

440,120

a

Netflix,

Inc.

..........................................

United

States

602

317,982

Nintendo

Co.

Ltd.

.....................................

Japan

1,000

578,725

a

Walt

Disney

Co.

(The)

..................................

United

States

9,161

1,610,229

4,452,450

Equity

Real

Estate

Investment

Trusts

(REITs)

0.8%

CoreSite

Realty

Corp.

..................................

United

States

107

14,402

Crown

Castle

International

Corp.

..........................

United

States

4,785

933,554

a

EPR

Properties

.......................................

United

States

565

29,764

Extra

Space

Storage,

Inc.

...............................

United

States

789

129,254

Gaming

and

Leisure

Properties,

Inc.

.......................

United

States

18

834

Goodman

Group

......................................

Australia

39,407

623,518

a

Host

Hotels

&

Resorts,

Inc.

..............................

United

States

5,012

85,655

Kimco

Realty

Corp.

....................................

United

States

6,723

140,175

National

Retail

Properties,

Inc.

...........................

United

States

1,212

56,819

Nomura

Real

Estate

Master

Fund,

Inc.

.....................

Japan

49

78,428

Omega

Healthcare

Investors,

Inc.

.........................

United

States

364

13,210

Public

Storage

.......................................

United

States

6,190

1,861,271

Realty

Income

Corp.

...................................

United

States

2,245

149,831

Simon

Property

Group,

Inc.

..............................

United

States

2,067

269,702

Spirit

Realty

Capital,

Inc.

................................

United

States

761

36,406

STORE

Capital

Corp.

..................................

United

States

1,406

48,521

VICI

Properties,

Inc.

...................................

United

States

914

28,352

Weyerhaeuser

Co.

....................................

United

States

28,617

984,997

WP

Carey,

Inc.

.......................................

United

States

1,022

76,262

5,560,955

Food

&

Staples

Retailing

0.7%

Casey's

General

Stores,

Inc.

.............................

United

States

248

48,271

Costco

Wholesale

Corp.

................................

United

States

1,045

413,475

Koninklijke

Ahold

Delhaize

NV

............................

Netherlands

7,317

217,916

Kroger

Co.

(The)

......................................

United

States

32,264

1,236,034

Lawson,

Inc.

.........................................

Japan

2,300

106,538

a

Sprouts

Farmers

Market,

Inc.

............................

United

States

726

18,041

Sundrug

Co.

Ltd.

......................................

Japan

16,943

538,592

Sysco

Corp.

.........................................

United

States

1,099

85,447

Walgreens

Boots

Alliance,

Inc.

...........................

United

States

5,034

264,839

Walmart,

Inc.

........................................

United

States

13,667

1,927,320

4,856,473

Food

Products

0.4%

Campbell

Soup

Co.

....................................

United

States

539

24,573

Flowers

Foods,

Inc.

....................................

United

States

1,300

31,460

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-16

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

Products

(continued)

General

Mills,

Inc.

.....................................

United

States

4,456

$

271,504

Hershey

Co.

(The)

....................................

United

States

1,229

214,067

Hormel

Foods

Corp.

...................................

United

States

2,078

99,224

Ingredion,

Inc.

........................................

United

States

452

40,906

J

M

Smucker

Co.

(The)

.................................

United

States

659

85,387

Kellogg

Co.

..........................................

United

States

1,342

86,331

Lamb

Weston

Holdings,

Inc.

.............................

United

States

3,086

248,917

McCormick

&

Co.,

Inc.

.................................

United

States

8,000

706,560

Nestle

SA

...........................................

Switzerland

6,195

772,189

Tyson

Foods,

Inc.,

A

...................................

United

States

1,995

147,151

b

WH

Group

Ltd.,

144A,

Reg

S

............................

Hong

Kong

62,000

55,651

2,783,920

Gas

Utilities

0.1%

Atmos

Energy

Corp.

...................................

United

States

777

74,677

Osaka

Gas

Co.

Ltd.

...................................

Japan

18,300

341,489

Tokyo

Gas

Co.

Ltd.

....................................

Japan

17,500

330,109

746,275

Health

Care

Equipment

&

Supplies

3.1%

Abbott

Laboratories

....................................

United

States

15,260

1,769,092

a

ABIOMED,

Inc.

.......................................

United

States

122

38,078

Alcon,

Inc.

...........................................

Switzerland

16,000

1,122,201

a

Align

Technology,

Inc.

..................................

United

States

262

160,082

Becton

Dickinson

and

Co.

...............................

United

States

5,200

1,264,588

Cochlear

Ltd.

........................................

Australia

7,200

1,358,131

Coloplast

A/S,

B

......................................

Denmark

2,513

412,635

Danaher

Corp.

.......................................

United

States

7,054

1,893,012

a

DexCom

,

Inc.

........................................

United

States

239

102,053

DiaSorin

SpA

........................................

Italy

755

142,870

a

Edwards

Lifesciences

Corp.

.............................

United

States

5,021

520,025

Fisher

&

Paykel

Healthcare

Corp.

Ltd.

......................

New

Zealand

8,367

181,980

GN

Store

Nord

A/S

....................................

Denmark

12,000

1,049,508

a

Haemonetics

Corp.

....................................

United

States

4,024

268,159

Hoya

Corp.

..........................................

Japan

5,600

740,781

a

IDEXX

Laboratories,

Inc.

................................

United

States

3,383

2,136,534

a

Intuitive

Surgical,

Inc.

..................................

United

States

1,922

1,767,548

Koninklijke

Philips

NV

..................................

Netherlands

3,193

158,495

Medtronic

plc

........................................

United

States

11,800

1,464,734

Olympus

Corp.

.......................................

Japan

6,800

135,271

a

Quidel

Corp.

.........................................

United

States

50

6,406

ResMed

,

Inc.

........................................

United

States

1,030

253,916

b

Siemens

Healthineers

AG,

144A,

Reg

S

....................

Germany

2,586

158,569

Sonova

Holding

AG

....................................

Switzerland

1,474

555,189

STERIS

plc

..........................................

United

States

464

95,723

Stryker

Corp.

........................................

United

States

9,392

2,439,384

Teleflex,

Inc.

.........................................

United

States

2,284

917,688

West

Pharmaceutical

Services,

Inc.

........................

United

States

4,779

1,716,139

22,828,791

Health

Care

Providers

&

Services

0.8%

Chemed

Corp.

.......................................

United

States

94

44,603

CVS

Health

Corp.

.....................................

United

States

2,800

233,632

Fresenius

Medical

Care

AG

&

Co.

KGaA

....................

Germany

9,601

797,874

Fresenius

SE

&

Co.

KGaA

...............................

Germany

1,980

103,345

a

Guardant

Health,

Inc.

..................................

United

States

700

86,933

HCA

Healthcare,

Inc.

...................................

United

States

3,884

802,978

Humana,

Inc.

........................................

United

States

358

158,494

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-17

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Providers

&

Services

(continued)

a

Laboratory

Corp.

of

America

Holdings

......................

United

States

2,900

$

799,965

Premier,

Inc.,

A

.......................................

United

States

339

11,794

Quest

Diagnostics,

Inc.

.................................

United

States

906

119,565

Sinopharm

Group

Co.

Ltd.,

H

............................

China

87,600

259,884

UnitedHealth

Group,

Inc.

................................

United

States

5,729

2,294,121

5,713,188

Health

Care

Technology

0.2%

a

American

Well

Corp.,

A

.................................

United

States

1,600

20,128

Cerner

Corp.

.........................................

United

States

11,676

912,596

a

Certara

,

Inc.

.........................................

United

States

1,000

28,330

a

Veeva

Systems,

Inc.,

A

.................................

United

States

1,580

491,301

1,452,355

Hotels,

Restaurants

&

Leisure

0.5%

a

Airbnb,

Inc.,

A

........................................

United

States

1,100

168,454

a

Booking

Holdings,

Inc.

.................................

United

States

177

387,292

a

Chipotle

Mexican

Grill,

Inc.

..............................

United

States

66

102,322

Domino's

Pizza,

Inc.

...................................

United

States

671

313,015

a

Las

Vegas

Sands

Corp.

.................................

United

States

9,944

523,949

McDonald's

Corp.

.....................................

United

States

6,336

1,463,553

Starbucks

Corp.

......................................

United

States

785

87,771

a

Wynn

Resorts

Ltd.

....................................

United

States

659

80,596

Yum!

Brands,

Inc.

.....................................

United

States

3,386

389,491

3,516,443

Household

Durables

0.4%

Barratt

Developments

plc

...............................

United

Kingdom

29,020

279,445

DR

Horton,

Inc.

.......................................

United

States

2,289

206,857

Garmin

Ltd.

..........................................

United

States

1,048

151,583

Iida

Group

Holdings

Co.

Ltd.

.............................

Japan

7,300

187,788

Lennar

Corp.,

A

.......................................

United

States

1,973

196,018

a

NVR,

Inc.

...........................................

United

States

25

124,332

Persimmon

plc

.......................................

United

Kingdom

1,765

72,306

PulteGroup,

Inc.

......................................

United

States

2,874

156,834

Sekisui

House

Ltd.

....................................

Japan

19,400

398,410

Sony

Group

Corp.

.....................................

Japan

9,322

904,010

Taylor

Wimpey

plc

.....................................

United

Kingdom

48,185

106,050

2,783,633

Household

Products

0.5%

Church

&

Dwight

Co.,

Inc.

...............................

United

States

1,747

148,879

Clorox

Co.

(The)

......................................

United

States

1,004

180,630

Colgate-Palmolive

Co.

.................................

United

States

23,216

1,888,622

Procter

&

Gamble

Co.

(The)

.............................

United

States

9,140

1,233,260

3,451,391

Industrial

Conglomerates

1.3%

3M

Co.

.............................................

United

States

4,896

972,493

Carlisle

Cos.,

Inc.

.....................................

United

States

2,400

459,312

CK

Hutchison

Holdings

Ltd.

..............................

United

Kingdom

180,500

1,405,149

Hitachi

Ltd.

..........................................

Japan

32,446

1,859,556

Honeywell

International,

Inc.

.............................

United

States

8,421

1,847,146

Roper

Technologies,

Inc.

................................

United

States

5,600

2,633,120

Siemens

AG

.........................................

Germany

2,329

369,827

9,546,603

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-18

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Insurance

0.4%

Admiral

Group

plc

.....................................

United

Kingdom

5,305

$

230,849

AIA

Group

Ltd.

.......................................

Hong

Kong

67,846

841,664

American

National

Group,

Inc.

............................

United

States

56

8,319

CNP

Assurances

......................................

France

8,227

140,228

Erie

Indemnity

Co.,

A

...................................

United

States

1,967

380,319

Lincoln

National

Corp.

..................................

United

States

1,251

78,613

MetLife,

Inc.

.........................................

United

States

2,408

144,119

NN

Group

NV

........................................

Netherlands

4,987

235,602

Progressive

Corp.

(The)

................................

United

States

1,637

160,770

Prudential

plc

........................................

United

Kingdom

26,103

496,666

Unum

Group

.........................................

United

States

2,811

79,832

2,796,981

Interactive

Media

&

Services

2.3%

a

Alphabet,

Inc.,

A

......................................

United

States

2,503

6,111,801

a

Alphabet,

Inc.,

C

......................................

United

States

1,573

3,942,441

a,b

Auto

Trader

Group

plc,

144A,

Reg

S

.......................

United

Kingdom

25,763

225,649

a

Baidu,

Inc.,

ADR

......................................

China

1,985

404,742

a

Facebook,

Inc.,

A

.....................................

United

States

13,530

4,704,516

a

IAC/InterActiveCorp

...................................

United

States

1,107

170,666

Kakaku.com,

Inc.

.....................................

Japan

2,000

60,174

a

Match

Group,

Inc.

.....................................

United

States

3,121

503,261

REA

Group

Ltd.

.......................................

Australia

2,468

312,656

a

Vimeo,

Inc.

..........................................

United

States

1,821

89,229

16,525,135

Internet

&

Direct

Marketing

Retail

1.9%

a

Alibaba

Group

Holding

Ltd.

..............................

China

46,993

1,332,424

a

Alibaba

Group

Holding

Ltd.,

ADR

.........................

China

2,245

509,121

a

Amazon.com,

Inc.

.....................................

United

States

2,388

8,215,102

a

boohoo

Group

plc

.....................................

United

Kingdom

280,000

1,202,260

eBay,

Inc.

...........................................

United

States

1,140

80,040

a,b

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...................

Germany

8,182

756,765

a

MercadoLibre

,

Inc.

....................................

Argentina

780

1,215,076

Qurate

Retail,

Inc.,

A

...................................

United

States

659

8,626

a,b

Zalando

SE,

144A,

Reg

S

...............................

Germany

1,225

148,164

ZOZO,

Inc.

..........................................

Japan

3,300

111,899

13,579,477

IT

Services

3.1%

Accenture

plc,

A

......................................

United

States

16,509

4,866,688

a,b

Adyen

NV,

144A,

Reg

S

................................

Netherlands

837

2,052,774

a

Akamai

Technologies,

Inc.

...............................

United

States

451

52,587

a

Amadeus

IT

Group

SA

.................................

Spain

19,009

1,340,184

Amdocs

Ltd.

.........................................

United

States

970

75,039

Automatic

Data

Processing,

Inc.

..........................

United

States

3,838

762,304

Broadridge

Financial

Solutions,

Inc.

........................

United

States

865

139,723

Cognizant

Technology

Solutions

Corp.,

A

....................

United

States

4,226

292,693

a

DXC

Technology

Co.

...................................

United

States

19,831

772,219

Fidelity

National

Information

Services,

Inc.

...................

United

States

594

84,152

Fujitsu

Ltd.

..........................................

Japan

4,400

823,309

International

Business

Machines

Corp.

.....................

United

States

3,317

486,239

Jack

Henry

&

Associates,

Inc.

............................

United

States

570

93,201

a

Keywords

Studios

plc

..................................

Ireland

33,000

1,136,740

a

Marqeta

,

Inc.,

A

.......................................

United

States

3,700

103,859

Mastercard

,

Inc.,

A

....................................

United

States

7,095

2,590,313

a

Okta

,

Inc.

...........................................

United

States

1,000

244,680

Paychex,

Inc.

........................................

United

States

2,555

274,151

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-19

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

IT

Services

(continued)

a

Paymentus

Holdings,

Inc.,

A

.............................

United

States

1,600

$

56,800

a

PayPal

Holdings,

Inc.

..................................

United

States

3,200

932,736

a

Shopify,

Inc.,

A

.......................................

Canada

760

1,110,345

a

Snowflake,

Inc.,

A

.....................................

United

States

1,400

338,520

a

Twilio

,

Inc.,

A

.........................................

United

States

1,862

733,926

Visa,

Inc.,

A

..........................................

United

States

13,705

3,204,503

Western

Union

Co.

(The)

................................

United

States

736

16,906

22,584,591

Life

Sciences

Tools

&

Services

1.2%

a

10X

Genomics,

Inc.,

A

..................................

United

States

1,300

254,566

Agilent

Technologies,

Inc.

...............................

United

States

5,882

869,418

a

Bio-Rad

Laboratories,

Inc.,

A

.............................

United

States

190

122,415

a

Charles

River

Laboratories

International,

Inc.

.................

United

States

269

99,508

a

Illumina,

Inc.

.........................................

United

States

2,546

1,204,793

a

Maravai

LifeSciences

Holdings,

Inc.,

A

.....................

United

States

1,646

68,688

a

Mettler

-Toledo

International,

Inc.

..........................

United

States

2,534

3,510,452

a

Olink

Holding

AB,

ADR

.................................

Sweden

200

6,884

Sartorius

Stedim

Biotech

................................

France

881

417,004

a

Seer,

Inc.

...........................................

United

States

100

3,278

Thermo

Fisher

Scientific,

Inc.

............................

United

States

2,196

1,107,816

a

Waters

Corp.

........................................

United

States

1,976

682,925

a,b

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

..................

China

39,000

714,097

9,061,844

Machinery

1.4%

Allison

Transmission

Holdings,

Inc.

........................

United

States

596

23,685

Atlas

Copco

AB,

A

.....................................

Sweden

11,426

701,701

Atlas

Copco

AB,

B

.....................................

Sweden

5,088

267,986

Caterpillar,

Inc.

.......................................

United

States

2,711

589,995

CNH

Industrial

NV

.....................................

United

Kingdom

10,669

176,989

Cummins,

Inc.

........................................

United

States

1,093

266,484

Deere

&

Co.

.........................................

United

States

3,207

1,131,141

Donaldson

Co.,

Inc.

...................................

United

States

5,700

362,121

Dover

Corp.

.........................................

United

States

6,387

961,882

Epiroc

AB,

A

.........................................

Sweden

20,522

467,189

Epiroc

AB,

B

.........................................

Sweden

8,308

163,119

Fortive

Corp.

.........................................

United

States

4,517

315,016

Graco

,

Inc.

..........................................

United

States

1,122

84,935

Illinois

Tool

Works,

Inc.

.................................

United

States

5,742

1,283,682

a

Ingersoll

Rand,

Inc.

....................................

United

States

3,926

191,628

Komatsu

Ltd.

........................................

Japan

19,826

491,205

Kurita

Water

Industries

Ltd.

..............................

Japan

1,400

67,302

Lincoln

Electric

Holdings,

Inc.

............................

United

States

160

21,074

Makita

Corp.

.........................................

Japan

2,800

131,856

Otis

Worldwide

Corp.

..................................

United

States

3,146

257,248

PACCAR,

Inc.

........................................

United

States

1,581

141,104

Pentair

plc

..........................................

United

States

9,200

620,908

Snap-on,

Inc.

........................................

United

States

1,133

253,146

Stanley

Black

&

Decker,

Inc.

.............................

United

States

3,668

751,903

Techtronic

Industries

Co.

Ltd.

............................

Hong

Kong

20,500

357,251

Toro

Co.

(The)

.......................................

United

States

815

89,552

Xylem,

Inc.

..........................................

United

States

2,100

251,916

10,422,018

Marine

0.0%

†

AP

Moller

-

Maersk

A/S,

A

...............................

Denmark

139

386,683

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-20

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Media

0.7%

a,b

Ascential

plc,

144A,

Reg

S

..............................

United

Kingdom

220,000

$

1,264,652

Cable

One,

Inc.

.......................................

United

States

361

690,524

Comcast

Corp.,

A

.....................................

United

States

13,901

792,635

CyberAgent

,

Inc.

......................................

Japan

59,000

1,263,721

Fox

Corp.,

A

.........................................

United

States

2,729

101,328

Fox

Corp.,

B

.........................................

United

States

5,798

204,089

Hakuhodo

DY

Holdings,

Inc.

.............................

Japan

10,800

168,221

a

Informa

plc

..........................................

United

Kingdom

50,910

353,838

Interpublic

Group

of

Cos.,

Inc.

(The)

.......................

United

States

5,193

168,721

Omnicom

Group,

Inc.

..................................

United

States

1,587

126,944

Publicis

Groupe

SA

....................................

France

1,446

92,545

TBS

Holdings,

Inc.

....................................

Japan

13,400

206,445

5,433,663

Metals

&

Mining

0.8%

Anglo

American

plc

....................................

South

Africa

3,532

140,563

ArcelorMittal

SA

......................................

Luxembourg

24,054

740,614

BHP

Group

Ltd.

......................................

Australia

8,375

304,624

BHP

Group

plc

.......................................

Australia

4,268

126,303

Evraz

plc

...........................................

Russia

23,591

193,560

Fortescue

Metals

Group

Ltd.

.............................

Australia

11,370

198,582

Newmont

Corp.

.......................................

United

States

2,249

142,542

Norsk

Hydro

ASA

.....................................

Norway

8,286

52,905

Nucor

Corp.

.........................................

United

States

12,158

1,166,317

Reliance

Steel

&

Aluminum

Co.

...........................

United

States

261

39,385

Rio

Tinto

Ltd.

........................................

Australia

3,758

356,208

Rio

Tinto

plc

.........................................

Australia

7,305

603,346

Southern

Copper

Corp.

.................................

Peru

123

7,911

Steel

Dynamics,

Inc.

...................................

United

States

1,193

71,103

Sumitomo

Metal

Mining

Co.

Ltd.

..........................

Japan

21,890

851,396

voestalpine

AG

.......................................

Austria

2,749

112,139

Wheaton

Precious

Metals

Corp.

..........................

Brazil

18,417

811,700

5,919,198

Multiline

Retail

0.6%

Dollar

General

Corp.

...................................

United

States

1,663

359,856

a

Next

plc

............................................

United

Kingdom

3,959

430,904

Seria

Co.

Ltd.

........................................

Japan

11,368

419,243

Target

Corp.

.........................................

United

States

11,982

2,896,529

4,106,532

Multi-Utilities

0.3%

Ameren

Corp.

........................................

United

States

1,333

106,693

CMS

Energy

Corp.

....................................

United

States

1,421

83,953

Consolidated

Edison,

Inc.

...............................

United

States

2,170

155,632

Dominion

Energy,

Inc.

..................................

United

States

3,792

278,978

DTE

Energy

Co.

......................................

United

States

3,151

408,370

E.ON

SE

............................................

Germany

87,614

1,013,751

NiSource,

Inc.

........................................

United

States

3,472

85,064

Public

Service

Enterprise

Group,

Inc.

......................

United

States

4,973

297,087

Sempra

Energy

.......................................

United

States

653

86,509

WEC

Energy

Group,

Inc.

................................

United

States

889

79,077

2,595,114

Oil,

Gas

&

Consumable

Fuels

1.2%

BP

plc

..............................................

United

Kingdom

352,504

1,545,981

Cabot

Oil

&

Gas

Corp.

.................................

United

States

7,293

127,336

Cenovus

Energy,

Inc.

..................................

Canada

39,020

373,283

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-21

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Chevron

Corp.

.......................................

United

States

4,700

$

492,278

EOG

Resources,

Inc.

..................................

United

States

24,617

2,054,042

Equinor

ASA

.........................................

Norway

38,987

825,359

Exxon

Mobil

Corp.

.....................................

United

States

19,271

1,215,615

Galp

Energia

SGPS

SA,

B

..............................

Portugal

19,129

208,001

Inpex

Corp.

..........................................

Japan

25,200

188,624

Lundin

Energy

AB

.....................................

Sweden

8,575

304,026

Royal

Dutch

Shell

plc,

B

................................

Netherlands

45,105

875,677

a

Thungela

Resources

Ltd.

...............................

South

Africa

353

972

TotalEnergies

SE

.....................................

France

13,382

606,280

8,817,474

Paper

&

Forest

Products

0.0%

†

Oji

Holdings

Corp.

.....................................

Japan

40,500

232,764

Personal

Products

0.4%

Estee

Lauder

Cos.,

Inc.

(The),

A

..........................

United

States

2,381

757,349

L'Oreal

SA

..........................................

France

3,286

1,467,631

Nu

Skin

Enterprises,

Inc.,

A

..............................

United

States

333

18,864

Unilever

plc

..........................................

United

Kingdom

11,471

670,340

2,914,184

Pharmaceuticals

2.6%

Astellas

Pharma,

Inc.

..................................

Japan

8,600

149,883

AstraZeneca

plc

......................................

United

Kingdom

4,913

590,311

AstraZeneca

plc,

ADR

..................................

United

Kingdom

8,514

509,989

Bayer

AG

...........................................

Germany

19,522

1,186,945

Bristol-Myers

Squibb

Co.

................................

United

States

7,967

532,355

a

Catalent

,

Inc.

........................................

United

States

12,889

1,393,559

Eli

Lilly

&

Co.

........................................

United

States

8,835

2,027,809

Hikma

Pharmaceuticals

plc

..............................

Jordan

34,000

1,150,708

Ipsen

SA

............................................

France

1,809

188,255

Johnson

&

Johnson

...................................

United

States

23,549

3,879,462

Merck

&

Co.,

Inc.

.....................................

United

States

17,785

1,383,139

Novo

Nordisk

A/S,

B

...................................

Denmark

11,708

980,163

a

Organon

&

Co.

.......................................

United

States

1,805

54,619

Orion

OYJ,

B

........................................

Finland

5,131

220,623

Otsuka

Holdings

Co.

Ltd.

...............................

Japan

6,200

257,460

Pfizer,

Inc.

...........................................

United

States

23,458

918,615

Roche

Holding

AG

....................................

Switzerland

4,656

1,754,558

Sanofi

..............................................

France

2,935

308,385

Sumitomo

Dainippon

Pharma

Co.

Ltd.

......................

Japan

4,300

90,197

Takeda

Pharmaceutical

Co.

Ltd.,

ADR

......................

Japan

64,604

1,087,285

Zoetis,

Inc.

..........................................

United

States

1,376

256,431

18,920,751

Professional

Services

1.0%

Adecco

Group

AG

.....................................

Switzerland

7,499

510,245

Booz

Allen

Hamilton

Holding

Corp.

........................

United

States

665

56,645

a

Clarivate

plc

.........................................

United

Kingdom

43,000

1,183,790

a

CoStar

Group,

Inc.

....................................

United

States

6,000

496,920

Equifax,

Inc.

.........................................

United

States

1,990

476,625

Experian

plc

.........................................

United

Kingdom

30,000

1,158,359

a

FTI

Consulting,

Inc.

....................................

United

States

99

13,525

IHS

Markit

Ltd.

.......................................

United

States

3,909

440,388

ManpowerGroup

,

Inc.

..................................

United

States

3,611

429,384

Persol

Holdings

Co.

Ltd.

................................

Japan

4,100

80,968

Randstad

NV

........................................

Netherlands

5,578

427,647

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-22

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Professional

Services

(continued)

Robert

Half

International,

Inc.

............................

United

States

5,087

$

452,590

Verisk

Analytics,

Inc.

...................................

United

States

6,296

1,100,037

Wolters

Kluwer

NV

....................................

Netherlands

4,415

443,806

7,270,929

Real

Estate

Management

&

Development

0.4%

a

CBRE

Group,

Inc.,

A

...................................

United

States

2,096

179,690

China

Overseas

Land

&

Investment

Ltd.

....................

China

149,500

339,008

CK

Asset

Holdings

Ltd.

.................................

Hong

Kong

121,830

838,552

Henderson

Land

Development

Co.

Ltd.

.....................

Hong

Kong

68,000

321,791

LEG

Immobilien

SE

....................................

Germany

2,736

393,899

Mitsui

Fudosan

Co.

Ltd.

................................

Japan

6,800

157,255

Sun

Hung

Kai

Properties

Ltd.

............................

Hong

Kong

38,000

564,750

Swire

Pacific

Ltd.,

A

...................................

Hong

Kong

53,000

359,105

3,154,050

Road

&

Rail

0.7%

Canadian

Pacific

Railway

Ltd.

............................

Canada

8,760

673,732

JB

Hunt

Transport

Services,

Inc.

..........................

United

States

3,011

490,642

Landstar

System,

Inc.

..................................

United

States

279

44,088

Nippon

Express

Co.

Ltd.

................................

Japan

3,100

236,411

Norfolk

Southern

Corp.

.................................

United

States

2,900

769,689

Old

Dominion

Freight

Line,

Inc.

...........................

United

States

1,119

284,002

Schneider

National,

Inc.,

B

..............................

United

States

168

3,657

a

Uber

Technologies,

Inc.

.................................

United

States

4,138

207,397

Union

Pacific

Corp.

....................................

United

States

10,508

2,311,024

5,020,642

Semiconductors

&

Semiconductor

Equipment

3.4%

a

Alphawave

IP

Group

plc

................................

United

Kingdom

10,511

52,347

Analog

Devices,

Inc.

...................................

United

States

10,900

1,876,544

Applied

Materials,

Inc.

..................................

United

States

8,402

1,196,445

ASML

Holding

NV

.....................................

Netherlands

2,407

1,661,738

ASML

Holding

NV,

NYRS

...............................

Netherlands

1,822

1,258,711

Broadcom,

Inc.

.......................................

United

States

187

89,169

a

Cirrus

Logic,

Inc.

......................................

United

States

152

12,938

a

Enphase

Energy,

Inc.

..................................

United

States

637

116,972

Intel

Corp.

...........................................

United

States

26,947

1,512,805

KLA

Corp.

...........................................

United

States

1,187

384,837

Lam

Research

Corp.

...................................

United

States

945

614,912

Maxim

Integrated

Products,

Inc.

..........................

United

States

3,386

356,749

a

Micron

Technology,

Inc.

.................................

United

States

18,028

1,532,020

Monolithic

Power

Systems,

Inc.

...........................

United

States

2,129

795,075

NVIDIA

Corp.

........................................

United

States

3,177

2,541,918

NXP

Semiconductors

NV

...............................

China

6,677

1,373,592

a

Qorvo

,

Inc.

..........................................

United

States

479

93,716

QUALCOMM,

Inc.

.....................................

United

States

5,013

716,508

a

Renesas

Electronics

Corp.

..............................

Japan

10,100

109,013

Skyworks

Solutions,

Inc.

................................

United

States

4,894

938,425

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

...............

Taiwan

49,586

1,065,957

Teradyne,

Inc.

........................................

United

States

952

127,530

Texas

Instruments,

Inc.

.................................

United

States

29,991

5,767,269

Tokyo

Electron

Ltd.

....................................

Japan

1,500

648,635

Xilinx,

Inc.

...........................................

United

States

1,830

264,691

25,108,516

Software

5.3%

a

Adobe,

Inc.

..........................................

United

States

3,838

2,247,686

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-23

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

AppLovin

Corp.,

A

.....................................

United

States

1,100

$

82,687

a

Aspen

Technology,

Inc.

.................................

United

States

381

52,403

a

Atlassian

Corp.

plc,

A

..................................

United

States

900

231,174

a

Autodesk,

Inc.

........................................

United

States

3,342

975,530

a

Avalara,

Inc.

.........................................

United

States

2,880

465,984

AVEVA

Group

plc

.....................................

United

Kingdom

23,000

1,180,583

a

Bill.com

Holdings,

Inc.

..................................

United

States

4,500

824,310

a

Cadence

Design

Systems,

Inc.

...........................

United

States

11,961

1,636,504

a

Check

Point

Software

Technologies

Ltd.

....................

Israel

1,400

162,582

Citrix

Systems,

Inc.

....................................

United

States

624

73,177

a

CyberArk

Software

Ltd.

.................................

United

States

8,700

1,133,349

a

Duck

Creek

Technologies,

Inc.

...........................

United

States

300

13,053

a

Fair

Isaac

Corp.

......................................

United

States

76

38,204

a

Fortinet,

Inc.

.........................................

United

States

384

91,465

Intuit,

Inc.

...........................................

United

States

8,391

4,113,016

Microsoft

Corp.

.......................................

United

States

55,313

14,984,292

Oracle

Corp.

.........................................

United

States

24,822

1,932,145

a

Paycom

Software,

Inc.

.................................

United

States

800

290,776

a

Procore

Technologies,

Inc.

..............................

United

States

300

28,485

a

PTC,

Inc.

...........................................

United

States

4,921

695,140

a

Qualtrics

International,

Inc.,

A

............................

United

States

700

26,775

Sage

Group

plc

(The)

..................................

United

Kingdom

105,000

994,657

a

salesforce.com,

Inc.

...................................

United

States

2,353

574,767

SAP

SE

............................................

Germany

3,633

510,333

a

ServiceNow

,

Inc.

......................................

United

States

3,955

2,173,470

SimCorp

A/S

.........................................

Denmark

7,500

942,117

a

Synopsys,

Inc.

.......................................

United

States

2,652

731,395

a

Tyler

Technologies,

Inc.

.................................

United

States

909

411,204

a

VMware,

Inc.,

A

.......................................

United

States

206

32,954

a

Workday,

Inc.,

A

......................................

United

States

3,220

768,743

38,418,960

Specialty

Retail

1.1%

a

AutoZone,

Inc.

.......................................

United

States

211

314,858

Best

Buy

Co.,

Inc.

.....................................

United

States

5,315

611,119

Foot

Locker,

Inc.

......................................

United

States

960

59,165

Home

Depot,

Inc.

(The)

.................................

United

States

4,530

1,444,572

Kingfisher

plc

........................................

United

Kingdom

82,374

415,779

L

Brands,

Inc.

........................................

United

States

8,194

590,460

Lowe's

Cos.,

Inc.

......................................

United

States

9,497

1,842,133

a

O'Reilly

Automotive,

Inc.

................................

United

States

700

396,347

Ross

Stores,

Inc.

.....................................

United

States

10,825

1,342,300

TJX

Cos.,

Inc.

(The)

...................................

United

States

6,092

410,723

Tractor

Supply

Co.

....................................

United

States

1,445

268,857

Williams-Sonoma,

Inc.

.................................

United

States

669

106,806

Yamada

Holdings

Co.

Ltd.

...............................

Japan

33,600

155,384

7,958,503

Technology

Hardware,

Storage

&

Peripherals

2.0%

Apple,

Inc.

..........................................

United

States

70,671

9,679,100

Brother

Industries

Ltd.

..................................

Japan

8,400

167,792

a

Dell

Technologies,

Inc.,

C

...............................

United

States

458

45,649

Hewlett

Packard

Enterprise

Co.

...........................

United

States

48,721

710,352

HP,

Inc.

.............................................

United

States

58,788

1,774,810

Logitech

International

SA

...............................

Switzerland

2,789

338,703

NetApp,

Inc.

.........................................

United

States

1,599

130,830

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

22,131

1,579,008

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-24

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Technology

Hardware,

Storage

&

Peripherals

(continued)

Xerox

Holdings

Corp.

..................................

United

States

478

$

11,228

14,437,472

Textiles,

Apparel

&

Luxury

Goods

0.5%

a

Burberry

Group

plc

....................................

United

Kingdom

2,611

74,678

Carter's,

Inc.

.........................................

United

States

285

29,403

Hanesbrands,

Inc.

.....................................

United

States

1,692

31,590

a

Lululemon

Athletica

,

Inc.

................................

United

States

824

300,735

NIKE,

Inc.,

B

.........................................

United

States

19,444

3,003,904

Pandora

A/S

.........................................

Denmark

1,640

221,282

3,661,592

Thrifts

&

Mortgage

Finance

0.1%

Housing

Development

Finance

Corp.

Ltd.

...................

India

24,973

833,035

Tobacco

0.5%

Altria

Group,

Inc.

......................................

United

States

11,121

530,249

Imperial

Brands

plc

....................................

United

Kingdom

44,572

961,164

Philip

Morris

International,

Inc.

...........................

United

States

20,091

1,991,219

3,482,632

Trading

Companies

&

Distributors

0.6%

Fastenal

Co.

.........................................

United

States

16,164

840,528

Ferguson

plc

.........................................

United

States

11,049

1,537,328

Marubeni

Corp.

.......................................

Japan

74,600

649,709

Mitsui

&

Co.

Ltd.

......................................

Japan

6,000

135,166

MSC

Industrial

Direct

Co.,

Inc.,

A

..........................

United

States

301

27,009

a

United

Rentals,

Inc.

....................................

United

States

262

83,581

Watsco

,

Inc.

.........................................

United

States

214

61,341

WW

Grainger,

Inc.

.....................................

United

States

2,419

1,059,522

4,394,184

Water

Utilities

0.1%

American

Water

Works

Co.,

Inc.

..........................

United

States

2,819

434,492

Wireless

Telecommunication

Services

0.1%

KDDI

Corp.

..........................................

Japan

20,400

635,633

a

T-Mobile

US,

Inc.

.....................................

United

States

629

91,098

726,731

Total

Common

Stocks

(Cost

$292,790,625)

.....................................

421,369,684

Management

Investment

Companies

3.0%

Capital

Markets

3.0%

Schwab

U.S.

TIPS

ETF

.................................

United

States

234,247

14,642,780

a,c

Templeton

Global

Bond

VIP

Fund,

Class

1

..................

United

States

511,021

7,210,506

21,853,286

Total

Management

Investment

Companies

(Cost

$22,621,280)

....................

21,853,286

Preferred

Stocks

0.1%

Automobiles

0.1%

d

Bayerische

Motoren

Werke

AG,

2.53%

.....................

Germany

2,748

247,229

Chemicals

0.0%

†

d

FUCHS

PETROLUB

SE,

2.41%

..........................

Germany

3,301

160,655

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-25

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Preferred

Stocks

(continued)

Health

Care

Equipment

&

Supplies

0.0%

†

d

Sartorius

AG,

0.24%

...................................

Germany

382

$

198,851

Total

Preferred

Stocks

(Cost

$604,298)

.........................................

606,735

Principal

Amount

*

Corporate

Bonds

10.7%

Aerospace

&

Defense

0.1%

Lockheed

Martin

Corp.

,

Senior

Bond

,

4.7

%

,

5/15/46

...........

United

States

200,000

265,201

Northrop

Grumman

Corp.

,

Senior

Bond

,

5.25

%

,

5/01/50

........

United

States

100,000

140,685

Raytheon

Technologies

Corp.

,

Senior

Bond

,

4.5

%

,

6/01/42

......

United

States

300,000

374,038

779,924

Air

Freight

&

Logistics

0.1%

b

DAE

Funding

LLC

,

Senior

Note

,

144A,

1.55

%

,

8/01/24

.........

United

Arab

Emirates

200,000

199,974

FedEx

Corp.

,

Senior

Bond,

5.1%,

1/15/44

............................

United

States

400,000

514,213

Senior

Bond,

4.75%,

11/15/45

..........................

United

States

100,000

124,948

United

Parcel

Service,

Inc.

,

Senior

Bond,

3.75%,

11/15/47

..........................

United

States

100,000

118,066

Senior

Bond,

5.3%,

4/01/50

............................

United

States

100,000

146,647

1,103,848

Airlines

0.1%

b

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

525,000

564,424

Banks

1.7%

Bancolombia

SA

,

Senior

Note

,

3

%

,

1/29/25

..................

Colombia

650,000

668,363

Bank

of

America

Corp.

,

L,

Sub.

Bond,

4.183%,

11/25/27

........................

United

States

960,000

1,076,127

Sub.

Note,

4.2%,

8/26/24

.............................

United

States

400,000

438,654

b

BNP

Paribas

SA

,

Senior

Bond

,

144A,

3.052%

to

1/13/30,

FRN

thereafter

,

1/13/31

...................................

France

200,000

211,129

Citigroup,

Inc.

,

Senior

Bond,

2.572%

to

6/03/30,

FRN

thereafter,

6/03/31

.....

United

States

700,000

720,323

Senior

Note,

3.352%

to

4/24/24,

FRN

thereafter,

4/24/25

......

United

States

1,100,000

1,172,706

Credit

Suisse

Group

Funding

Guernsey

Ltd.

,

Senior

Note

,

3.8

%

,

9/15/22

...........................................

Switzerland

1,200,000

1,249,016

HSBC

Holdings

plc

,

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

200,000

200,320

Senior

Note,

1.645%

to

8/18/25,

FRN

thereafter,

4/18/26

......

United

Kingdom

525,000

532,296

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

300,000

301,206

JPMorgan

Chase

&

Co.

,

Senior

Bond

,

3.54%

to

5/01/27,

FRN

thereafter

,

5/01/28

...................................

United

States

1,200,000

1,320,114

b

Standard

Chartered

plc

,

Senior

Note

,

144A,

4.05

%

,

4/12/26

.....

United

Kingdom

470,000

520,025

SVB

Financial

Group

,

Senior

Note

,

3.125

%

,

6/05/30

...........

United

States

100,000

106,624

Truist

Bank

,

Sub.

Note

,

2.25

%

,

3/11/30

.....................

United

States

400,000

406,367

Truist

Financial

Corp.

,

Sub.

Note

,

3.875

%

,

3/19/29

............

United

States

860,000

980,319

b

UniCredit

SpA

,

Senior

Note

,

144A,

1.982%

to

6/03/26,

FRN

thereafter

,

6/03/27

...................................

Italy

500,000

498,712

US

Bancorp

,

Sub.

Note

,

3

%

,

7/30/29

.......................

United

States

300,000

325,322

Wells

Fargo

&

Co.

,

Senior

Bond,

2.879%

to

10/30/29,

FRN

thereafter,

10/30/30

...

United

States

200,000

211,965

Senior

Note,

2.1%,

7/26/21

............................

United

States

225,000

225,288

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-26

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Banks

(continued)

Wells

Fargo

Bank

NA

,

Senior

Note

,

2.082%

to

9/09/21,

FRN

thereafter

,

9/09/22

...................................

United

States

1,100,000

$

1,103,712

12,268,588

Beverages

0.1%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

4.9

%

,

2/01/46

............................

Belgium

100,000

126,797

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond,

3.5%,

6/01/30

............................

Belgium

420,000

467,627

Senior

Bond,

5.8%,

1/23/59

............................

Belgium

250,000

361,688

956,112

Biotechnology

0.4%

AbbVie,

Inc.

,

Senior

Bond,

4.85%,

6/15/44

...........................

United

States

400,000

510,034

Senior

Bond,

4.75%,

3/15/45

...........................

United

States

300,000

377,800

Senior

Bond,

4.25%,

11/21/49

..........................

United

States

370,000

444,159

Senior

Note,

3.8%,

3/15/25

............................

United

States

400,000

437,760

Senior

Note

,

3.2%,

11/21/29

...........................

United

States

200,000

217,376

Amgen,

Inc.

,

Senior

Note,

2.2%,

2/21/27

............................

United

States

100,000

103,909

Senior

Note,

2.45%,

2/21/30

...........................

United

States

980,000

1,011,226

3,102,264

Building

Products

0.1%

Carrier

Global

Corp.

,

Senior

Bond

,

3.577

%

,

4/05/50

...........

United

States

430,000

457,034

Capital

Markets

0.3%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note,

3.5%,

1/23/25

............................

United

States

625,000

675,980

Sub.

Note,

4.25%,

10/21/25

...........................

United

States

400,000

447,466

Morgan

Stanley

,

Senior

Bond

,

3.591%

to

7/22/27,

FRN

thereafter

,

7/22/28

...........................................

United

States

1,060,000

1,174,944

2,298,390

Chemicals

0.1%

EI

du

Pont

de

Nemours

and

Co.

,

Senior

Note

,

1.7

%

,

7/15/25

.....

United

States

180,000

184,786

Sherwin-Williams

Co.

(The)

,

Senior

Bond

,

2.3

%

,

5/15/30

........

United

States

400,000

405,126

Westlake

Chemical

Corp.

,

Senior

Note

,

3.375

%

,

6/15/30

........

United

States

100,000

107,861

b

Yara

International

ASA

,

Senior

Note

,

144A,

3.148

%

,

6/04/30

.....

Brazil

100,000

107,134

804,907

Consumer

Finance

0.2%

Capital

One

Financial

Corp.

,

Senior

Note

,

3.75

%

,

3/09/27

.......

United

States

1,035,000

1,151,222

Containers

&

Packaging

0.0%

†

WRKCo

,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

235,000

246,457

Diversified

Financial

Services

0.3%

b

CK

Hutchison

International

19

Ltd.

,

Senior

Note

,

144A,

3.25

%

,

4/11/24

...........................................

United

Kingdom

635,000

676,642

b

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

700,000

694,318

b

NTT

Finance

Corp.

,

Senior

Bond

,

144A,

2.065

%

,

4/03/31

.......

Japan

500,000

507,522

Shell

International

Finance

BV

,

Senior

Bond

,

4.125

%

,

5/11/35

....

Netherlands

500,000

595,655

2,474,137

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Telecommunication

Services

0.4%

AT&T,

Inc.

,

Senior

Note,

3.8%,

2/15/27

............................

United

States

920,000

$

1,026,491

Senior

Note,

2.3%,

6/01/27

............................

United

States

100,000

103,513

Bell

Telephone

Co.

of

Canada

or

Bell

Canada

(The)

,

Senior

Bond

,

4.3

%

,

7/29/49

......................................

Canada

275,000

333,292

Orange

SA

,

Senior

Bond

,

9

%

,

3/01/31

......................

France

300,000

472,315

Verizon

Communications,

Inc.

,

Senior

Bond,

2.55%,

3/21/31

...........................

United

States

200,000

204,577

Senior

Note,

1.45%,

3/20/26

...........................

United

States

700,000

706,261

2,846,449

Electric

Utilities

0.8%

Commonwealth

Edison

Co.

,

Senior

Bond

,

4

%

,

3/01/48

.........

United

States

200,000

240,949

Duke

Energy

Corp.

,

Senior

Bond

,

3.75

%

,

9/01/46

.............

United

States

200,000

214,266

Duke

Energy

Florida

LLC

,

Senior

Bond

,

6.4

%

,

6/15/38

.........

United

States

200,000

296,531

b

Enel

Finance

International

NV

,

Senior

Bond,

144A,

3.5%,

4/06/28

.......................

Italy

300,000

328,929

Senior

Note,

144A,

4.25%,

9/14/23

......................

Italy

1,200,000

1,293,790

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

850,000

969,109

Georgia

Power

Co.

,

Senior

Bond

,

4.3

%

,

3/15/42

..............

United

States

700,000

828,699

Southern

Co.

(The)

,

A

,

Senior

Bond

,

3.7

%

,

4/30/30

............

United

States

700,000

772,577

b

State

Grid

Overseas

Investment

2016

Ltd.

,

Senior

Note

,

144A,

3.5

%

,

5/04/27

...........................................

China

600,000

661,797

b

Vistra

Operations

Co.

LLC

,

Senior

Secured

Note

,

144A,

3.55

%

,

7/15/24

...........................................

United

States

235,000

248,284

5,854,931

Electronic

Equipment,

Instruments

&

Components

0.1%

Flex

Ltd.

,

Senior

Note

,

4.875

%

,

5/12/30

.....................

United

States

300,000

348,595

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

...............

United

States

575,000

580,040

928,635

Energy

Equipment

&

Services

0.2%

Baker

Hughes

a

GE

Co.

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Bond

,

4.08

%

,

12/15/47

..........................

United

States

485,000

555,134

b

Schlumberger

Holdings

Corp.

,

Senior

Note

,

144A,

3.75

%

,

5/01/24

.

United

States

610,000

656,923

1,212,057

Entertainment

0.1%

NBCUniversal

Media

LLC

,

Senior

Bond

,

5.95

%

,

4/01/41

........

United

States

200,000

288,641

Walt

Disney

Co.

(The)

,

Senior

Bond

,

2.65

%

,

1/13/31

...........

United

States

200,000

210,123

498,764

Equity

Real

Estate

Investment

Trusts

(REITs)

0.2%

Alexandria

Real

Estate

Equities,

Inc.

,

Senior

Bond

,

4.9

%

,

12/15/30

United

States

300,000

366,332

Essex

Portfolio

LP

,

Senior

Bond

,

2.65

%

,

3/15/32

..............

United

States

360,000

365,983

Simon

Property

Group

LP

,

Senior

Note

,

3.375

%

,

12/01/27

.......

United

States

595,000

648,928

1,381,243

Food

&

Staples

Retailing

0.1%

Kroger

Co.

(The)

,

Senior

Bond

,

5.4

%

,

1/15/49

................

United

States

400,000

547,129

Walmart,

Inc.

,

Senior

Bond

,

3.95

%

,

6/28/38

..................

United

States

350,000

422,148

969,277

Food

Products

0.1%

b

Bimbo

Bakeries

USA,

Inc.

,

Senior

Bond

,

144A,

4

%

,

5/17/51

.....

Mexico

400,000

431,423

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-28

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Food

Products

(continued)

b

JBS

Finance

Luxembourg

SARL

,

Senior

Bond

,

144A,

3.625

%

,

1/15/32

...........................................

United

States

200,000

$

200,138

631,561

Health

Care

Equipment

&

Supplies

0.1%

STERIS

Irish

FinCo

.

UnLtd

.

Co.

,

Senior

Bond,

3.75%,

3/15/51

...........................

United

States

250,000

265,973

Senior

Note,

2.7%,

3/15/31

............................

United

States

200,000

203,913

469,886

Health

Care

Providers

&

Services

0.6%

Anthem,

Inc.

,

Senior

Bond,

5.1%,

1/15/44

............................

United

States

400,000

528,479

Senior

Note,

4.101%,

3/01/28

..........................

United

States

400,000

457,487

Centene

Corp.

,

Senior

Note

,

3

%

,

10/15/30

..................

United

States

450,000

462,839

Cigna

Corp.

,

Senior

Note

,

3.05

%

,

10/15/27

..................

United

States

550,000

594,509

CVS

Health

Corp.

,

Senior

Bond,

5.3%,

12/05/43

...........................

United

States

500,000

664,506

Senior

Bond,

5.125%,

7/20/45

..........................

United

States

200,000

260,558

HCA,

Inc.

,

Senior

Secured

Bond,

4.5%,

2/15/27

.....................

United

States

408,000

461,543

Senior

Secured

Note,

4.125%,

6/15/29

...................

United

States

300,000

338,067

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

2.8

%

,

6/30/31

...........

United

States

600,000

627,116

4,395,104

Hotels,

Restaurants

&

Leisure

0.1%

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

650,000

692,516

Household

Durables

0.1%

Mohawk

Industries,

Inc.

,

Senior

Note

,

3.625

%

,

5/15/30

.........

United

States

290,000

317,687

NVR,

Inc.

,

Senior

Bond

,

3

%

,

5/15/30

.......................

United

States

200,000

212,377

530,064

Household

Products

0.1%

b

Kimberly-Clark

de

Mexico

SAB

de

CV

,

Senior

Bond

,

144A,

2.431

%

,

7/01/31

...........................................

Mexico

500,000

496,577

Independent

Power

and

Renewable

Electricity

Producers

0.1%

b

Colbun

SA

,

Senior

Note,

144A,

3.95%,

10/11/27

.....................

Chile

200,000

218,829

Senior

Note,

144A,

3.15%,

3/06/30

......................

Chile

200,000

204,397

423,226

Insurance

0.7%

Aflac,

Inc.

,

Senior

Bond

,

4.75

%

,

1/15/49

....................

United

States

700,000

925,913

Allstate

Corp.

(The)

,

Senior

Bond

,

4.2

%

,

12/15/46

.............

United

States

500,000

614,965

Aon

Corp.

,

Senior

Note

,

2.8

%

,

5/15/30

.....................

United

States

500,000

525,505

Arch

Capital

Group

Ltd.

,

Senior

Bond

,

3.635

%

,

6/30/50

.........

United

States

800,000

864,236

Manulife

Financial

Corp.

,

Sub.

Bond

,

4.061%

to

2/24/27,

FRN

thereafter

,

2/24/32

...................................

Canada

200,000

220,985

Marsh

&

McLennan

Cos.,

Inc.

,

Senior

Bond

,

4.9

%

,

3/15/49

......

United

States

250,000

341,870

MetLife,

Inc.

,

Junior

Sub.

Bond

,

6.4

%

,

12/15/36

...............

United

States

250,000

321,918

b

Metropolitan

Life

Global

Funding

I

,

Secured

Note

,

144A,

3.6

%

,

1/11/24

...........................................

United

States

940,000

1,010,876

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-29

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Insurance

(continued)

Prudential

plc

,

Senior

Note

,

3.125

%

,

4/14/30

.................

United

Kingdom

425,000

$

460,261

5,286,529

Interactive

Media

&

Services

0.1%

b

Tencent

Holdings

Ltd.

,

Senior

Note,

144A,

3.595%,

1/19/28

.....................

China

500,000

548,163

Senior

Note,

144A,

2.39%,

6/03/30

......................

China

500,000

498,735

1,046,898

Internet

&

Direct

Marketing

Retail

0.3%

Alibaba

Group

Holding

Ltd.

,

Senior

Bond,

2.125%,

2/09/31

..........................

China

200,000

196,803

Senior

Bond,

4%,

12/06/37

............................

China

300,000

337,557

Senior

Bond,

4.2%,

12/06/47

...........................

China

800,000

927,338

Amazon.com,

Inc.

,

Senior

Bond

,

4.05

%

,

8/22/47

..............

United

States

500,000

611,073

2,072,771

IT

Services

0.2%

Fiserv,

Inc.

,

Senior

Bond,

2.65%,

6/01/30

...........................

United

States

200,000

207,287

Senior

Note

,

3.5%,

7/01/29

............................

United

States

870,000

958,158

1,165,445

Machinery

0.1%

Caterpillar,

Inc.

,

Senior

Bond,

3.25%,

4/09/50

...........................

United

States

200,000

221,403

Senior

Note

,

2.6%,

4/09/30

............................

United

States

500,000

533,539

754,942

Media

0.3%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

350,000

358,218

Comcast

Corp.

,

Senior

Bond,

4.25%,

1/15/33

...........................

United

States

300,000

358,281

Senior

Bond,

4.049%,

11/01/52

.........................

United

States

500,000

596,294

Fox

Corp.

,

Senior

Bond,

5.476%,

1/25/39

..........................

United

States

100,000

129,535

Senior

Note,

4.709%,

1/25/29

..........................

United

States

400,000

469,986

1,912,314

Multiline

Retail

0.0%

†

Dollar

Tree,

Inc.

,

Senior

Note

,

4

%

,

5/15/25

..................

United

States

350,000

386,666

Multi-Utilities

0.3%

Berkshire

Hathaway

Energy

Co.

,

Senior

Bond

,

6.125

%

,

4/01/36

..

United

States

200,000

281,911

Dominion

Energy,

Inc.

,

Senior

Note

,

4.25

%

,

6/01/28

...........

United

States

1,050,000

1,207,564

Public

Service

Enterprise

Group,

Inc.

,

Senior

Note

,

2.875

%

,

6/15/24

United

States

1,000,000

1,061,246

2,550,721

Oil,

Gas

&

Consumable

Fuels

1.0%

b

Aker

BP

ASA

,

Senior

Note

,

144A,

3.75

%

,

1/15/30

.............

Norway

500,000

540,085

BP

Capital

Markets

America,

Inc.

,

Senior

Note

,

3.937

%

,

9/21/28

..

United

States

100,000

114,145

Canadian

Natural

Resources

Ltd.

,

Senior

Bond

,

3.9

%

,

2/01/25

...

Canada

200,000

217,442

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note

,

5.125

%

,

6/30/27

.....................................

United

States

200,000

232,773

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-30

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

b

Continental

Resources,

Inc.

,

Senior

Bond

,

144A,

5.75

%

,

1/15/31

..

United

States

300,000

$

359,625

Energy

Transfer

LP

,

Senior

Bond

,

6.05

%

,

6/01/41

.............

United

States

500,000

636,142

Enterprise

Products

Operating

LLC

,

Senior

Bond,

3.125%,

7/31/29

..........................

United

States

400,000

431,894

Senior

Bond,

6.125%,

10/15/39

.........................

United

States

700,000

985,052

Kinder

Morgan,

Inc.

,

Senior

Bond,

5.55%,

6/01/45

...........................

United

States

300,000

389,015

Senior

Note

,

4.3%,

3/01/28

............................

United

States

400,000

456,861

MPLX

LP

,

Senior

Bond,

5.5%,

2/15/49

............................

United

States

325,000

421,609

Senior

Note,

4.875%,

12/01/24

.........................

United

States

200,000

224,034

Senior

Note

,

4.875%,

6/01/25

..........................

United

States

100,000

112,962

Reliance

Industries

Ltd.

,

Senior

Note

,

2.06

%

,

1/15/26

..........

India

625,000

646,087

b

Sinopec

Group

Overseas

Development

2018

Ltd.

,

Senior

Bond

,

144A,

3.35

%

,

5/13/50

.................................

China

200,000

202,996

TransCanada

PipeLines

Ltd.

,

Senior

Bond

,

4.25

%

,

5/15/28

......

Canada

500,000

574,954

Transcontinental

Gas

Pipe

Line

Co.

LLC

,

Senior

Note

,

7.85

%

,

2/01/26

...........................................

United

States

400,000

508,491

Valero

Energy

Corp.

,

Senior

Note

,

4

%

,

4/01/29

...............

United

States

435,000

486,171

7,540,338

Paper

&

Forest

Products

0.1%

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

225,000

236,250

Senior

Bond,

3.125%,

1/15/32

..........................

Brazil

200,000

198,324

434,574

Pharmaceuticals

0.3%

AstraZeneca

plc

,

Senior

Bond,

4%,

9/18/42

.............................

United

Kingdom

300,000

358,359

Senior

Bond,

4.375%,

11/16/45

.........................

United

Kingdom

450,000

561,039

b

Royalty

Pharma

plc

,

Senior

Bond,

144A,

2.2%,

9/02/30

.......................

United

States

200,000

196,337

Senior

Note,

144A,

1.75%,

9/02/27

......................

United

States

100,000

98,493

Takeda

Pharmaceutical

Co.

Ltd.

,

Senior

Bond,

3.175%,

7/09/50

..........................

Japan

400,000

405,144

Senior

Note,

5%,

11/26/28

.............................

Japan

300,000

361,493

1,980,865

Road

&

Rail

0.2%

b

Ashtead

Capital,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

8/15/25

......

United

Kingdom

375,000

384,609

Burlington

Northern

Santa

Fe

LLC

,

Senior

Bond

,

4.9

%

,

4/01/44

...

United

States

200,000

267,354

CSX

Corp.

,

Senior

Bond,

3.8%,

11/01/46

...........................

United

States

200,000

229,328

Senior

Bond,

4.75%,

11/15/48

..........................

United

States

525,000

681,815

1,563,106

Software

0.1%

Microsoft

Corp.

,

Senior

Note

,

2.65

%

,

11/03/22

................

United

States

420,000

432,098

ServiceNow

,

Inc.

,

Senior

Bond

,

1.4

%

,

9/01/30

................

United

States

250,000

234,848

666,946

Specialty

Retail

0.1%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

100,000

118,402

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-31

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Specialty

Retail

(continued)

AutoZone,

Inc.

,

Senior

Bond,

1.65%,

1/15/31

...........................

United

States

265,000

$

252,491

Senior

Note

,

3.75%,

4/18/29

...........................

United

States

100,000

111,597

482,490

Thrifts

&

Mortgage

Finance

0.1%

b

BPCE

SA

,

Sub.

Bond

,

144A,

5.15

%

,

7/21/24

.................

France

600,000

668,791

Radian

Group,

Inc.

,

Senior

Note

,

4.875

%

,

3/15/27

.............

United

States

350,000

381,668

1,050,459

Tobacco

0.1%

b

Imperial

Brands

Finance

plc

,

Senior

Note,

144A,

3.5%,

7/26/26

.......................

United

Kingdom

300,000

321,589

Senior

Note

,

144A,

4.25%,

7/21/25

......................

United

Kingdom

585,000

644,699

966,288

Wireless

Telecommunication

Services

0.1%

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

200,000

199,920

Senior

Secured

Note,

3.75%,

4/15/27

....................

United

States

325,000

359,900

Vodafone

Group

plc

,

Senior

Bond

,

6.15

%

,

2/27/37

.............

United

Kingdom

300,000

415,643

975,463

Total

Corporate

Bonds

(Cost

$74,174,510)

......................................

78,374,412

a

Foreign

Government

and

Agency

Securities

0.9%

b

African

Export

-Import

Bank

(The),

Senior

Note

,

144A,

3.994%,

9/21/29

...........................................

Supranational

e

500,000

527,402

Colombia

Government

Bond,

Senior

Bond,

5%,

6/15/45

........

Colombia

500,000

532,975

b

Corp.

Nacional

del

Cobre

de

Chile,

Senior

Bond,

144A,

4.5%,

8/01/47

...........................................

Chile

200,000

236,733

b

Electricite

de

Franc

e

SA,

Senior

Note

,

144A,

4.5%,

9/21/28

......

France

655,000

763,671

b

Export-Import

Bank

of

India,

Senior

Bond,

144A,

3.25%,

1/15/30

..

India

200,000

203,634

b

Indonesia

Government

Bond,

Senior

Bond,

144A,

4.35%,

1/08/27

.

Indonesia

500,000

567,018

b

Kazakhstan

Government

Bond,

Senior

Bond,

144A,

5.125%,

7/21/25

Kazakhstan

350,000

407,369

Mexico

Government

Bond

,

Senior

Bond,

3.6%,

1/30/25

............................

Mexico

200,000

220,208

Senior

Note

,

4.15%,

3/28/27

...........................

Mexico

500,000

565,923

Panama

Notas

del

Tesoro,

Senior

Note,

3.75%,

4/17/26

........

Panama

450,000

486,389

b

Pertamina

Persero

PT,

Senior

Bond,

144A,

4.7%,

7/30/49

.......

Indonesia

200,000

217,112

Peru

Government

Bond

,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

200,000

204,252

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

200,000

276,111

Philippines

Government

Bond,

Senior

Bond,

3.95%,

1/20/40

.....

Philippines

310,000

345,121

b

Romania

Government

Bond,

Senior

Bond,

144A,

5.125%,

6/15/48

.

Romania

200,000

245,521

b

Russia

Government

Bond,

Senior

Bond,

144A,

5.1%,

3/28/35

....

Russia

400,000

476,504

Uruguay

Government

Bond

,

Senior

Bond,

4.5%,

8/14/24

............................

Uruguay

400,000

435,280

Senior

Bond,

4.375%,

1/23/31

..........................

Uruguay

150,000

174,901

Total

Foreign

Government

and

Agency

Securities

(Cost

$6,651,716)

...............

6,886,124

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-32

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

13.1%

Federal

Agricultural

Mortgage

Corp.,

2.9%,

1/03/22

............

United

States

800,000

$

811,565

FFCB,

3.17%,

3/07/28

..................................

United

States

800,000

906,652

Tennessee

Valley

Authority,

5.88%,

4/01/36

..................

United

States

630,000

937,435

U.S.

Treasury

Bonds

,

6%,

2/15/26

........................................

United

States

705,000

871,639

f

3.625%,

4/15/28

.....................................

United

States

109,000

242,799

4.5%,

2/15/36

......................................

United

States

780,000

1,071,038

3.5%,

2/15/39

......................................

United

States

21,000

26,275

1.125%,

8/15/40

.....................................

United

States

425,000

365,766

1.375%,

11/15/40

....................................

United

States

307,000

275,892

2.875%,

5/15/43

.....................................

United

States

490,000

563,691

3.375%,

5/15/44

.....................................

United

States

15,000

18,708

3.125%,

8/15/44

.....................................

United

States

725,000

870,312

3%,

11/15/44

.......................................

United

States

160,000

188,413

2.5%,

2/15/46

......................................

United

States

620,000

671,828

2.5%,

5/15/46

......................................

United

States

5,129,000

5,558,153

2.25%,

8/15/46

.....................................

United

States

5,575,000

5,766,205

3.375%,

11/15/48

....................................

United

States

990,000

1,264,416

3%,

2/15/49

........................................

United

States

1,161,000

1,390,343

1.25%,

5/15/50

.....................................

United

States

707,000

577,503

1.375%,

8/15/50

.....................................

United

States

185,000

156,014

2.375%,

5/15/51

.....................................

United

States

35,000

37,376

U.S.

Treasury

Notes

,

1.75%,

4/30/22

.....................................

United

States

670,000

679,293

1.75%,

5/15/22

.....................................

United

States

1,670,000

1,694,341

1.875%,

5/31/22

.....................................

United

States

1,465,000

1,488,989

1.5%,

3/31/23

......................................

United

States

150,000

153,378

2.75%,

11/15/23

.....................................

United

States

1,320,000

1,396,106

2.125%,

11/30/23

....................................

United

States

1,120,000

1,168,584

2.125%,

3/31/24

.....................................

United

States

18,837,000

19,725,135

2%,

4/30/24

........................................

United

States

1,345,000

1,404,947

2.25%,

4/30/24

.....................................

United

States

125,000

131,431

2.5%,

5/15/24

......................................

United

States

150,000

158,915

2%,

5/31/24

........................................

United

States

1,705,000

1,782,125

1.75%,

6/30/24

.....................................

United

States

178,000

184,891

2%,

6/30/24

........................................

United

States

1,365,000

1,427,758

f

0.125%,

7/15/24

.....................................

United

States

800,000

967,788

1.75%,

7/31/24

.....................................

United

States

1,345,000

1,397,959

2.375%,

8/15/24

.....................................

United

States

1,640,000

1,736,574

1.25%,

8/31/24

.....................................

United

States

700,000

716,652

1.5%,

10/31/24

.....................................

United

States

4,650,000

4,799,127

1.5%,

11/30/24

......................................

United

States

320,000

330,250

f

0.125%,

4/15/25

.....................................

United

States

750,000

837,195

0.25%,

6/30/25

.....................................

United

States

600,000

589,477

0.25%,

9/30/25

.....................................

United

States

2,340,000

2,291,189

0.375%,

11/30/25

....................................

United

States

5,143,000

5,051,189

0.375%,

1/31/26

.....................................

United

States

7,603,000

7,451,831

0.5%,

2/28/26

......................................

United

States

611,400

602,241

f

0.125%,

4/15/26

.....................................

United

States

350,000

387,878

0.875%,

6/30/26

.....................................

United

States

200,000

199,914

2.375%,

5/15/27

.....................................

United

States

1,280,000

1,378,300

0.5%,

6/30/27

......................................

United

States

1,045,000

1,010,956

2.25%,

8/15/27

.....................................

United

States

2,038,800

2,180,959

2.25%,

11/15/27

.....................................

United

States

5,375,000

5,751,040

1.25%,

4/30/28

.....................................

United

States

1,200,000

1,203,938

3.125%,

11/15/28

....................................

United

States

320,000

362,312

1.625%,

8/15/29

.....................................

United

States

235,000

240,398

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-33

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

(continued)

U.S.

Treasury

Notes,

(continued)

0.625%,

8/15/30

.....................................

United

States

900,000

$

838,617

0.875%,

11/15/30

....................................

United

States

750,000

713,320

1.125%,

2/15/31

.....................................

United

States

200,000

194,187

United

States

International

Development

Finance

Corp.,

2.12%,

3/20/24

...........................................

United

States

400,000

409,484

Total

U.S.

Government

and

Agency

Securities

(Cost

$97,088,431)

.................

95,610,691

Asset-Backed

Securities

0.5%

Airlines

0.1%

American

Airlines

Pass-Through

Trust

,

2016-3

,

A

,

3.25

%

,

10/15/28

United

States

438,525

427,492

United

Airlines

Pass-Through

Trust

,

2016-1,

A,

3.45%,

7/07/28

.............................

United

States

81,532

83,119

2019-2,

A,

2.9%,

5/01/28

..............................

United

States

191,137

190,872

2020-1,

B,

4.875%,

7/15/27

............................

United

States

291,150

309,208

1,010,691

a

a

a

a

a

a

Banks

0.1%

Capital

One

Multi-Asset

Execution

Trust

,

2017-A6

,

A6

,

2.29

%

,

7/15/25

...........................................

United

States

600,000

615,207

Consumer

Finance

0.2%

American

Express

Credit

Account

Master

Trust

,

2019-1

,

A

,

2.87

%

,

10/15/24

..........................................

United

States

600,000

612,112

Discover

Card

Execution

Note

Trust

,

2019-A1

,

A1

,

3.04

%

,

7/15/24

United

States

500,000

507,819

1,119,931

a

a

a

a

a

a

Diversified

Financial

Services

0.1%

BA

Credit

Card

Trust

,

2018-A3

,

A3

,

3.1

%

,

12/15/23

............

United

States

500,000

500,580

b

CF

Hippolyta

LLC

,

2020-1,

A1,

144A,

1.69%,

7/15/60

.......................

United

States

152,701

155,311

2021-1A,

A1,

144A,

1.53%,

3/15/61

......................

United

States

108,000

108,840

764,731

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$3,497,766)

................................

3,510,560

Mortgage-Backed

Securities

9.9%

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

2.3%

FHLMC

Gold

Pools,

30

Year,

4.5%,

1/01/49

..................

United

States

1,963,898

2,170,945

FHLMC

Pool,

15

Year,

2%,

10/01/35

.......................

United

States

369,947

383,193

FHLMC

Pool,

15

Year,

3%,

8/01/34

........................

United

States

78,984

83,226

FHLMC

Pool,

30

Year,

2%,

11/01/50

.......................

United

States

375,893

380,723

FHLMC

Pool,

30

Year,

2.5%,

10/01/50

-

7/01/51

..............

United

States

2,205,478

2,285,148

FHLMC

Pool,

30

Year,

3%,

3/01/50

........................

United

States

3,058,411

3,227,812

FHLMC

Pool,

30

Year,

3.5%,

2/01/47

.......................

United

States

2,701,106

2,911,533

FHLMC

Pool,

30

Year,

3.5%,

4/01/50

.......................

United

States

1,966,994

2,127,318

FHLMC

Pool,

30

Year,

4%,

5/01/47

-

9/01/49

.................

United

States

1,327,601

1,441,550

FHLMC

Pool,

30

Year,

4.5%,

10/01/48

-

1/01/49

..............

United

States

1,697,004

1,876,784

16,888,232

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

3.3%

FNMA,

15

Year,

2%,

9/01/35

.............................

United

States

2,634,996

2,729,711

FNMA,

15

Year,

2%,

10/01/35

-

7/01/36

.....................

United

States

2,204,426

2,276,253

FNMA,

15

Year,

2.5%,

10/01/35

-

7/01/36

...................

United

States

1,395,144

1,459,610

FNMA,

30

Year,

2%,

5/01/51

-

7/01/51

......................

United

States

2,113,292

2,135,866

FNMA,

30

Year,

2.5%,

7/01/51

...........................

United

States

2,294,000

2,375,621

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-34

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

(continued)

FNMA,

30

Year,

2.5%,

9/01/50

-

10/01/50

...................

United

States

2,026,967

$

2,116,498

FNMA,

30

Year,

3%,

4/01/51

.............................

United

States

2,821,946

2,961,475

FNMA,

30

Year,

3%,

7/01/51

.............................

United

States

2,385,000

2,499,886

FNMA,

30

Year,

3%,

8/01/50

-

9/01/50

......................

United

States

753,060

797,765

FNMA,

30

Year,

3.5%,

11/01/46

-

11/01/50

...................

United

States

1,396,179

1,497,164

FNMA,

30

Year,

4%,

8/01/49

-

1/01/50

......................

United

States

1,753,095

1,911,228

FNMA,

30

Year,

4.5%,

2/01/50

...........................

United

States

1,322,693

1,449,043

24,210,120

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

4.3%

GNMA

II,

Single-family,

30

Year,

2%,

11/20/50

................

United

States

6,013,680

6,130,910

GNMA

II,

Single-family,

30

Year,

2%,

6/20/51

.................

United

States

400,000

410,890

GNMA

II,

Single-family,

30

Year,

2.5%,

11/20/50

..............

United

States

5,969,921

6,182,317

GNMA

II,

Single-family,

30

Year,

2.5%,

3/20/51

...............

United

States

3,329,319

3,449,719

GNMA

II,

Single-family,

30

Year,

2.5%,

8/20/50

-

6/20/51

........

United

States

2,902,338

3,008,554

GNMA

II,

Single-family,

30

Year,

3%,

2/20/51

.................

United

States

2,245,689

2,353,685

GNMA

II,

Single-family,

30

Year,

3%,

9/20/47

-

4/20/51

.........

United

States

4,565,462

4,789,389

GNMA

II,

Single-family,

30

Year,

3.5%,

9/20/47

...............

United

States

2,842,552

3,008,798

GNMA

II,

Single-family,

30

Year,

3.5%,

5/20/47

...............

United

States

1,485,607

1,576,847

30,911,109

Total

Mortgage-Backed

Securities

(Cost

$72,527,994)

............................

72,009,461

Municipal

Bonds

0.6%

Arizona

0.1%

Maricopa

County

Union

High

School

District

No.

210-Phoenix,

GO,

2020

C,

5%,

7/01/31

.................................

United

States

200,000

259,675

California

0.1%

California

Health

Facilities

Financing

Authority

,

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.934%,

6/01/32

..............................

United

States

65,000

69,671

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.984%,

6/01/33

..............................

United

States

55,000

58,817

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

3.034%,

6/01/34

..............................

United

States

40,000

42,735

Foothill-Eastern

Transportation

Corridor

Agency,

Revenue,

2019

A,

Refunding,

4.094%,

1/15/49

............................

United

States

35,000

37,132

Gilroy

Unified

School

District,

GO,

2019,

Refunding,

3.364%,

8/01/47

United

States

140,000

144,565

State

of

California,

GO,

2.5%,

10/01/29

.....................

United

States

500,000

530,468

883,388

Florida

0.1%

County

of

Broward,

Airport

System,

Revenue,

2019

C,

Refunding,

3.477%,

10/01/43

....................................

United

States

70,000

73,196

County

of

Sarasota,

Revenue,

2020,

5%,

10/01/34

............

United

States

500,000

653,784

726,980

Illinois

0.0%

†

State

of

Illinois,

GO,

2003,

5.1%,

6/01/33

...................

United

States

125,000

147,081

Massachusetts

0.1%

Massachusetts

State

College

Building

Authority,

Revenue,

2019

C,

Refunding,

3.373%,

5/01/43

............................

United

States

230,000

239,306

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-35

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

New

Jersey

0.0%

†

State

of

New

Jersey,

GO,

2020

A,

3%,

6/01/32

...............

United

States

110,000

$

125,051

New

York

0.0%

†

Metropolitan

Transportation

Authority,

Revenue,

2020

E,

Refunding,

4%,

11/15/45

.......................................

United

States

95,000

111,072

Ohio

0.0%

†

Greenville

City

School

District,

GO,

2019,

Refunding,

3.541%,

1/01/51

...........................................

United

States

160,000

164,000

Pennsylvania

0.1%

Commonwealth

Financing

Authority,

Revenue,

2021

A,

2.991%,

6/01/42

...........................................

United

States

625,000

642,760

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education,

Revenue,

2017

C,

Refunding,

3.005%,

9/15/41

.....

United

States

250,000

262,345

905,105

Texas

0.1%

City

of

Austin,

Electric

Utility,

Revenue,

2008,

Refunding,

AGMC

Insured,

6.262%,

11/15/32

.............................

United

States

355,000

445,531

Total

Municipal

Bonds

(Cost

$3,844,617)

.......................................

4,007,189

Total

Long

Term

Investments

(Cost

$573,801,237)

...............................

704,228,142

a

Short

Term

Investments

3.1%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

3.1%

c,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

22,473,141

22,473,141

Total

Money

Market

Funds

(Cost

$22,473,141)

..................................

22,473,141

Total

Short

Term

Investments

(Cost

$22,473,141

)

................................

22,473,141

a

Total

Investments

(Cost

$596,274,378)

99.6%

...................................

$726,701,283

Other

Assets,

less

Liabilities

0.4%

.............................................

3,318,598

Net

Assets

100.0%

...........................................................

$730,019,881

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$25,377,113,

representing

3.5%

of

net

assets.

c

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

d

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

e

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

f

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(f).

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Allocation

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-36

At

June

30,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

At

June

30,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1(c). 

See

Note 

8

regarding

other

derivative

information.

See

Abbreviations

on

page

FFA-

52

.

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Equity

contracts

S&P

500

E-Mini

Index

.........................

Long

132

$

28,304,760

9/17/21

$

518,082

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

164

21,730,000

9/21/21

(87,391)

U.S.

Treasury

10

Year

Notes

....................

Long

30

3,975,000

9/21/21

14,576

U.S.

Treasury

Long

Bonds

.....................

Short

5

803,750

9/21/21

1,243

Total

Futures

Contracts

......................................................................

$446,510

*

As

of

period

end.

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)

OTC

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Nordstrom,

Inc.

.

1.00%

Quarterly

CITI

6/20/26

200,000

$

(11,052)

$

(12,929)

$

1,877

BB+

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

6/20/26

200,000

(11,053)

(9,922)

(1,131)

BB+

Total

OTC

Swap

Contracts

..............................................

$(22,105)

$(22,851)

$746

Total

Credit

Default

Swap

Contracts

....................................

$(22,105)

$

(22,851)

$746

(a)

In

U.S.

dollars

unless

otherwise

indicated.

For

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.

(b)

Based

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.

(c)

Performance

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.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-37

Franklin

Allocation

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$565,587,904

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

30,686,474

Value

-

Unaffiliated

issuers

..................................................................

$697,017,636

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

29,683,647

Cash

....................................................................................

6,965

Foreign

currency,

at

value

(cost

$962,043)

........................................................

957,283

Receivables:

Investment

securities

sold

...................................................................

469,247

Capital

shares

sold

........................................................................

168,610

Dividends

and

interest

.....................................................................

1,954,091

Deposits

with

brokers

for:

Futures

contracts

........................................................................

1,731,825

Variation

margin

on

futures

contracts

...........................................................

8,872

Unrealized

appreciation

on

OTC

swap

contracts

....................................................

1,877

Total

assets

..........................................................................

732,000,053

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

655,343

Capital

shares

redeemed

...................................................................

627,171

Management

fees

.........................................................................

338,674

Distribution

fees

..........................................................................

197,670

OTC

swap

c

ontracts

(upfront

receipts

$23,

297

)

....................................................

22,851

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

1,131

Deferred

tax

...............................................................................

27,597

Accrued

expenses

and

other

liabilities

...........................................................

109,735

Total

liabilities

.........................................................................

1,980,172

Net

assets,

at

value

.................................................................

$730,019,881

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$565,889,674

Total

distributable

earnings

(losses)

.............................................................

164,130,207

Net

assets,

at

value

.................................................................

$730,019,881

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-38

Franklin

Allocation

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$808,636

Shares

outstanding

........................................................................

140,101

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$5.77

Class

2:

Net

assets,

at

value

.......................................................................

$309,707,335

Shares

outstanding

........................................................................

54,152,122

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$5.72

Class

4:

Net

assets,

at

value

.......................................................................

$419,503,910

Shares

outstanding

........................................................................

70,829,814

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$5.92

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FA-39

Franklin

Allocation

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$186,627)

Unaffiliated

issuers

........................................................................

$4,342,001

Non-controlled

affiliates

(Note

3e)

.............................................................

921

Interest:

Unaffiliated

issuers

........................................................................

2,919,662

Total

investment

income

...................................................................

7,262,584

Expenses:

Management

fees

(Note

3

a

)

...................................................................

2,208,695

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

492,324

    Class

4

................................................................................

714,883

Custodian

fees

(Note

4

)

......................................................................

8,420

Reports

to

shareholders

......................................................................

57,234

Professional

fees

...........................................................................

47,578

Trustees'

fees

and

expenses

..................................................................

2,653

Other

....................................................................................

35,795

Total

expenses

.........................................................................

3,567,582

Expense

reductions

(Note

4

)

...............................................................

(7)

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(132,376)

Net

expenses

.........................................................................

3,435,199

Net

investment

income

................................................................

3,827,385

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$3,731)

Unaffiliated

issuers

......................................................................

36,954,667

Non-controlled

affiliates

(Note

3e)

...........................................................

(115,461)

Foreign

currency

transactions

................................................................

(79,314)

Futures

contracts

.........................................................................

5,436,034

Swap

contracts

...........................................................................

729

Net

realized

gain

(loss)

..................................................................

42,196,655

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

8,420,798

Non-controlled

affiliates

(Note

3e)

...........................................................

(95,185)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(34,986)

Futures

contracts

.........................................................................

180,302

Swap

contracts

...........................................................................

746

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

20,907

Net

change

in

unrealized

appreciation

(depreciation)

............................................

8,492,582

Net

realized

and

unrealized

gain

(loss)

............................................................

50,689,237

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$54,516,622

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-40

Franklin

Allocation

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$3,827,385

$11,362,253

Net

realized

gain

(loss)

.................................................

42,1

96,655

(9,609,886)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

8,492,582

82,252,924

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

54,516,622

84,005,291

Distributions

to

shareholders:

Class

1

.............................................................

(15,547)

(227,036)

Class

2

.............................................................

(7,020,699)

(106,811,345)

Class

4

.............................................................

(6,571,792)

(104,689,179)

Total

distributions

to

shareholders

..........................................

(13,608,038)

(211,727,560)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(41,951)

104,749

Class

2

.............................................................

(108,128,949)

61,121,480

Class

4

.............................................................

(11,536,361)

64,739,571

Total

capital

share

transactions

............................................

(119,707,261)

125,965,800

Net

increase

(decrease)

in

net

assets

...................................

(78,798,677)

(1,756,469)

Net

assets:

Beginning

of

period

.....................................................

808,818,558

810,575,027

End

of

period

..........................................................

$730,019,881

$808,818,558

Franklin

Templeton

Variable

Insurance

Products

Trust

FA-41

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Franklin

Allocation

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Allocation

VIP

Fund

(Fund)

is

included

in

this

report. Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

At

June

30,

2021,

43.24%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities,

exchange

traded

funds

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-

counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the OTC

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Certain

derivative

financial

instruments

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-42

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Derivative

Financial

Instruments

The

Fund invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statement

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statement

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

The

Fund

attempts

to

reduce its

exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-43

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

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,

2021,

the

Fund

had

OTC

derivatives

in

a

net

liability

position

for

such

contracts

of

$1,131.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

the

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

The

Fund

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

and

equity

price

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

The

Fund

entered

into

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-44

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

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.

See

Note

8 regarding

other

derivative

information.

d.

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.

e.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

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. 

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.

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

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-45

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

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.

g.

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.

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

5,345

$30,296

7,931

$46,123

Shares

issued

in

reinvestment

of

distributions

..........

2,704

15,547

47,596

227,036

Shares

redeemed

...............................

(15,689)

(87,794)

(30,469)

(168,410)

Net

increase

(decrease)

..........................

(7,640)

$(41,951)

25,058

$104,749

Class

2

Shares:

Shares

sold

...................................

1,540,360

$8,573,073

3,511,007

$20,473,913

Shares

issued

in

reinvestment

of

distributions

..........

1,231,702

7,020,699

22,581,680

106,811,345

Shares

redeemed

...............................

(22,005,591)

(123,722,721)

(11,902,724)

(66,163,778)

Net

increase

(decrease)

..........................

(19,233,529)

$(108,128,949)

14,189,963

$61,121,480

Class

4

Shares:

Shares

sold

...................................

923,440

$5,339,540

2,339,473

$13,610,746

Shares

issued

in

reinvestment

of

distributions

..........

1,113,863

6,571,792

21,365,139

104,689,179

Shares

redeemed

...............................

(4,055,676)

(23,447,693)

(9,182,946)

(53,560,354)

Net

increase

(decrease)

..........................

(2,018,373)

$(11,536,361)

14,521,666

$64,739,571

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-46

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

of

0.55%

per

year

of

the

average

daily

net

assets

of

the

Fund.

Under

a

subadvisory

agreement,

Global

Advisors

and

FT

Institutional,

affiliates

of

Advisers,

provide

subadvisory

services

to

the

Fund.

The

subadvisory

fee

is

paid

by

Advisers

based

on Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-47

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

f.

Waiver

and

Expense

Reimbursements

Advisers

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating expenses

(excluding

distribution

fees and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

and

acquired

fund

fees

and

expenses for

each

class

of

the

Fund

do not

exceed

0.57%,

based

on

the

average

net

assets

of

each

class

until

April

30,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

4.

Expense

Offset

Arrangement

The Fund has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

June

30,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Allocation

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$24,011,384

$63,976,980

$(65,515,223)

$—

$—

$22,473,141

22,473,141

$921

Templeton

Global

Bond

VIP

Fund,

Class

1

.................

7,821,152

—

(400,000)

(115,461)

(95,185)

7,210,506

511,021

—

Total

Affiliated

Securities

....

$31,832,536

$63,976,980

$(65,915,223)

$(115,461)

$(95,185)

$29,683,647

$921

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$5,645,804

Cost

of

investments

..........................................................................

$602,750,592

Unrealized

appreciation

........................................................................

$137,244,697

Unrealized

depreciation

........................................................................

(12,869,600)

Net

unrealized

appreciation

(depreciation)

..........................................................

$124,375,097

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-48

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

passive

foreign

investment

company

shares,

bond

discounts

and

premiums,

foreign

currency

transactions

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$225,369,194

and

$344,245,262,

respectively.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Other

Derivative

Information

At

June

30,

2021,

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

Franklin

Allocation

VIP

Fund

Interest

rate

contracts

.......

Variation

margin

on

futures

contracts

$

15,819

a

Variation

margin

on

futures

contracts

$

87,391

a

Credit

contracts

............

OTC

swap

contracts

(upfront

payments)

—

OTC

swap

contracts

(upfront

receipts)

22,851

Unrealized

appreciation

on

OTC

swap

contracts

1,877

Unrealized

depreciation

on

OTC

swap

contracts

1,131

Equity

contracts

...........

Variation

margin

on

futures

contracts

518,082

a

Variation

margin

on

futures

contracts

—

Total

....................

$535,778

$111,373

a

This

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.

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-49

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

futures

contracts

and

swap

contracts

represented

$62,305,242

and

$114,286

respectively.

See

Note

1(c)

regarding

derivative

financial

instruments. 

9.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

10.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

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

Franklin

Allocation

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Interest

rate

contracts

..........

Futures

contracts

$758,240

Futures

contracts

$(86,670)

Credit

contracts

...............

Swap

contracts

729

Swap

contracts

746

Equity

Contracts

..............

Futures

contracts

4,677,794

Futures

contracts

266,972

Total

.......................

$5,436,763

$181,048

8.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-50

Semiannual

Report

Franklin

Allocation

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,

2021,

in

valuing

the

Fund's assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Allocation

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

7,411,584

$

2,785,560

$

—

$

10,197,144

Air

Freight

&

Logistics

...................

2,575,131

2,170,400

—

4,745,531

Airlines

..............................

77,352

358,044

—

435,396

Auto

Components

......................

455,170

1,367,314

—

1,822,484

Automobiles

..........................

99,236

4,462,413

—

4,561,649

Banks

...............................

5,599,837

9,799,365

—

15,399,202

Beverages

...........................

5,375,311

1,151,275

—

6,526,586

Biotechnology

.........................

6,471,569

2,857,840

—

9,329,409

Building

Products

......................

2,908,066

1,952,477

—

4,860,543

Capital

Markets

........................

10,748,743

5,363,791

—

16,112,534

Chemicals

...........................

10,779,470

6,632,817

—

17,412,287

Commercial

Services

&

Supplies

...........

2,118,319

235,533

—

2,353,852

Communications

Equipment

..............

999,643

—

—

999,643

Construction

&

Engineering

...............

—

912,364

—

912,364

Construction

Materials

..................

585,060

78,232

—

663,292

Consumer

Finance

.....................

1,225,090

—

—

1,225,090

Containers

&

Packaging

.................

220,036

—

—

220,036

Distributors

...........................

305,123

—

—

305,123

Diversified

Consumer

Services

............

1,276,405

—

—

1,276,405

Diversified

Financial

Services

.............

750,940

1,437,804

—

2,188,744

Diversified

Telecommunication

Services

.....

792,434

2,898,732

—

3,691,166

Electric

Utilities

........................

2,680,506

—

—

2,680,506

Electrical

Equipment

....................

2,226,470

663,497

—

2,889,967

Electronic

Equipment,

Instruments

&

Components

........................

2,501,168

201,468

—

2,702,636

Energy

Equipment

&

Services

.............

84,226

883,245

—

967,471

Entertainment

.........................

2,749,232

1,703,218

—

4,452,450

Equity

Real

Estate

Investment

Trusts

(REITs)

.

4,859,009

701,946

—

5,560,955

Food

&

Staples

Retailing

.................

3,993,427

863,046

—

4,856,473

Food

Products

........................

1,956,080

827,840

—

2,783,920

Gas

Utilities

..........................

74,677

671,598

—

746,275

Health

Care

Equipment

&

Supplies

.........

16,813,161

6,015,630

—

22,828,791

Health

Care

Providers

&

Services

..........

4,552,085

1,161,103

—

5,713,188

Health

Care

Technology

.................

1,452,355

—

—

1,452,355

Hotels,

Restaurants

&

Leisure

.............

3,516,443

—

—

3,516,443

Household

Durables

....................

835,624

1,948,009

—

2,783,633

Household

Products

....................

3,451,391

—

—

3,451,391

Industrial

Conglomerates

................

5,912,071

3,634,532

—

9,546,603

Insurance

............................

851,972

1,945,009

—

2,796,981

Interactive

Media

&

Services

..............

15,926,656

598,479

—

16,525,135

Internet

&

Direct

Marketing

Retail

..........

10,027,965

3,551,512

—

13,579,477

IT

Services

...........................

18,368,324

4,216,267

—

22,584,591

Life

Sciences

Tools

&

Services

............

7,930,743

1,131,101

—

9,061,844

Machinery

............................

7,597,420

2,824,598

—

10,422,018

Marine

..............................

—

386,683

—

386,683

Media

...............................

2,084,241

3,349,422

—

5,433,663

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-51

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

11.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

Level

1

Level

2

Level

3

Total

Franklin

Allocation

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Metals

&

Mining

.......................

$

2,238,958

$

3,680,240

$

—

$

5,919,198

Multiline

Retail

........................

3,256,385

850,147

—

4,106,532

Multi-Utilities

..........................

1,581,363

1,013,751

—

2,595,114

Oil,

Gas

&

Consumable

Fuels

.............

4,263,526

4,553,948

—

8,817,474

Paper

&

Forest

Products

.................

—

232,764

—

232,764

Personal

Products

.....................

776,213

2,137,971

—

2,914,184

Pharmaceuticals

.......................

12,043,263

6,877,488

—

18,920,751

Professional

Services

...................

4,649,904

2,621,025

—

7,270,929

Real

Estate

Management

&

Development

....

179,690

2,974,360

—

3,154,050

Road

&

Rail

..........................

4,784,231

236,411

—

5,020,642

Semiconductors

&

Semiconductor

Equipment

.

21,623,173

3,485,343

—

25,108,516

Software

.............................

34,791,270

3,627,690

—

38,418,960

Specialty

Retail

........................

7,387,340

571,163

—

7,958,503

Technology

Hardware,

Storage

&

Peripherals

.

12,351,969

2,085,503

—

14,437,472

Textiles,

Apparel

&

Luxury

Goods

..........

3,365,632

295,960

—

3,661,592

Thrifts

&

Mortgage

Finance

...............

—

833,035

—

833,035

Tobacco

.............................

2,521,468

961,164

—

3,482,632

Trading

Companies

&

Distributors

..........

2,071,981

2,322,203

—

4,394,184

Water

Utilities

.........................

434,492

—

—

434,492

Wireless

Telecommunication

Services

.......

91,098

635,633

—

726,731

Management

Investment

Companies

.........

21,853,286

—

—

21,853,286

Preferred

Stocks

........................

—

606,735

—

606,735

Corporate

Bonds

........................

—

78,374,412

—

78,374,412

Foreign

Government

and

Agency

Securities

....

—

6,886,124

—

6,886,124

U.S.

Government

and

Agency

Securities

.......

—

95,610,691

—

95,610,691

Asset-Backed

Securities

..................

—

3,510,560

—

3,510,560

Mortgage-Backed

Securities

................

—

72,009,461

—

72,009,461

Municipal

Bonds

.........................

—

4,007,189

—

4,007,189

Short

Term

Investments

...................

22,473,141

—

—

22,473,141

Total

Investments

in

Securities

...........

$343,958,148

$382,743,135

a

$—

$726,701,283

Other

Financial

Instruments:

Futures

contracts

........................

$

533,901

$

—

$

—

$

533,901

Swap

contracts

.........................

—

1,877

—

1,877

Total

Other

Financial

Instruments

.........

$533,901

$1,877

$—

$535,778

Liabilities:

Other

Financial

Instruments:

Futures

contracts

........................

$

87,391

$

—

$

—

$

87,391

Swap

contracts

..........................

—

1,131

—

1,131

Total

Other

Financial

Instruments

.........

$87,391

$1,131

$—

$88,522

a

Includes

foreign

securities

valued

at

$122,344,698,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FA-52

Semiannual

Report

Franklin

Allocation

VIP

Fund

(continued)

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

C

ounterparty

CITI

Citibank

NA

JPHQ

JPMorgan

Chase

Bank

NA

Selected

Portfolio

ADR

American

Depositary

Receipt

AGMC

Assured

Guaranty

Municipal

Corp.

CDI

CREST

Depository

Interest

ETF

Exchange-Traded

Fund

FFCB

Federal

Farm

Credit

Banks

Funding

Corp.

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

NYRS

New

York

Registry

Shares

TIPS

Treasury

Inflation-Protected

Securities

10.

Fair

Value

Measurements

(continued)

FGR-1

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

This

semi

annual

report

for

Franklin

Global

Real

Estate

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+15.29%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*The

Fund

has

an

expense

reduction

contractually

guaranteed

through

4/30/22.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

FGR-2

Semiannual

Report

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).

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).

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

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

®

EPRA

®

/

NAREIT

®

Developed

Index

posted

a

+16.11%

total

return

for

the

same

period.

1

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR,

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Equity

Real

Estate

Investment

Trusts

(REITs)

78.6%

Real

Estate

Management

&

Development

18.8%

Other

0.8%

Short-Term

Investments

&

Other

Net

Assets

1.8%

Franklin

Global

Real

Estate

VIP

Fund

FGR-3

Semiannual

Report

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

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.

Manager’s

Discussion

During

the

six

months

under

review,

the

Fund’s

performance

relative

to

the

FTSE

EPRA/NAREIT

Developed

Index

was

supported

by

stock

selection

in

the

healthcare

property

sector

and

an

underweighting

and

stock

selection

in

the

diversified

sector.

The

positive

effects

from

both

these

sectors

came

almost

exclusively

from

a

lack

of

exposure

to

stocks

that

underperformed

a

real

estate

market

that

advanced

strongly

during

the

period.

An

underweighting

in

the

retail

property

sector

also

helped

relative

performance.

Contributors

included

Regency

Centers,

an

owner

of

mostly

grocery-anchored

shopping

centers

located

in

affluent

and

densely

populated

trade

areas

across

the

U.S.

Like

many

other

retail

landlords,

Regency

was

severely

impacted

by

the

government

mandated

lockdowns

and

restrictions

relating

to

the

COVID-19

pandemic.

The

announcement

of

the

vaccine

and

rollout

plans

produced

a

dramatic

shift

in

sentiment

about

the

economic

recovery

and

brought

a

better

fundamental

outlook

for

Regency’s

business.

Accordingly,

we

increased

our

position

in

the

company

during

the

first

half

of

2021.

The

company’s

first-quarter

2021

results

highlighted

solid

leasing

activity

and

reductions

in

bad

debt

while

the

improved

outlook

was

evidenced

by

a

material

increase

to

its

full-year

2021

guidance.

SmartCentres

(not

held

at

period-

end),

a

REIT

which

owns

approximately

150

predominantly

Walmart-anchored

shopping

centers

across

Canada,

also

contributed.

Amid

the

broader

challenges

facing

retail

real

estate

as

a

consequence

of

COVID-19,

such

as

prolonged

store

closures

and

reduced

rent

collections,

SmartCentres’

operating

metrics

held

up

relatively

well

owing

to

the

company’

suburban

footprint

and

defensive

tenant

line-up,

namely

its

high

concentration

of

essential

service

tenants.

Recent

results

highlight

the

relative

stability

with

stable

rent

collections

and

portfolio

occupancy

remaining

at

the

97%

level.

Other

individual

contributors

to

relative

performance

included

American

Homes

4

Rent,

an

owner,

operator

and

developer

of

single-family

rental

housing

across

the

U.S.

With

a

portfolio

of

approximately

54,000

homes

mostly

in

the

Southeastern

and

Southwestern

regions

of

the

country,

the

company

has

continued

to

benefit

from

demographic

shifts

driving

increased

demand

for

single-family

rentals

versus

a

backdrop

of

sustained

under-production

of

detached

houses

dating

back

to

the

Global

Financial

Crisis.

The

COVID-19

pandemic

has

accelerated

such

demand

trends

(namely

migration

from

urban

and

apartment

living),

with

the

company

experiencing

record

strength

in

operating

metrics

as

evidenced

by

portfolio

occupancy

rising

to

nearly

98%

and

double-digit

new

lease

rent

spreads

achieved

thus

far

in

2021.

Conversely,

stock

selection

in

the

office

space

sector

detracted

from

relative

performance

during

the

period.

Performance

in

the

sector

was

hurt

by

Alexandria

Real

Estate

Equities,

a

developer,

owner

and

operator

of

life

science

office

and

lab

clusters

in

the

U.S.

This

specific

focus

on

life

science

minimized

concern

about

risks

to

cash

collections,

occupancy

and

rental

rates

through

the

depths

of

the

pandemic,

driving

significant

outperformance.

As

concern

about

the

pandemic

shifted

into

optimism

around

reopening

over

the

past

six

months,

however,

this

relative

stability

became

a

drag

as

the

company

had

little

negative

impact

Top

10

Countries

6/30/21

a

%

of

Total

Net

Assets

a

a

United

States

55.8%

Japan

10.5%

United

Kingdom

6.0%

Germany

5.2%

Hong

Kong

4.1%

Australia

3.8%

Singapore

3.1%

Canada

2.7%

Sweden

2.0%

Spain

1.7%

Franklin

Global

Real

Estate

VIP

Fund

FGR-4

Semiannual

Report

from

which

to

recover.

Despite

the

recent

underperformance,

we

remain

positively

biased

to

Alexandria

because

the

company’s

unique

cluster

model

minimizes

competitive

supply

risk,

leading

to

what

we

view

as

stable

occupancy

and

industry-leading

leasing

economics

which

drives

sustainable

cash

flow

growth.

An

underweighting

in

the

regional

malls

sector

also

hurt

relative

performance.

Significant

detractors

included

our

underweighted

position

in

Simon

Property

Group.

Simon

is

one

of

the

largest

owners

of

retail

real

estate

in

the

world,

primarily

regional

malls

in

the

U.S.

Despite

possessing

a

relatively

high-quality

portfolio

and

a

better

balance

sheet

than

most

of

its

shopping

mall

peers,

we

have

maintained

an

underweight

to

Simon

as

we

see

the

outlook

for

their

assets

as

challenged,

amid

increasing

e-commerce

adoption.

The

emergence

of

COVID-19

only

served

to

accelerate

such

trends,

in

addition

to

hampering

rent

collecting

ability

due

to

the

store

closures.

However,

the

arrival

of

positive

vaccine

news

in

November

2020

sparked

a

significant

rotation

into

value

stocks

and

reopening

themes

which

benefited

Simon,

leading

to

share

price

outperformance

over

the

period.

Nevertheless,

we

maintain

a

less-favorable

view

of

the

firm’s

long-term

prospects

and

anticipate

a

long

road

of

rent

and

valuation

declines

in

the

years

ahead.

An

underweighting

in

the

storage

property

sector

and

stock

selection

in

the

industrial

property

sector

hurt

relative

results

as

well.

In

industrial

property,

detractors

included

Singaporean

industrial

REIT

Mapletree

Logistics

Trust,

which

owns

and

operates

industrial

warehouses

and

logistics

facilities

across

the

Asia

Pacific

region.

The

sudden,

significant

shift

to

e-commerce

consumption

made

industrial/logistics

one

of

the

beneficiaries

of

the

pandemic,

and

while

demand

remains

very

robust

as

the

pandemic

ebbs,

the

subsector

does

not

have

any

tailwinds

from

economic

reopenings.

Moreover,

like

most

industrial/

logistics

REITs

globally,

the

company

trades

at

a

healthy

premium

to

net

asset

value,

making

it

a

common

source

of

funds

for

reopening-focused

trades.

Despite

the

recent

underperformance,

we

remain

favorably

biased

to

industrial

real

estate

globally

given

strong

secular

trends

favoring

demand

growth

and

limiting

supply

availability.

Thank

you

for

your

participation

in

Franklin

Global

Real

Estate

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,

2021,

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.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Prologis,

Inc.

5.9%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Vonovia

SE

3.2%

Real

Estate

Management

&

Development,

Germany

AvalonBay

Communities,

Inc.

3.1%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Equinix

,

Inc.

3.0%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Public

Storage

2.8%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Welltower

,

Inc.

2.7%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Healthpeak

Properties,

Inc.

2.7%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Alexandria

Real

Estate

Equities,

Inc.

2.5%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

UDR,

Inc.

2.5%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Segro

plc

2.4%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

Kingdom

Class

1

Fund

Expenses

Franklin

Global

Real

Estate

VIP

Fund

FGR-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,152.90

$5.33

$1,019.84

$5.00

1.00%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Global

Real

Estate

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.66

$17.99

$15.41

$16.96

$15.83

$15.93

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.39

0.29

0.33

0.17

0.30

c

Net

realized

and

unrealized

gains

(losses)

2.11

(1.59)

3.15

(1.41)

1.52

(0.16)

Total

from

investment

operations

........

2.27

(1.20)

3.44

(1.08)

1.69

0.14

Less

distributions

from:

Net

investment

income

..............

(0.18)

(0.54)

(0.50)

(0.47)

(0.56)

(0.24)

Net

realized

gains

.................

(0.37)

(1.59)

(0.36)

—

—

—

Total

distributions

...................

(0.55)

(2.13)

(0.86)

(0.47)

(0.56)

(0.24)

Net

asset

value,

end

of

period

..........

$16.38

$14.66

$17.99

$15.41

$16.96

$15.83

Total

return

d

.......................

15.29%

(5.17)%

22.62%

(6.52)%

10.76%

0.81%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.15

%

1.24%

1.14%

1.15%

1.14%

1.11%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.00%

1.00%

f

1.04%

f

1.15%

f

1.14%

g

1.11%

g

Net

investment

income

...............

2.09%

2.73%

1.66%

1.92%

1.04%

1.99%

c

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$911

$966

$1,057

$878

$819

$821

Portfolio

turnover

rate

................

15.87%

23.01%

28.34%

17.78%

22.18%

28.53%

h

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

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%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Global

Real

Estate

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGR-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.21

$17.50

$15.00

$16.52

$15.42

$15.52

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.14

0.35

0.24

0.27

0.13

0.28

c

Net

realized

and

unrealized

gains

(losses)

2.03

(1.56)

3.08

(1.36)

1.47

(0.19)

Total

from

investment

operations

........

2.17

(1.21)

3.32

(1.09)

1.60

0.09

Less

distributions

from:

Net

investment

income

..............

(0.14)

(0.49)

(0.46)

(0.43)

(0.50)

(0.19)

Net

realized

gains

.................

(0.37)

(1.59)

(0.36)

—

—

—

Total

distributions

...................

(0.51)

(2.08)

(0.82)

(0.43)

(0.50)

(0.19)

Net

asset

value,

end

of

period

..........

$15.87

$14.21

$17.50

$15.00

$16.52

$15.42

Total

return

d

.......................

15.18%

(5.39)%

22.37%

(6.77)%

10.47%

0.54%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.39%

1.48%

1.39%

1.40%

1.39%

1.36%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.25%

1.25%

f

1.29%

f

1.40%

f

1.39%

g

1.36%

g

Net

investment

income

...............

1.85%

2.47%

1.41%

1.67%

0.79%

1.74%

c

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$146,478

$134,051

$159,153

$146,408

$183,532

$193,707

Portfolio

turnover

rate

................

15.87%

23.01%

28.34%

17.78%

22.18%

28.53%

h

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

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

1.34%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Global

Real

Estate

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-8

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

98.2%

Diversified

Telecommunication

Services

0.8%

a

Cellnex

Telecom

SA,

144A,

Reg

S

.........................

Spain

19,502

$

1,243,967

Equity

Real

Estate

Investment

Trusts

(REITs)

78.6%

Aedifica

SA

..........................................

Belgium

8,598

1,135,908

Alexandria

Real

Estate

Equities,

Inc.

.......................

United

States

20,412

3,713,759

Allied

Properties

Real

Estate

Investment

Trust

................

Canada

30,168

1,096,244

American

Homes

4

Rent,

A

..............................

United

States

85,407

3,318,062

Americold

Realty

Trust

.................................

United

States

32,340

1,224,069

AvalonBay

Communities,

Inc.

............................

United

States

21,556

4,498,522

Boston

Properties,

Inc.

.................................

United

States

10,858

1,244,218

Broadstone

Net

Lease,

Inc.

..............................

United

States

62,698

1,467,760

Camden

Property

Trust

.................................

United

States

25,582

3,393,964

Canadian

Apartment

Properties

REIT

......................

Canada

49,994

2,343,740

b

Capital

&

Counties

Properties

plc

.........................

United

Kingdom

210,568

470,468

CapitaLand

Integrated

Commercial

Trust

....................

Singapore

814,766

1,268,478

City

Office

REIT,

Inc.

...................................

United

States

32,662

405,989

Cousins

Properties,

Inc.

................................

United

States

64,046

2,355,612

CyrusOne

,

Inc.

.......................................

United

States

16,723

1,196,029

Derwent

London

plc

...................................

United

Kingdom

32,944

1,511,220

Dexus

..............................................

Australia

235,090

1,873,696

Douglas

Emmett,

Inc.

..................................

United

States

13,170

442,775

Equinix

,

Inc.

.........................................

United

States

5,521

4,431,155

Equity

LifeStyle

Properties,

Inc.

...........................

United

States

38,769

2,880,924

Gecina

SA

..........................................

France

12,802

1,961,582

GLP

J-

Reit

..........................................

Japan

921

1,588,546

Goodman

Group

......................................

Australia

172,218

2,724,922

GPT

Group

(The)

.....................................

Australia

279,335

1,021,643

H&R

Real

Estate

Investment

Trust

........................

Canada

45,094

581,975

Healthcare

Realty

Trust,

Inc.

.............................

United

States

42,682

1,288,996

Healthpeak

Properties,

Inc.

..............................

United

States

118,506

3,945,065

b

Host

Hotels

&

Resorts,

Inc.

..............................

United

States

99,586

1,701,925

Hulic

Reit

,

Inc.

.......................................

Japan

729

1,227,055

Ichigo

Office

REIT

Investment

Corp.

.......................

Japan

922

818,961

c

Inmobiliaria

Colonial

Socimi

SA

...........................

Spain

124,180

1,254,216

Japan

Hotel

REIT

Investment

Corp.

........................

Japan

1,153

690,365

Kenedix

Office

Investment

Corp.

..........................

Japan

217

1,528,424

Kilroy

Realty

Corp.

....................................

United

States

24,904

1,734,315

Life

Storage,

Inc.

......................................

United

States

10,147

1,089,280

Link

REIT

...........................................

Hong

Kong

128,016

1,238,590

Mapletree

Logistics

Trust

...............................

Singapore

966,591

1,477,597

MGM

Growth

Properties

LLC,

A

...........................

United

States

44,163

1,617,249

NETSTREIT

Corp.

....................................

United

States

32,315

745,184

NTT

UD

REIT

Investment

Corp.

..........................

Japan

822

1,213,676

Orix

JREIT,

Inc.

.......................................

Japan

726

1,393,838

Prologis,

Inc.

.........................................

United

States

72,949

8,719,594

Public

Storage

.......................................

United

States

13,900

4,179,591

Realty

Income

Corp.

...................................

United

States

51,695

3,450,124

Regency

Centers

Corp.

.................................

United

States

47,678

3,054,729

Rexford

Industrial

Realty,

Inc.

............................

United

States

48,472

2,760,480

RPT

Realty

..........................................

United

States

50,107

650,389

b

Ryman

Hospitality

Properties,

Inc.

.........................

United

States

15,182

1,198,771

SBA

Communications

Corp.

.............................

United

States

4,191

1,335,672

Segro

plc

...........................................

United

Kingdom

230,993

3,497,090

Simon

Property

Group,

Inc.

..............................

United

States

18,620

2,429,538

Spirit

Realty

Capital,

Inc.

................................

United

States

53,535

2,561,114

Terreno

Realty

Corp.

...................................

United

States

23,528

1,518,027

UDR,

Inc.

...........................................

United

States

74,490

3,648,520

UNITE

Group

plc

(The)

.................................

United

Kingdom

110,575

1,642,892

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Global

Real

Estate

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGR-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

Welltower

,

Inc.

.......................................

United

States

48,456

$

4,026,694

115,789,221

Real

Estate

Management

&

Development

18.8%

c

Aroundtown

SA

.......................................

Germany

202,748

1,582,021

CapitaLand

Ltd.

......................................

Singapore

652,181

1,801,407

a,b

CTP

NV,

144A,

Reg

S

..................................

Netherlands

40,772

822,928

Fabege

AB

..........................................

Sweden

81,751

1,310,971

b

Fastighets

AB

Balder,

B

.................................

Sweden

26,914

1,687,297

Grainger

plc

.........................................

United

Kingdom

442,430

1,743,804

Hang

Lung

Properties

Ltd.

...............................

Hong

Kong

364,000

882,799

LEG

Immobilien

SE

....................................

Germany

8,915

1,283,483

Mitsubishi

Estate

Co.

Ltd.

...............................

Japan

145,920

2,358,802

Mitsui

Fudosan

Co.

Ltd.

................................

Japan

148,642

3,437,458

New

World

Development

Co.

Ltd.

.........................

Hong

Kong

276,639

1,434,627

Nomura

Real

Estate

Holdings,

Inc.

........................

Japan

45,581

1,154,617

Shurgard

Self

Storage

SA

...............................

Belgium

19,218

928,584

Sun

Hung

Kai

Properties

Ltd.

............................

Hong

Kong

170,442

2,533,084

Vonovia

SE

..........................................

Germany

74,067

4,787,023

27,748,905

Total

Common

Stocks

(Cost

$94,543,288)

......................................

144,782,093

Short

Term

Investments

2.3%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.5%

d

Joint

Repurchase

Agreement,

0.033%,

7/01/21

(Maturity

Value

$711,231)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$519,014)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$78,975)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$113,242)

Collateralized

by

U.S.

Government

Agency

Securities,

2.5%

-

5%,

6/20/47

-

3/20/51;

U.S.

Treasury

Bond,

Index

Linked,

2.38%,

1/15/25;

and

U.S.

Treasury

Note,

1.88%,

4/30/22

(valued

at

$725,960)

.........................................

711,230

711,230

Total

Repurchase

Agreements

(Cost

$711,230)

..................................

711,230

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.8%

Country

Shares

Money

Market

Funds

1.4%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

2,136,000

2,136,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Global

Real

Estate

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-10

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.4%

d

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0.05%,

7/01/21

(Maturity

Value

$534,541)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$545,231)

.........................................

534,540

$

534,540

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$2,670,540)

............................................................

2,670,540

Total

Short

Term

Investments

(Cost

$3,381,770

)

.................................

3,381,770

a

Total

Investments

(Cost

$97,925,058)

100.5%

...................................

$148,163,863

Other

Assets,

less

Liabilities

(0.5)%

...........................................

(775,344)

Net

Assets

100.0%

...........................................................

$147,388,519

See

A

bbreviations

on

page

FGR-

21

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$2,066,895,

representing

1.4%

of

net

assets.

b

Non-income

producing.

c

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(d)

.

d

See

Note

1(c)

regarding

joint

repurchase

agreement.

e

See

Note

1(d)

regarding

securities

on

loan.

f

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGR-11

Franklin

Global

Real

Estate

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$94,543,288

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

2,136,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

1,245,770

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$2,441,010)

.................................

$144,782,093

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

2,136,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

1,245,770

Foreign

currency,

at

value

(cost

$2,779)

..........................................................

2,765

Receivables:

Investment

securities

sold

...................................................................

2,600,544

Capital

shares

sold

........................................................................

10,227

Dividends

...............................................................................

491,999

European

Union

tax

reclaims

(Note

1

e

)

.........................................................

1,319,112

Total

assets

..........................................................................

152,588,510

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

2,141,700

Capital

shares

redeemed

...................................................................

108,388

Management

fees

.........................................................................

112,905

Distribution

fees

..........................................................................

30,710

Payable

upon

return

of

securities

loaned

(Note

1

d

)

..................................................

2,670,540

Accrued

expenses

and

other

liabilities

...........................................................

135,748

Total

liabilities

.........................................................................

5,199,991

Net

assets,

at

value

.................................................................

$147,388,519

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$95,195,600

Total

distributable

earnings

(losses)

.............................................................

52,192,919

Net

assets,

at

value

.................................................................

$147,388,519

Franklin

Global

Real

Estate

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$910,930

Shares

outstanding

........................................................................

55,618

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$16.38

Class

2:

Net

assets,

at

value

.......................................................................

$146,477,589

Shares

outstanding

........................................................................

9,230,494

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$15.87

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-12

Franklin

Global

Real

Estate

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$33,456)

Unaffiliated

issuers

........................................................................

$2,083,670

Interest:

Unaffiliated

issuers

........................................................................

185

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

1,823

Non-controlled

affiliates

(Note

3e)

.............................................................

26

Other

income

(Note

1e)

......................................................................

66,307

Total

investment

income

...................................................................

2,152,011

Expenses:

Management

fees

(Note

3

a

)

...................................................................

727,567

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

172,162

Custodian

fees

(Note

4

)

......................................................................

2,620

Reports

to

shareholders

......................................................................

16,233

Professional

fees

...........................................................................

42,816

Trustees'

fees

and

expenses

..................................................................

800

Other

....................................................................................

4,098

Total

expenses

.........................................................................

966,296

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(101,287)

Net

expenses

.........................................................................

865,009

Net

investment

income

................................................................

1,287,002

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

5,934,989

Foreign

currency

transactions

................................................................

(60,344)

Net

realized

gain

(loss)

..................................................................

5,874,645

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

12,716,368

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(26,699)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

12,689,669

Net

realized

and

unrealized

gain

(loss)

............................................................

18,564,314

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$19,851,316

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGR-13

Franklin

Global

Real

Estate

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$1,287,002

$3,273,214

Net

realized

gain

(loss)

.................................................

5,874,645

5,502,334

Net

change

in

unrealized

appreciation

(depreciation)

...........................

12,689,669

(18,826,188)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

19,851,316

(10,050,640)

Distributions

to

shareholders:

Class

1

.............................................................

(29,467)

(122,579)

Class

2

.............................................................

(4,585,707)

(18,130,603)

Total

distributions

to

shareholders

..........................................

(4,615,174)

(18,253,182)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(144,576)

91,462

Class

2

.............................................................

(2,720,298)

3,019,898

Total

capital

share

transactions

............................................

(2,864,874)

3,111,360

Net

increase

(decrease)

in

net

assets

...................................

12,371,268

(25,192,462)

Net

assets:

Beginning

of

period

.....................................................

135,017,251

160,209,713

End

of

period

..........................................................

$147,388,519

$135,017,251

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Franklin

Global

Real

Estate

VIP

Fund

FGR-14

Semiannual

Report

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,

2021,

82.6%

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

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 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the Trust’s

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time. In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-15

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

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

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

d.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-16

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

e.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims).

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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

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. 

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

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-17

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

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.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

The

Fund

intends

to

distribute

substantially

all

of

the

income

quarterly.

g.

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.

h.

Guarantees

and

Indemnifications

Under

the

Trust’s

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust’s

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

81

$1,190

2,518

$33,827

Shares

issued

in

reinvestment

of

distributions

..........

1,752

29,467

9,436

122,579

Shares

redeemed

...............................

(12,099)

(175,233)

(4,809)

(64,944)

Net

increase

(decrease)

..........................

(10,266)

$(144,576)

7,145

$91,462

Class

2

Shares:

Shares

sold

...................................

110,829

$1,680,999

236,639

$3,343,255

Shares

issued

in

reinvestment

of

distributions

..........

281,332

4,585,707

1,438,937

18,130,603

Shares

redeemed

...............................

(598,269)

(8,987,004)

(1,332,313)

(18,453,960)

Net

increase

(decrease)

..........................

(206,108)

$(2,720,298)

343,263

$3,019,898

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-18

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

1.050%

of

the

Fund’s

average

daily

net

assets.

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.

Subsidiary

Affiliation

Franklin

Templeton

Institutional,

LLC

(FT

Institutional)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-19

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

f.

Waiver

and

Expense

Reimbursements

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

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

each

class

of

the

Fund

do

not

exceed

1.00%

based

on

the

average

net

assets

of

each

class

until

April

30,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

4.

Expense

Offset

Arrangement

The Fund has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

June

30,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments,

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

EU

reclaims,

passive

foreign

investment

company

shares

and

wash

sales.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Global

Real

Estate

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$163,000

$8,076,000

$(6,103,000)

$

—

$

—

$2,136,000

2,136,000

$26

Total

Affiliated

Securities

....

$163,000

$8,076,000

$(6,103,000)

$—

$—

$2,136,000

$26

Cost

of

investments

..........................................................................

$104,311,067

Unrealized

appreciation

........................................................................

$50,906,591

Unrealized

depreciation

........................................................................

(7,053,795)

Net

unrealized

appreciation

(depreciation)

..........................................................

$43,852,796

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-20

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$21,744,114

and

$28,512,743

respectively.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$2,670,540

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

10.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGR-21

Semiannual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

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,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

11.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Level

1

Level

2

Level

3

Total

Franklin

Global

Real

Estate

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Diversified

Telecommunication

Services

.....

$

—

$

1,243,967

$

—

$

1,243,967

Equity

Real

Estate

Investment

Trusts

(REITs)

.

89,481,492

26,307,729

—

115,789,221

Real

Estate

Management

&

Development

....

—

27,748,905

—

27,748,905

Short

Term

Investments

...................

2,136,000

1,245,770

—

3,381,770

Total

Investments

in

Securities

...........

$91,617,492

$56,546,371

a

$—

$148,163,863

a

Includes

foreign

securities

valued

at

$55,300,601,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Selected

Portfolio

REIT

Real

Estate

Investment

Trust

10.

Fair

Value

Measurements

(continued)

FGI-1

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

This

semi

annual

report

for

Franklin

Growth

and

Income

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+13.88%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*The

Fund

has

an

expense

reduction

contractually

guaranteed

through

4/30/22.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

FGI-2

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

Fund

Goals

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,

with

the

remainder

of

its

net

assets

in

other

equity-related

instruments

such

as

convertible

securities

and

equity-linked

notes

(ELNs).

The

Fund

does

not

currently

anticipate

investing

more

than

15%

of

its

net

assets

in

foreign

securities.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

A

blend

strategy

results

in

investments

in

both

value

and

growth

stocks,

or

in

stocks

with

characteristics

of

both.

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.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues,

and

can,

therefore,

fall

dramatically

if

the

company

fails

to

meet

those

projections.

Because

the

Fund

can

only

distribute

what

it

earns,

the

Fund’s

distributions

to

shareholders

may

decline

when

dividend

income

from

investments

in

stocks

decline

or

when

prevailing

interest

rates

fall.

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.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund’s

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

primary

benchmark,

the

Russell

1000

®

Value

Index,

posted

a

+17.05%

total

return.

1

Also

for

comparison,

the

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

)

posted

a

+15.25%

total

return.

1

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Banks

11.6%

Capital

Markets

8.4%

Electric

Utilities

5.9%

Health

Care

Equipment

&

Supplies

5.8%

Oil,

Gas

&

Consumable

Fuels

5.2%

Chemicals

5.1%

Pharmaceuticals

5.0%

Aerospace

&

Defense

3.8%

Beverages

3.7%

Multiline

Retail

3.4%

Semiconductors

&

Semiconductor

Equipment

3.4%

Specialty

Retail

3.4%

Machinery

3.3%

Electrical

Equipment

3.0%

Other*

28.7%

Short-Term

Investments

&

Other

Net

Assets

0.3%

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).

Franklin

Growth

and

Income

VIP

Fund

FGI-3

Semiannual

Report

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-pandemic

levels,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

bolstered

growth.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

5.9%

in

June

2021

as

job

openings

grew,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

2

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

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,

cash

flow

potential

and

balance

sheet

strength.

We

also

consider

a

company’s

price/earnings

ratio,

return

on

capital,

profit

margins

and

asset

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.

Manager’s

Discussion

During

the

six

months

under

review,

nearly

all

sectors

represented

in

the

Fund’s

portfolio

posted

positive

returns

and

contributed

to

absolute

performance,

led

by

financials,

industrials,

consumer

discretionary

and

energy.

The

improving

economic

backdrop

with

the

rollout

of

COVID-19

vaccines

boosted

financial

stocks,

including

our

investments

in

Morgan

Stanley,

Bank

of

America

and

JPMorgan

Chase—

the

Fund’s

top

three

individual

contributors

during

the

period.

These

financial

institutions

have

managed

the

pandemic

disruptions

better

than

many

of

their

peers

because

of

the

diversification

of

their

revenue

streams

and

focus

on

improving

operational

efficiency.

In

the

industrials

sector,

our

positions

in

air

freight

and

logistics

firm

United

Parcel

Service

and

aerospace

and

defense

company

Raytheon

Technologies

boosted

performance.

In

consumer

discretionary,

our

holding

in

omni-channel

retailer

Target

aided

results.

In

the

energy

sector,

our

investments

in

oil,

gas

and

consumable

fuels

companies

Chevron

and

Suncor

Energy

(Canada)

benefited

performance.

In

contrast,

the

consumer

staples

sector

was

the

only

sector

that

detracted

from

the

Fund’s

absolute

performance.

Within

the

sector,

our

position

in

household

products

company

Procter

&

Gamble

hindered

returns.

Although

the

company

continued

to

execute

well,

the

market

has

generally

preferred

companies

that

will

see

relatively

more

demand

from

economies

reopening.

Our

holding

in

U.K.

personal

products

company

Unilever

(not

held

at

period-end)

also

hampered

Fund

returns.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

A

a

Bank

of

America

Corp.

4.3%

Banks,

United

States

JPMorgan

Chase

&

Co.

4.1%

Banks,

United

States

Morgan

Stanley

3.7%

Capital

Markets,

United

States

Johnson

&

Johnson

3.1%

Pharmaceuticals,

United

States

Raytheon

Technologies

Corp.

2.8%

Aerospace

&

Defense,

United

States

Target

Corp.

2.8%

Multiline

Retail,

United

States

Medtronic

plc

2.8%

Health

Care

Equipment

&

Supplies,

United

States

United

Parcel

Service,

Inc.

2.6%

Air

Freight

&

Logistics,

United

States

Duke

Energy

Corp.

2.6%

Electric

Utilities,

United

States

Procter

&

Gamble

Co.

(The)

2.4%

Household

Products,

United

States

2.

Source:

Bureau

of

Labor

Statistics.

Franklin

Growth

and

Income

VIP

Fund

FGI-4

Semiannual

Report

Other

individual

detractors

included

our

positions

in

electric

utility

firm

NextEra

Energy,

multi-utility

firm

Xcel

Energy

and

water

utility

company

Essential

Utilities,

as

the

improving

economic

outlook

hurt

the

performance

of

traditionally

defensive

areas

of

investment,

such

as

utilities.

Elsewhere,

our

holdings

in

chemicals

firm

Huntsman

and

food

and

staples

retailer

Walmart

also

detracted

from

the

Fund’s

absolute

performance.

Thank

you

for

your

participation

in

Franklin

Growth

and

Income

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Growth

and

Income

VIP

Fund

FGI-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,138.80

$3.13

$1,021.87

$2.96

0.59%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Growth

and

Income

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$13.33

$17.20

$14.80

$16.32

$15.97

$15.94

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.13

0.31

0.41

0.31

0.35

0.40

Net

realized

and

unrealized

gains

(losses)

1.73

(0.13)

3.28

(0.97)

2.04

1.33

Total

from

investment

operations

........

1.86

0.18

3.69

(0.66)

2.39

1.73

Less

distributions

from:

Net

investment

income

..............

(0.39)

(0.63)

(0.41)

(0.43)

(1.03)

(0.46)

Net

realized

gains

.................

(0.99)

(3.42)

(0.88)

(0.43)

(1.01)

(1.24)

Total

distributions

...................

(1.38)

(4.05)

(1.29)

(0.86)

(2.04)

(1.70)

Net

asset

value,

end

of

period

..........

$13.81

$13.33

$17.20

$14.80

$16.32

$15.97

Total

return

c

.......................

13.88%

5.81%

26.05%

(4.37)%

16.15%

11.86%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.81%

0.83%

0.72%

0.73%

0.72%

0.59%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.59%

0.59%

0.59%

0.59%

0.59%

0.59%

f

Net

investment

income

...............

1.91%

2.31%

2.07%

1.96%

2.21%

2.38%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$3,856

$3,206

$3,539

$31,479

$35,865

$29,829

Portfolio

turnover

rate

................

15.81%

33.46%

25.20%

24.29%

33.91%

40.59%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Growth

and

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGI-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$12.97

$16.84

$14.51

$16.02

$15.69

$15.68

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.11

0.27

0.25

0.27

0.31

0.30

Net

realized

and

unrealized

gains

(losses)

1.67

(0.14)

3.33

(0.96)

2.00

1.37

Total

from

investment

operations

........

1.78

0.13

3.58

(0.69)

2.31

1.67

Less

distributions

from:

Net

investment

income

..............

(0.36)

(0.58)

(0.37)

(0.39)

(0.97)

(0.42)

Net

realized

gains

.................

(0.99)

(3.42)

(0.88)

(0.43)

(1.01)

(1.24)

Total

distributions

...................

(1.35)

(4.00)

(1.25)

(0.82)

(1.98)

(1.66)

Net

asset

value,

end

of

period

..........

$13.40

$12.97

$16.84

$14.51

$16.02

$15.69

Total

return

c

.......................

13.70%

5.52%

25.66%

(4.58)%

15.85%

11.62%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.06%

1.08%

0.97%

0.98%

0.97%

0.84%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.84%

0.84%

0.84%

0.84%

0.84%

0.84%

f

Net

investment

income

...............

1.66%

2.07%

1.82%

1.71%

1.96%

2.13%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$68,317

$64,455

$69,635

$61,855

$74,105

$69,474

Portfolio

turnover

rate

................

15.81

%

33.46%

25.20%

24.29%

33.91%

40.59%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Growth

and

Income

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-8

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

83.4%

Aerospace

&

Defense

3.8%

Lockheed

Martin

Corp.

.................................

United

States

1,765

$

667,788

Raytheon

Technologies

Corp.

............................

United

States

24,305

2,073,459

2,741,247

Air

Freight

&

Logistics

2.7%

United

Parcel

Service,

Inc.,

B

............................

United

States

9,210

1,915,404

Banks

10.7%

Bank

of

America

Corp.

.................................

United

States

59,140

2,438,342

Citigroup,

Inc.

........................................

United

States

17,295

1,223,621

JPMorgan

Chase

&

Co.

.................................

United

States

19,220

2,989,479

Truist

Financial

Corp.

..................................

United

States

18,840

1,045,620

7,697,062

Beverages

3.7%

Coca-Cola

Co.

(The)

...................................

United

States

26,465

1,432,021

PepsiCo,

Inc.

........................................

United

States

8,350

1,237,220

2,669,241

Capital

Markets

8.4%

a

Apollo

Global

Management,

Inc.

..........................

United

States

17,800

1,107,160

Ares

Management

Corp.

................................

United

States

17,850

1,135,081

BlackRock,

Inc.

.......................................

United

States

1,325

1,159,335

Morgan

Stanley

.......................................

United

States

29,095

2,667,721

6,069,297

Chemicals

3.6%

BASF

SE

...........................................

Germany

7,640

603,151

Huntsman

Corp.

......................................

United

States

26,970

715,244

Linde

plc

............................................

United

Kingdom

2,070

598,437

Sherwin-Williams

Co.

(The)

..............................

United

States

2,445

666,140

2,582,972

Commercial

Services

&

Supplies

1.5%

Republic

Services,

Inc.

.................................

United

States

10,070

1,107,801

Communications

Equipment

0.6%

Cisco

Systems,

Inc.

...................................

United

States

8,125

430,625

Diversified

Telecommunication

Services

2.0%

TELUS

Corp.

........................................

Canada

13,900

311,692

Verizon

Communications,

Inc.

............................

United

States

20,155

1,129,285

1,440,977

Electric

Utilities

5.9%

Duke

Energy

Corp.

....................................

United

States

19,125

1,888,020

Entergy

Corp.

........................................

United

States

6,145

612,656

NextEra

Energy,

Inc.

...................................

United

States

20,770

1,522,026

Xcel

Energy,

Inc.

......................................

United

States

3,950

260,226

4,282,928

Electrical

Equipment

2.4%

Eaton

Corp.

plc

.......................................

United

States

7,480

1,108,387

Emerson

Electric

Co.

..................................

United

States

6,530

628,447

1,736,834

Equity

Real

Estate

Investment

Trusts

(REITs)

1.3%

Prologis,

Inc.

.........................................

United

States

5,185

619,763

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Growth

and

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGI-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

Public

Storage

.......................................

United

States

950

$

285,656

905,419

Food

&

Staples

Retailing

1.3%

Walmart,

Inc.

........................................

United

States

6,480

913,810

Health

Care

Equipment

&

Supplies

2.8%

Medtronic

plc

........................................

United

States

16,250

2,017,112

Health

Care

Providers

&

Services

2.3%

HCA

Healthcare,

Inc.

...................................

United

States

3,321

686,584

UnitedHealth

Group,

Inc.

................................

United

States

2,480

993,091

1,679,675

Hotels,

Restaurants

&

Leisure

1.5%

McDonald's

Corp.

.....................................

United

States

4,785

1,105,287

Household

Products

2.4%

Procter

&

Gamble

Co.

(The)

.............................

United

States

12,775

1,723,731

Insurance

0.5%

Arthur

J

Gallagher

&

Co.

................................

United

States

2,815

394,325

IT

Services

1.4%

Fidelity

National

Information

Services,

Inc.

...................

United

States

3,400

481,678

Visa,

Inc.,

A

..........................................

United

States

2,130

498,037

979,715

Machinery

1.2%

Illinois

Tool

Works,

Inc.

.................................

United

States

2,160

482,890

Stanley

Black

&

Decker,

Inc.

.............................

United

States

1,888

387,021

869,911

Media

1.9%

Comcast

Corp.,

A

.....................................

United

States

24,290

1,385,016

Multiline

Retail

2.8%

Target

Corp.

.........................................

United

States

8,350

2,018,529

Oil,

Gas

&

Consumable

Fuels

5.2%

Canadian

Natural

Resources

Ltd.

.........................

Canada

15,360

557,261

Chevron

Corp.

.......................................

United

States

14,190

1,486,260

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

19,250

777,700

Suncor

Energy,

Inc.

....................................

Canada

37,845

907,145

3,728,366

Pharmaceuticals

5.0%

Johnson

&

Johnson

...................................

United

States

13,910

2,291,533

Merck

&

Co.,

Inc.

.....................................

United

States

6,170

479,841

Pfizer,

Inc.

...........................................

United

States

21,425

839,003

3,610,377

Road

&

Rail

1.5%

Norfolk

Southern

Corp.

.................................

United

States

4,150

1,101,451

Semiconductors

&

Semiconductor

Equipment

1.9%

Broadcom,

Inc.

.......................................

United

States

870

414,851

Texas

Instruments,

Inc.

.................................

United

States

5,005

962,461

1,377,312

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Growth

and

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

2.0%

Microsoft

Corp.

.......................................

United

States

3,150

$

853,335

Oracle

Corp.

.........................................

United

States

8,030

625,055

1,478,390

Specialty

Retail

2.6%

Lowe's

Cos.,

Inc.

......................................

United

States

5,370

1,041,619

TJX

Cos.,

Inc.

(The)

...................................

United

States

11,990

808,366

1,849,985

Technology

Hardware,

Storage

&

Peripherals

0.5%

Apple,

Inc.

..........................................

United

States

2,865

392,390

Total

Common

Stocks

(Cost

$35,453,391)

......................................

60,205,189

b

Equity-Linked

Securities

9.7%

Banks

0.9%

c

Royal

Bank

of

Canada

into

Bank

of

America

Corp.,

144A,

7.75%,

11/01/21

..........................................

United

States

23,000

685,445

Chemicals

1.5%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Sherwin-Williams

Co.

(The),

144A,

6.5%,

7/09/21

............................

United

States

800

531,922

c

Goldman

Sachs

International

Bank

into

Linde

plc,

144A,

6.5%,

10/25/21

..........................................

United

Kingdom

2,037

555,586

1,087,508

Electrical

Equipment

0.6%

c

Royal

Bank

of

Canada

into

Eaton

Corp.

plc,

144A,

7%,

8/30/21

...

United

States

2,900

398,072

Equity

Real

Estate

Investment

Trusts

(REITs)

0.7%

c

Royal

Bank

of

Canada

into

Healthpeak

Properties,

Inc.,

144A,

9.5%,

12/01/21

..........................................

United

States

16,000

533,664

Food

&

Staples

Retailing

0.7%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Tesco

plc,

144A,

6.5%,

1/10/22

...........................................

United

Kingdom

3,150

509,924

Health

Care

Providers

&

Services

0.6%

c

Royal

Bank

of

Canada

into

HCA

Healthcare,

Inc.,

144A,

6%,

7/15/22

United

States

2,100

432,922

Internet

&

Direct

Marketing

Retail

0.9%

c

Credit

Suisse

AG

into

Amazon.com,

Inc.,

144A,

5%,

4/22/22

.....

United

States

200

679,471

IT

Services

0.8%

c

Credit

Suisse

AG

into

Visa,

Inc.,

144A,

5%,

11/30/21

...........

United

States

1,500

340,960

c

Royal

Bank

of

Canada

into

Fidelity

National

Information

Services,

Inc.,

144A,

5%,

5/27/22

...............................

United

States

1,400

202,820

543,780

Machinery

0.8%

c

Credit

Suisse

AG

into

Stanley

Black

&

Decker,

Inc.,

144A,

6.5%,

3/31/22

...........................................

United

States

3,000

606,014

Multiline

Retail

0.6%

c

Barclays

Bank

plc

into

Dollar

Tree,

Inc.,

Senior

Note

,

144A,

5.5%,

1/14/22

...........................................

United

States

4,100

422,653

Software

0.8%

c

Barclays

Bank

plc

into

Oracle

Corp.,

144A,

7%,

7/30/21

........

United

States

8,000

559,643

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Growth

and

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGI-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

b

Equity-Linked

Securities

(continued)

Specialty

Retail

0.8%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

TJX

Cos.,

Inc.

(The),

144A,

6.5%,

9/14/21

.................................

United

States

8,808

$

567,558

Total

Equity-Linked

Securities

(Cost

$6,364,401)

................................

7,026,654

Convertible

Preferred

Stocks

6.6%

Health

Care

Equipment

&

Supplies

3.0%

a

Becton

Dickinson

and

Co.,

6%,

B

.........................

United

States

13,670

731,482

Boston

Scientific

Corp.,

5.5%,

A

..........................

United

States

3,435

398,666

Danaher

Corp.,

4.75%,

A

................................

United

States

485

872,326

a

Danaher

Corp.,

5%,

B

..................................

United

States

116

171,131

2,173,605

Machinery

1.3%

Fortive

Corp.,

5%,

A

...................................

United

States

945

928,944

Semiconductors

&

Semiconductor

Equipment

1.5%

Broadcom,

Inc.,

8%,

A

..................................

United

States

695

1,056,310

Water

Utilities

0.8%

Essential

Utilities,

Inc.,

6%

..............................

United

States

10,380

593,528

Total

Convertible

Preferred

Stocks

(Cost

$3,927,419)

............................

4,752,387

Total

Long

Term

Investments

(Cost

$45,745,211)

................................

71,984,230

a

Short

Term

Investments

1.3%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.2%

d

Joint

Repurchase

Agreement,

0.033%,

7/01/21

(Maturity

Value

$130,991)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$95,590)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$14,545)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$20,856)

Collateralized

by

U.S.

Government

Agency

Securities,

2.5%

-

5%,

6/20/47

-

3/20/51;

U.S.

Treasury

Bond,

Index

Linked,

2.38%,

1/15/25;

and

U.S.

Treasury

Note,

1.88%,

4/30/22

(valued

at

$133,704)

.........................................

130,991

130,991

Total

Repurchase

Agreements

(Cost

$130,991)

..................................

130,991

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.1%

Country

Shares

Money

Market

Funds

0.9%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

671,000

671,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Growth

and

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-12

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.2%

d

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0.05%,

7/01/21

(Maturity

Value

$168,963)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$172,342)

.........................................

168,963

$

168,963

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$839,963)

.............................................................

839,963

Total

Short

Term

Investments

(Cost

$970,954

)

..................................

970,954

a

Total

Investments

(Cost

$46,716,165)

101.0%

...................................

$72,955,184

Other

Assets,

less

Liabilities

(1.0)%

...........................................

(781,516)

Net

Assets

100.0%

...........................................................

$72,173,668

See

Abbreviations

on

page

FGI-

24

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(e).

b

See

Note

1(d)

regarding

equity-linked

securities.

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$7,026,654,

representing

9.7%

of

net

assets.

d

See

Note

1(c)

regarding

joint

repurchase

agreement.

e

See

Note

1(e)

regarding

securities

on

loan.

f

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGI-13

Franklin

Growth

and

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$45,745,211

Cost

-

Non-controlled

a

ffiliate

s

(Note

3e)

........................................................

671,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

299,954

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$811,762)

...................................

$71,984,230

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

671,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

299,954

Cash

....................................................................................

534,794

Receivables:

Investment

securities

sold

...................................................................

175,786

Capital

shares

sold

........................................................................

20,552

Dividends

...............................................................................

75,762

Total

assets

..........................................................................

73,762,078

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

560,068

Capital

shares

redeemed

...................................................................

79,612

Management

fees

.........................................................................

25,232

Distribution

fees

..........................................................................

14,061

Payable

upon

return

of

securities

loaned

(Note

1

e

)

..................................................

839,963

Accrued

expenses

and

other

liabilities

...........................................................

69,474

Total

liabilities

.........................................................................

1,588,410

Net

assets,

at

value

.................................................................

$72,173,668

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$40,621,269

Total

distributable

earnings

(losses)

.............................................................

31,552,399

Net

assets,

at

value

.................................................................

$72,173,668

Franklin

Growth

and

Income

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$3,856,171

Shares

outstanding

........................................................................

279,306

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.81

Class

2:

Net

assets,

at

value

.......................................................................

$68,317,497

Shares

outstanding

........................................................................

5,096,745

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.40

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-14

Franklin

Growth

and

Income

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$12,992)

Unaffiliated

issuers

........................................................................

$870,264

Interest:

Unaffiliated

issuers

........................................................................

893

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

1,139

Non-controlled

affiliates

(Note

3

e

)

.............................................................

15

Total

investment

income

...................................................................

872,311

Expenses:

Management

fees

(Note

3

a

)

...................................................................

217,769

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

82,814

Custodian

fees

(Note

4

)

......................................................................

580

Reports

to

shareholders

......................................................................

24,248

Professional

fees

...........................................................................

31,988

Trustees'

fees

and

expenses

..................................................................

585

Other

....................................................................................

7,135

Total

expenses

.........................................................................

365,119

Expense

reductions

(Note

4

)

...............................................................

(261)

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(76,420)

Net

expenses

.........................................................................

288,438

Net

investment

income

................................................................

583,873

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

4,981,310

Foreign

currency

transactions

................................................................

172

Net

realized

gain

(loss)

..................................................................

4,981,482

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

3,461,349

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(518)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

3,460,831

Net

realized

and

unrealized

gain

(loss)

............................................................

8,442,313

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$9,026,186

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FGI-15

Franklin

Growth

and

Income

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$583,873

$1,330,696

Net

realized

gain

(loss)

.................................................

4,981,482

5,087,661

Net

change

in

unrealized

appreciation

(depreciation)

...........................

3,460,831

(3,257,210)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

9,026,186

3,161,147

Distributions

to

shareholders:

Class

1

.............................................................

(341,784)

(726,968)

Class

2

.............................................................

(6,298,087)

(15,849,541)

Total

distributions

to

shareholders

..........................................

(6,639,871)

(16,576,509)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

547,376

235,202

Class

2

.............................................................

1,579,448

7,666,739

Total

capital

share

transactions

............................................

2,126,824

7,901,941

Net

increase

(decrease)

in

net

assets

...................................

4,513,139

(5,513,421)

Net

assets:

Beginning

of

period

.....................................................

67,660,529

73,173,950

End

of

period

..........................................................

$72,173,668

$67,660,529

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Franklin

Growth

and

Income

VIP

Fund

FGI-16

Semiannual

Report

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.

At

June

30,

2021,

41.1%

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 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price

of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time. In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-17

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

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

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-18

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

e.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund,

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 any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

f.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

g.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-19

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

h.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

i.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

35,232

$508,884

15,478

$202,485

Shares

issued

in

reinvestment

of

distributions

..........

24,660

341,784

65,434

726,968

Shares

redeemed

...............................

(20,984)

(303,292)

(46,293)

(694,251)

Net

increase

(decrease)

..........................

38,908

$547,376

34,619

$235,202

Class

2

Shares:

Shares

sold

...................................

38,555

$521,306

249,299

$3,313,867

Shares

issued

in

reinvestment

of

distributions

..........

467,911

6,298,087

1,464,837

15,849,541

Shares

redeemed

...............................

(379,721)

(5,239,945)

(879,658)

(11,496,669)

Net

increase

(decrease)

..........................

126,745

$1,579,448

834,478

$7,666,739

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-20

Semiannual

Report

Franklin

Growth

and

Income

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.625%

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

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

rate,

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

$112.5

billion,

up

to

and

including

$15

billion

0.400%

In

excess

of

$15

billion

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-21

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

f.

Waiver

and

Expense

Reimbursements

Advisers

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating

expenses

(excluding

distribution

fees,

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

0.59%

based

on

the

average

net

assets

of

each

class

until

April

30,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

4.

Expense

Offset

Arrangement

The Fund has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

June

30,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

equity-linked

securities

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$10,991,526

and

$15,054,114,

respectively.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Growth

and

Income

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$114,000

$6,109,000

$(5,552,000)

$

—

$

—

$671,000

671,000

$15

Total

Affiliated

Securities

....

$114,000

$6,109,000

$(5,552,000)

$—

$—

$671,000

$15

Cost

of

investments

..........................................................................

$46,871,539

Unrealized

appreciation

........................................................................

$26,579,106

Unrealized

depreciation

........................................................................

(495,461)

Net

unrealized

appreciation

(depreciation)

..........................................................

$26,083,645

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-22

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$839,963

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

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.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Growth

and

Income

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

2,741,247

$

—

$

—

$

2,741,247

Air

Freight

&

Logistics

...................

1,915,404

—

—

1,915,404

6.

Investment

Transactions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-23

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

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.

Level

1

Level

2

Level

3

Total

Franklin

Growth

and

Income

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Banks

...............................

$

7,697,062

$

—

$

—

$

7,697,062

Beverages

...........................

2,669,241

—

—

2,669,241

Capital

Markets

........................

6,069,297

—

—

6,069,297

Chemicals

...........................

1,979,821

603,151

—

2,582,972

Commercial

Services

&

Supplies

...........

1,107,801

—

—

1,107,801

Communications

Equipment

..............

430,625

—

—

430,625

Diversified

Telecommunication

Services

.....

1,440,977

—

—

1,440,977

Electric

Utilities

........................

4,282,928

—

—

4,282,928

Electrical

Equipment

....................

1,736,834

—

—

1,736,834

Equity

Real

Estate

Investment

Trusts

(REITs)

.

905,419

—

—

905,419

Food

&

Staples

Retailing

.................

913,810

—

—

913,810

Health

Care

Equipment

&

Supplies

.........

2,017,112

—

—

2,017,112

Health

Care

Providers

&

Services

..........

1,679,675

—

—

1,679,675

Hotels,

Restaurants

&

Leisure

.............

1,105,287

—

—

1,105,287

Household

Products

....................

1,723,731

—

—

1,723,731

Insurance

............................

394,325

—

—

394,325

IT

Services

...........................

979,715

—

—

979,715

Machinery

............................

869,911

—

—

869,911

Media

...............................

1,385,016

—

—

1,385,016

Multiline

Retail

........................

2,018,529

—

—

2,018,529

Oil,

Gas

&

Consumable

Fuels

.............

3,728,366

—

—

3,728,366

Pharmaceuticals

.......................

3,610,377

—

—

3,610,377

Road

&

Rail

..........................

1,101,451

—

—

1,101,451

Semiconductors

&

Semiconductor

Equipment

.

1,377,312

—

—

1,377,312

Software

.............................

1,478,390

—

—

1,478,390

Specialty

Retail

........................

1,849,985

—

—

1,849,985

Technology

Hardware,

Storage

&

Peripherals

.

392,390

—

—

392,390

Equity-Linked

Securities

...................

—

7,026,654

—

7,026,654

Convertible

Preferred

Stocks

...............

4,752,387

—

—

4,752,387

Short

Term

Investments

...................

671,000

299,954

—

970,954

Total

Investments

in

Securities

...........

$65,025,425

$7,929,759

a

$—

$72,955,184

a

Includes

foreign

securities

valued

at

$603,151,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FGI-24

Semiannual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

FI-1

Semiannual

Report

Franklin

Income

VIP

Fund

This

semi

annual

report

for

Franklin

Income

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+10.91

%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

4/30/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

FI-2

Semiannual

Report

1.

Source:

Morningstar.

2.

Source:

FactSet.

The

Fund’s

Blended

Benchmark

was

calculated

internally

and

was

composed

of

50%

MSCI

USA

High

Dividend

Yield

Index

+

25%

Bloomberg

Barclays

U.S.

High

Yield

Very

Liquid

Index

+

25%

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

High-yield

debt

securities

are

generally

considered

predominantly

speculative

by

the

applicable

rating

agencies

as

their

issuers

are

more

likely

to

encounter

financial

difficulties

because

they

may

be

more

highly

leveraged,

or

because

of

other

considerations.

The

Fund’s

share

price

and

yield

will

be

affected

by

interest

rate

movements.

When

interest

rates

rise,

debt

security

prices

generally

fall.

The

opposite

is

also

generally

true:

debt

security

prices

rise

when

interest

rates

fall.

Changes

in

an

issuer’s

financial

strength

or

in

a

security’s

or

government’s

credit

rating

may

affect

a

security’s

value.

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.

Investing

in

foreign

securities

typically

involves

more

risks

than

investing

in

U.S.

securities,

including

risks

related

to

currency

exchange

rates

and

policies,

country

or

government

specific

issues,

less

favorable

trading

practices

or

regulation

and

greater

price

volatility.

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

®

),

which

tracks

total

U.S.

equity

market

performance,

posted

a

+15.25%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Blended

Benchmark,

posted

a

+6.35%

total

return.

2

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

a

-1.60%

total

return

for

the

six

months

ended

June

30,

2021.

1

The

economy

continued

to

recover

from

the

novel

coronavirus

(COVID-19)

pandemic,

aided

by

additional

fiscal

stimulus

measures,

and

yields

(which

move

inversely

to

prices)

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Pharmaceuticals

9.2%

Health

Care

Providers

&

Services

8.9%

Oil,

Gas

&

Consumable

Fuels

8.0%

Banks

8.0%

Electric

Utilities

7.3%

Semiconductors

&

Semiconductor

Equipment

5.7%

Multi-Utilities

3.9%

Beverages

3.6%

Diversified

Financial

Services

3.2%

Capital

Markets

3.2%

Media

2.9%

Diversified

Telecommunication

Services

2.8%

Biotechnology

2.6%

Household

Products

2.1%

Other

*

25.8%

Short-Term

Investments

&

Other

Net

Assets

2.8%

Franklin

Income

VIP

Fund

FI-3

Semiannual

Report

increased

for

most

bonds.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

U.S.

Federal

Reserve

(Fed)

maintained

the

federal

funds

target

rate

at

a

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

purchasing

of

government-

backed

and

corporate

bonds

as

necessary

to

provide

liquidity

to

bond

markets.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

posted

a

-2.58%

total

return

for

the

six-month

period.

1

The

10-year

U.S.

Treasury

yield,

which

began

the

period

below

one

percent,

rose

notably

amid

many

investors’

increasing

inflation

expectations.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

Barclays

MBS

Index,

posted

a

-0.77%

total

return

for

the

period,

as

low

interest

rates

led

to

accelerated

prepayments

from

mortgage

refinancing.

1

U.S.

corporate

bond

performance

varied

significantly

based

on

credit

rating,

reflecting

the

continued

recovery

of

credit

markets

following

the

onset

of

COVID-19.

Although

the

strengthening

economy

pressured

corporate

bonds

generally,

it

helped

temper

investor

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+3.62%

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

posted

a

-1.27%

total

return.

1

Investment

Strategy

We

search

for

undervalued

or

out-of-favor

securities

we

believe

offer

opportunities

for

income

today

and

significant

growth

tomorrow.

In

analyzing

corporate

debt

and

equity

securities,

we

consider

such

factors

as

a

security’s

relative

value

based

on

anticipated

cash

flow,

interest

or

dividend

coverage,

asset

coverage

and

earnings

prospects;

the

experience

and

strength

of

the

company’s

management;

the

company’s

changing

financial

condition

and

market

recognition

of

the

change;

sensitivity

to

changes

in

interest

rates

and

business

conditions;

and

debt

maturity

schedules

and

borrowing

requirements.

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

our

evaluation

of

the

company’s

long-

term

earnings,

asset

value

and

cash

flow

potential.

Manager’s

Discussion

During

the

six-month

period,

the

Fund

performed

well

across

equity

and

fixed

income

asset

classes.

Increased

Fund

exposure

to

the

equity

markets

and

lower

exposure

to

interest-rate

sensitive

fixed

income

securities

led

to

strong

Fund

performance.

Dividend

stocks,

particularly

those

in

value-oriented

sectors,

performed

well.

Corporate

credit

spreads

continued

to

narrow

during

the

period

as

economic

reopening

and

the

lingering

positive

effects

of

the

record

fiscal

and

monetary

accommodation

continued

to

support

markets.

Offsetting

narrowing

credit

spreads

were

rising

interest

rates

during

the

period’s

first

three

months,

which

weighed

on

the

more

duration

sensitive

portions

of

the

Fund’s

benchmark.

Ten-year

U.S.

Treasury

yields

started

the

period

at

0.91%,

peaking

at

1.74%

in

late

March

before

settling

back

to

1.47%

by

period-end.

Fixed

income

returns

for

the

Fund

during

the

period

were

favorable

as

well.

During

the

period,

the

Fund’s

equity

weighting

increased

as

its

fixed

income

allocation

decreased,

continuing

a

trend

from

last

year.

Equity

holdings

increased

over

the

period.

As

an

asset-class,

equities

outperformed

fixed

income

during

the

period.

We

used

considerable

weakness

earlier

in

2020

to

shift

assets

out

of

fixed

income

and

into

the

equity

markets.

Dividend

paying

companies,

which

had

lagged

leading

up

to

the

period

under

review,

were

strong

performers

during

the

period.

We

continued

to

selectively

add

to

positions

across

the

equity

markets

during

the

period,

including

common

stocks,

convertible

securities

and

equity

linked

notes.

All

sectors

were

positive

absolute

contributors

to

Fund

performance

during

the

period.

Financials

and

energy

holdings

were

the

largest

positive

absolute

contributors

Top

Five

Equity

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Exxon

Mobil

Corp.

2.2%

Oil,

Gas

&

Consumable

Fuels

,

United

States

Procter

&

Gamble

Co.

(The)

2.1%

Household

Products

,

United

States

Merck

&

Co.,

Inc.

2.1%

Pharmaceuticals

,

United

States

Chevron

Corp.

2.0%

Oil,

Gas

&

Consumable

Fuels

,

United

States

Southern

Co.

(The)

2.0%

Electric

Utilities

,

United

States

Franklin

Income

VIP

Fund

FI-4

Semiannual

Report

during

the

period

(large

contributors

relative

to

the

Fund’s

benchmark

as

well)

with

the

industrials,

materials,

information

technology

and

consumer

discretionary

sectors

providing

notable

positive

contributions

as

well.

All

the

Fund’s

equity

positions

in

the

financials

sector

were

positive

contributors

during

the

period

amid

rising

interest

rates.

Holdings

of

JPMorgan

Chase,

Bank

of

America,

MetLife

and

Morgan

Stanley

led

returns.

Other

notable

contributors

included

Barclays,

Citigroup,

Truist

Financial

and

U.S.

Bancorp.

Energy

peers

Chevron

and

Exxon

were

notable

positive

contributors

during

the

period,

as

a

much

better

macro

supply

and

demand

forecast

for

the

industry

led

to

strong

performance

from

depressed

valuations.

Top

performers

in

the

Fund

outside

of

financials

and

energy

were

Raytheon

Technology

within

the

industrials

sector,

CVS

Health

in

the

health

care

sector,

General

Motors

in

the

consumer

discretionary

sector

and

Rio

Tinto

in

the

materials

sector.

Despite

positive

absolute

contributions,

equity

holdings

in

the

consumer

staples

and

consumer

discretionary

sectors

were

modest

detractors

in

the

period

relative

to

the

Fund’s

benchmark.

At

the

individual

security

level,

the

only

notable

detractor

from

performance

during

the

period

was

our

small

position

in

the

preferred

securities

of

Federal

National

Mortgage

Association

(FNMA)

which

received

an

unfavorable

Supreme

Court

ruling

related

to

the

U.S.

government

conservatorship

actions

since

the

global

financial

crisis.

During

the

period,

the

Fund

used

derivatives

such

as

equity

call

and

put

options

to

sell

and

reduce

positions

and/or

to

initiate

and

add

to

positions,

which

generated

gains

during

the

period

under

review.

Fixed

income

holdings

posted

positive

returns

during

the

period.

As

an

asset

class,

fixed

income

underperformed

equities,

which

benefited

the

Fund

given

our

decreased

allocation

to

fixed

income.

The

Fund’s

duration

positioning

at

the

front

end

of

the

yield

curve

in

the

face

of

rising

interest

rates

during

the

first

half

of

the

period

under

review

was

a

key

source

driving

performance

in

addition

to

strong

corporate

credit

performance.

Every

corporate

credit

sector

generated

positive

absolute

returns

during

the

period

under

review,

with

energy

and

health

care

leading

the

way

in

terms

of

performance

contribution

relative

to

the

Fund’s

blended

benchmark.

Our

holdings

in

U.S.

Treasuries

and

agency

mortgage-backed

securities

(MBS)

were

minor

absolute

detractors

during

the

period,

but

these

positions

were

shorter

in

duration

and

much

smaller

in

size

relative

to

the

benchmark,

so

these

sectors

were

positive

contributors

relative

to

the

Fund’s

blended

benchmark.

Corporate

credit

spreads

continued

to

narrow

during

the

period

under

review,

which

particularly

benefited

the

Fund’s

high-yield

exposures.

High-yield

corporate

bonds

are

generally

lower

in

duration

than

investment-grade

corporate

bonds.

Narrowing

credit

spreads

and

increased

U.S

Treasury

yields

certainly

favored

high-yield

performance

within

the

fixed

income

asset

class.

Within

energy,

the

largest

contributor

to

performance

was

high-yield

oilfield

service

company

Weatherford

International.

Strong

commodity

price

performance,

increased

demand

outlooks

as

the

markets

looked

past

the

lockdown

environments,

as

well

as

strong

business

performance

led

to

the

gains.

Other

notable

energy

contributors

included

Calumet

Specialty

Products

and

HighPoint

Energy.

The

other

large

sector

contributor

to

fixed

income

performance

during

the

period

came

from

debt

securities

in

the

health

care

sector.

High-yield

rated

hospital

peers

Community

Health

Systems

and

Tenet

Healthcare

were

notable

outperformers.

The

companies

moved

past

COVID-19

induced

disruptions

and

both

were

able

to

access

the

capital

markets

during

the

period

to

reduce

interest

expense

and

improve

the

health

of

their

balance

sheets,

which

led

to

strong

performance.

Agency

MBS

holdings

were

small

absolute

detractors

during

the

period

as

described

above.

Other

small

detractors

were

health

care

company

Endo

Pharmaceutical,

as

it

works

through

company

specific

litigation

around

one

of

its

business

units;

and

Sinclair

Broadcasting/Diamond

Sports,

as

the

company

deals

with

renewing

carriage

contracts

in

its

regional

sports

broadcasting

business.

There

were

no

other

notable

detractors

in

the

period

under

review.

Top

Five

Fixed

Income

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

CHS/Community

Health

Systems,

Inc.

4.3%

Health

Care

Providers

&

Services

,

United

States

U.S.

Treasury

Notes

2.7%

Diversified

Financial

Services

,

United

States

Tenet

Healthcare

Corp.

1.8%

Health

Care

Providers

&

Services

,

United

States

DISH

DBS

Corp.

1.3%

Media

,

United

States

Credit

Suisse

AG

1.1%

Capital

Markets

,

Switzerland

Franklin

Income

VIP

Fund

FI-5

Semiannual

Report

Thank

you

for

your

participation

in

Franklin

Income

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Income

VIP

Fund

FI-6

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,109.10

$2.45

$1,022.47

$2.35

0.47%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.65

$16.52

$15.26

$16.72

$15.87

$14.64

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.27

0.59

0.75

0.71

0.69

0.67

Net

realized

and

unrealized

gains

(losses)

1.44

(0.54)

1.68

(1.35)

0.87

1.34

Total

from

investment

operations

........

1.71

0.05

2.43

(0.64)

1.56

2.01

Less

distributions

from:

Net

investment

income

..............

(0.80)

(0.91)

(0.91)

(0.82)

(0.71)

(0.78)

Net

realized

gains

.................

—

(0.01)

(0.26)

—

—

—

Total

distributions

...................

(0.80)

(0.92)

(1.17)

(0.82)

(0.71)

(0.78)

Net

asset

value,

end

of

period

..........

$16.56

$15.65

$16.52

$15.26

$16.72

$15.87

Total

return

c

.......................

10.91%

0.97%

16.42%

(4.09)%

9.94%

14.33%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.47%

0.47%

0.46%

0.47%

0.47%

0.47%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.47%

f

0.46%

0.45%

0.45%

0.45%

0.44%

Net

investment

income

...............

3.34%

3.96%

4.38%

4.33%

4.22%

4.47%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$234,063

$306,641

$309,330

$612,657

$735,149

$696,227

Portfolio

turnover

rate

................

18.56%

45.93%

25.16%

43.22%

20.96%

39.03%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.04

$15.91

$14.74

$16.17

$15.38

$14.20

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.24

0.53

0.64

0.65

0.63

0.61

Net

realized

and

unrealized

gains

(losses)

1.40

(0.53)

1.66

(1.30)

0.83

1.31

Total

from

investment

operations

........

1.64

—

c

2.30

(0.65)

1.46

1.92

Less

distributions

from:

Net

investment

income

..............

(0.77)

(0.86)

(0.87)

(0.78)

(0.67)

(0.74)

Net

realized

gains

.................

—

(0.01)

(0.26)

—

—

—

Total

distributions

...................

(0.77)

(0.87)

(1.13)

(0.78)

(0.67)

(0.74)

Net

asset

value,

end

of

period

..........

$15.91

$15.04

$15.91

$14.74

$16.17

$15.38

Total

return

d

.......................

10.83%

0.69%

16.06%

(4.30)%

9.67%

14.02%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.72%

0.72%

0.71%

0.72%

0.72%

0.72%

Expenses

net

of

waiver

and

payments

by

affiliates

f

..........................

0.72%

g

0.71%

0.70%

0.70%

0.70%

0.69%

Net

investment

income

...............

3.09%

3.73%

4.13%

4.08%

3.97%

4.22%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$3,033,420

$3,852,709

$4,318,156

$4,086,652

$5,041,498

$5,088,556

Portfolio

turnover

rate

................

18.56%

45.93%

25.16%

43.22%

20.96%

39.03%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affili

ates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.45

$16.32

$15.08

$16.53

$15.71

$14.49

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.24

0.53

0.64

0.64

0.62

0.61

Net

realized

and

unrealized

gains

(losses)

1.43

(0.54)

1.71

(1.33)

0.85

1.33

Total

from

investment

operations

........

1.67

(0.01)

2.35

(0.69)

1.47

1.94

Less

distributions

from:

Net

investment

income

..............

(0.75)

(0.85)

(0.85)

(0.76)

(0.65)

(0.72)

Net

realized

gains

.................

—

(0.01)

(0.26)

—

—

—

Total

distributions

...................

(0.75)

(0.86)

(1.11)

(0.76)

(0.65)

(0.72)

Net

asset

value,

end

of

period

..........

$16.37

$15.45

$16.32

$15.08

$16.53

$15.71

Total

return

c

.......................

10.77%

0.58%

16.05%

(4.42)%

9.55%

13.87%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.82%

0.82%

0.81%

0.82%

0.82%

0.82%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.82%

f

0.81%

0.80%

0.80%

0.80%

0.79%

Net

investment

income

...............

2.98%

3.62%

4.03%

3.98%

3.87%

4.12%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$319,797

$302,474

$323,582

$294,700

$335,217

$309,935

Portfolio

turnover

rate

................

18.56%

45.93%

25.16%

43.22%

20.96%

39.03%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Income

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

51.3%

Aerospace

&

Defense

1.8%

Lockheed

Martin

Corp.

.................................

United

States

100,000

$

37,835,000

Raytheon

Technologies

Corp.

............................

United

States

300,000

25,593,000

63,428,000

Air

Freight

&

Logistics

0.9%

United

Parcel

Service,

Inc.,

B

............................

United

States

157,700

32,796,869

Banks

6.6%

Bank

of

America

Corp.

.................................

United

States

1,500,000

61,845,000

Barclays

plc

.........................................

United

Kingdom

12,500,000

29,665,619

Citigroup,

Inc.

........................................

United

States

500,000

35,375,000

JPMorgan

Chase

&

Co.

.................................

United

States

400,000

62,216,000

Truist

Financial

Corp.

..................................

United

States

495,000

27,472,500

US

Bancorp

.........................................

United

States

325,000

18,515,250

235,089,369

Beverages

3.6%

Coca-Cola

Co.

(The)

...................................

United

States

1,150,000

62,226,500

PepsiCo,

Inc.

........................................

United

States

450,000

66,676,500

128,903,000

Biotechnology

1.2%

AbbVie,

Inc.

.........................................

United

States

225,000

25,344,000

Amgen,

Inc.

.........................................

United

States

70,000

17,062,500

42,406,500

Capital

Markets

1.1%

Morgan

Stanley

.......................................

United

States

416,500

38,188,885

Chemicals

0.8%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

7,500

2,157,600

BASF

SE

...........................................

Germany

325,000

25,657,589

27,815,189

Diversified

Telecommunication

Services

2.1%

BCE,

Inc.

...........................................

Canada

466,000

22,977,681

Verizon

Communications,

Inc.

............................

United

States

950,000

53,228,500

76,206,181

Electric

Utilities

5.5%

American

Electric

Power

Co.,

Inc.

.........................

United

States

350,000

29,606,500

Duke

Energy

Corp.

....................................

United

States

520,000

51,334,400

Edison

International

...................................

United

States

770,000

44,521,400

Exelon

Corp.

.........................................

United

States

300,000

13,293,000

Southern

Co.

(The)

....................................

United

States

900,000

54,459,000

Xcel

Energy,

Inc.

......................................

United

States

67,500

4,446,900

197,661,200

Energy

Equipment

&

Services

0.4%

a,b

Weatherford

International

plc

.............................

United

States

700,000

12,740,000

Health

Care

Providers

&

Services

1.0%

a

CHS/Community

Health

Systems,

Inc.

......................

United

States

1,000,000

15,440,000

CVS

Health

Corp.

.....................................

United

States

250,000

20,860,000

36,300,000

Household

Products

2.1%

Procter

&

Gamble

Co.

(The)

.............................

United

States

560,000

75,560,800

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Industrial

Conglomerates

1.8%

c

Honeywell

International,

Inc.

.............................

United

States

300,000

$

65,805,000

Insurance

1.3%

MetLife,

Inc.

.........................................

United

States

805,108

48,185,714

IT

Services

0.8%

International

Business

Machines

Corp.

.....................

United

States

199,679

29,270,944

Machinery

0.7%

Cummins,

Inc.

........................................

United

States

100,000

24,381,000

Media

0.8%

Comcast

Corp.,

A

.....................................

United

States

500,000

28,510,000

Metals

&

Mining

0.9%

b

Rio

Tinto

plc,

ADR

.....................................

Australia

400,000

33,556,000

Multi-Utilities

2.3%

Dominion

Energy,

Inc.

..................................

United

States

706,638

51,987,358

DTE

Energy

Co.

......................................

United

States

100,000

12,960,000

Sempra

Energy

.......................................

United

States

125,000

16,560,000

81,507,358

Oil,

Gas

&

Consumable

Fuels

6.4%

Bonanza

Creek

Energy,

Inc.

.............................

United

States

425,000

20,004,750

BP

plc,

ADR

.........................................

United

Kingdom

550,000

14,531,000

Chevron

Corp.

.......................................

United

States

700,000

73,318,000

Exxon

Mobil

Corp.

.....................................

United

States

1,250,000

78,850,000

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

450,000

18,180,000

TotalEnergies

SE,

ADR

.................................

France

550,000

24,893,000

229,776,750

Personal

Products

0.5%

Unilever

plc

..........................................

United

Kingdom

300,000

17,531,344

Pharmaceuticals

5.1%

Bristol-Myers

Squibb

Co.

................................

United

States

750,000

50,115,000

Eli

Lilly

&

Co.

........................................

United

States

80,000

18,361,600

Johnson

&

Johnson

...................................

United

States

250,000

41,185,000

Merck

&

Co.,

Inc.

.....................................

United

States

950,000

73,881,500

183,543,100

Road

&

Rail

0.6%

Union

Pacific

Corp.

....................................

United

States

106,500

23,422,545

Semiconductors

&

Semiconductor

Equipment

1.3%

Analog

Devices,

Inc.

...................................

United

States

100,000

17,216,000

Intel

Corp.

...........................................

United

States

250,000

14,035,000

Texas

Instruments,

Inc.

.................................

United

States

85,000

16,345,500

47,596,500

Specialty

Retail

0.3%

Home

Depot,

Inc.

(The)

.................................

United

States

32,000

10,204,480

Tobacco

1.4%

Altria

Group,

Inc.

......................................

United

States

149,700

7,137,696

Philip

Morris

International,

Inc.

...........................

United

States

427,900

42,409,169

49,546,865

Total

Common

Stocks

(Cost

$1,297,406,620)

....................................

1,839,933,593

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

d

Equity-Linked

Securities

13.1%

Automobiles

1.6%

e

National

Bank

of

Canada

into

General

Motors

Co.,

Senior

Note

,

144A,

10%,

1/26/22

..................................

United

States

1,123,500

$

58,388,955

Biotechnology

1.1%

e

Goldman

Sachs

International

Bank

into

AbbVie,

Inc.,

144A,

10%,

7/22/21

...........................................

United

States

348,000

38,962,942

Capital

Markets

0.5%

e

UBS

AG

into

Morgan

Stanley,

Senior

Note,

144A,

8.5%,

2/11/22

..

United

States

200,000

16,659,722

Chemicals

0.9%

e

National

Bank

of

Canada

into

Air

Products

and

Chemicals,

Inc.,

144A,

8.5%,

4/13/22

.................................

United

States

106,000

31,194,706

Energy

Equipment

&

Services

0.8%

e

Royal

Bank

of

Canada

into

Schlumberger

NV,

144A,

10%,

3/01/22

United

States

900,000

27,674,334

Health

Care

Providers

&

Services

1.0%

e

J.P.

Morgan

Structured

Products

BV

into

CVS

Health

Corp.,

Senior

Note,

144A,

Reg

S,

8.5%,

1/25/22

.......................

United

States

451,000

36,113,174

Internet

&

Direct

Marketing

Retail

0.7%

e

J.P.

Morgan

Structured

Products

BV

into

Amazon.com,

Inc.,

Senior

Note,

144A,

Reg

S,

9.5%,

12/07/21

......................

United

States

8,000

26,830,013

Pharmaceuticals

1.8%

e

Credit

Suisse

AG

into

Pfizer,

Inc.,

144A,

8%,

8/27/21

...........

United

States

1,642,000

64,613,899

Road

&

Rail

0.2%

e

Goldman

Sachs

International

Bank

into

Union

Pacific

Corp.,

Senior

Note,

144A,

8%,

2/09/22

..............................

United

States

33,000

7,416,193

Semiconductors

&

Semiconductor

Equipment

3.4%

e

Citigroup

Global

Markets

Holdings,

Inc.

into

Texas

Instruments,

Inc.,

Senior

Note,

144A,

8.5%,

1/27/22

.......................

United

States

234,000

42,756,187

e

Royal

Bank

of

Canada

into

Analog

Devices,

Inc.,

144A,

8.5%,

9/10/21

...........................................

United

States

270,000

37,287,707

e

Royal

Bank

of

Canada

into

Intel

Corp.,

Senior

Note,

144A,

8.5%,

12/14/21

..........................................

United

States

782,000

40,502,682

120,546,576

Software

0.5%

e

Citigroup

Global

Markets

Holdings,

Inc.

into

Microsoft

Corp.,

Senior

Note,

144A,

8%,

9/24/21

..............................

United

States

80,000

20,077,094

Technology

Hardware,

Storage

&

Peripherals

0.6%

e

BNP

Paribas

Issuance

BV

into

Apple,

Inc.,

144A,

10%,

12/22/21

..

United

States

164,000

21,999,169

Total

Equity-Linked

Securities

(Cost

$423,247,203)

..............................

470,476,777

Convertible

Preferred

Stocks

4.7%

Capital

Markets

0.2%

b

KKR

&

Co.,

Inc.,

6%,

C

.................................

United

States

85,000

6,550,100

Electric

Utilities

1.8%

American

Electric

Power

Co.,

Inc.,

6.125%

..................

United

States

300,000

14,739,000

NextEra

Energy,

Inc.,

5.279%

............................

United

States

400,000

19,584,000

NextEra

Energy,

Inc.,

6.219%

............................

United

States

230,200

11,371,880

Southern

Co.

(The),

6.75%,

2019

.........................

United

States

350,000

17,720,500

63,415,380

Multi-Utilities

1.6%

Dominion

Energy,

Inc.,

7.25%,

A

..........................

United

States

175,000

16,997,750

DTE

Energy

Co.,

6.25%

................................

United

States

400,000

19,772,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

(continued)

Multi-Utilities

(continued)

Sempra

Energy,

6.75%,

B

...............................

United

States

200,000

$

19,754,000

56,523,750

Semiconductors

&

Semiconductor

Equipment

1.0%

Broadcom,

Inc.,

8%,

A

..................................

United

States

25,000

37,996,750

Thrifts

&

Mortgage

Finance

0.1%

a

FNMA,

5.375%

.......................................

United

States

475

3,028,125

a

Total

Convertible

Preferred

Stocks

(Cost

$183,058,821)

..........................

167,514,105

Principal

Amount

*

Convertible

Bonds

0.1%

Media

0.1%

DISH

Network

Corp.

,

Senior

Note

,

2.375

%

,

3/15/24

............

United

States

4,555,000

4,432,584

Total

Convertible

Bonds

(Cost

$4,251,235)

.....................................

4,432,584

Corporate

Bonds

23.5%

Aerospace

&

Defense

0.2%

Raytheon

Technologies

Corp.

,

Senior

Note

,

3.95

%

,

8/16/25

......

United

States

7,500,000

8,344,615

Automobiles

0.5%

Ford

Motor

Co.

,

Senior

Note

,

4.346

%

,

12/08/26

...............

United

States

7,000,000

7,507,570

General

Motors

Co.

,

Senior

Bond

,

5.15

%

,

4/01/38

.............

United

States

7,500,000

9,169,014

16,676,584

Banks

1.4%

Bank

of

America

Corp.

,

f

AA,

Junior

Sub.

Bond,

6.1%

to

3/17/25,

FRN

thereafter,

Perpetual

United

States

8,000,000

8,988,520

f

X,

Junior

Sub.

Bond,

6.25%

to

9/05/24,

FRN

thereafter,

Perpetual

United

States

6,000,000

6,641,250

Senior

Bond,

3.419%

to

12/20/27,

FRN

thereafter,

12/20/28

...

United

States

5,000,000

5,449,184

Citigroup,

Inc.

,

Sub.

Bond

,

4.125

%

,

7/25/28

..................

United

States

12,500,000

14,093,426

f

JPMorgan

Chase

&

Co.

,

g

I,

Junior

Sub.

Bond,

FRN,

3.656%,

(3-month

USD

LIBOR

+

3.47%),

Perpetual

...................................

United

States

10,559,000

10,598,596

R,

Junior

Sub.

Bond,

6%

to

8/01/23,

FRN

thereafter,

Perpetual

.

United

States

3,200,000

3,404,000

49,174,976

Biotechnology

0.3%

AbbVie,

Inc.

,

Senior

Note

,

3.8

%

,

3/15/25

....................

United

States

10,500,000

11,491,193

Capital

Markets

0.3%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note

,

3.272%

to

9/29/24,

FRN

thereafter

,

9/29/25

...............................

United

States

9,000,000

9,631,194

Chemicals

0.1%

e

SCIH

Salt

Holdings,

Inc.

,

Senior

Note

,

144A,

6.625

%

,

5/01/29

....

United

States

2,000,000

2,007,500

Consumer

Finance

0.9%

Capital

One

Financial

Corp.

,

Sub.

Note

,

4.2

%

,

10/29/25

........

United

States

8,000,000

8,937,449

Ford

Motor

Credit

Co.

LLC

,

Senior

Note

,

5.125

%

,

6/16/25

.......

United

States

20,000,000

22,050,000

30,987,449

Containers

&

Packaging

0.6%

e

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25%,

4/15/25

......................

United

States

11,500,000

11,293,000

Senior

Secured

Note,

144A,

5.5%,

4/15/24

................

United

States

10,000,000

10,112,500

21,405,500

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-14

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Financial

Services

0.5%

e

MPH

Acquisition

Holdings

LLC

,

Senior

Note

,

144A,

5.75

%

,

11/01/28

United

States

18,000,000

$

18,112,230

Diversified

Telecommunication

Services

0.7%

AT&T,

Inc.

,

Senior

Bond

,

4.125

%

,

2/17/26

...................

United

States

12,000,000

13,497,801

e

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5.5

%

,

5/01/26

.................................

United

States

10,000,000

10,362,350

23,860,151

Energy

Equipment

&

Services

0.7%

e

Weatherford

International

Ltd.

,

Senior

Note

,

144A,

11

%

,

12/01/24

.

United

States

25,000,000

26,031,750

Entertainment

0.7%

Netflix,

Inc.

,

Senior

Bond

,

4.875

%

,

4/15/28

..................

United

States

22,000,000

25,603,160

Health

Care

Providers

&

Services

6.9%

e

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

....................

United

States

70,000,000

73,456,950

Secured

Note,

144A,

6.125%,

4/01/30

....................

United

States

33,500,000

34,044,375

Senior

Note,

144A,

6.875%,

4/01/28

.....................

United

States

10,000,000

9,905,750

Senior

Secured

Note,

144A,

6.625%,

2/15/25

..............

United

States

10,000,000

10,587,400

Senior

Secured

Note,

144A,

8%,

3/15/26

..................

United

States

12,500,000

13,484,563

Senior

Secured

Note,

144A,

8%,

12/15/27

.................

United

States

10,000,000

11,138,550

CVS

Health

Corp.

,

Senior

Bond,

4.3%,

3/25/28

............................

United

States

8,000,000

9,197,843

Senior

Note,

4.1%,

3/25/25

............................

United

States

1,225,000

1,359,232

HCA,

Inc.

,

Senior

Bond,

5.875%,

5/01/23

..........................

United

States

7,500,000

8,159,625

Senior

Secured

Note,

5%,

3/15/24

.......................

United

States

10,400,000

11,495,687

Tenet

Healthcare

Corp.

,

e

Secured

Note,

144A,

6.25%,

2/01/27

.....................

United

States

29,000,000

30,305,000

Senior

Note,

6.75%,

6/15/23

...........................

United

States

24,000,000

26,220,000

e

Senior

Note,

144A,

6.125%,

10/01/28

....................

United

States

9,000,000

9,616,410

248,971,385

Hotels,

Restaurants

&

Leisure

1.1%

e

Caesars

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

7/01/25

...........................................

United

States

18,000,000

19,102,500

e

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Bond,

144A,

5.5%,

3/01/25

.......................

United

States

13,200,000

14,246,628

Senior

Note,

144A,

5.25%,

5/15/27

......................

United

States

6,000,000

6,461,700

39,810,828

Media

2.0%

e

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

15,000,000

9,732,000

DISH

DBS

Corp.

,

Senior

Note,

5.875%,

7/15/22

..........................

United

States

14,000,000

14,622,300

Senior

Note,

5%,

3/15/23

.............................

United

States

21,000,000

22,029,840

Senior

Note,

5.875%,

11/15/24

.........................

United

States

9,400,000

10,105,000

e

Univision

Communications,

Inc.

,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

..............

United

States

7,140,000

7,306,041

Senior

Secured

Note,

144A,

6.625%,

6/01/27

..............

United

States

8,500,000

9,220,800

73,015,981

Metals

&

Mining

0.1%

e

Cleveland-Cliffs,

Inc.

,

Senior

Secured

Note

,

144A,

6.75

%

,

3/15/26

.

United

States

5,000,000

5,400,000

Oil,

Gas

&

Consumable

Fuels

1.3%

Bonanza

Creek

Energy,

Inc.

,

Senior

Note

,

7.5

%

,

4/30/26

........

United

States

6,877,144

6,961,320

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-15

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Calumet

Specialty

Products

Partners

LP

/

Calumet

Finance

Corp.

,

Senior

Note,

7.625%,

1/15/22

..........................

United

States

1,501,000

$

1,503,875

e

Senior

Note,

144A,

11%,

4/15/25

........................

United

States

15,000,000

16,353,075

Senior

Note,

7.75%,

4/15/23

...........................

United

States

2,000,000

1,997,200

e

Senior

Secured

Note,

144A,

9.25%,

7/15/24

...............

United

States

5,185,000

5,726,625

Occidental

Petroleum

Corp.

,

Senior

Note,

8%,

7/15/25

.............................

United

States

5,000,000

5,993,900

Senior

Note,

6.625%,

9/01/30

..........................

United

States

6,000,000

7,207,500

45,743,495

Pharmaceuticals

2.3%

e

Bausch

Health

Cos.,

Inc.

,

Senior

Bond,

144A,

6.125%,

4/15/25

.....................

United

States

9,110,000

9,349,138

Senior

Note,

144A,

9%,

12/15/25

.......................

United

States

5,000,000

5,367,750

Senior

Note,

144A,

5%,

2/15/29

........................

United

States

5,000,000

4,668,850

Senior

Secured

Note,

144A,

5.5%,

11/01/25

...............

United

States

11,000,000

11,299,750

Senior

Secured

Note,

144A,

4.875%,

6/01/28

..............

United

States

4,500,000

4,611,375

e

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

4.25

%

,

12/15/25

...

Germany

11,000,000

12,268,164

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.4

%

,

7/26/29

..........

United

States

8,000,000

8,974,677

e

Endo

Dac

/

Endo

Finance

LLC

/

Endo

Finco

,

Inc.

,

Senior

Note

,

144A,

6

%

,

6/30/28

........................................

United

States

7,094,000

4,793,061

e

Par

Pharmaceutical,

Inc.

,

Senior

Secured

Note

,

144A,

7.5

%

,

4/01/27

United

States

8,429,000

8,628,472

Utah

Acquisition

Sub,

Inc.

,

Senior

Note

,

3.95

%

,

6/15/26

.........

United

States

10,000,000

11,023,124

80,984,361

Road

&

Rail

0.1%

e

Ashtead

Capital,

Inc.

,

Senior

Note

,

144A,

4.25

%

,

11/01/29

......

United

Kingdom

4,500,000

4,871,250

Tobacco

0.6%

BAT

Capital

Corp.

,

Senior

Note

,

3.557

%

,

8/15/27

.............

United

Kingdom

20,000,000

21,428,820

Trading

Companies

&

Distributors

0.7%

United

Rentals

North

America,

Inc.

,

Senior

Bond

,

4.875

%

,

1/15/28

United

States

11,300,000

11,997,775

e

WESCO

Distribution,

Inc.

,

Senior

Note

,

144A,

7.125

%

,

6/15/25

...

United

States

14,000,000

15,147,300

27,145,075

Wireless

Telecommunication

Services

1.5%

Sprint

Communications,

Inc.

,

Senior

Note,

11.5%,

11/15/21

..........................

United

States

15,000,000

15,578,048

Senior

Note,

6%,

11/15/22

.............................

United

States

6,300,000

6,678,000

Sprint

Corp.

,

Senior

Note,

7.625%,

3/01/26

..........................

United

States

7,500,000

9,169,725

Senior

Note

,

7.875%,

9/15/23

..........................

United

States

12,500,000

14,216,575

Senior

Note,

7.125%,

6/15/24

..........................

United

States

8,200,000

9,471,000

55,113,348

Total

Corporate

Bonds

(Cost

$773,108,895)

.....................................

845,810,845

Units

a

h

Index-Linked

Notes

1.1%

Capital

Markets

1.1%

e,i

Credit

Suisse

AG,

Senior

Note,

144A,

12.095%,

9/06/22

........

Switzerland

10,332

39,041,218

Total

Index-Linked

Notes

(Cost

$34,999,753)

....................................

39,041,218

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-16

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

2.7%

U.S.

Treasury

Notes

,

2.75%,

5/31/23

.....................................

United

States

50,000,000

$

52,408,203

0.5%,

3/31/25

......................................

United

States

25,000,000

24,880,860

0.875%,

6/30/26

.....................................

United

States

20,000,000

19,991,406

Total

U.S.

Government

and

Agency

Securities

(Cost

$94,948,565)

.................

97,280,469

Asset-Backed

Securities

0.3%

Airlines

0.3%

United

Airlines

Pass-Through

Trust

,

2020-1

,

A

,

5.875

%

,

10/15/27

.

United

States

9,516,500

10,579,221

Total

Asset-Backed

Securities

(Cost

$9,516,500)

................................

10,579,221

Mortgage-Backed

Securities

0.1%

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.1%

FNMA,

30

Year,

4%,

8/01/49

.............................

United

States

2,607,439

2,830,267

Total

Mortgage-Backed

Securities

(Cost

$2,762,256)

.............................

2,830,267

Shares

Escrows

and

Litigation

Trusts

0.3%

e

Chesapeake

Energy

Corp.,

Escrow

Account,

144A

............

United

States

9,500,000

10,295,625

Total

Escrows

and

Litigation

Trusts

(Cost

$9,500,000)

...........................

10,295,625

Total

Long

Term

Investments

(Cost

$2,832,799,848)

.............................

3,488,194,704

a

Short

Term

Investments

2.5%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.3%

j,k

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

83,415,064

83,415,064

Total

Money

Market

Funds

(Cost

$83,415,064)

..................................

83,415,064

l

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.2%

a

a

a

a

a

Money

Market

Funds

0.1%

j,k

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

4,051,000

4,051,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-17

See

Abbreviations

on

page

FI-

31

.

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.1%

m

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0.05%,

7/01/21

(Maturity

Value

$1,013,001)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$1,033,261)

........................................

1,013,000

$

1,013,000

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$5,064,000)

............................................................

5,064,000

Total

Short

Term

Investments

(Cost

$88,479,064

)

................................

88,479,064

a

Total

Investments

(Cost

$2,921,278,912)

99.7%

..................................

$3,576,673,768

Options

Written

(0.0)%

†

......................................................

(534,000)

Other

Assets,

less

Liabilities

0.3%

.............................................

11,140,581

Net

Assets

100.0%

...........................................................

$3,587,280,349

Number

of

Contracts

Notional

Amount

#

n

Options

Written

(0.0)%

†

Calls

-

Exchange-Traded

Equity

Options

Honeywell

International,

Inc.,

September

Strike

Price

$240.00,

Expires

9/17/21

.....................................

3,000

65,805,000

(534,000)

(534,000)

Total

Options

Written

(Premiums

received

$1,823,887)

...........................

$

(534,000)

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(g).

c

A

portion

or

all

of

the

security

is

held

in

connection

with

written

option

contracts

open

at

period

end.

d

See

Note

1(f)

regarding

equity-linked

securities.

e

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$964,826,427,

representing

26.9%

of

net

assets.

f

Perpetual

security

with

no

stated

maturity

date.

g

The

coupon

rate

shown

represents

the

rate

at

period

end.

h

See

Note

1(e)

regarding

index-linked

notes.

i

Security

pays

variable

interest

based

on

the

distributions

of

the

strategy

index

and

proceeds

earned

from

related

equity

derivatives.

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

strategy

index.

j

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

k

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

l

See

Note

1(g)

regarding

securities

on

loan.

m

See

Note

1(c)

regarding

joint

repurchase

agreement.

n

See

Note

1(d)

regarding

written

options.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-18

Franklin

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,832,799,848

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

87,466,064

Cost

-

Unaffiliated

repurchase

agreements

......................................................

1,013,000

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$4,916,278)

.................................

$3,488,194,704

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

87,466,064

Value

-

Unaffiliated

repurchase

agreements

......................................................

1,013,000

Receivables:

Investment

securities

sold

...................................................................

3,709,352

Capital

shares

sold

........................................................................

2,159,528

Dividends

and

interest

.....................................................................

16,282,702

European

Union

tax

reclaims

(Note

1

h

)

.........................................................

1,784,728

Total

assets

..........................................................................

3,600,610,078

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

2,007,500

Capital

shares

redeemed

...................................................................

2,750,443

Management

fees

.........................................................................

1,615,763

Distribution

fees

..........................................................................

857,493

Options

written,

at

value

(premiums

received

$1,823,887)

............................................

534,000

Payable

upon

return

of

securities

loaned

(Note

1

g

)

..................................................

5,064,000

Accrued

expenses

and

other

liabilities

...........................................................

500,530

Total

liabilities

.........................................................................

13,329,729

Net

assets,

at

value

.................................................................

$3,587,280,349

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,980,482,966

Total

distributable

earnings

(losses)

.............................................................

606,797,383

Net

assets,

at

value

.................................................................

$3,587,280,349

Franklin

Income

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$234,063,179

Shares

outstanding

........................................................................

14,131,015

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$16.56

Class

2:

Net

assets,

at

value

.......................................................................

$3,033,420,231

Shares

outstanding

........................................................................

190,658,978

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$15.91

Class

4:

Net

assets,

at

value

.......................................................................

$319,796,939

Shares

outstanding

........................................................................

19,539,816

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$16.37

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FI-19

Franklin

Income

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$451,946)

Unaffiliated

issuers

........................................................................

$46,548,123

Non-controlled

affiliates

(Note

3e)

.............................................................

3,364

Interest:

Unaffiliated

issuers

........................................................................

39,193,051

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

43,768

Non-controlled

affiliates

(Note

3e)

.............................................................

393

Other

income

(Note

1h

)

......................................................................

22,370

Total

investment

income

...................................................................

85,811,069

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,267,130

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

4,839,479

    Class

4

................................................................................

544,461

Custodian

fees

(Note

4

)

......................................................................

14,835

Reports

to

shareholders

......................................................................

196,404

Professional

fees

...........................................................................

47,016

Trustees'

fees

and

expenses

..................................................................

13,431

Other

....................................................................................

52,911

Total

expenses

.........................................................................

15,975,667

Expense

reductions

(Note

4

)

...............................................................

(45)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(51,523)

Net

expenses

.........................................................................

15,924,099

Net

investment

income

................................................................

69,886,970

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

306,634,453

Foreign

currency

transactions

................................................................

(6,940)

Net

realized

gain

(loss)

..................................................................

306,627,513

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

80,213,986

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(76,839)

Written

options

...........................................................................

1,289,887

Net

change

in

unrealized

appreciation

(depreciation)

............................................

81,427,034

Net

realized

and

unrealized

gain

(loss)

............................................................

388,054,547

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$457,941,517

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-20

Franklin

Income

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$69,886,970

$160,490,300

Net

realized

gain

(loss)

.................................................

306,627,513

(366,440,390)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

81,427,034

189,780,651

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

457,941,517

(16,169,439)

Distributions

to

shareholders:

Class

1

.............................................................

(16,108,183)

(16,535,949)

Class

2

.............................................................

(184,021,190)

(219,850,517)

Class

4

.............................................................

(14,055,725)

(16,548,919)

Total

distributions

to

shareholders

..........................................

(214,185,098)

(252,935,385)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(89,376,876)

11,863,357

Class

2

.............................................................

(1,028,416,031)

(227,620,547)

Class

4

.............................................................

(507,387)

(4,380,893)

Total

capital

share

transactions

............................................

(1,118,300,294)

(220,138,083)

Net

increase

(decrease)

in

net

assets

...................................

(874,543,875)

(489,242,907)

Net

assets:

Beginning

of

period

.....................................................

4,461,824,224

4,951,067,131

End

of

period

..........................................................

$3,587,280,349

$4,461,824,224

Franklin

Templeton

Variable

Insurance

Products

Trust

FI-21

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Franklin

Income

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Income

VIP

Fund

(Fund)

is

included

in

this

report. Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the OTC

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can occur

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-22

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-23

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

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.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

The

Fund

purchased

or

wrote

exchange

traded

option

contracts

primarily

to

gain

exposure

to

equity

price

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

See

Note

9

regarding

other

derivative

information.

e.

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.

f.

Equity-Linked

Securities

The

Fund

invests

in

equity-linked

securities.

Equity-linked

securities

are

hybrid

financial

instruments

that

generally

combine

both

debt

and

equity

characteristics

into

a

single

note

form.

Income

received

from

equity-linked

securities

is

recorded

as

realized

gains

in

the

Statements

of

Operations

and

may

be

based

on

the

performance

of

an

underlying

equity

security,

an

equity

index,

or

an

option

position.

The

risks

of

investing

in

equity-linked

securities

include

unfavorable

price

movements

in

the

underlying

security

and

the

credit

risk

of

the

issuing

financial

institution.

There

may

be

no

guarantee

of

a

return

of

principal

with

equity-linked

securities

and

the

appreciation

potential

may

be

limited.

Equity-linked

securities

may

be

more

volatile

and

less

liquid

than

other

investments

held

by

the

Fund.

g.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-24

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

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 any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

h.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). 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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

i.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-25

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

j.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

k.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

1,927,424

$31,809,488

2,306,541

$33,745,188

Shares

issued

in

reinvestment

of

distributions

..........

964,562

16,108,183

1,187,928

16,535,949

Shares

redeemed

...............................

(8,356,755)

(137,294,547)

(2,618,645)

(38,417,780)

Net

increase

(decrease)

..........................

(5,464,769)

$(89,376,876)

875,824

$11,863,357

Class

2

Shares:

Shares

sold

...................................

4,495,221

$72,188,702

18,351,749

$260,263,939

Shares

issued

in

reinvestment

of

distributions

..........

11,472,643

184,021,190

16,406,755

219,850,517

Shares

redeemed

...............................

(81,444,692)

(1,284,625,923)

(49,970,834)

(707,735,003)

Net

increase

(decrease)

..........................

(65,476,828)

$(1,028,416,031)

(15,212,330)

$(227,620,547)

Class

4

Shares:

Shares

sold

...................................

643,568

$10,556,896

2,068,153

$30,108,099

Shares

issued

in

reinvestment

of

distributions

..........

851,346

14,055,725

1,201,809

16,548,919

Shares

redeemed

...............................

(1,535,971)

(25,120,008)

(3,520,562)

(51,037,911)

Net

increase

(decrease)

..........................

(41,057)

$(507,387)

(250,600)

$(4,380,893)

1.

Organization

and

Significant

Accounting

Policies

(continued)

i.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-26

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.456%

of

the

Fund’s

average

daily

net

assets. 

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

Manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

Manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Subsidiary

Affiliation

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-27

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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,

2021,

these

purchase

and

sale

transactions

aggregated

$0

and

$169,315,086,

respectively.

4.

Expense

Offset

Arrangement

The Fund has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

June

30,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Income

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$129,156,296

$1,151,171,792

$(1,196,913,024)

$—

$—

$83,415,064

83,415,064

$3,364

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$8,117,000

$200,632,000

$(204,698,000)

$

—

$

—

$4,051,000

4,051,000

$393

Total

Affiliated

Securities

....

$137,273,296

$1,351,803,792

$(1,401,611,024)

$—

$—

$87,466,064

$3,757

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$18,659,427

Long

term

................................................................................

396,154,822

Total

capital

loss

carryforwards

...............................................................

$414,814,249

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-28

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

bond

discounts

and

premiums,

convertible

securities

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$799,997,414

and

$1,991,665,492,

respectively.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$5,064,000

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Credit

Risk

At

June

30,

2021,

the

Fund

had

18.4%

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.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Other

Derivative

Information

At

June

30,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

Cost

of

investments

..........................................................................

$2,916,829,799

Unrealized

appreciation

........................................................................

$724,957,201

Unrealized

depreciation

........................................................................

(65,647,231)

Net

unrealized

appreciation

(depreciation)

..........................................................

$659,309,970

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

Franklin

Income

VIP

Fund

Equity

contracts

...........

Investments

in

securities,

at

value

$

—

Options

written,

at

value

$

534,000

Total

....................

$—

$534,000

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-29

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

options

represented

42,857

shares.

See

Note

1(d)

regarding

derivative

financial

instruments. 

10.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

and

liabilities

carried

at

fair

value,

is

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

Franklin

Income

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

..............

Written

options

$—

Written

options

$1,289,887

Total

.......................

$—

$1,289,887

9.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-30

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

Level

1

Level

2

Level

3

Total

Franklin

Income

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

63,428,000

$

—

$

—

$

63,428,000

Air

Freight

&

Logistics

...................

32,796,869

—

—

32,796,869

Banks

...............................

205,423,750

29,665,619

—

235,089,369

Beverages

...........................

128,903,000

—

—

128,903,000

Biotechnology

.........................

42,406,500

—

—

42,406,500

Capital

Markets

........................

38,188,885

—

—

38,188,885

Chemicals

...........................

2,157,600

25,657,589

—

27,815,189

Diversified

Telecommunication

Services

.....

76,206,181

—

—

76,206,181

Electric

Utilities

........................

197,661,200

—

—

197,661,200

Energy

Equipment

&

Services

.............

12,740,000

—

—

12,740,000

Health

Care

Providers

&

Services

..........

36,300,000

—

—

36,300,000

Household

Products

....................

75,560,800

—

—

75,560,800

Industrial

Conglomerates

................

65,805,000

—

—

65,805,000

Insurance

............................

48,185,714

—

—

48,185,714

IT

Services

...........................

29,270,944

—

—

29,270,944

Machinery

............................

24,381,000

—

—

24,381,000

Media

...............................

28,510,000

—

—

28,510,000

Metals

&

Mining

.......................

33,556,000

—

—

33,556,000

Multi-Utilities

..........................

81,507,358

—

—

81,507,358

Oil,

Gas

&

Consumable

Fuels

.............

229,776,750

—

—

229,776,750

Personal

Products

.....................

—

17,531,344

—

17,531,344

Pharmaceuticals

.......................

183,543,100

—

—

183,543,100

Road

&

Rail

..........................

23,422,545

—

—

23,422,545

Semiconductors

&

Semiconductor

Equipment

.

47,596,500

—

—

47,596,500

Specialty

Retail

........................

10,204,480

—

—

10,204,480

Tobacco

.............................

49,546,865

—

—

49,546,865

Equity-Linked

Securities

...................

—

470,476,777

—

470,476,777

Convertible

Preferred

Stocks

:

Capital

Markets

........................

6,550,100

—

—

6,550,100

Electric

Utilities

........................

63,415,380

—

—

63,415,380

Multi-Utilities

..........................

56,523,750

—

—

56,523,750

Semiconductors

&

Semiconductor

Equipment

.

37,996,750

—

—

37,996,750

Thrifts

&

Mortgage

Finance

...............

—

3,028,125

—

3,028,125

Convertible

Bonds

.......................

—

4,432,584

—

4,432,584

Corporate

Bonds

........................

—

845,810,845

—

845,810,845

Index-Linked

Notes

......................

—

39,041,218

—

39,041,218

U.S.

Government

and

Agency

Securities

.......

—

97,280,469

—

97,280,469

Asset-Backed

Securities

..................

—

10,579,221

—

10,579,221

Mortgage-Backed

Securities

................

—

2,830,267

—

2,830,267

Escrows

and

Litigation

Trusts

...............

—

10,295,625

—

10,295,625

Short

Term

Investments

...................

87,466,064

1,013,000

—

88,479,064

Total

Investments

in

Securities

...........

$2,019,031,085

$1,557,642,683

a

$—

$3,576,673,768

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

534,000

$

—

$

—

$

534,000

$—

$—

$—

$—

a

Includes

foreign

securities

valued

at

$72,854,552,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

11.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FI-31

Semiannual

Report

Franklin

Income

VIP

Fund

(continued)

12.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

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

Cu

r

rency

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

LIBOR

London

Inter-Bank

Offered

Rate

FLG-1

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

This

semi

annual

report

for

Franklin

Large

Cap

Growth

VIP

Fund

covers

the

period

ended

June

3

0

,

202

1

.

Class

1

Performance

Summary

as

of

June

3

0

,

202

1

T

he

Fund’s

Class

1

Shares

posted

a

+

10.18

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

FLG-2

Semiannual

Report

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).

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

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

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.

The

Fund

may

focus

on

particular

sectors

of

the

market

from

time

to

time,

which

can

carry

greater

risks

of

adverse

developments

in

such

sectors.

Smaller

or

midsized

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger,

more

established

companies.

Investments

in

foreign

securities

may

involve

special

risks

including

currency

fluctuations

and

economic

and

political

uncertainty.

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

+15.25%

total

return.

2

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

2

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-pandemic

levels,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

bolstered

growth.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

5.9%

in

June

2021

as

job

openings

grew,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

3

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Software

19.1%

IT

Services

15.2%

Internet

&

Direct

Marketing

Retail

8.6%

Health

Care

Equipment

&

Supplies

8.2%

Capital

Markets

5.6%

Semiconductors

&

Semiconductor

Equipment

5.2%

Interactive

Media

&

Services

4.3%

Technology

Hardware,

Storage

&

Peripherals

4.1%

Professional

Services

3.0%

Equity

Real

Estate

Investment

Trusts

(REITs)

2.8%

Health

Care

Providers

&

Services

2.3%

Health

Care

Technology

2.0%

Industrial

Conglomerates

1.8%

Life

Sciences

Tools

&

Services

1.7%

Other*

16.4%

Short-Term

Investments

&

Other

Net

Assets

(0.3)%

Franklin

Large

Cap

Growth

VIP

Fund

FLG-3

Semiannual

Report

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

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

During

the

period

under

review,

relative

returns

were

helped

by

stock

selection

in

the

health

care

sector

and

underweightings

in

the

consumer

staples

and

utilities

sectors.

In

health

care,

vaccine

developer

Novavax

(not

part

of

the

index)

reported

favorable

trial

results

for

its

COVID-19

vaccine

candidate

and

will

be

submitting

these

results

to

the

U.S.

Food

and

Drug

Administration

(FDA)

for

emergency

use

authorization.

The

Fund

also

benefited

from

a

position

in

West

Pharmaceutical

Services.

The

company

is

a

leading

manufacturer

of

packaging

components

and

delivery

systems

for

injectable

drugs

and

health

care

products.

Strong

organic

sales

growth

and

accelerating

demand

for

products

associated

with

COVID-19

have

been

a

tailwind

for

the

company.

Elsewhere,

chipmaker

NVIDIA

contributed

to

relative

results.

The

company

manufactures

graphic

processing

units

used

in

video

games,

computer

graphics,

artificial

intelligence

and

autonomous

vehicles,

which

are

some

of

the

fastest

growing

areas

of

technology

spending.

A

favorable

underweighting

in

Apple

also

contributed

to

relative

returns.

Rising

bond

yields

and

expectations

of

an

economic

rebound

tempered

technology

stocks

in

general,

which

have

performed

well

since

the

pandemic.

E-commerce

platform

Shopify

(not

part

of

the

index)

helped

performance

as

well,

benefiting

from

strong

subscription

and

merchant

revenue

growth.

In

contrast,

stock

selection

in

the

industrials

sector

detracted

from

relative

returns.

Within

the

sector,

data

analytics

provider

Verisk

Analytics

faced

COVID-19

headwinds

in

its

energy

and

financials

businesses,

which

weakened

margins.

Another

detractor

in

the

sector

was

real

estate

data

and

analytics

company

CoStar

Group

(not

part

of

the

index),

which

has

been

actively

engaged

in

acquiring

assets

for

a

move

into

the

residential

real

estate

market.

However,

concerns

about

short-term

stock

dilution

held

back

share

performance.

Stock

selection

and

an

underweighting

in

the

financials

sector

also

hurt

relative

performance.

Electronic

bond

trading

platform

MarketAxess

Holdings

was

a

significant

detractor,

with

the

stock

falling

from

a

high

point

partly

due

to

the

rotation

from

growth

to

value.

Stock

selection

and

an

overweighting

hurt

relative

results

in

the

information

technology

sector.

Elsewhere,

relative

performance

was

hurt

by

drugmaker

Heron

Therapeutics

(not

part

of

the

index),

which

continued

to

face

FDA

hurdles

for

approval

of

its

non-opioid

painkiller.

Medical

device

company

Nevro

(not

part

of

the

index)

also

hurt

relative

performance

after

the

cancellation

of

non-emergency

medical

procedures

due

to

COVID-19

undermining

the

company’s

share

price.

Thank

you

for

your

participation

in

Franklin

Large

Cap

Growth

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Top

10

Holdings

6/30/21

Company

Industry

%

of

Total

Net

Assets

a

aa

Amazon.com,

Inc.

8.3%

Internet

&

Direct

Marketing

Retail

Microsoft

Corp.

4.5%

Software

Mastercard

,

Inc.

4.3%

IT

Services

Apple,

Inc.

4.1%

Technology

Hardware,

Storage

&

Peripherals

Visa,

Inc.

3.7%

IT

Services

NVIDIA

Corp.

3.1%

Semiconductors

&

Semiconductor

Equipment

ServiceNow

,

Inc.

3.1%

Software

Alphabet,

Inc.

2.9%

Interactive

Media

&

Services

Adobe,

Inc.

2.6%

Software

SBA

Communications

Corp.

2.3%

Equity

Real

Estate

Investment

Trusts

(REITs)

Franklin

Large

Cap

Growth

VIP

Fund

FLG-4

Semiannual

Report

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021

,

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.

Class

1

Fund

Expenses

Franklin

Large

Cap

Growth

VIP

Fund

FLG-5

Semiannual

Report

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.

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.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,101.80

$4.31

$1,020.70

$4.14

0.83%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Large

Cap

Growth

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-6

-1

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$29.78

$22.73

$19.19

$20.93

$17.85

$18.42

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.03)

(0.09)

(0.06)

(0.04)

(0.03)

(0.04)

Net

realized

and

unrealized

gains

(losses)

2.91

9.54

6.51

0.03

4.91

(0.26)

Total

from

investment

operations

........

2.88

9.45

6.45

(0.01)

4.88

(0.30)

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

(0.20)

—

Net

realized

gains

.................

(3.77)

(2.40)

(2.91)

(1.73)

(1.60)

(0.27)

Total

distributions

...................

(3.77)

(2.40)

(2.91)

(1.73)

(1.80)

(0.27)

Net

asset

value,

end

of

period

..........

$28.89

$29.78

$22.73

$19.19

$20.93

$17.85

Total

return

c

.......................

10.18%

44.98%

34.98%

(1.24)%

28.38%

(1.49)%

Ratios

to

average

net

assets

d

Expenses

e

........................

0.83%

f

0.84%

f

0.84%

f

0.85%

0.87%

0.80%

Net

investment

(loss)

................

(0.20)%

(0.36)%

(0.25)%

(0.17)%

(0.14)%

(0.19)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$5,161

$4,606

$1,350

$1,040

$1,092

$883

Portfolio

turnover

rate

................

7.87%

14.90%

17.01%

21.93%

24.96%

36.26%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FLG-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$28.65

$22.00

$18.70

$20.48

$17.48

$18.09

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.07)

(0.14)

(0.11)

(0.09)

(0.08)

(0.08)

Net

realized

and

unrealized

gains

(losses)

2.81

9.19

6.32

0.04

4.81

(0.26)

Total

from

investment

operations

........

2.74

9.05

6.21

(0.05)

4.73

(0.34)

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

(0.13)

—

Net

realized

gains

.................

(3.77)

(2.40)

(2.91)

(1.73)

(1.60)

(0.27)

Total

distributions

...................

(3.77)

(2.40)

(2.91)

(1.73)

(1.73)

(0.27)

Net

asset

value,

end

of

period

..........

$27.62

$28.65

$22.00

$18.70

$20.48

$17.48

Total

return

c

.......................

10.05%

44.63%

34.58%

(1.47)%

28.11%

(1.79)%

Ratios

to

average

net

assets

d

Expenses

e

........................

1.08%

f

1.09%

f

1.09%

f

1.10%

1.12%

1.05%

Net

investment

(loss)

................

(0.46)%

(0.58)%

(0.50)%

(0.42)%

(0.39)%

(0.44)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$132,543

$131,001

$114,170

$100,435

$118,875

$113,028

Portfolio

turnover

rate

................

7.87

%

14.90%

17.01%

21.93%

24.96%

36.26%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Large

Cap

Growth

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-8

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

100.3%

Auto

Components

0.8%

a

Aptiv

plc

............................................

United

States

6,805

$

1,070,631

Automobiles

0.9%

a

Tesla,

Inc.

...........................................

United

States

1,901

1,292,110

Beverages

1.3%

Constellation

Brands,

Inc.,

A

.............................

United

States

4,543

1,062,562

a

Monster

Beverage

Corp.

................................

United

States

8,619

787,346

1,849,908

Biotechnology

1.5%

a

Heron

Therapeutics,

Inc.

................................

United

States

46,656

724,101

a

Novavax

,

Inc.

........................................

United

States

5,238

1,112,080

a

PTC

Therapeutics,

Inc.

.................................

United

States

5,541

234,218

2,070,399

Capital

Markets

5.6%

a,b

Churchill

Capital

Corp.

IV,

A

..............................

United

States

11,802

340,134

a

Dragoneer

Growth

Opportunities

Corp.

.....................

United

States

28,900

300,271

Intercontinental

Exchange,

Inc.

...........................

United

States

7,106

843,482

MarketAxess

Holdings,

Inc.

..............................

United

States

1,751

811,746

MSCI,

Inc.

...........................................

United

States

4,988

2,659,003

S&P

Global,

Inc.

......................................

United

States

5,756

2,362,550

a

Soaring

Eagle

Acquisition

Corp.

..........................

United

States

28,200

298,638

a

TPG

Pace

Beneficial

II

Corp.,

A

...........................

United

States

15,800

159,264

7,775,088

Chemicals

1.3%

Ecolab,

Inc.

..........................................

United

States

3,064

631,092

Linde

plc

............................................

United

Kingdom

3,836

1,108,988

1,740,080

Commercial

Services

&

Supplies

0.3%

a

Legalzoom.com,

Inc.

...................................

United

States

300

11,355

Republic

Services,

Inc.

.................................

United

States

4,079

448,731

460,086

Consumer

Finance

0.5%

a,b

SoFi

Technologies,

Inc.

.................................

United

States

33,360

639,511

Electric

Utilities

0.4%

NextEra

Energy,

Inc.

...................................

United

States

7,957

583,089

Entertainment

1.2%

a

Sea

Ltd.,

ADR

........................................

Taiwan

2,543

698,308

a

Walt

Disney

Co.

(The)

..................................

United

States

5,161

907,149

1,605,457

Equity

Real

Estate

Investment

Trusts

(REITs)

2.8%

American

Tower

Corp.

..................................

United

States

2,345

633,478

SBA

Communications

Corp.

.............................

United

States

10,005

3,188,594

3,822,072

Food

Products

0.9%

a

Freshpet

,

Inc.

........................................

United

States

3,595

585,841

Lamb

Weston

Holdings,

Inc.

.............................

United

States

8,368

674,963

1,260,804

Health

Care

Equipment

&

Supplies

8.2%

Danaher

Corp.

.......................................

United

States

6,791

1,822,433

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FLG-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Equipment

&

Supplies

(continued)

a

Edwards

Lifesciences

Corp.

.............................

United

States

13,402

$

1,388,045

a,b

Figs,

Inc.,

A

..........................................

United

States

13,800

691,380

a

IDEXX

Laboratories,

Inc.

................................

United

States

2,914

1,840,337

a

Intuitive

Surgical,

Inc.

..................................

United

States

1,772

1,629,602

a

Nevro

Corp.

.........................................

United

States

7,224

1,197,667

West

Pharmaceutical

Services,

Inc.

........................

United

States

7,450

2,675,295

11,244,759

Health

Care

Providers

&

Services

2.3%

a

Guardant

Health,

Inc.

..................................

United

States

4,189

520,232

UnitedHealth

Group,

Inc.

................................

United

States

6,766

2,709,377

3,229,609

Health

Care

Technology

2.0%

a

Veeva

Systems,

Inc.,

A

.................................

United

States

8,797

2,735,427

Hotels,

Restaurants

&

Leisure

1.5%

a

Airbnb,

Inc.,

A

........................................

United

States

578

88,515

a

Chipotle

Mexican

Grill,

Inc.

..............................

United

States

1,045

1,620,105

Starbucks

Corp.

......................................

United

States

3,163

353,655

2,062,275

Industrial

Conglomerates

1.8%

Honeywell

International,

Inc.

.............................

United

States

5,294

1,161,239

Roper

Technologies,

Inc.

................................

United

States

2,772

1,303,394

2,464,633

Interactive

Media

&

Services

4.3%

a

Alphabet,

Inc.,

A

......................................

United

States

1,614

3,941,049

a,b

Bumble,

Inc.,

A

.......................................

United

States

6,639

382,406

a

Facebook,

Inc.,

A

.....................................

United

States

4,542

1,579,299

5,902,754

Internet

&

Direct

Marketing

Retail

8.6%

a

Amazon.com,

Inc.

.....................................

United

States

3,323

11,431,652

a,b

Coupang

,

Inc.

........................................

South

Korea

10,600

443,292

11,874,944

IT

Services

15.2%

a

Black

Knight,

Inc.

.....................................

United

States

8,806

686,692

a,b

Marqeta

,

Inc.,

A

.......................................

United

States

22,256

624,726

Mastercard

,

Inc.,

A

....................................

United

States

16,271

5,940,379

a

Okta

,

Inc.

...........................................

United

States

2,456

600,934

a

Paymentus

Holdings,

Inc.,

A

.............................

United

States

2,300

81,650

a

PayPal

Holdings,

Inc.

..................................

United

States

10,097

2,943,074

a

Shopify,

Inc.,

A

.......................................

Canada

1,275

1,862,749

a

Snowflake,

Inc.,

A

.....................................

United

States

2,144

518,419

a

Twilio

,

Inc.,

A

.........................................

United

States

6,298

2,482,420

Visa,

Inc.,

A

..........................................

United

States

22,076

5,161,810

20,902,853

Life

Sciences

Tools

&

Services

1.7%

a

Illumina,

Inc.

.........................................

United

States

1,942

918,974

a

Maravai

LifeSciences

Holdings,

Inc.,

A

.....................

United

States

3,180

132,701

a,c

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

..................

China

72,288

1,323,606

2,375,281

Machinery

0.6%

a,b

Proterra

,

Inc.

.........................................

United

States

48,184

824,428

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Media

0.7%

a

Liberty

Broadband

Corp.,

C

..............................

United

States

5,218

$

906,158

Pharmaceuticals

1.3%

AstraZeneca

plc,

ADR

..................................

United

Kingdom

13,578

813,322

a

Catalent

,

Inc.

........................................

United

States

7,089

766,463

a

Reata

Pharmaceuticals,

Inc.,

A

...........................

United

States

1,873

265,086

1,844,871

Professional

Services

3.0%

a

CoStar

Group,

Inc.

....................................

United

States

34,380

2,847,351

TransUnion

..........................................

United

States

7,369

809,190

Verisk

Analytics,

Inc.

...................................

United

States

2,743

479,257

4,135,798

Road

&

Rail

1.0%

Union

Pacific

Corp.

....................................

United

States

6,047

1,329,917

Semiconductors

&

Semiconductor

Equipment

5.2%

a

Alphawave

IP

Group

plc

................................

United

Kingdom

14,400

71,715

Analog

Devices,

Inc.

...................................

United

States

6,369

1,096,487

Monolithic

Power

Systems,

Inc.

...........................

United

States

4,430

1,654,384

NVIDIA

Corp.

........................................

United

States

5,352

4,282,135

7,104,721

Software

19.1%

a

Adobe,

Inc.

..........................................

United

States

6,212

3,637,996

a,b

AppLovin

Corp.,

A

.....................................

United

States

6,060

455,530

a

Atlassian

Corp.

plc,

A

..................................

United

States

2,078

533,755

a

Avalara,

Inc.

.........................................

United

States

920

148,856

a

Bill.com

Holdings,

Inc.

..................................

United

States

9,932

1,819,344

a

Confluent,

Inc.,

A

......................................

United

States

2,900

137,750

a

DocuSign,

Inc.

.......................................

United

States

4,493

1,256,108

Intuit,

Inc.

...........................................

United

States

4,063

1,991,561

Microsoft

Corp.

.......................................

United

States

22,629

6,130,196

a

Paycom

Software,

Inc.

.................................

United

States

1,169

424,897

a,b

Procore

Technologies,

Inc.

..............................

United

States

500

47,475

a

PTC,

Inc.

...........................................

United

States

9,282

1,311,175

a

salesforce.com,

Inc.

...................................

United

States

4,930

1,204,251

a

SentinelOne

,

Inc.,

A

...................................

United

States

2,400

102,000

a

ServiceNow

,

Inc.

......................................

United

States

7,658

4,208,454

a

Sprinklr

,

Inc.,

A

.......................................

United

States

6,000

123,540

a

Synopsys,

Inc.

.......................................

United

States

4,198

1,157,766

a

Workday,

Inc.,

A

......................................

United

States

2,964

707,625

a

Zendesk

,

Inc.

........................................

United

States

6,291

908,043

26,306,322

Specialty

Retail

0.3%

a

Burlington

Stores,

Inc.

..................................

United

States

1,325

426,637

Technology

Hardware,

Storage

&

Peripherals

4.1%

Apple,

Inc.

..........................................

United

States

41,002

5,615,634

Textiles,

Apparel

&

Luxury

Goods

1.0%

NIKE,

Inc.,

B

.........................................

United

States

9,150

1,413,583

Wireless

Telecommunication

Services

0.9%

a

T-Mobile

US,

Inc.

.....................................

United

States

9,084

1,315,636

Total

Common

Stocks

(Cost

$45,570,929)

......................................

138,185,475

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FLG-11

See

Abbreviations

on

page

FLG-

22

.

Short

Term

Investments

2.7%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.2%

d

Joint

Repurchase

Agreement,

0.033%,

7/01/21

(Maturity

Value

$268,050)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$195,607)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$29,764)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$42,679)

Collateralized

by

U.S.

Government

Agency

Securities,

2.5%

-

5%,

6/20/47

-

3/20/51;

U.S.

Treasury

Bond,

Index

Linked,

2.38%,

1/15/25;

and

U.S.

Treasury

Note,

1.88%,

4/30/22

(valued

at

$273,601)

.........................................

268,049

$

268,049

Total

Repurchase

Agreements

(Cost

$268,049)

..................................

268,049

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

2.5%

Country

Shares

Money

Market

Funds

2.0%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

2,737,000

2,737,000

Principal

Amount

*

Repurchase

Agreements

0.5%

d

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0.05%,

7/01/21

(Maturity

Value

$660,816)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$674,032)

.........................................

660,815

660,815

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$3,397,815)

............................................................

3,397,815

Total

Short

Term

Investments

(Cost

$3,665,864

)

.................................

3,665,864

a

Total

Investments

(Cost

$49,236,793)

103.0%

...................................

$141,851,339

Other

Assets,

less

Liabilities

(3.0)%

...........................................

(4,147,778)

Net

Assets

100.0%

...........................................................

$137,703,561

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(d).

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

value

of

this

security

was

$1,323,606,

representing

1.0%

of

net

assets.

d

See

Note

1(c)

regarding

joint

repurchase

agreement.

e

See

Note

1(d)

regarding

securities

on

loan.

f

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-12

Franklin

Large

Cap

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$45,570,929

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

2,737,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

928,864

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$3,712,255)

.................................

$138,185,475

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

2,737,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

928,864

Receivables:

Investment

securities

sold

...................................................................

1,872,592

Capital

shares

sold

........................................................................

154,467

Dividends

and

interest

.....................................................................

71,270

Total

assets

..........................................................................

143,949,668

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

1,576,146

Capital

shares

redeemed

...................................................................

1,129,140

Management

fees

.........................................................................

82,409

Distribution

fees

..........................................................................

26,456

Payable

upon

return

of

securities

loaned

(Note

1

d

)

..................................................

3,397,815

Accrued

expenses

and

other

liabilities

...........................................................

34,141

Total

liabilities

.........................................................................

6,246,107

Net

assets,

at

value

.................................................................

$137,703,561

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$34,726,344

Total

distributable

earnings

(losses)

.............................................................

102,977,217

Net

assets,

at

value

.................................................................

$137,703,561

Franklin

Large

Cap

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$5,160,917

Shares

outstanding

........................................................................

178,616

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$28.89

Class

2:

Net

assets,

at

value

.......................................................................

$132,542,644

Shares

outstanding

........................................................................

4,799,630

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$27.62

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FLG-13

Franklin

Large

Cap

Growth

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$254,169

Interest:

Unaffiliated

issuers

........................................................................

73

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

151,970

Non-controlled

affiliates

(Note

3

e

)

.............................................................

51

Total

investment

income

...................................................................

406,263

Expenses:

Management

fees

(Note

3

a

)

...................................................................

493,390

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

158,619

Custodian

fees

(Note

4

)

......................................................................

1,402

Reports

to

shareholders

......................................................................

15,442

Professional

fees

...........................................................................

28,653

Trustees'

fees

and

expenses

..................................................................

736

Other

....................................................................................

5,014

Total

expenses

.........................................................................

703,256

Expense

reductions

(Note

4

)

...............................................................

(6)

Expenses

waived/paid

by

affiliates

(Note

3e

)

...................................................

(302)

Net

expenses

.........................................................................

702,948

Net

investment

income

(loss)

............................................................

(296,685)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

10,925,826

Foreign

currency

transactions

................................................................

(304)

Net

realized

gain

(loss)

..................................................................

10,925,522

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

2,153,096

Net

realized

and

unrealized

gain

(loss)

............................................................

13,078,618

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$12,781,933

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-14

Franklin

Large

Cap

Growth

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(296,685)

$(689,116)

Net

realized

gain

(loss)

.................................................

10,925,522

17,097,318

Net

change

in

unrealized

appreciation

(depreciation)

...........................

2,153,096

28,111,649

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

12,781,933

44,519,851

Distributions

to

shareholders:

Class

1

.............................................................

(589,813)

(319,951)

Class

2

.............................................................

(16,040,591)

(11,348,356)

Total

distributions

to

shareholders

..........................................

(16,630,404)

(11,668,307)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

664,888

2,179,293

Class

2

.............................................................

5,279,848

(14,944,016)

Total

capital

share

transactions

............................................

5,944,736

(12,764,723)

Net

increase

(decrease)

in

net

assets

...................................

2,096,265

20,086,821

Net

assets:

Beginning

of

period

.....................................................

135,607,296

115,520,475

End

of

period

..........................................................

$137,703,561

$135,607,296

Franklin

Templeton

Variable

Insurance

Products

Trust

FLG-15

Semiannual

Report

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,

2021,

67.4%

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

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 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in open-end

mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund’s

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-16

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

d.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund,

and/or

a

joint

repurchase

agreement.

Additionally,

the

Fund

received

$393,774

in

U.S.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-17

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Government

and

Agency

securities

as

collateral.

These

securities

received

as

collateral

are

held

in

segregated

accounts

with

the

Funds'

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

received

as

collateral.

As

such,

the

non-cash

collateral

is

excluded

from

the

Statement

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

e.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

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. 

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.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

g.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-18

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

h.

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

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

2,914

$82,500

91,945

$2,104,488

Shares

issued

in

reinvestment

of

distributions

..........

21,262

589,813

14,182

319,951

Shares

redeemed

...............................

(247)

(7,425)

(10,851)

(245,146)

Net

increase

(decrease)

..........................

23,929

$664,888

95,276

$2,179,293

Class

2

Shares:

Shares

sold

...................................

172,993

$4,910,363

358,053

$8,575,790

Shares

issued

in

reinvestment

of

distributions

..........

604,849

16,040,591

522,004

11,348,356

Shares

redeemed

...............................

(550,673)

(15,671,106)

(1,496,315)

(34,868,162)

Net

increase

(decrease)

..........................

227,169

$5,279,848

(616,258)

$(14,944,016)

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-19

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.750%

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

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

rate,

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Large

Cap

Growth

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$14,000

$11,797,000

$(9,074,000)

$

—

$

—

$2,737,000

2,737,000

$51

Total

Affiliated

Securities

....

$14,000

$11,797,000

$(9,074,000)

$—

$—

$2,737,000

$51

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-20

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

2021,

aggregated

$10,377,072

and

$19,669,942,

respectively.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$3,397,815

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

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

Cost

of

investments

..........................................................................

$49,502,531

Unrealized

appreciation

........................................................................

$93,381,175

Unrealized

depreciation

........................................................................

(1,032,367)

Net

unrealized

appreciation

(depreciation)

..........................................................

$92,348,808

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-21

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Large

Cap

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Auto

Components

......................

$

1,070,631

$

—

$

—

$

1,070,631

Automobiles

..........................

1,292,110

—

—

1,292,110

Beverages

...........................

1,849,908

—

—

1,849,908

Biotechnology

.........................

2,070,399

—

—

2,070,399

Capital

Markets

........................

7,775,088

—

—

7,775,088

Chemicals

...........................

1,740,080

—

—

1,740,080

Commercial

Services

&

Supplies

...........

460,086

—

—

460,086

Consumer

Finance

.....................

639,511

—

—

639,511

Electric

Utilities

........................

583,089

—

—

583,089

Entertainment

.........................

1,605,457

—

—

1,605,457

Equity

Real

Estate

Investment

Trusts

(REITs)

.

3,822,072

—

—

3,822,072

Food

Products

........................

1,260,804

—

—

1,260,804

Health

Care

Equipment

&

Supplies

.........

11,244,759

—

—

11,244,759

Health

Care

Providers

&

Services

..........

3,229,609

—

—

3,229,609

Health

Care

Technology

.................

2,735,427

—

—

2,735,427

Hotels,

Restaurants

&

Leisure

.............

2,062,275

—

—

2,062,275

Industrial

Conglomerates

................

2,464,633

—

—

2,464,633

Interactive

Media

&

Services

..............

5,902,754

—

—

5,902,754

Internet

&

Direct

Marketing

Retail

..........

11,874,944

—

—

11,874,944

IT

Services

...........................

20,902,853

—

—

20,902,853

Life

Sciences

Tools

&

Services

............

1,051,675

1,323,606

—

2,375,281

Machinery

............................

824,428

—

—

824,428

Media

...............................

906,158

—

—

906,158

Pharmaceuticals

.......................

1,844,871

—

—

1,844,871

Professional

Services

...................

4,135,798

—

—

4,135,798

Road

&

Rail

..........................

1,329,917

—

—

1,329,917

Semiconductors

&

Semiconductor

Equipment

.

7,104,721

—

—

7,104,721

Software

.............................

26,306,322

—

—

26,306,322

Specialty

Retail

........................

426,637

—

—

426,637

Technology

Hardware,

Storage

&

Peripherals

.

5,615,634

—

—

5,615,634

Textiles,

Apparel

&

Luxury

Goods

..........

1,413,583

—

—

1,413,583

Wireless

Telecommunication

Services

.......

1,315,636

—

—

1,315,636

Short

Term

Investments

...................

2,737,000

928,864

—

3,665,864

Total

Investments

in

Securities

...........

$139,598,869

$2,252,470

a

$—

$141,851,339

a

Includes

foreign

securities

valued

at

$1,323,606,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FLG-22

Semiannual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

11.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

MGD-1

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

This

semiannual

report

for

Franklin

Mutual

Global

Discovery

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+1

5.83

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

MGD-2

Semiannual

Report

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).

Franklin

Mutual

Global

Discovery

VIP

Fund

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

we

believe

are

available

at

market

prices

less

than

their

intrinsic

value.

The

equity

securities

in

which

the

Fund

invests

are

primarily

common

stock,

with

a

current

focus

on

mid-

and

large

cap

companies.

To

a

lesser

extent,

the

Fund

also

invests

in

merger

arbitrage

securities

and

the

debt

and

equity

of

distressed

companies.

The

Fund

may

invest

substantially

and

potentially

up

to

100%

of

its

assets

in

foreign

securities,

which

may

include

sovereign

debt

and

participations

in

foreign

government

debt.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

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

small

and

mid-capitalization

companies

may

be

more

volatile

in

price

than

those

of

larger

companies

and

may

involve

additional

risks.

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

significantly

exceeds

the

Fund’s

initial

investment.

A

merger

or

other

restructuring,

or

a

tender

or

exchange

offer,

proposed

or

pending

at

the

time

the

Fund

invests

in

merger

arbitrage

securities

may

not

be

completed

on

the

terms

or

within

the

time

frame

contemplated,

which

may

result

in

losses

to

the

Fund.

Debt

obligations

of

distressed

companies

typically

are

unrated,

lower-rated,

in

default

or

close

to

default

and

are

generally

more

likely

to

become

worthless

than

the

securities

of

more

financially

stable

companies.

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

new

benchmark,

the

MSCI

World

Value

Index-NR

(USD),

posted

a

+14.72%

total

return

for

the

period

under

review.

1

Also

for

comparison,

the

Fund’s

former

benchmark,

the

MSCI

World

Index

(USD),

posted

a

+13.33%

total

return

for

the

same

period.

1

The

MSCI

World

Value

Index-NR

(USD;

net

of

taxes

on

dividends)

is

replacing

the

MSCI

World

Index

(USD;

gross

of

taxes

on

dividends)

as

the

Fund’s

benchmark.

The

investment

manager

believes

the

composition

of

the

MSCI

World

Value

Index-NR

(USD)

more

accurately

reflects

the

Fund’s

current

investment

strategy

and

portfolio

characteristics,

and

that

the

actual

withholding

rates

for

the

Fund

are

closer

to

the

assumptions

of

the

MSCI

World

Value

Index-NR

(USD)

than

the

MSCI

World

Index

(USD).

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(USD),

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

United

States

49.0%

United

Kingdom

8.8%

Germany

7.4%

France

7.3%

Netherlands

5.9%

Switzerland

5.0%

Canada

3.0%

Israel

1.9%

Japan

1.6%

South

Korea

1.5%

China

1.2%

Other

0.8%

Short-Term

Investments

&

Other

Net

Assets

6.6%

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-3

Semiannual

Report

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR

(USD),

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR

(USD),

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR

(USD),

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

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

and

debt

investments

are

made

in

publicly

traded

companies

globally,

we

may

invest

occasionally

in

privately

held

companies

as

well.

Our

portfolio

selection

process

generally

includes

an

assessment

of

the

potential

impacts

of

any

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

complement

this

more

traditional

investment

strategy

with

two

others.

One

is

distressed

investing,

which

is

complex

and

can

take

many

forms.

The

most

common

distressed

investment

the

Fund

undertakes

is

the

purchase

of

financially

troubled

or

bankrupt

companies’

debt

at

a

substantial

discount

to

face

value.

After

the

financially

distressed

company

is

reorganized,

often

in

bankruptcy

court,

the

old

debt

is

typically

replaced

with

new

securities

issued

by

the

financially

stronger

company.

The

other

piece

of

our

investment

strategy

is

participating

in

arbitrage

situations,

another

highly

specialized

field.

When

companies

announce

proposed

mergers

or

takeovers,

commonly

referred

to

as

deals,

the

target

company

may

trade

at

a

discount

to

the

bid

it

ultimately

accepts.

One

form

of

arbitrage

involves

purchasing

the

target

company’s

stock

when

it

is

trading

below

the

value

we

believe

it

would

receive

in

a

deal.

In

keeping

with

our

commitment

to

a

relatively

conservative

investment

approach,

we

typically

focus

our

arbitrage

efforts

on

announced

deals,

and

eschew

rumored

deals

or

other

situations

we

consider

relatively

risky.

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-4

Semiannual

Report

In

addition,

it

is

our

practice

to

hedge

the

Fund’s

currency

exposure

when

we

deem

it

advantageous

for

our

shareholders.

Manager’s

Discussion

Before

the

start

of

the

period,

a

large,

multi-year

performance

gap

existed

between

growth

and

value

stocks.

The

beginning

of

2021

brought

a

rotation

into

value

stocks

that

lasted

for

much

of

the

period,

narrowing

the

gap.

For

the

six-month

period

ending

June

30,

2021,

the

MSCI

World

Value

Index-NR

(USD)

posted

a

+14.72%

total

return,

while

the

MSCI

World

Growth

Index-NR

(USD)

posted

a

+11.14%

total

return.

1

While

“the

reopening

trade”

boosted

the

stock

prices

of

many

companies

that

stood

to

benefit

from

economic

reopening

and

citizens’

reentry

into

a

more

normalized

society,

a

bigger

driver

of

performance

within

our

portfolios

was

“the

reflation

trade,”

reflecting

expectations

of

rising

interest

rates

and

increasing

inflationary

pressures.

Fiscal

and

monetary

stimulus,

increased

demand

for

certain

products

such

as

automobiles

where

production

was

constrained

by

supply

bottlenecks,

a

steepening

yield

curve

and

commodity

price

increases

are

drivers

of

the

reflation

trade.

Many

of

Franklin

Mutual

Series’

portfolios

had

a

significant

position

in

banks.

The

team

had

invested

in

these

names

on

account

of

their

discounted

pricing

compared

to

our

assessment

of

fair

value.

When

rates

started

to

rise

at

the

beginning

of

the

period,

financial

companies

benefited.

Higher

rates

generally

mean

high

spreads

on

lending

products.

Moreover,

increased

economic

activity

and

overall

confidence

in

future

economic

growth

spurs

increased

lending

activity,

which

is

also

good

for

banks.

Investments

in

companies

such

as

ING

Groep,

Wells

Fargo

and

Capital

One

Financial

were

some

of

our

biggest

contributors

to

absolute

performance

during

the

period.

Our

traditional

value

equity

investment

approach

is

complemented

with

two

other

investment

strategies

we

use

to

take

advantage

of

special

situations,

which

are

merger

arbitrage

and

distressed

investing.

We

were

active

in

special

situations

investing

during

the

first

half

of

2021.

During

the

period,

our

new

ideas

were

driven

by

merger

arbitrage

opportunities,

while

our

attention

in

credit

remained

focused

on

opportunistic

performing

and

stressed

names,

in

addition

to

post-reorganization

distressed

securities.

Within

merger

arbitrage,

which

involves

trading

the

stocks

of

companies

involved

in

a

merger

or

acquisition,

activity

has

been

significant.

Strong

global

markets,

cheap

and

available

financing

and

the

administration

change

in

the

U.S.

have

helped

to

increase

and

sustain

merger

activity.

As

corporations

seek

inorganic

growth

opportunities

across

products,

service

offerings

and

end

markets

while

extracting

merger

synergies,

we

expect

deal

momentum

to

continue.

We

are

seeking

opportunities

that

either

present

a

straightforward

rate

of

return

with

relatively

low

risk,

deals

with

high

discounts

due

to

concerns

over

the

antitrust

review

process,

or

deals

stemming

from

unsolicited

approaches

or

auctions.

Within

our

distressed

credit

strategy,

historically

low

rates

and

a

steepening

yield

curve

drove

tight

credit

spreads.

As

a

result,

total

risk-adjusted

return

potential

in

performing

and

stressed

credit

was

muted

during

the

period,

particularly

in

fixed-rate,

long

duration

investments.

Given

the

current

environment,

we

are

invested

in

three

key

areas:

top

of

the

capital

structure

secured

debt,

event-driven

credit

and

traditional

distressed

debt.

Fund

Performance

Turning

to

Fund

performance,

top

positive

contributors

included

Wells

Fargo,

ING

Groep

and

Eli

Lilly.

Wells

Fargo

was

among

the

leading

contributors

to

Fund

results

during

the

period.

The

company

announced

its

first-

quarter

2021

results

in

April.

Headline

earnings

per

share

beat

consensus

expectations.

The

mortgage

and

investment

banking

business

lines

generated

strong

fee

revenues

and

management

expects

profitability

of

the

company’s

other

core

lines

of

business

to

improve

as

the

economy

continues

to

reopen.

The

stock

performed

well

throughout

the

remainder

of

the

six-month

period.

Financial

services

company

ING

Groep

was

a

main

contributor

to

Fund

results

during

the

period.

The

stock

price

rose

throughout

the

six

months,

riding

a

wave

of

investor

optimism

and

positive

financial

results.

Early

in

the

period,

the

company

announced

fourth-quarter

2020

Top

10

Industries

6/30/21

%

of

Total

Net

Assets

a

Pharmaceuticals

10.1%

Oil,

Gas

&

Consumable

Fuels

9.3%

Banks

8.5%

Insurance

7.2%

Health

Care

Providers

&

Services

4.6%

Software

4.3%

Technology

Hardware,

Storage

&

Peripherals

3.9%

Diversified

Telecommunication

Services

3.5%

Tobacco

3.4%

IT

Services

3.1%

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-5

Semiannual

Report

adjusted

earnings

per

share

that

beat

expectations,

which

helped

provide

support

for

price

appreciation

in

February

and

March.

In

May,

ING

Groep

announced

strong

results

for

2021’s

first

quarter,

further

lifting

the

price.

In

addition,

the

continuing

prospect

of

improving

economic

conditions

and

higher

interest

rates

has

helped

to

support

financial

stocks.

Additionally,

management

has

announced

a

series

of

restructurings

and

market

exits

to

reduce

cost

and

streamline

the

company’s

operations.

Shares

of

drug

company

Eli

Lilly

appreciated

during

the

period

and

contributed

positively

to

portfolio

results.

The

company's

stock

price

appreciated

strongly

due

to

positive

phase

2

data

for

its

Alzheimer’s

compound,

Donanemab,

as

well

as

Lilly

announcing

that

it

expected

to

file

Donanemab

with

the

FDA

much

earlier

than

originally

anticipated

due

to

potentially

positive

regulatory

developments,

namely

the

FDA

approval

of

Aduhelm,

an

Alzheimer’s

product

from

Biogen

(not

a

Fund

holding).

In

addition,

Eli

Lilly’s

diabetes

drug,

Trulicity,

continues

to

grow

strongly,

and

its

key

diabetes

pipeline

compound,

Tirzepatide,

showed

positive

results

in

multiple

phase

3

clinical

trials,

which

further

strengthens

the

company’s

position

in

the

growing

diabetes

end

market.

During

the

period

under

review,

Fund

investments

that

detracted

from

performance

included

Cognizant

Technology

Solutions,

Check

Point

Software

Technologies

and

Credit

Suisse

Group.

Outsourcing

services

company

Cognizant

Technology

Solutions

detracted

from

results

during

the

period.

The

stock

fell

precipitously

in

May

after

the

company’s

first-quarter

2021

earnings

call.

Despite

financial

results

that

were

largely

in-line

with

expectations,

investors

reacted

negatively

as

the

company

lowered

its

full-year

margin

guidance

to

tackle

a

high

employee

attrition

rate,

which

led

to

lost

business

opportunities

due

to

the

inability

to

source

talent.

Long

term,

the

company

is

investing

in

its

recruiting

and

employee

retention

efforts

and

building

out

its

automation

technology

to

decouple

employee

headcount

growth

from

revenue

growth.

Information

technology

security

software

provider

Check

Point

Software

Technologies

detracted

from

Fund

performance

during

the

period.

The

stock

slid

in

February

after

the

company

announced

fourth

fiscal

quarter

results,

including

2021

guidance

that

was

below

consensus

expectations

due

to

higher

selling,

general

and

administrative

expenses,

lower

interest

income

and

foreign

exchange

headwinds.

In

late

April,

the

company

announced

first-quarter

2021

financial

results

that

were

in-line

with

estimates,

as

better

subscription

revenues

offset

lower

product

revenues.

The

stock

was

range-bound

for

the

remainder

of

the

six-month

period.

The

stock

of

Switzerland-based

financial

services

company

Credit

Suisse

detracted

from

portfolio

results

during

the

six-month

period.

In

March,

the

price

fell

due

to

two

large

risk

management

lapses

at

the

firm.

First,

the

collapse

of

Greensill,

which

is

a

provider

of

supply

chain

finance

to

companies

around

the

world.

Funds

managed

by

Credit

Suisse

had

approximately

$10

billion

of

exposure.

Since

the

collapse

of

Greensill,

Credit

Suisse

continues

to

work

on

recovering

and

returning

investors’

capital.

Second,

the

firm

had

outsized

exposure

to

Archegos

Capital

Management,

a

prime

broker

client

of

the

firm.

Although

multiple

global

banks

suffered

losses,

Credit

Suisse

suffered

significantly

higher

losses

than

others,

with

a

$5.5

billion

write-off

booked

during

the

quarter.

As

a

result

of

this

charge,

it

was

forced

to

raise

close

to

$2

billion

to

shore

up

the

bank's

capital.

In

response

to

the

two

events,

Credit

Suisse

announced

multiple

restructuring

programs

and

management

changes.

The

stock

was

range-bound

for

the

remainder

of

the

period.

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

as

the

dollar

rose

against

most

currencies

during

the

period.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

GlaxoSmithKline

plc

3.3%

Pharmaceuticals,

United

Kingdom

Charter

Communications,

Inc.

2.7%

Media,

United

States

Deutsche

Telekom

AG

2.6%

Diversified

Telecommunication

Services,

Germany

Merck

&

Co.,

Inc.

2.6%

Pharmaceuticals,

United

States

Wells

Fargo

&

Co.

2.6%

Banks,

United

States

BP

plc

2.5%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

CVS

Health

Corp.

2.5%

Health

Care

Providers

&

Services,

United

States

ING

Groep

NV

2.4%

Banks,

Netherlands

Williams

Cos.,

Inc.

(The)

2.3%

Oil,

Gas

&

Consumable

Fuels,

United

States

British

American

Tobacco

plc

2.2%

Tobacco,

United

Kingdom

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-6

Semiannual

Report

Thank

you

for

your

participation

in

Franklin

Mutual

Global

Discovery

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-7

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,158.29

$5.20

$1,019.97

$4.87

0.97%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Global

Discovery

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$17.50

$19.17

$17.47

$20.38

$20.22

$19.85

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.19

0.57

c

0.43

0.36

0.47

0.41

Net

realized

and

unrealized

gains

(losses)

2.58

(1.52)

3.64

(2.50)

1.29

1.92

Total

from

investment

operations

........

2.77

(0.95)

4.07

(2.14)

1.76

2.33

Less

distributions

from:

Net

investment

income

..............

—

(0.42)

(0.37)

(0.52)

(0.42)

(0.39)

Net

realized

gains

.................

—

(0.30)

(2.00)

(0.25)

(1.18)

(1.57)

Total

distributions

...................

—

(0.72)

(2.37)

(0.77)

(1.60)

(1.96)

Net

asset

value,

end

of

period

..........

$20.27

$17.50

$19.17

$17.47

$20.38

$20.22

Total

return

d

.......................

15.83%

(4.22)%

24.71%

(11.01)%

8.99%

12.32%

Ratios

to

average

net

assets

e

Expenses

f

,

g

,

h

.......................

0.97%

0.97%

0.94%

0.96%

1.01%

1.01%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

2.00%

3.57%

c

2.22%

1.81%

2.29%

2.10%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$4,069

$3,788

$3,878

$3,282

$3,189

$3,084

Portfolio

turnover

rate

................

19.28%

34.79%

21.82%

29.84%

17.49%

17.54%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.24

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

2.07%.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

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).

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$16.91

$18.54

$16.96

$19.80

$19.69

$19.37

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.51

c

0.37

0.30

0.41

0.35

Net

realized

and

unrealized

gains

(losses)

2.50

(1.47)

3.53

(2.42)

1.25

1.87

Total

from

investment

operations

........

2.66

(0.96)

3.90

(2.12)

1.66

2.22

Less

distributions

from:

Net

investment

income

..............

—

(0.37)

(0.32)

(0.47)

(0.37)

(0.33)

Net

realized

gains

.................

—

(0.30)

(2.00)

(0.25)

(1.18)

(1.57)

Total

distributions

...................

—

(0.67)

(2.32)

(0.72)

(1.55)

(1.90)

Net

asset

value,

end

of

period

..........

$19.57

$16.91

$18.54

$16.96

$19.80

$19.69

Total

return

d

.......................

15.73%

(4.46)%

24.37%

(11.22)%

8.71%

12.06%

Ratios

to

average

net

assets

e

Expenses

f,g,h

.......................

1.22%

1.22%

1.19%

1.21%

1.26%

1.26%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

1.75%

3.33%

c

1.97%

1.56%

2.04%

1.85%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$491,818

$467,653

$539,759

$500,607

$631,179

$630,397

Portfolio

turnover

rate

................

19.28%

34.79%

21.82%

29.84%

17.49%

17.54%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.24

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.83%.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

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).

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-10

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$17.34

$18.98

$17.30

$20.17

$20.02

$19.66

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.51

c

0.36

0.29

0.40

0.34

Net

realized

and

unrealized

gains

(losses)

2.55

(1.50)

3.61

(2.47)

1.27

1.89

Total

from

investment

operations

........

2.71

(0.99)

3.97

(2.18)

1.67

2.23

Less

distributions

from:

Net

investment

income

..............

—

(0.35)

(0.29)

(0.44)

(0.34)

(0.30)

Net

realized

gains

.................

—

(0.30)

(2.00)

(0.25)

(1.18)

(1.57)

Total

distributions

...................

—

(0.65)

(2.29)

(0.69)

(1.52)

(1.87)

Net

asset

value,

end

of

period

..........

$20.05

$17.34

$18.98

$17.30

$20.17

$20.02

Total

return

d

.......................

15.63%

(4.54)%

24.28%

(11.31)%

8.61%

11.91%

Ratios

to

average

net

assets

e

Expenses

f,g,h

.......................

1.32%

1.32%

1.29%

1.31%

1.36%

1.36%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

1.65%

3.22%

c

1.87%

1.46%

1.94%

1.75%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$27,444

$26,688

$30,865

$30,094

$41,713

$45,262

Portfolio

turnover

rate

................

19.28

%

34.79%

21.82%

29.84%

17.49%

17.54%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.24

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.72%.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

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).

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Mutual

Global

Discovery

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

93.8%

Aerospace

&

Defense

2.6%

a

Airbus

SE

...........................................

France

43,989

$

5,668,586

BAE

Systems

plc

.....................................

United

Kingdom

1,096,354

7,922,850

13,591,436

Auto

Components

1.6%

Cie

Generale

des

Etablissements

Michelin

SCA

..............

France

53,424

8,526,942

a,b,c

International

Automotive

Components

Group

Brazil

LLC

........

Brazil

424,073

30,585

8,557,527

Automobiles

1.4%

a

General

Motors

Co.

....................................

United

States

119,200

7,053,064

Banks

8.4%

BNP

Paribas

SA

......................................

France

155,907

9,785,493

Citigroup,

Inc.

........................................

United

States

116,235

8,223,626

ING

Groep

NV

.......................................

Netherlands

960,888

12,756,241

Wells

Fargo

&

Co.

.....................................

United

States

295,666

13,390,713

44,156,073

Beverages

1.3%

Heineken

NV

........................................

Netherlands

55,066

6,685,546

Biotechnology

0.9%

a

Alexion

Pharmaceuticals,

Inc.

............................

United

States

24,400

4,482,524

Building

Products

1.6%

Johnson

Controls

International

plc

.........................

United

States

122,142

8,382,605

Capital

Markets

1.7%

Credit

Suisse

Group

AG,

A

..............................

Switzerland

699,537

7,322,701

a,d

Guotai

Junan

Securities

Co.

Ltd.,

H,

144A,

Reg

S

.............

China

1,085,512

1,541,697

8,864,398

Chemicals

2.8%

BASF

SE

...........................................

Germany

102,530

8,094,377

d

Covestro

AG,

144A,

Reg

S

..............................

Germany

102,702

6,641,118

14,735,495

Construction

Materials

1.0%

HeidelbergCement

AG

.................................

Germany

60,379

5,184,369

Consumer

Finance

1.5%

Capital

One

Financial

Corp.

.............................

United

States

52,288

8,088,431

Diversified

Financial

Services

1.9%

Voya

Financial,

Inc.

....................................

United

States

161,150

9,910,725

Diversified

Telecommunication

Services

3.5%

Deutsche

Telekom

AG

..................................

Germany

648,121

13,708,919

a

Frontier

Communications

Parent,

Inc.

......................

United

States

171,776

4,534,887

18,243,806

Entertainment

1.8%

a,e

Walt

Disney

Co.

(The)

..................................

United

States

52,291

9,191,189

Food

Products

1.5%

Kraft

Heinz

Co.

(The)

..................................

United

States

193,600

7,895,008

Health

Care

Equipment

&

Supplies

1.7%

Medtronic

plc

........................................

United

States

73,513

9,125,169

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Providers

&

Services

4.6%

Anthem,

Inc.

.........................................

United

States

28,932

$

11,046,238

CVS

Health

Corp.

.....................................

United

States

155,791

12,999,201

24,045,439

Hotels,

Restaurants

&

Leisure

1.4%

a

Accor

SA

...........................................

France

200,680

7,506,792

Industrial

Conglomerates

1.6%

General

Electric

Co.

...................................

United

States

625,050

8,413,173

Insurance

8.5%

a

Alleghany

Corp.

......................................

United

States

9,530

6,357,177

China

Pacific

Insurance

Group

Co.

Ltd.,

H

...................

China

1,467,708

4,610,430

Everest

Re

Group

Ltd.

.................................

United

States

28,278

7,126,339

Hartford

Financial

Services

Group,

Inc.

(The)

................

United

States

138,961

8,611,413

NN

Group

NV

........................................

Netherlands

237,579

11,224,022

Willis

Towers

Watson

plc

................................

United

States

28,900

6,647,578

44,576,959

IT

Services

3.1%

Capgemini

SE

........................................

France

33,932

6,526,133

Cognizant

Technology

Solutions

Corp.,

A

....................

United

States

141,960

9,832,150

16,358,283

Media

2.7%

a

Charter

Communications,

Inc.,

A

..........................

United

States

19,786

14,274,610

Oil,

Gas

&

Consumable

Fuels

9.3%

BP

plc

..............................................

United

Kingdom

2,966,046

13,008,224

Canadian

Natural

Resources

Ltd.

.........................

Canada

280,400

10,177,858

Inter

Pipeline

Ltd.

.....................................

Canada

370,296

6,018,523

Kinder

Morgan,

Inc.

....................................

United

States

408,970

7,455,523

e

Williams

Cos.,

Inc.

(The)

................................

United

States

461,701

12,258,162

48,918,290

Pharmaceuticals

10.7%

a

Elanco

Animal

Health,

Inc.

...............................

United

States

86,487

3,000,234

Eli

Lilly

&

Co.

........................................

United

States

46,835

10,749,569

GlaxoSmithKline

plc

...................................

United

Kingdom

865,810

17,022,274

e

Merck

&

Co.,

Inc.

.....................................

United

States

174,416

13,564,332

Novartis

AG,

ADR

.....................................

Switzerland

119,597

10,912,030

a

Organon

&

Co.

.......................................

United

States

16,341

494,479

55,742,918

Road

&

Rail

0.5%

Kansas

City

Southern

..................................

United

States

9,900

2,805,363

Semiconductors

&

Semiconductor

Equipment

2.7%

a

Renesas

Electronics

Corp.

..............................

Japan

799,001

8,623,884

Xilinx,

Inc.

...........................................

United

States

38,600

5,583,104

14,206,988

Software

4.7%

a

Avaya

Holdings

Corp.

..................................

United

States

4

108

a

Check

Point

Software

Technologies

Ltd.

....................

Israel

83,559

9,703,707

Oracle

Corp.

.........................................

United

States

124,760

9,711,318

a

Slack

Technologies,

Inc.,

A

..............................

United

States

116,600

5,165,380

24,580,513

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Technology

Hardware,

Storage

&

Peripherals

3.9%

Catcher

Technology

Co.

Ltd.

.............................

Taiwan

613,167

$

3,997,361

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

111,916

7,985,012

a,e

Western

Digital

Corp.

..................................

United

States

115,177

8,197,147

20,179,520

Textiles,

Apparel

&

Luxury

Goods

1.5%

Cie

Financiere

Richemont

SA

............................

Switzerland

63,468

7,694,138

Tobacco

3.4%

Altria

Group,

Inc.

......................................

United

States

130,784

6,235,781

British

American

Tobacco

plc

.............................

United

Kingdom

290,877

11,294,286

17,530,067

Total

Common

Stocks

(Cost

$353,642,866)

.....................................

490,980,418

Preferred

Stocks

1.0%

Automobiles

1.0%

f

Volkswagen

AG,

2.3%

..................................

Germany

21,093

5,289,125

Total

Preferred

Stocks

(Cost

$2,867,110)

.......................................

5,289,125

Warrants

Warrants

0.0%

†

Software

0.0%

†

a

Avaya

Holdings

Corp.,

12/15/22

..........................

United

States

3,613

18,535

Textiles,

Apparel

&

Luxury

Goods

0.0%

†

a

Cie

Financiere

Richemont

SA,

11/22/23

.....................

Switzerland

147,346

98,735

Total

Warrants

(Cost

$—)

.....................................................

117,270

Principal

Amount

*

Convertible

Bonds

0.1%

Banks

0.1%

d

Credit

Suisse

Group

Guernsey

VII

Ltd.

,

BR

,

Senior

Note

,

144A,

Reg

S,

3

%

,

11/12/21

.....................................

Switzerland

294,000

CHF

357,821

Total

Convertible

Bonds

(Cost

$323,735)

.......................................

357,821

Corporate

Bonds

2.0%

Airlines

1.8%

d

American

Airlines

Inc/AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note,

144A,

5.5%,

4/20/26

................

United

States

2,023,000

2,144,380

Senior

Secured

Note,

144A,

5.75%,

4/20/29

...............

United

States

162,000

175,365

d

American

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

11.75

%

,

7/15/25

United

States

3,988,000

5,009,925

d

Mileage

Plus

Holdings

LLC

/

Mileage

Plus

Intellectual

Property

Assets

Ltd.

,

Senior

Secured

Note

,

144A,

6.5

%

,

6/20/27

.......

United

States

2,060,000

2,270,635

9,600,305

Multiline

Retail

0.2%

d

Macy's,

Inc.

,

Senior

Secured

Note

,

144A,

8.375

%

,

6/15/25

......

United

States

829,000

914,971

Total

Corporate

Bonds

(Cost

$9,005,525)

.......................................

10,515,276

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-14

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

0.1%

Airlines

0.1%

AAdvantage

Loyalty

IP

Ltd.

(American

Airlines,

Inc.)

,

Initial

Term

Loan

,

5.5

%

,

(

3-month

USD

LIBOR

+

4.75

%

),

4/20/28

.........

United

States

423,000

$

441,534

Total

Senior

Floating

Rate

Interests

(Cost

$418,819)

.............................

441,534

Shares

Companies

in

Liquidation

0.0%

a,b,i

Tribune

Media,

Litigation

Trust,

Contingent

Distribution

.........

United

States

57,457

—

a,b,i

Vistra

Energy

Corp.,

Litigation

Trust,

Contingent

Distribution

.....

United

States

5,912,264

—

a,b,i

Walter

Energy,

Inc.,

Litigation

Trust,

Contingent

Distribution

......

United

States

966,000

—

Total

Companies

in

Liquidation

(Cost

$185,800)

.................................

—

Total

Long

Term

Investments

(Cost

$366,443,855)

...............................

507,701,444

a

Short

Term

Investments

0.7%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

0.7%

j

FHLB,

7/01/21

.......................................

United

States

200,000

200,000

j

U.S.

Treasury

Bills

,

7/08/21

...........................................

United

States

1,500,000

1,499,990

8/26/21

...........................................

United

States

1,500,000

1,499,908

11/04/21

..........................................

United

States

400,000

399,932

3,399,830

Total

U.S.

Government

and

Agency

Securities

(Cost

$3,599,815)

..................

3,599,830

Total

Short

Term

Investments

(Cost

$3,599,815

)

.................................

3,599,830

a

Total

Investments

(Cost

$370,043,670)

97.7%

...................................

$511,301,274

Securities

Sold

Short

(3.6)%

..................................................

(18,899,421)

Other

Assets,

less

Liabilities

5.9%

.............................................

30,929,739

Net

Assets

100.0%

...........................................................

$523,331,592

Shares

Securities

Sold

Short

(3.6)%

Common

Stocks

(3.6)%

Insurance

(1.3)%

k

Aon

plc,

A

...........................................

United

States

28,728

(6,859,097)

Pharmaceuticals

(0.6)%

k

AstraZeneca

plc,

ADR

..................................

United

Kingdom

51,833

(3,104,797)

Road

&

Rail

(0.1)%

k

Canadian

National

Railway

Co.

...........................

Canada

4,516

(476,528)

Semiconductors

&

Semiconductor

Equipment

(1.2)%

k

Advanced

Micro

Devices,

Inc.

............................

United

States

66,524

(6,248,600)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-15

a

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Securities

Sold

Short

(continued)

Common

Stocks

(continued)

Software

(0.4)%

k

salesforce.com,

Inc.

...................................

United

States

9,049

(2,210,399)

Total

Common

Stocks

(Proceeds

$17,243,885)

..................................

(18,899,421)

Total

Securities

Sold

Short

(Proceeds

$17,243,885)

..............................

$(18,899,421)

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$19,055,912,

representing

3.6%

of

net

assets.

e

A

portion

or

all

of

the

security

has

been

segregated

as

collateral

for

securities

sold

short

and/or

open

forward

exchange

contracts.

At

June

30,

2021,

the

aggregate

value

of

these

securities

pledged

amounted

to

$20,851,362,

representing

4.0%

of

net

assets.

f

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

g

See

Note

1(f)

regarding

senior

floating

rate

interests.

h

The

coupon

rate

shown

represents

the

rate

at

period

end.

i

Contingent

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.

j

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

k

See

Note

1(d)

regarding

securities

sold

short.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-16

At

June

30,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

At

June

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(c)

. 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Foreign

exchange

contracts

Foreign

Exchange

EUR/USD

...................

Short

94

$

13,941,375

9/13/21

$

414,527

Foreign

Exchange

GBP/USD

...................

Short

89

7,679,031

9/13/21

207,089

Total

Futures

Contracts

......................................................................

$621,616

*

As

of

period

end.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Canadian

Dollar

....

HSBK

Sell

5,942,573

4,901,558

7/19/21

$

108,335

$

—

Canadian

Dollar

....

UBSW

Sell

840,458

695,908

7/19/21

18,005

—

Swiss

Franc

.......

HSBK

Sell

6,916,393

7,620,967

7/19/21

142,552

—

British

Pound

......

HSBK

Buy

318,999

449,792

7/23/21

144

(8,616)

British

Pound

......

HSBK

Sell

4,930,009

6,949,168

7/23/21

128,735

—

British

Pound

......

SSBT

Sell

57,185

80,606

7/23/21

1,493

—

British

Pound

......

UBSW

Buy

1,290,904

1,819,072

7/23/21

—

(33,168)

British

Pound

......

UBSW

Sell

41,000

57,981

7/23/21

1,259

—

Euro

.............

HSBK

Sell

30,705,839

37,337,724

8/23/21

884,160

—

Euro

.............

UBSW

Sell

4,037,044

4,884,583

8/23/21

91,859

—

New

Taiwan

Dollar

..

HSBK

Sell

67,093,040

2,415,685

8/27/21

1,732

(122)

New

Taiwan

Dollar

..

UBSW

Sell

41,719,482

1,505,510

8/27/21

4,401

—

South

Korean

Won

..

HSBK

Sell

2,957,988,745

2,624,657

11/19/21

8,615

—

South

Korean

Won

..

UBSW

Sell

269,296,183

239,066

11/19/21

901

—

South

Korean

Won

..

HSBK

Sell

3,276,006,847

2,947,825

12/17/21

51,046

—

South

Korean

Won

..

UBSW

Sell

178,093,425

160,326

12/17/21

2,849

—

Total

Forward

Exchange

Contracts

...................................................

$1,446,086

$(41,906)

Net

unrealized

appreciation

(depreciation)

............................................

$1,404,180

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

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-

31

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-17

Franklin

Mutual

Global

Discovery

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$370,043,670

Value

-

Unaffiliated

issuers

..................................................................

$511,301,274

Cash

....................................................................................

4,517,110

Foreign

currency,

at

value

(cost

$267,397)

........................................................

267,397

Receivables:

Investment

securities

sold

...................................................................

3,538,684

Capital

shares

sold

........................................................................

36,306

Dividends

and

interest

.....................................................................

1,154,866

European

Union

tax

reclaims

(Note

1

g

)

.........................................................

2,700,078

Deposits

with

brokers

for:

Securities

sold

short

.....................................................................

18,895,601

Futures

contracts

........................................................................

416,830

Variation

margin

on

futures

contracts

...........................................................

91,325

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

1,446,086

Other

assets

..............................................................................

188,952

Total

assets

..........................................................................

544,554,509

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

978,294

Capital

shares

redeemed

...................................................................

559,833

Management

fees

.........................................................................

383,291

Distribution

fees

..........................................................................

110,978

Securities

sold

short,

at

value

(proceeds

$17,243,885)

...............................................

18,899,421

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

41,906

Accrued

expenses

and

other

liabilities

...........................................................

249,194

Total

liabilities

.........................................................................

21,222,917

Net

assets,

at

value

.................................................................

$523,331,592

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$367,198,408

Total

distributable

earnings

(losses)

.............................................................

156,133,184

Net

assets,

at

value

.................................................................

$523,331,592

Franklin

Mutual

Global

Discovery

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$4,068,893

Shares

outstanding

........................................................................

200,745

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$20.27

Class

2:

Net

assets,

at

value

.......................................................................

$491,818,299

Shares

outstanding

........................................................................

25,136,282

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.57

Class

4:

Net

assets,

at

value

.......................................................................

$27,444,400

Shares

outstanding

........................................................................

1,369,088

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$20.05

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-18

Franklin

Mutual

Global

Discovery

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$412,391)

Unaffiliated

issuers

........................................................................

$7,261,805

Interest:

Unaffiliated

issuers

........................................................................

385,176

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

2,773

Non-controlled

affiliates

(Note

3

e

)

.............................................................

47

Other

income

(Note

1

g

)

......................................................................

19,117

Total

investment

income

...................................................................

7,668,918

Expenses:

Management

fees

(Note

3

a

)

...................................................................

2,257,247

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

605,732

    Class

4

................................................................................

47,948

Custodian

fees

(Note

4

)

......................................................................

7,033

Reports

to

shareholders

......................................................................

64,374

Professional

fees

...........................................................................

63,707

Trustees'

fees

and

expenses

..................................................................

1,812

Dividends

on

securities

sold

short

..............................................................

78,448

Other

....................................................................................

37,567

Total

expenses

.........................................................................

3,163,868

Expense

reductions

(Note

4

)

...............................................................

(21)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(114)

Net

expenses

.........................................................................

3,163,733

Net

investment

income

................................................................

4,505,185

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

26,935,796

Foreign

currency

transactions

................................................................

(50,235)

Forward

exchange

contracts

.................................................................

(280,477)

Futures

contracts

.........................................................................

(507,821)

Securities

sold

short

.......................................................................

(214,684)

Net

realized

gain

(loss)

..................................................................

25,882,579

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

43,285,820

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(107,662)

Forward

exchange

contracts

.................................................................

2,247,515

Futures

contracts

.........................................................................

852,238

Securities

sold

short

.......................................................................

(1,548,913)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

44,728,998

Net

realized

and

unrealized

gain

(loss)

............................................................

70,611,577

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$75,116,762

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MGD-19

Franklin

Mutual

Global

Discovery

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$4,505,185

$15,446,502

Net

realized

gain

(loss)

.................................................

25,882,579

(31,439,546)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

44,728,998

(11,712,372)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

75,116,762

(27,705,416)

Distributions

to

shareholders:

Class

1

.............................................................

—

(151,550)

Class

2

.............................................................

—

(18,507,580)

Class

4

.............................................................

—

(1,028,932)

Total

distributions

to

shareholders

..........................................

—

(19,688,062)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(299,894)

172,218

Class

2

.............................................................

(46,380,801)

(27,296,236)

Class

4

.............................................................

(3,233,147)

(1,856,627)

Total

capital

share

transactions

............................................

(49,913,842)

(28,980,645)

Net

increase

(decrease)

in

net

assets

...................................

25,202,920

(76,374,123)

Net

assets:

Beginning

of

period

.....................................................

498,128,672

574,502,795

End

of

period

..........................................................

$523,331,592

$498,128,672

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-20

Semiannual

Report

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,

2021,

43.99%

of

the

Fund's

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities,

exchange

traded

funds

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-

counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the OTC

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

Certain

derivative

financial

instruments

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-21

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information. 

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Derivative

Financial

Instruments

The

Fund invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statement

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statement

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

The

Fund

attempts

to

reduce

its

exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

possible,

by

entering

into

International

Swaps

and

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-22

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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,

2021 the

Fund

had

no

OTC

derivatives

in

a

net

liability

position

for

such

contracts.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

the

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

The

Fund

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

and

equity

price

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

The

Fund entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-23

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

e.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund,

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 any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

At

June

30,

2021,

the

fund

had

no

securities

on

loan.

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

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims).

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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

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. 

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-24

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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

are

recorded

on

the

ex-

dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

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

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,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

11,079

$209,139

35,855

$553,637

Shares

issued

in

reinvestment

of

distributions

..........

—

—

10,310

151,550

Shares

redeemed

...............................

(26,777)

(509,033)

(32,073)

(532,969)

Net

increase

(decrease)

..........................

(15,698)

$(299,894)

14,092

$172,218

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-25

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

management

fee

rate

was

0.875%

of

the

Fund’s

average

daily

net

assets.

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

2

Shares:

Shares

sold

...................................

491,751

$9,091,198

2,017,207

$28,571,483

Shares

issued

in

reinvestment

of

distributions

..........

—

—

1,301,518

18,507,580

Shares

redeemed

...............................

(3,004,451)

(55,471,999)

(4,784,030)

(74,375,299)

Net

increase

(decrease)

..........................

(2,512,700)

$(46,380,801)

(1,465,305)

$(27,296,236)

Class

4

Shares:

Shares

sold

...................................

10,557

$203,523

178,276

$2,524,788

Shares

issued

in

reinvestment

of

distributions

..........

—

—

70,572

1,028,932

Shares

redeemed

...............................

(180,803)

(3,436,670)

(336,123)

(5,410,347)

Net

increase

(decrease)

..........................

(170,246)

$(3,233,147)

(87,275)

$(1,856,627)

Subsidiary

Affiliation

Franklin

Mutual

Advisers,

LLC.

(Franklin

Mutual)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-26

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

b.

Administrative

Fees

Under

an

agreement

with

Franklin

Mutual,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Franklin

Mutual

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Mutual

Global

Discovery

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$17,241,000

$(17,241,000)

$

—

$

—

$—

a

—

$47

Total

Affiliated

Securities

....

$—

$17,241,000

$(17,241,000)

$—

$—

$—

$47

a

As

of

June

30,

2021,

no

longer

held

by

the

fund.

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-27

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

partnerships,

bond

market

discounts

and

premiums,

return

of

capital

distributions,

defaulted

securities,

foreign

currency

transactions

and

wash

sales,

EU

reclaims,

passive

foreign

investment

company

shares

and

tax

straddles.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities

and

securities

sold

short)

for

the

period

ended

June

30,

2021,

aggregated

$95,411,900

and

$136,629,931,

respectively.

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$3,106,976

Long

term

................................................................................

26,241,010

Total

capital

loss

carryforwards

...............................................................

$29,347,986

Cost

of

investments

..........................................................................

$354,589,416

Unrealized

appreciation

........................................................................

$150,758,881

Unrealized

depreciation

........................................................................

(10,920,648)

Net

unrealized

appreciation

(depreciation)

..........................................................

$139,838,233

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-28

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

9.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

June

30,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

10.

Other

Derivative

Information

At

June

30,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Mutual

Global

Discovery

VIP

Fund

424,073

International

Automotive

Components

Group

BVBA

..

4/13/06

-

12/26/08

$

281,629

$

30,585

Total

Restricted

Securities

(Value

is

0.0%

†

of

Net

Assets)

.............

$281,629

$30,585

†

Rounds

to

less

than

0.1%

of

net

assets.

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

Franklin

Mutual

Global

Discovery

VIP

Fund

Foreign

exchange

contracts

..

Variation

margin

on

futures

contracts

$

621,616

a

Variation

margin

on

futures

contracts

$

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,446,086

Unrealized

depreciation

on

OTC

forward

exchange

contracts

41,906

Total

....................

$2,067,702

$41,906

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-29

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

futures

contracts

represented

$23,530,822.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$75,647,556.

See

Note

1(c)

regarding

derivative

financial

instruments. 

11.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

12.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

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,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

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

Franklin

Mutual

Global

Discovery

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Futures

contracts

$(507,821)

Futures

contracts

$852,238

Forward

exchange

contracts

(280,477)

Forward

exchange

contracts

2,247,515

Total

.......................

$(788,298)

$3,099,753

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-30

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Global

Discovery

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

13,591,436

$

—

$

13,591,436

Auto

Components

......................

—

8,526,942

30,585

8,557,527

Automobiles

..........................

7,053,064

—

—

7,053,064

Banks

...............................

21,614,339

22,541,734

—

44,156,073

Beverages

...........................

—

6,685,546

—

6,685,546

Biotechnology

.........................

4,482,524

—

—

4,482,524

Building

Products

......................

8,382,605

—

—

8,382,605

Capital

Markets

........................

—

8,864,398

—

8,864,398

Chemicals

...........................

—

14,735,495

—

14,735,495

Construction

Materials

..................

—

5,184,369

—

5,184,369

Consumer

Finance

.....................

8,088,431

—

—

8,088,431

Diversified

Financial

Services

.............

9,910,725

—

—

9,910,725

Diversified

Telecommunication

Services

.....

4,534,887

13,708,919

—

18,243,806

Entertainment

.........................

9,191,189

—

—

9,191,189

Food

Products

........................

7,895,008

—

—

7,895,008

Health

Care

Equipment

&

Supplies

.........

9,125,169

—

—

9,125,169

Health

Care

Providers

&

Services

..........

24,045,439

—

—

24,045,439

Hotels,

Restaurants

&

Leisure

.............

—

7,506,792

—

7,506,792

Industrial

Conglomerates

................

8,413,173

—

—

8,413,173

Insurance

............................

28,742,507

15,834,452

—

44,576,959

IT

Services

...........................

9,832,150

6,526,133

—

16,358,283

Media

...............................

14,274,610

—

—

14,274,610

Oil,

Gas

&

Consumable

Fuels

.............

35,910,066

13,008,224

—

48,918,290

Pharmaceuticals

.......................

38,720,644

17,022,274

—

55,742,918

Road

&

Rail

..........................

2,805,363

—

—

2,805,363

Semiconductors

&

Semiconductor

Equipment

.

5,583,104

8,623,884

—

14,206,988

Software

.............................

24,580,513

—

—

24,580,513

Technology

Hardware,

Storage

&

Peripherals

.

8,197,147

11,982,373

—

20,179,520

Textiles,

Apparel

&

Luxury

Goods

..........

—

7,694,138

—

7,694,138

Tobacco

.............................

6,235,781

11,294,286

—

17,530,067

Preferred

Stocks

........................

—

5,289,125

—

5,289,125

Warrants

..............................

117,270

—

—

117,270

Convertible

Bonds

.......................

—

357,821

—

357,821

Corporate

Bonds

........................

—

10,515,276

—

10,515,276

Senior

Floating

Rate

Interests

...............

—

441,534

—

441,534

Companies

in

Liquidation

..................

—

—

—

a

—

Short

Term

Investments

...................

3,399,830

200,000

—

3,599,830

Total

Investments

in

Securities

...........

$301,135,538

$210,135,151

b

$30,585

$511,301,274

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

1,446,086

$

—

$

1,446,086

Futures

contracts

........................

621,616

—

—

621,616

Total

Other

Financial

Instruments

.........

$621,616

$1,446,086

$—

$2,067,702

Liabilities:

Other

Financial

Instruments:

Securities

Sold

Short

.....................

18,899,421

—

—

18,899,421

Forward

exchange

contracts

................

$

—

$

41,906

$

—

$

41,906

Total

Other

Financial

Instruments

.........

$18,899,421

$41,906

$—

$18,941,327

a

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

b

Includes

foreign

securities

valued

at

$198,620,520,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MGD-31

Semiannual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the year.

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provides

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

14.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Counterparty

HSBK

HSBC

Bank

plc

SSBT

State

Street

Bank

and

Trust

Co.

UBSW

UBS

AG

Cu

r

rency

CHF

Swiss

Franc

EUR

Euro

GBP

British

Pound

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

FHLB

Federal

Home

Loan

Banks

12.

Fair

Value

Measurements

(continued)

MS-1

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

This

semiannual

report

for

Franklin

Mutual

Shares

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+1

7.25

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

MS-2

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

capital

appreciation.

Its

secondary

goal

is

income.

Under

normal

market

conditions,

the

Fund

invests

primarily

in

U.S.

and

foreign

equity

securities

that

we

believe

are

available

at

market

prices

less

than

their

intrinsic

value.

The

equity

securities

in

which

the

Fund

invests

are

primarily

common

stock,

with

a

current

focus

on

companies

with

market

capitalizations

greater

than

$5

billion.

To

a

lesser

extent,

the

Fund

also

invests

in

merger

arbitrage

securities

and

the

debt

and

equity

of

distressed

companies.

The

Fund

may

invest

up

to

35%

of

its

assets

in

foreign

securities,

which

may

include

sovereign

debt

and

participations

in

foreign

government

debt.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Value

securities

may

not

increase

in

price

as

anticipated

or

may

decline

further

in

value.

Investing

in

foreign

securities

typically

involves

more

risks

than

investing

in

U.S.

securities,

including

risks

related

to

currency

exchange

rates

and

policies,

country

or

government

specific

issues,

less

favorable

trading

practices

or

regulation

and

greater

price

volatility.

Securities

issued

by

small

and

mid-capitalization

companies

may

be

more

volatile

in

price

than

those

of

larger

companies

and

may

involve

additional

risks.

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

significantly

exceeds

the

Fund’s

initial

investment.

A

merger

or

other

restructuring,

or

a

tender

or

exchange

offer,

proposed

or

pending

at

the

time

the

Fund

invests

in

merger

arbitrage

securities

may

not

be

completed

on

the

terms

or

within

the

time

frame

contemplated,

which

may

result

in

losses

to

the

Fund.

Debt

obligations

of

distressed

companies

typically

are

unrated,

lower-rated,

in

default

or

close

to

default

and

are

generally

more

likely

to

become

worthless

than

the

securities

of

more

financially

stable

companies.

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.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

new

benchmark,

the

Russell

1000

®

Value

Index,

posted

a

+17.05%

total

return

for

the

period

under

review.

1

Also

for

comparison,

the

Fund’s

prior

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+15.25%

total

return

for

the

same

period.

1

The

Russell

1000

®

Value

Index

is

replacing

the

S&P

500

as

the

Fund’s

benchmark.

The

investment

manager

believes

the

composition

of

the

Russell

1000

®

Value

Index

more

accurately

reflects

the

Fund’s

current

investment

strategy

and

portfolio

characteristics.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(USD,

net

of

tax

withholding

when

dividends

are

paid),

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

United

States

81.4%

United

Kingdom

5.6%

Netherlands

2.3%

Switzerland

2.0%

South

Korea

1.8%

Other

0.6%

Short-Term

Investments

&

Other

Net

Assets

6.3%

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).

Franklin

Mutual

Shares

VIP

Fund

MS-3

Semiannual

Report

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR

(USD),

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR

(USD),

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR

(USD),

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

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

and

debt

investments

are

made

in

publicly

traded

companies

globally,

we

may

invest

occasionally

in

privately

held

companies

as

well.

Our

portfolio

selection

process

generally

includes

an

assessment

of

the

potential

impacts

of

any

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

complement

this

more

traditional

investment

strategy

with

two

others.

One

is

distressed

investing,

which

is

complex

and

can

take

many

forms.

The

most

common

distressed

investment

the

Fund

undertakes

is

the

purchase

of

financially

troubled

or

bankrupt

companies’

debt

at

a

substantial

discount

to

face

value.

After

the

financially

distressed

company

is

reorganized,

often

in

bankruptcy

court,

the

old

debt

is

typically

replaced

with

new

securities

issued

by

the

financially

stronger

company.

The

other

piece

of

our

investment

strategy

is

participating

in

arbitrage

situations,

another

highly

specialized

field.

When

companies

announce

proposed

mergers

or

takeovers,

commonly

referred

to

as

deals,

the

target

company

may

trade

at

a

discount

to

the

bid

it

ultimately

accepts.

One

form

of

arbitrage

involves

purchasing

the

target

company’s

stock

when

it

is

trading

below

the

value

we

believe

it

would

receive

in

a

deal.

In

keeping

with

our

commitment

to

a

relatively

conservative

investment

approach,

we

typically

focus

our

arbitrage

efforts

on

announced

deals,

and

eschew

rumored

deals

or

other

situations

we

consider

relatively

risky.

In

addition,

it

is

our

practice

to

hedge

the

Fund’s

currency

exposure

when

we

deem

it

advantageous

for

our

shareholders.

Top

10

Industries

6/30/21

%

of

Total

Net

Assets

a

Banks

10.0%

Pharmaceuticals

9.3%

Insurance

6.4%

Software

5.5%

Oil,

Gas

&

Consumable

Fuels

5.4%

Health

Care

Providers

&

Services

4.9%

Media

4.8%

Technology

Hardware,

Storage

&

Peripherals

3.6%

Food

Products

3.0%

Tobacco

3.0%

Franklin

Mutual

Shares

VIP

Fund

MS-4

Semiannual

Report

Manager’s

Discussion

Before

the

start

of

the

period,

a

large,

multi-year

performance

gap

existed

between

growth

and

value

stocks.

The

beginning

of

2021

brought

a

rotation

into

value

stocks

that

lasted

for

much

of

the

period,

narrowing

the

gap.

For

the

six-month

period

ending

June

30,

2021,

the

MSCI

World

Value

Index-NR

(USD)

posted

a

+14.72%

total

return,

while

the

MSCI

World

Growth

Index-NR

(USD)

posted

a

+11.14%

total

return.

1

While

“the

reopening

trade”

boosted

the

stock

prices

of

many

companies

that

stood

to

benefit

from

economic

reopening

and

citizens’

reentry

into

a

more

normalized

society,

a

bigger

driver

of

performance

within

our

portfolios

was

“the

reflation

trade,”

reflecting

expectations

of

rising

interest

rates

and

increasing

inflationary

pressures.

Fiscal

and

monetary

stimulus,

increased

demand

for

certain

products

such

as

automobiles

where

production

was

constrained

by

supply

bottlenecks,

a

steepening

yield

curve

and

commodity

price

increases

are

drivers

of

the

reflation

trade.

Many

of

Franklin

Mutual

Series’

portfolios

had

a

significant

position

in

banks.

The

team

had

invested

in

these

names

on

account

of

their

discounted

pricing

compared

to

our

assessment

of

fair

value.

When

rates

started

to

rise

at

the

beginning

of

the

period,

financial

companies

benefited.

Higher

rates

generally

mean

high

spreads

on

lending

products.

Moreover,

increased

economic

activity

and

overall

confidence

in

future

economic

growth

spurs

increased

lending

activity,

which

is

also

good

for

banks.

Investments

in

companies

such

as

JPMorgan

Chase,

Wells

Fargo

and

Capital

One

Financial

were

some

of

our

biggest

contributors

to

absolute

performance

during

the

period.

Our

traditional

value

equity

investment

approach

is

complemented

with

two

other

investment

strategies

we

use

to

take

advantage

of

special

situations,

which

are

merger

arbitrage

and

distressed

investing.

We

were

active

in

special

situations

investing

during

the

first

half

of

2021.

During

the

period,

our

new

ideas

were

driven

by

merger

arbitrage

opportunities,

while

our

attention

in

credit

remained

focused

on

opportunistic

performing

and

stressed

names,

in

addition

to

post-reorganization

distressed

securities.

Within

merger

arbitrage,

which

involves

trading

the

stocks

of

companies

involved

in

a

merger

or

acquisition,

activity

has

been

significant.

Strong

global

markets,

cheap

and

available

financing

and

the

administration

change

in

the

U.S.

have

helped

to

increase

and

sustain

merger

activity.

As

corporations

seek

inorganic

growth

opportunities

across

products,

service

offerings

and

end

markets

while

extracting

merger

synergies,

we

expect

deal

momentum

to

continue.

We

are

seeking

opportunities

that

either

present

a

straightforward

rate

of

return

with

relatively

low

risk,

deals

with

high

discounts

due

to

concerns

over

the

antitrust

review

process,

or

deals

stemming

from

unsolicited

approaches

or

auctions.

Within

our

distressed

credit

strategy,

historically

low

rates

and

a

steepening

yield

curve

drove

tight

credit

spreads.

As

a

result,

total

risk-adjusted

return

potential

in

performing

and

stressed

credit

was

muted

during

the

period,

particularly

in

fixed-rate,

long

duration

investments.

Given

the

current

environment,

we

are

invested

in

three

key

areas:

top

of

the

capital

structure

secured

debt,

event-driven

credit

and

traditional

distressed

debt.

Fund

Performance

Turning

to

Fund

performance,

top

positive

contributors

included

Williams

Companies,

Eli

Lilly

and

Wells

Fargo.

Natural

gas

pipeline

operator

Williams

Companies

was

among

the

leading

contributors

to

Fund

results

for

the

period.

The

stock

price

appreciated

throughout

the

period

based

on

resilient

operations

and

positive

financial

announcements

which

beat

estimates.

In

February,

Williams

reported

strong

fourth-quarter

2020

results

and

2021

guidance

that

surpassed

expectations.

May

brought

another

expectation-beating

first-quarter

2021

financial

announcement.

Positive

first-quarter

results

were

driven

by

strong

underlying

performance

and

one-off

gains

related

to

winter

storm

Uri.

Efforts

to

accelerate

growth

appear

to

be

taking

hold,

along

with

an

improved

macro

backdrop.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Charter

Communications,

Inc.

3.0%

Media,

United

States

CVS

Health

Corp.

2.7%

Health

Care

Providers

&

Services,

United

States

GlaxoSmithKline

plc

2.7%

Pharmaceuticals,

United

Kingdom

Merck

&

Co.,

Inc.

2.6%

Pharmaceuticals,

United

States

Williams

Cos.,

Inc.

(The)

2.5%

Oil,

Gas

&

Consumable

Fuels,

United

States

Johnson

Controls

International

plc

2.3%

Building

Products,

United

States

ING

Groep

NV

2.3%

Banks,

Netherlands

Sensata

Technologies

Holding

plc

2.2%

Electrical

Equipment,

United

States

Oracle

Corp.

2.2%

Software,

United

States

Anthem,

Inc.

2.2%

Health

Care

Providers

&

Services,

United

States

Franklin

Mutual

Shares

VIP

Fund

MS-5

Semiannual

Report

Shares

of

drug

company

Eli

Lilly

appreciated

during

the

period

and

contributed

positively

to

portfolio

results.

The

company’s

stock

price

appreciated

strongly

due

to

positive

phase

2

data

for

its

Alzheimer’s

compound,

Donanemab,

as

well

as

Lilly

announcing

that

it

expected

to

file

Donanemab

with

the

FDA

much

earlier

than

originally

anticipated

due

to

potentially

positive

regulatory

developments,

namely

the

U.S.

Food

and

Drug

Administration’s

approval

of

Aduhelm,

an

Alzheimer’s

product

from

Biogen

(not

a

Fund

holding).

In

addition,

demand

for

Eli

Lilly’s

diabetes

drug,

Trulicity,

continues

to

grow

strongly,

and

its

key

diabetes

pipeline

compound,

Tirzepatide,

showed

positive

results

in

multiple

phase

3

clinical

trials,

which

further

strengthens

the

company’s

position

in

the

growing

diabetes

end

market.

Wells

Fargo

was

among

the

leading

contributors

to

Fund

results

during

the

period.

The

company

announced

its

first-

quarter

2021

results

in

April.

Headline

earnings

per

share

beat

consensus

expectations.

The

mortgage

and

investment

banking

business

lines

generated

strong

fee

revenues

and

management

expects

profitability

of

the

company’s

other

core

lines

of

business

to

improve

as

the

economy

continues

to

reopen.

The

stock

performed

well

throughout

the

remainder

of

the

six-month

period.

During

the

period

under

review,

Fund

investments

that

detracted

from

performance

included

Cognizant

Technology

Solutions,

Credit

Suisse

Group

and

Novartis.

Outsourcing

services

company

Cognizant

Technology

Solutions

detracted

from

results

during

the

period.

The

stock

fell

precipitously

in

May

after

the

company’s

first-quarter

2021

earnings

call.

Despite

financial

results

that

were

largely

in-line

with

expectations,

investors

reacted

negatively

as

the

company

lowered

its

full-year

margin

guidance

to

tackle

a

high

employee

attrition

rate,

which

led

to

lost

business

opportunities

due

to

the

inability

to

source

talent.

Long

term,

the

company

is

investing

in

its

recruiting

and

employee

retention

efforts

and

building

out

its

automation

technology

to

decouple

employee

headcount

growth

from

revenue

growth.

The

stock

of

Switzerland-based

financial

services

company

Credit

Suisse

detracted

from

portfolio

results

during

the

six-month

period.

In

March,

the

price

fell

due

to

two

large

risk

management

lapses

at

the

firm.

First,

the

collapse

of

Greensill,

which

is

a

provider

of

supply

chain

finance

to

companies

around

the

world.

Funds

managed

by

Credit

Suisse

had

approximately

$10

billion

of

exposure.

Since

the

collapse

of

Greensill,

Credit

Suisse

continues

to

work

on

recovering

and

returning

investors’

capital.

Second,

the

firm

had

outsized

exposure

to

Archegos

Capital

Management,

a

prime

broker

client

of

the

firm.

Although

multiple

global

banks

suffered

losses,

Credit

Suisse

suffered

significantly

higher

losses

than

others,

with

a

$5.5

billion

write-off

booked

during

the

quarter.

As

a

result

of

this

charge,

it

was

forced

to

raise

close

to

$2

billion

to

shore

up

the

bank's

capital.

In

response

to

the

two

events,

Credit

Suisse

announced

multiple

restructuring

programs

and

management

changes.

The

stock

was

range-bound

for

the

remainder

of

the

period,

and

we

sold

our

position.

Pharmaceutical

company

Novartis

detracted

from

portfolio

returns

during

the

six-month

period.

The

stock

price

fell

in

January

after

the

company

missed

fourth-quarter

2020

expectations,

impacted

by

a

resurgence

of

COVID-19

that

led

to

delayed

product

launches

and

decreased

new

product

sales.

The

company

also

provided

2021

guidance

at

that

time,

which

was

below

expectations

due

to

the

continued

impact

of

COVID-19

in

2021’s

first

half.

In

April,

the

company

announced

first-quarter

2021

results

that

modestly

missed

expectations,

primarily

due

to

weakness

in

Novartis’

Sandoz

generic

business

as

well

as

a

COVID-19

related

impact

on

treatment

rates

in

oncology.

However,

the

company

sees

a

return

to

normal

global

health

care

prescription

dynamics

by

mid-2021.

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

as

the

dollar

rose

against

most

currencies

during

the

period.

Thank

you

for

your

participation

in

Franklin

Mutual

Shares

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,

2021,

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.

Class

1

Fund

Expenses

Franklin

Mutual

Shares

VIP

Fund

MS-6

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,172.50

$3.96

$1,021.15

$3.69

0.74%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Shares

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$16.93

$19.19

$17.71

$20.71

$20.40

$19.48

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.17

0.55

c

0.46

0.36

0.49

0.50

Net

realized

and

unrealized

gains

(losses)

2.75

(1.68)

3.39

(2.04)

1.22

2.56

Total

from

investment

operations

........

2.92

(1.13)

3.85

(1.68)

1.71

3.06

Less

distributions

from:

Net

investment

income

..............

—

(0.50)

(0.42)

(0.55)

(0.53)

(0.46)

Net

realized

gains

.................

—

(0.63)

(1.95)

(0.77)

(0.87)

(1.68)

Total

distributions

...................

—

(1.13)

(2.37)

(1.32)

(1.40)

(2.14)

Net

asset

value,

end

of

period

..........

$19.85

$16.93

$19.19

$17.71

$20.71

$20.40

Total

return

d

.......................

17.25%

(4.85)%

22.92%

(8.86)%

8.64%

16.35%

Ratios

to

average

net

assets

e

Expenses

f,g,h

.......................

0.74%

0.73%

0.71%

0.71%

0.72%

0.72%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

1.78%

3.48%

c

2.35%

1.77%

2.34%

2.57%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$112,460

$157,734

$158,431

$537,324

$653,700

$610,395

Portfolio

turnover

rate

................

20.52%

i

36.96%

38.50%

24.67%

18.32%

24.45%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.19

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

2.27%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

and/or

interest

expense

on

securities

sold

short

and

security

borrowing

fees,

if

any.

See

below

for

the

ratios

of

such

expenses

to

average

net

assets

for

the

periods

presented.

See

Note

1(e).

i

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

11.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Shares

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$16.59

$18.81

$17.40

$20.36

$20.08

$19.20

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.14

0.51

c

0.40

0.31

0.43

0.45

Net

realized

and

unrealized

gains

(losses)

2.69

(1.65)

3.32

(2.00)

1.20

2.52

Total

from

investment

operations

........

2.83

(1.14)

3.72

(1.69)

1.63

2.97

Less

distributions

from:

Net

investment

income

..............

—

(0.45)

(0.36)

(0.50)

(0.48)

(0.41)

Net

realized

gains

.................

—

(0.63)

(1.95)

(0.77)

(0.87)

(1.68)

Total

distributions

...................

—

(1.08)

(2.31)

(1.27)

(1.35)

(2.09)

Net

asset

value,

end

of

period

..........

$19.42

$16.59

$18.81

$17.40

$20.36

$20.08

Total

return

d

.......................

17.06%

(5.04)%

22.57%

(9.07)%

8.35%

16.06%

Ratios

to

average

net

assets

e

Expenses

f,g,h

.......................

0.99%

0.98%

0.96%

0.96%

0.97%

0.97%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

1.51%

3.25%

c

2.10%

1.52%

2.09%

2.32%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,475,764

$2,620,645

$2,931,753

$2,516,834

$3,476,913

$3,621,358

Portfolio

turnover

rate

................

20.52%

i

36.96%

38.50%

24.67%

18.32%

24.45%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.19

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

2.04%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

and/or

interest

expense

on

securities

sold

short

and

security

borrowing

fees,

if

any.

See

below

for

the

ratios

of

such

expenses

to

average

net

assets

for

the

periods

presented.

See

Note

1(e).

i

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

11.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$16.75

$18.99

$17.55

$20.53

$20.23

$19.32

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.13

0.49

c

0.38

0.29

0.41

0.44

Net

realized

and

unrealized

gains

(losses)

2.72

(1.66)

3.36

(2.02)

1.21

2.53

Total

from

investment

operations

........

2.85

(1.17)

3.74

(1.73)

1.62

2.97

Less

distributions

from:

Net

investment

income

..............

—

(0.44)

(0.35)

(0.48)

(0.45)

(0.38)

Net

realized

gains

.................

—

(0.63)

(1.95)

(0.77)

(0.87)

(1.68)

Total

distributions

...................

—

(1.07)

(2.30)

(1.25)

(1.32)

(2.06)

Net

asset

value,

end

of

period

..........

$19.60

$16.75

$18.99

$17.55

$20.53

$20.23

Total

return

d

.......................

17.01%

(5.17)%

22.44%

(9.16)%

8.25%

15.94%

Ratios

to

average

net

assets

e

Expenses

f,g,h

.......................

1.09%

1.08%

1.06%

1.06%

1.07%

1.07%

Expenses

-

incurred

in

connection

with

securities

sold

short

.................

0.03%

0.01%

0.02%

0.01%

—

0.01%

Net

investment

income

...............

1.41%

3.13%

c

2.00%

1.42%

1.99%

2.22%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$122,686

$116,704

$120,345

$105,047

$122,942

$122,476

Portfolio

turnover

rate

................

20.52%

i

36.96%

38.50%

24.67%

18.32%

24.45%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.19

per

share

related

to

income

received

in

the

form

of

special

dividends

and

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.92%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Includes

dividends

and/or

interest

expense

on

securities

sold

short

and

security

borrowing

fees,

if

any.

See

below

for

the

ratios

of

such

expenses

to

average

net

assets

for

the

periods

presented.

See

Note

1(e).

i

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

11

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Mutual

Shares

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

95.0%

Aerospace

&

Defense

2.3%

a

Airbus

SE

...........................................

France

161,543

$

20,817,030

Huntington

Ingalls

Industries,

Inc.

.........................

United

States

201,744

42,517,548

63,334,578

Auto

Components

0.0%

†

a,b,c

International

Automotive

Components

Group

Brazil

LLC

........

Brazil

1,730,515

124,810

Automobiles

1.3%

a

General

Motors

Co.

....................................

United

States

583,650

34,534,570

Banks

10.0%

Bank

of

America

Corp.

.................................

United

States

1,012,923

41,762,815

Citigroup,

Inc.

........................................

United

States

649,011

45,917,528

ING

Groep

NV

.......................................

Netherlands

4,685,346

62,200,175

JPMorgan

Chase

&

Co.

.................................

United

States

296,483

46,114,966

Synovus

Financial

Corp.

................................

United

States

523,735

22,981,492

Wells

Fargo

&

Co.

.....................................

United

States

1,146,489

51,924,487

270,901,463

Biotechnology

1.0%

a

Alexion

Pharmaceuticals,

Inc.

............................

United

States

141,800

26,050,078

Building

Products

2.3%

Johnson

Controls

International

plc

.........................

United

States

907,449

62,278,225

Chemicals

1.1%

Ashland

Global

Holdings,

Inc.

............................

United

States

326,800

28,595,000

Communications

Equipment

0.5%

Cisco

Systems,

Inc.

...................................

United

States

275,076

14,579,028

Consumer

Finance

1.7%

Capital

One

Financial

Corp.

.............................

United

States

303,468

46,943,465

Containers

&

Packaging

1.3%

International

Paper

Co.

.................................

United

States

566,519

34,733,280

Diversified

Financial

Services

1.5%

Voya

Financial,

Inc.

....................................

United

States

676,010

41,574,615

Diversified

Telecommunication

Services

1.1%

a,d

Frontier

Communications

Parent,

Inc.

......................

United

States

750,148

19,803,907

a,b,c

Windstream

Holdings,

Inc.

...............................

United

States

609,467

10,141,143

29,945,050

Electric

Utilities

1.9%

Evergy

,

Inc.

..........................................

United

States

436,800

26,395,824

Pinnacle

West

Capital

Corp.

.............................

United

States

311,301

25,517,343

51,913,167

Electrical

Equipment

2.2%

a

Sensata

Technologies

Holding

plc

.........................

United

States

1,025,572

59,452,409

Entertainment

1.8%

a,e

Walt

Disney

Co.

(The)

..................................

United

States

279,149

49,066,020

Equity

Real

Estate

Investment

Trusts

(REITs)

1.8%

Uniti

Group,

Inc.

......................................

United

States

461,741

4,889,837

Vornado

Realty

Trust

...................................

United

States

939,986

43,869,147

48,758,984

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

Products

3.0%

Archer-Daniels-Midland

Co.

.............................

United

States

552,213

$

33,464,108

Kraft

Heinz

Co.

(The)

..................................

United

States

1,193,130

48,655,841

82,119,949

Health

Care

Equipment

&

Supplies

1.9%

Medtronic

plc

........................................

United

States

409,737

50,860,654

Health

Care

Providers

&

Services

4.9%

Anthem,

Inc.

.........................................

United

States

154,743

59,080,877

CVS

Health

Corp.

.....................................

United

States

880,173

73,441,635

132,522,512

Household

Durables

2.2%

Lennar

Corp.,

A

.......................................

United

States

296,074

29,414,952

Newell

Brands,

Inc.

....................................

United

States

1,048,643

28,806,223

58,221,175

Household

Products

0.7%

Energizer

Holdings,

Inc.

................................

United

States

440,421

18,929,295

Industrial

Conglomerates

1.7%

General

Electric

Co.

...................................

United

States

3,464,536

46,632,655

Insurance

7.9%

a

Alleghany

Corp.

......................................

United

States

81,523

54,381,548

Everest

Re

Group

Ltd.

.................................

United

States

152,620

38,461,766

Hartford

Financial

Services

Group,

Inc.

(The)

................

United

States

739,961

45,855,383

MetLife,

Inc.

.........................................

United

States

626,981

37,524,813

Willis

Towers

Watson

plc

................................

United

States

167,200

38,459,344

214,682,854

IT

Services

2.8%

Alliance

Data

Systems

Corp.

.............................

United

States

264,554

27,563,881

Cognizant

Technology

Solutions

Corp.,

A

....................

United

States

680,946

47,162,320

74,726,201

Media

4.8%

a

Charter

Communications,

Inc.,

A

..........................

United

States

113,261

81,712,149

Comcast

Corp.,

A

.....................................

United

States

864,809

49,311,409

131,023,558

Oil,

Gas

&

Consumable

Fuels

5.4%

BP

plc

..............................................

United

Kingdom

11,951,399

52,415,395

Kinder

Morgan,

Inc.

....................................

United

States

1,550,694

28,269,152

e

Williams

Cos.,

Inc.

(The)

................................

United

States

2,521,947

66,957,693

147,642,240

Pharmaceuticals

10.0%

a

Elanco

Animal

Health,

Inc.

...............................

United

States

546,163

18,946,394

Eli

Lilly

&

Co.

........................................

United

States

239,856

55,051,749

GlaxoSmithKline

plc

...................................

United

Kingdom

3,674,302

72,238,682

e

Merck

&

Co.,

Inc.

.....................................

United

States

894,702

69,580,974

Novartis

AG,

ADR

.....................................

Switzerland

608,615

55,530,033

271,347,832

Professional

Services

0.5%

KBR,

Inc.

...........................................

United

States

345,528

13,181,893

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Road

&

Rail

1.1%

Kansas

City

Southern

..................................

United

States

103,900

$

29,442,143

Semiconductors

&

Semiconductor

Equipment

1.4%

Xilinx,

Inc.

...........................................

United

States

261,900

37,881,216

Software

5.2%

a

Avaya

Holdings

Corp.

..................................

United

States

116

3,121

NortonLifeLock

,

Inc.

...................................

United

States

1,884,367

51,292,470

Oracle

Corp.

.........................................

United

States

761,410

59,268,154

a

Slack

Technologies,

Inc.,

A

..............................

United

States

671,800

29,760,740

140,324,485

Specialty

Retail

0.0%

a,b,c

Wayne

Services

Legacy,

Inc.

.............................

United

States

2,039

—

Technology

Hardware,

Storage

&

Peripherals

3.6%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

687,406

49,045,218

a,e

Western

Digital

Corp.

..................................

United

States

670,782

47,739,555

96,784,773

Textiles,

Apparel

&

Luxury

Goods

1.4%

a

PVH

Corp.

..........................................

United

States

347,411

37,377,949

Tobacco

3.0%

Altria

Group,

Inc.

......................................

United

States

763,218

36,390,234

British

American

Tobacco

plc

.............................

United

Kingdom

1,142,275

44,352,702

80,742,936

Wireless

Telecommunication

Services

1.7%

a

T-Mobile

US,

Inc.

.....................................

United

States

320,646

46,439,160

Total

Common

Stocks

(Cost

$1,736,212,639)

....................................

2,573,668,222

Warrants

Warrants

0.0%

†

Diversified

Telecommunication

Services

0.0%

†

a,b,c

Windstream

Holdings,

Inc.,

9/21/55

........................

United

States

34,368

571,862

Software

0.0%

†

a

Avaya

Holdings

Corp.,

12/15/22

..........................

United

States

63,871

327,658

Total

Warrants

(Cost

$436,130)

................................................

899,520

Principal

Amount

*

Corporate

Bonds

2.7%

Airlines

1.6%

f

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note,

144A,

5.5%,

4/20/26

................

United

States

10,557,000

11,190,420

Senior

Secured

Note,

144A,

5.75%,

4/20/29

...............

United

States

845,000

914,713

f

American

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

11.75

%

,

7/15/25

United

States

15,905,000

19,980,656

f

Mileage

Plus

Holdings

LLC

/

Mileage

Plus

Intellectual

Property

Assets

Ltd.

,

Senior

Secured

Note

,

144A,

6.5

%

,

6/20/27

.......

United

States

9,869,000

10,878,105

42,963,894

Diversified

Telecommunication

Services

0.1%

Frontier

Communications

Holdings

LLC

,

Secured

Note

,

5.875

%

,

11/01/29

..........................................

United

States

2,949,278

3,007,084

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-13

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Machinery

0.1%

f

Navistar

International

Corp.

,

Senior

Secured

Note

,

144A,

9.5

%

,

5/01/25

...........................................

United

States

1,562,400

$

1,676,846

Multiline

Retail

0.1%

f

Macy's,

Inc.

,

Senior

Secured

Note

,

144A,

8.375

%

,

6/15/25

......

United

States

3,958,000

4,368,464

Software

0.8%

f

Veritas

US,

Inc.

/

Veritas

Bermuda

Ltd.

,

Senior

Note

,

144A,

10.5

%

,

2/01/24

...........................................

United

States

21,045,000

21,684,663

Total

Corporate

Bonds

(Cost

$64,697,201)

......................................

73,700,951

a

g,h

Senior

Floating

Rate

Interests

0.1%

Airlines

0.1%

AAdvantage

Loyalty

IP

Ltd.

(American

Airlines,

Inc.)

,

Initial

Term

Loan

,

5.5

%

,

(

3-month

USD

LIBOR

+

4.75

%

),

4/20/28

.........

United

States

2,477,000

2,585,530

Software

0.0%

†

Veritas

US,

Inc.

,

USD

Term

Loan,

B

,

6

%

,

(

3-month

USD

LIBOR

+

5

%

),

9/01/25

.......................................

United

States

1,813,078

1,827,129

Total

Senior

Floating

Rate

Interests

(Cost

$4,212,218)

...........................

4,412,659

Asset-Backed

Securities

0.2%

Airlines

0.2%

American

Airlines

Pass-Through

Trust

,

2013-2

,

A

,

4.95

%

,

1/15/23

.

United

States

4,740,363

4,811,754

Total

Asset-Backed

Securities

(Cost

$4,669,257)

................................

4,811,754

Shares

Companies

in

Liquidation

0.0%

a,b,i

Bosgen

Liquidating

Trust

c/o

Verdolino

and

Lowey

P.C.,

Contingent

Distribution

........................................

Netherlands

347,093

—

a,b,i

Tribune

Media,

Litigation

Trust,

Contingent

Distribution

.........

United

States

397,730

—

a,b,i

Vistra

Energy

Corp.,

Litigation

Trust,

Contingent

Distribution

.....

United

States

90,618,405

—

a,b,i

Walter

Energy,

Inc.,

Litigation

Trust,

Contingent

Distribution

......

United

States

6,301,000

—

Total

Companies

in

Liquidation

(Cost

$2,834,275)

...............................

—

Total

Long

Term

Investments

(Cost

$1,813,061,720)

.............................

2,657,493,106

a

Short

Term

Investments

1.3%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

1.2%

j

FHLB,

7/01/21

.......................................

United

States

500,000

500,000

j

U.S.

Treasury

Bills

,

7/08/21

...........................................

United

States

8,000,000

7,999,948

7/22/21

...........................................

United

States

2,500,000

2,499,938

8/05/21

...........................................

United

States

1,000,000

999,959

e

8/12/21

...........................................

United

States

1,000,000

999,939

8/26/21

...........................................

United

States

20,000,000

19,998,771

32,498,555

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-14

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

(continued)

j

U.S.

Treasury

Bills,

(continued)

Total

U.S.

Government

and

Agency

Securities

(Cost

$32,998,095)

.................

32,998,555

k

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

Shares

Money

Market

Funds

0.1%

l,m

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

1,858,000

$

1,858,000

Principal

Amount

*

Repurchase

Agreements

0.0%

†

n

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0.05%,

7/01/21

(Maturity

Value

$464,936)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$474,234)

.........................................

464,935

464,935

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$2,322,935)

............................................................

2,322,935

Total

Short

Term

Investments

(Cost

$35,321,030

)

................................

35,321,490

a

Total

Investments

(Cost

$1,848,382,750)

99.3%

..................................

$2,692,814,596

Securities

Sold

Short

(4.3)%

..................................................

(117,909,120)

Other

Assets,

less

Liabilities

5.0%

.............................................

136,004,468

Net

Assets

100.0%

...........................................................

$2,710,909,944

Shares

Securities

Sold

Short

(4.3)%

Common

Stocks

(4.3)%

Insurance

(1.5)%

o

Aon

plc,

A

...........................................

United

States

167,832

(40,071,568)

Pharmaceuticals

(0.6)%

o

AstraZeneca

plc,

ADR

..................................

United

Kingdom

301,225

(18,043,378)

Road

&

Rail

(0.2)%

o

Canadian

National

Railway

Co.

...........................

Canada

44,200

(4,663,984)

Semiconductors

&

Semiconductor

Equipment

(1.5)%

o

Advanced

Micro

Devices,

Inc.

............................

United

States

451,359

(42,396,151)

Software

(0.5)%

o

salesforce.com,

Inc.

...................................

United

States

52,131

(12,734,039)

Total

Common

Stocks

(Proceeds

$107,570,645)

.................................

(117,909,120)

Total

Securities

Sold

Short

(Proceeds

$107,570,645)

.............................

$(117,909,120)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-15

At

June

30,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(d)

. 

At

June

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(d)

. 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Foreign

exchange

contracts

Foreign

Exchange

EUR/USD

...................

Short

39

$

5,784,188

9/13/21

$

171,768

Foreign

Exchange

GBP/USD

...................

Short

176

15,185,500

9/13/21

409,828

Total

Futures

Contracts

......................................................................

$581,596

*

As

of

period

end.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

British

Pound

......

HSBK

Buy

52,545

72,547

7/23/21

$

146

$

—

British

Pound

......

HSBK

Sell

3,305,686

4,659,579

7/23/21

86,320

—

British

Pound

......

SSBT

Buy

1,046,656

1,456,550

7/23/21

—

(8,552)

British

Pound

......

UBSW

Buy

413,005

584,568

7/23/21

—

(13,194)

Euro

.............

BOFA

Buy

197,993

241,746

8/23/21

—

(6,691)

Euro

.............

HSBK

Buy

6,938,651

8,434,302

8/23/21

—

(196,829)

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

c

See

Note

8

regarding

restricted

securities.

d

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(f).

e

A

portion

or

all

of

the

security

has

been

segregated

as

collateral

for

securities

sold

short

and/or

open

forward

exchange

contracts.

At

June

30,

2021,

the

aggregate

value

of

these

securities

pledged

amounted

to

$136,678,448,

representing

5.0%

of

net

assets.

f

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$70,693,867,

representing

2.6%

of

net

assets.

g

See

Note

1(g)

regarding

senior

floating

rate

interests.

h

The

coupon

rate

shown

represents

the

rate

at

period

end.

i

Contingent

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.

j

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

k

See

Note

1(f)

regarding

securities

on

loan.

l

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

m

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

n

See

Note

1(c)

regarding

joint

repurchase

agreement.

o

See

Note

1(e)

regarding

securities

sold

short.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-16

See

Note 

9

 regarding

other

derivative

information.

See

abbreviations

on

page

MS-33.

Forward

Exchange

Contracts

(continued)

Currency

Counter-

party

a

Type

Quantity

Contract

Amount*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

(continued)

Euro

.............

HSBK

Sell

18,207,824

21,930,772

8/23/21

$

314,688

$

—

Euro

.............

SSBT

Buy

4,386,350

5,343,394

8/23/21

—

(135,979)

Euro

.............

SSBT

Sell

20,326,093

24,249,855

8/23/21

120,957

(1,968)

Euro

.............

UBSW

Buy

4,679,002

5,582,269

8/23/21

—

(27,421)

Euro

.............

UBSW

Sell

6,241,784

7,525,142

8/23/21

114,979

—

South

Korean

Won

..

HSBK

Buy

6,487,853,600

5,710,887

11/19/21

26,964

—

South

Korean

Won

..

HSBK

Sell

18,634,460,573

16,534,570

11/19/21

54,272

—

South

Korean

Won

..

UBSW

Sell

10,600,916,932

9,410,908

11/19/21

35,467

—

South

Korean

Won

..

HSBK

Sell

23,213,960,218

20,888,449

12/17/21

361,714

—

South

Korean

Won

..

UBSW

Sell

9,030,995,877

8,130,026

12/17/21

144,450

—

Total

Forward

Exchange

Contracts

...................................................

$1,259,957

$(390,634)

Net

unrealized

appreciation

(depreciation)

............................................

$869,323

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-17

Franklin

Mutual

Shares

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$1,846,059,815

Cost

-

Non-controlled

affiliate

s

(Note

3e)

........................................................

1,858,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

464,935

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$2,315,174)

.................................

$2,690,491,661

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

1,858,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

464,935

Cash

....................................................................................

12,400,999

Receivables:

Investment

securities

sold

...................................................................

4,396,600

Capital

shares

sold

........................................................................

227,844

Dividends

and

interest

.....................................................................

6,131,354

European

Union

tax

reclaims

(Note

1

h

)

.........................................................

3,586,576

Deposits

with

brokers

for:

Securities

sold

short

.....................................................................

117,530,918

Futures

contracts

........................................................................

490,775

Variation

margin

on

futures

contracts

...........................................................

79,612

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

1,259,957

Other

assets

..............................................................................

495,436

Total

assets

..........................................................................

2,839,414,667

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

4,029,124

Capital

shares

redeemed

...................................................................

949,505

Management

fees

.........................................................................

1,664,393

Distribution

fees

..........................................................................

594,310

Securities

sold

short,

at

value

(proceeds

$107,570,645)

..............................................

117,909,120

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

390,634

Payable

upon

return

of

securities

loaned

(Note

1

f

)

..................................................

2,322,935

Accrued

expenses

and

other

liabilities

...........................................................

644,702

Total

liabilities

.........................................................................

128,504,723

Net

assets,

at

value

.................................................................

$2,710,909,944

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$1,639,021,451

Total

distributable

earnings

(losses)

.............................................................

1,071,888,493

Net

assets,

at

value

.................................................................

$2,710,909,944

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

June

30,

2021

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-18

Franklin

Mutual

Shares

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$112,459,576

Shares

outstanding

........................................................................

5,665,904

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.85

Class

2:

Net

assets,

at

value

.......................................................................

$2,475,763,963

Shares

outstanding

........................................................................

127,506,142

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.42

Class

4:

Net

assets,

at

value

.......................................................................

$122,686,405

Shares

outstanding

........................................................................

6,258,294

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.60

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

MS-19

Franklin

Mutual

Shares

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$775,199)

Unaffiliated

issuers

........................................................................

$33,304,356

Interest:

Unaffiliated

issuers

........................................................................

4,167,441

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

2,252

Non-controlled

affiliates

(Note

3

e

)

.............................................................

56

Total

investment

income

...................................................................

37,474,105

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,121,322

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

3,392,103

    Class

4

................................................................................

211,050

Custodian

fees

(Note

4

)

......................................................................

14,980

Reports

to

shareholders

......................................................................

277,947

Professional

fees

...........................................................................

71,501

Trustees'

fees

and

expenses

..................................................................

8,255

Dividends

on

securities

sold

short

..............................................................

464,895

Other

....................................................................................

70,968

Total

expenses

.........................................................................

14,633,021

Expense

reductions

(Note

4

)

...............................................................

(82)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(257)

Net

expenses

.........................................................................

14,632,682

Net

investment

income

................................................................

22,841,423

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

+

Unaffiliated

issuers

......................................................................

246,089,709

Foreign

currency

transactions

................................................................

(113,168)

Forward

exchange

contracts

.................................................................

215,700

Futures

contracts

.........................................................................

(1,612,660)

Securities

sold

short

.......................................................................

(1,439,027)

Net

realized

gain

(loss)

..................................................................

243,140,554

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

208,788,375

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(238,698)

Forward

exchange

contracts

.................................................................

3,919,485

Futures

contracts

.........................................................................

1,182,248

Securities

sold

short

.......................................................................

(9,747,355)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

203,904,055

Net

realized

and

unrealized

gain

(loss)

............................................................

447,044,609

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$469,886,032

+

Includes

gains

from

redemption

in-kind

(Note

11)

$66,991,358

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-20

Franklin

Mutual

Shares

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$22,841,423

$83,091,278

Net

realized

gain

(loss)

.................................................

243,140,554

(85,543,839)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

203,904,055

(174,178,576)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

469,886,032

(176,631,137)

Distributions

to

shareholders:

Class

1

.............................................................

—

(9,923,875)

Class

2

.............................................................

—

(153,724,682)

Class

4

.............................................................

—

(7,227,115)

Total

distributions

to

shareholders

..........................................

—

(170,875,672)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(70,559,170)

15,161,489

Class

2

.............................................................

(570,496,215)

9,448,782

Class

4

.............................................................

(13,003,862)

7,450,316

Total

capital

share

transactions

............................................

(654,059,247)

32,060,587

Net

increase

(decrease)

in

net

assets

...................................

(184,173,215)

(315,446,222)

Net

assets:

Beginning

of

period

.....................................................

2,895,083,159

3,210,529,381

End

of

period

..........................................................

$2,710,909,944

$2,895,083,159

Franklin

Templeton

Variable

Insurance

Products

Trust

MS-21

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Franklin

Mutual

Shares

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Mutual

Shares

VIP

Fund

(Fund)

is

included

in

this

report. Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the OTC

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value. 

Certain

derivative

financial

instruments

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-22

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-23

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

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.

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,

2021 the

Fund

had

OTC

derivatives

in

a

net

liability

position

of

$25,542

and

the

aggregate

value

of

collateral

pledged

for

such

contracts

was

$272,989.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

the

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

The

Fund

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

and

equity

price

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

The

Fund entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date.

See

Note

9

regarding

other

derivative

information.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-24

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

e.

Securities

Sold

Short

The

Fund

is

engaged

in

selling

securities

short,

which

obligates

the

Fund

to

replace

a

borrowed

security

with

the

same

security

at

current

fair

value.

The

Fund

incurs

a

loss

if

the

price

of

the

security

increases

between

the

date

of

the

short

sale

and

the

date

on

which

the

Fund

replaces

the

borrowed

security.

The

Fund

realizes

a

gain

if

the

price

of

the

security

declines

between

those

dates.

Gains

are

limited

to

the

price

at

which

the

Fund

sold

the

security

short,

while

losses

are

potentially

unlimited

in

size.

The

Fund

is

required

to

establish

a

margin

account

with

the

broker

lending

the

security

sold

short.

While

the

short

sale

is

outstanding,

the

broker

retains

the

proceeds

of

the

short

sale

to

the

extent

necessary

to

meet

margin

requirements

until

the

short

position

is

closed

out.

A

deposit

must

also

be

maintained

with

the

Fund's

custodian/counterparty

broker

consisting

of

cash

and/or

securities

having

a

value

equal

to

a

specified

percentage

of

the

value

of

the

securities

sold

short.

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. 

f.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund,

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 any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

g.

Senior

Floating

Rate

Interests

The

Fund

invests

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the Fund

invests

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

h.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims).

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-25

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

i.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income.

Dividend

income,

capital

gain

distributions

are

recorded

on

the

ex-

dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

j.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

k.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-26

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

92,434

$1,788,130

991,549

$14,998,414

Shares

issued

in

reinvestment

of

distributions

..........

—

—

686,298

9,923,875

Shares

redeemed

in-kind

(Note

11)

..................

(3,060,698)

(59,532,727)

—

—

Shares

redeemed

...............................

(680,991)

(12,814,573)

(619,658)

(9,760,800)

Net

increase

(decrease)

..........................

(3,649,255)

$(70,559,170)

1,058,189

$15,161,489

Class

2

Shares:

Shares

sold

...................................

679,892

$12,550,045

22,804,922

$339,671,560

Shares

issued

in

reinvestment

of

distributions

..........

—

—

10,848,601

153,724,682

Shares

redeemed

in-kind

(Note

11)

..................

(13,941,656)

(265,295,778)

—

—

Shares

redeemed

...............................

(17,242,173)

(317,750,482)

(31,525,525)

(483,947,460)

Net

increase

(decrease)

..........................

(30,503,937)

$(570,496,215)

2,127,998

$9,448,782

Class

4

Shares:

Shares

sold

...................................

186,197

$3,383,339

1,256,949

$18,190,882

Shares

issued

in

reinvestment

of

distributions

..........

—

—

504,687

7,227,115

Shares

redeemed

...............................

(893,996)

(16,387,201)

(1,132,933)

(17,967,681)

Net

increase

(decrease)

..........................

(707,799)

$(13,003,862)

628,703

$7,450,316

Subsidiary

Affiliation

Franklin

Mutual

Advisers,

LLC

(Franklin

Mutual)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-27

Semiannual

Report

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.675%

of

the

Fund’s

average

daily

net

assets. 

b.

Administrative

Fees

Under

an

agreement

with

Franklin

Mutual,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Franklin

Mutual

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-28

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

EU

reclaims,

partnerships,

defaults,

return

of

capital

from

securities,

foreign

currency

transactions

and

wash

sales.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Mutual

Shares

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$28,250,000

$(26,392,000)

$

—

$

—

$1,858,000

1,858,000

$56

Total

Affiliated

Securities

....

$—

$28,250,000

$(26,392,000)

$—

$—

$1,858,000

$56

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$9,931,155

Long

term

................................................................................

75,381,114

Total

capital

loss

carryforwards

...............................................................

$85,312,269

Cost

of

investments

..........................................................................

$1,765,060,591

Unrealized

appreciation

........................................................................

$876,782,551

Unrealized

depreciation

........................................................................

(65,486,748)

Net

unrealized

appreciation

(depreciation)

..........................................................

$811,295,803

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-29

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities,

in-kind

transactions,

and

securities

sold

short)

for

the

period

ended

June

30,

2021,

aggregated

$587,732,574

and

$924,449,020,

respectively.

Sales

of

investments

excludes

in-kind

transactions

of

$290,114,734.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$2,322,935

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

June

30,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Mutual

Shares

VIP

Fund

1,730,515

International

Automotive

Components

Group

Brazil

LLC

4/13/06

-

12/26/08

$

1,149,241

$

124,810

2,039

Wayne

Services

Legacy,

Inc.

...................

1/22/20

—

—

609,467

Windstream

Holdings,

Inc.

.....................

9/21/20

4,827,676

10,141,143

34,368

Windstream

Holdings,

Inc.,

9/21/55

..............

9/21/20

436,130

571,862

Total

Restricted

Securities

(Value

is

0.39%

of

Net

Assets)

.............

$6,413,047

$10,837,815

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-30

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

9.

Other

Derivative

Information

At

June

30,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

futures

contracts

represented

$30,435,286.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$197,448,504.

See

Note

1(d)

regarding

derivative

financial

instruments.

10.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

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

Franklin

Mutual

Shares

VIP

Fund

Foreign

exchange

contracts

..

Variation

margin

on

futures

contracts

$

581,596

a

Variation

margin

on

futures

contracts

$

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,259,957

Unrealized

depreciation

on

OTC

forward

exchange

contracts

390,634

Total

....................

$1,841,553

$390,634

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

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

Franklin

Mutual

Shares

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Futures

contracts

$(1,612,660)

Futures

contracts

$1,182,248

Forward

exchange

contracts

215,700

Forward

exchange

contracts

3,919,485

Total

.......................

$(1,396,960)

$5,101,733

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-31

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

11.

Redemption

In-Kind

During

the

period

ended

June

30,

2021,

the

Fund

realized

$66,991,358

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.

12.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Shares

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

42,517,548

$

20,817,030

$

—

$

63,334,578

Auto

Components

......................

—

—

124,810

124,810

Automobiles

..........................

34,534,570

—

—

34,534,570

Banks

...............................

208,701,288

62,200,175

—

270,901,463

Biotechnology

.........................

26,050,078

—

—

26,050,078

Building

Products

......................

62,278,225

—

—

62,278,225

Chemicals

...........................

28,595,000

—

—

28,595,000

Communications

Equipment

..............

14,579,028

—

—

14,579,028

Consumer

Finance

.....................

46,943,465

—

—

46,943,465

Containers

&

Packaging

.................

34,733,280

—

—

34,733,280

Diversified

Financial

Services

.............

41,574,615

—

—

41,574,615

Diversified

Telecommunication

Services

.....

19,803,907

—

10,141,143

29,945,050

Electric

Utilities

........................

51,913,167

—

—

51,913,167

Electrical

Equipment

....................

59,452,409

—

—

59,452,409

Entertainment

.........................

49,066,020

—

—

49,066,020

Equity

Real

Estate

Investment

Trusts

(REITs)

.

48,758,984

—

—

48,758,984

Food

Products

........................

82,119,949

—

—

82,119,949

Health

Care

Equipment

&

Supplies

.........

50,860,654

—

—

50,860,654

Health

Care

Providers

&

Services

..........

132,522,512

—

—

132,522,512

10.

Credit

Facility

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-32

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the year.

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provides

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Shares

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Household

Durables

....................

$

58,221,175

$

—

$

—

$

58,221,175

Household

Products

....................

18,929,295

—

—

18,929,295

Industrial

Conglomerates

................

46,632,655

—

—

46,632,655

Insurance

............................

214,682,854

—

—

214,682,854

IT

Services

...........................

74,726,201

—

—

74,726,201

Media

...............................

131,023,558

—

—

131,023,558

Oil,

Gas

&

Consumable

Fuels

.............

95,226,845

52,415,395

—

147,642,240

Pharmaceuticals

.......................

199,109,150

72,238,682

—

271,347,832

Professional

Services

...................

13,181,893

—

—

13,181,893

Road

&

Rail

..........................

29,442,143

—

—

29,442,143

Semiconductors

&

Semiconductor

Equipment

.

37,881,216

—

—

37,881,216

Software

.............................

140,324,485

—

—

140,324,485

Specialty

Retail

........................

—

—

—

a

—

Technology

Hardware,

Storage

&

Peripherals

.

47,739,555

49,045,218

—

96,784,773

Textiles,

Apparel

&

Luxury

Goods

..........

37,377,949

—

—

37,377,949

Tobacco

.............................

36,390,234

44,352,702

—

80,742,936

Wireless

Telecommunication

Services

.......

46,439,160

—

—

46,439,160

Warrants

:

Diversified

Telecommunication

Services

.....

—

—

571,862

571,862

Software

.............................

327,658

—

—

327,658

Corporate

Bonds

........................

—

73,700,951

—

73,700,951

Senior

Floating

Rate

Interests

...............

—

4,412,659

—

4,412,659

Asset-Backed

Securities

..................

—

4,811,754

—

4,811,754

Companies

in

Liquidation

..................

—

—

—

a

—

Short

Term

Investments

...................

34,356,555

964,935

—

35,321,490

Total

Investments

in

Securities

...........

$2,297,017,280

$384,959,501

b

$10,837,815

$2,692,814,596

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

1,259,957

$

—

$

1,259,957

Futures

contracts

........................

581,596

—

—

581,596

Total

Other

Financial

Instruments

.........

$581,596

$1,259,957

$—

$1,841,553

Liabilities:

Other

Financial

Instruments:

Securities

Sold

Short

.....................

117,909,120

—

—

117,909,120

Forward

exchange

contracts

................

$

—

$

390,634

$

—

$

390,634

Total

Other

Financial

Instruments

.........

$117,909,120

$390,634

$—

$118,299,754

a

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

b

Includes

foreign

securities

valued

at

$301,069,202,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

MS-33

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

due

to

the

planned

discontinuation

of

LIBOR

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

14.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Counterparty

BOFA

Bank

of

America

Corp.

HSBK

HSBC

Bank

plc

SSBT

State

Street

Bank

and

Trust

Co.

UBSW

UBS

AG

Cu

r

rency

EUR

Euro

GBP

British

Pound

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

FHLB

Federal

Home

Loan

Banks

LIBOR

London

Inter-Bank

Offered

Rate

13.

New

Accounting

Pronouncements

(continued)

FRD-1

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

This

semiannual

report

for

Franklin

Rising

Dividends

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+

12.88

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

FRD-2

Semiannual

Report

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).

Franklin

Rising

Dividends

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

appreciation.

Preservation

of

capital,

while

not

a

goal,

is

also

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues

and

can

fall

dramatically

if

the

company

fails

to

meet

those

projections.

Value

stocks

may

not

increase

in

value

as

anticipated

by

the

Fund

or

may

decline

even

further

if

other

investors

fail

to

recognize

the

company’s

value,

or

favor

investing

in

faster-growing

companies.

Companies

that

have

historically

paid

regular

dividends

to

shareholders

may

decrease

or

eliminate

dividend

payments

in

the

future.

Securities

issued

by

smaller

and

midsize

companies

may

be

more

volatile

in

price

than

those

of

larger

companies,

involve

substantial

risks

and

should

be

considered

relatively

more

speculative.

To

the

extent

that

the

Fund

focuses

on

particular

countries,

regions,

industries,

sectors

or

types

of

investment

from

time

to

time,

the

Fund

may

be

subject

to

greater

risks

of

adverse

developments

in

such

areas

of

focus

than

a

fund

that

invests

in

a

wider

variety

of

countries,

regions,

industries,

sectors

or

investments.

Foreign

investing

carries

additional

risks

such

as

currency

and

market

volatility

and

political

or

social

instability,

risks

that

are

heightened

in

developing

countries.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

In

comparison,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

)

posted

a

+15.25%

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.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-pandemic

levels,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

bolstered

growth.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

5.9%

in

June

2021

as

job

openings

grew,

but

a

relative

lack

of

available

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Health

Care

Equipment

&

Supplies

13.6%

Chemicals

10.1%

Software

8.9%

Industrial

Conglomerates

8.2%

Semiconductors

&

Semiconductor

Equipment

6.9%

IT

Services

6.4%

Specialty

Retail

3.9%

Aerospace

&

Defense

3.6%

Machinery

3.4%

Multiline

Retail

2.9%

Household

Products

2.7%

Pharmaceuticals

2.5%

Health

Care

Providers

&

Services

2.5%

Textiles,

Apparel

&

Luxury

Goods

2.5%

Other*

20.9%

Short-Term

Investments

&

Other

Net

Assets

1.0%

Franklin

Rising

Dividends

VIP

Fund

FRD-3

Semiannual

Report

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

2

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

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

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

12-month

period

ended

June

30,

2021,

some

companies

that

contributed

to

absolute

performance

included

Microsoft,

Target

and

Johnson

Controls

International.

Enterprise

software

company

Microsoft

contributed,

as

the

stock

continued

to

rise

on

strong

demand

for

its

cloud-

based

services

during

the

pandemic.

The

company

has

seen

strength

in

its

commercial

cloud

services,

gaming

and

in

sales

of

Windows

as

customers

migrated

away

from

Windows

7

in

recent

quarters.

We

believe

that

the

trends

of

helping

business

customers

move

to

the

cloud

and

providing

workers

with

productivity

tools

should

support

what

we

consider

attractive

growth

over

the

medium

to

longer

term.

Target

was

an

absolute

contributor

during

the

six-month

period

following

a

series

of

robust

quarterly

financial

results.

The

retailer

has

continued

to

see

strong

sales

trends

both

in

its

stores

and

online,

as

investment

spending

in

recent

years

had

enabled

it

to

become

a

strong

omnichannel

retailer.

The

company

has

made

improvements

to

its

merchandise,

and

the

company's

efforts

to

utilize

its

large

store

base

to

provide

flexible

fulfillment

options

has

been

successful.

We

continue

to

view

Target

as

a

high-conviction,

multi-year

growth

story.

In

the

industrials

sector,

Johnson

Controls

International,

a

heating,

ventilation,

and

air

conditioning

and

fire

and

safety

systems

manufacturer,

boosted

absolute

performance

following

an

upbeat

earnings

report.

We

believe

that

over

the

longer

term,

as

real

estate

owners

look

to

make

their

buildings

more

efficient

and

environmentally

sustainable,

Johnson

Controls

could

see

robust

demand

for

its

products

and

services.

In

contrast,

some

companies

that

detracted

from

absolute

performance

included

Erie

Indemnity,

McCormick

&

Co.

and

Colgate-Palmolive.

Insurer

Erie

Indemnity

weighed

on

absolute

returns

during

the

six-month

period.

The

property

and

casualty

insurer’s

latest

quarterly

report

was

mixed.

Although

operating

revenue

and

investment

income

rose

since

2020,

operating

expenses

were

also

higher

and

average

premium

rates

declined.

However,

we

believe

the

company

could

post

steady

premium

growth

over

the

longer

term.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Microsoft

Corp.

8.9%

Software,

United

States

Roper

Technologies,

Inc.

4.7%

Industrial

Conglomerates,

United

States

Accenture

plc

3.9%

IT

Services,

United

States

Stryker

Corp.

3.6%

Health

Care

Equipment

&

Supplies,

United

States

Texas

Instruments,

Inc.

3.5%

Semiconductors

&

Semiconductor

Equipment,

United

States

Analog

Devices,

Inc.

3.4%

Semiconductors

&

Semiconductor

Equipment,

United

States

Linde

plc

3.2%

Chemicals,

United

Kingdom

West

Pharmaceutical

Services,

Inc.

3.0%

Health

Care

Equipment

&

Supplies,

United

States

Target

Corp.

3.0%

Multiline

Retail,

United

States

Air

Products

and

Chemicals,

Inc.

2.8%

Chemicals,

United

States

2.

Source:

Bureau

of

Labor

Statistics.

Franklin

Rising

Dividends

VIP

Fund

FRD-4

Semiannual

Report

Food

seasoning

and

spice

maker

McCormick

&

Co.

was

a

detractor

during

the

period,

despite

the

strong

increase

in

demand

for

its

products

from

more

people

eating

at

home.

Novel

coronavirus-related

costs

have

weighed

on

profitability

in

recent

quarters.

However,

we

believe

McCormick

is

one

of

the

biggest

long-term

beneficiaries

of

a

more

permanent

shift

to

increased

cooking

at

home.

Furthermore,

the

company’s

fundamentals

are

among

the

most

robust

in

the

packaged

food

industry,

in

our

view.

Household

products

company

Colgate-Palmolive

hindered

performance

on

an

absolute

basis,

as

the

broader

consumer

staples

sector

lagged

the

overall

market.

The

company

has

been

boosting

research

and

development

spending

to

focus

on

greater

innovation

to

boost

long-term

growth.

Colgate-

Palmolive

is

also

investing

in

digital

initiatives.

Thank

you

for

your

participation

in

Franklin

Rising

Dividends

VIP

Fund.

We

look

forward

to

continuing

to

serve

your

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Rising

Dividends

VIP

Fund

FRD-5

Semiannual

Report

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.

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.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,128.80

$3.32

$1,021.67

$3.16

0.63%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Rising

Dividends

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$30.17

$27.90

$25.75

$29.21

$25.51

$25.26

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.15

0.32

0.37

0.39

0.40

0.42

Net

realized

and

unrealized

gains

(losses)

3.72

3.76

6.77

(1.65)

4.76

3.45

Total

from

investment

operations

........

3.87

4.08

7.14

(1.26)

5.16

3.87

Less

distributions

from:

Net

investment

income

..............

(0.35)

(0.41)

(0.45)

(0.44)

(0.48)

(0.44)

Net

realized

gains

.................

(1.06)

(1.40)

(4.54)

(1.76)

(0.98)

(3.18)

Total

distributions

...................

(1.41)

(1.81)

(4.99)

(2.20)

(1.46)

(3.62)

Net

asset

value,

end

of

period

..........

$32.63

$30.17

$27.90

$25.75

$29.21

$25.51

Total

return

c

.......................

12.88%

16.23%

29.58%

(4.84)%

20.85%

16.33%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.63%

0.65%

0.63%

0.62%

0.62%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.63%

f

0.65%

f

0.63%

f

0.62%

f

0.62%

f

0.62%

Net

investment

income

...............

0.94%

1.20%

1.34%

1.38%

1.49%

1.67%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$167,062

$156,585

$150,864

$157,838

$216,015

$181,072

Portfolio

turnover

rate

................

2.37%

12.83%

7.26%

g

3.09%

g

3.36%

6.66%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Rising

Dividends

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FRD-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$29.14

$26.99

$25.04

$28.46

$24.89

$24.72

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.11

0.24

0.29

0.31

0.33

0.35

Net

realized

and

unrealized

gains

(losses)

3.58

3.65

6.57

(1.61)

4.63

3.37

Total

from

investment

operations

........

3.69

3.89

6.86

(1.30)

4.96

3.72

Less

distributions

from:

Net

investment

income

..............

(0.28)

(0.33)

(0.37)

(0.36)

(0.41)

(0.37)

Net

realized

gains

.................

(1.06)

(1.41)

(4.54)

(1.76)

(0.98)

(3.18)

Total

distributions

...................

(1.34)

(1.74)

(4.91)

(2.12)

(1.39)

(3.55)

Net

asset

value,

end

of

period

..........

$31.49

$29.14

$26.99

$25.04

$28.46

$24.89

Total

return

c

.......................

12.72%

15.97%

29.23%

(5.07)%

20.56%

16.04%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.88%

0.90%

0.88%

0.87%

0.87%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.88%

f

0.90%

f

0.88%

f

0.87%

f

0.87%

f

0.87%

Net

investment

income

...............

0.69%

0.95%

1.09%

1.13%

1.24%

1.42%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,458,139

$1,365,745

$1,387,688

$1,106,334

$1,640,883

$1,530,374

Portfolio

turnover

rate

................

2.37%

12.83%

7.26%

g

3.09%

g

3.36%

6.66%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Rising

Dividends

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$29.22

$27.08

$25.11

$28.54

$24.98

$24.81

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.09

0.22

0.26

0.29

0.30

0.32

Net

realized

and

unrealized

gains

(losses)

3.59

3.65

6.60

(1.62)

4.65

3.39

Total

from

investment

operations

........

3.68

3.87

6.86

(1.33)

4.95

3.71

Less

distributions

from:

Net

investment

income

..............

(0.27)

(0.32)

(0.35)

(0.34)

(0.41)

(0.36)

Net

realized

gains

.................

(1.06)

(1.41)

(4.54)

(1.76)

(0.98)

(3.18)

Total

distributions

...................

(1.33)

(1.73)

(4.89)

(2.10)

(1.39)

(3.54)

Net

asset

value,

end

of

period

..........

$31.57

$29.22

$27.08

$25.11

$28.54

$24.98

Total

return

c

.......................

12.64%

15.85%

29.16%

(5.16)%

20.40%

15.93%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.98%

1.00%

0.98%

0.97%

0.97%

0.98%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.98%

f

1.00%

f

0.98%

f

0.97%

f

0.97%

f

0.97%

Net

investment

income

...............

0.60%

0.85%

0.99%

1.03%

1.14%

1.32%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$62,764

$51,137

$46,539

$32,825

$36,407

$28,579

Portfolio

turnover

rate

................

2.37

%

12.83%

7.26%

g

3.09%

g

3.36%

6.66%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Rising

Dividends

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FRD-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

99.0%

Aerospace

&

Defense

3.6%

General

Dynamics

Corp.

................................

United

States

107,552

$

20,247,740

Raytheon

Technologies

Corp.

............................

United

States

482,246

41,140,406

61,388,146

Air

Freight

&

Logistics

2.2%

United

Parcel

Service,

Inc.,

B

............................

United

States

175,317

36,460,677

Banks

1.3%

JPMorgan

Chase

&

Co.

.................................

United

States

139,325

21,670,611

Beverages

1.5%

PepsiCo,

Inc.

........................................

United

States

174,630

25,874,927

Biotechnology

1.0%

AbbVie,

Inc.

.........................................

United

States

148,936

16,776,151

Building

Products

1.9%

Johnson

Controls

International

plc

.........................

United

States

457,510

31,398,911

Capital

Markets

1.1%

Nasdaq,

Inc.

.........................................

United

States

111,200

19,548,960

Chemicals

10.1%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

164,767

47,400,170

Albemarle

Corp.

......................................

United

States

223,310

37,618,803

Ecolab,

Inc.

..........................................

United

States

118,809

24,471,090

Linde

plc

............................................

United

Kingdom

189,532

54,793,701

Sherwin-Williams

Co.

(The)

..............................

United

States

21,500

5,857,675

170,141,439

Commercial

Services

&

Supplies

1.8%

Cintas

Corp.

.........................................

United

States

78,572

30,014,504

Electrical

Equipment

0.6%

nVent

Electric

plc

.....................................

United

States

324,926

10,150,688

Food

&

Staples

Retailing

1.4%

Walmart,

Inc.

........................................

United

States

167,208

23,579,672

Food

Products

1.3%

McCormick

&

Co.,

Inc.

.................................

United

States

243,994

21,549,550

Health

Care

Equipment

&

Supplies

13.6%

Abbott

Laboratories

....................................

United

States

296,495

34,372,665

Becton

Dickinson

and

Co.

...............................

United

States

156,815

38,135,840

Medtronic

plc

........................................

United

States

363,354

45,103,132

Stryker

Corp.

........................................

United

States

237,045

61,567,698

West

Pharmaceutical

Services,

Inc.

........................

United

States

140,101

50,310,269

229,489,604

Health

Care

Providers

&

Services

2.5%

CVS

Health

Corp.

.....................................

United

States

87,493

7,300,416

UnitedHealth

Group,

Inc.

................................

United

States

88,200

35,318,808

42,619,224

Hotels,

Restaurants

&

Leisure

1.7%

McDonald's

Corp.

.....................................

United

States

124,199

28,688,727

Household

Products

2.7%

Colgate-Palmolive

Co.

.................................

United

States

236,040

19,201,854

Procter

&

Gamble

Co.

(The)

.............................

United

States

190,694

25,730,341

44,932,195

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Rising

Dividends

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Industrial

Conglomerates

8.2%

Carlisle

Cos.,

Inc.

.....................................

United

States

73,902

$

14,143,365

Honeywell

International,

Inc.

.............................

United

States

200,475

43,974,191

Roper

Technologies,

Inc.

................................

United

States

170,383

80,114,087

138,231,643

Insurance

0.7%

Erie

Indemnity

Co.,

A

...................................

United

States

61,070

11,807,885

IT

Services

6.4%

Accenture

plc,

A

......................................

United

States

224,978

66,321,265

Visa,

Inc.,

A

..........................................

United

States

178,862

41,821,513

108,142,778

Machinery

3.4%

Donaldson

Co.,

Inc.

...................................

United

States

176,597

11,219,207

Dover

Corp.

.........................................

United

States

179,888

27,091,133

Pentair

plc

..........................................

United

States

284,394

19,193,751

57,504,091

Multiline

Retail

2.9%

Target

Corp.

.........................................

United

States

206,237

49,855,732

Oil,

Gas

&

Consumable

Fuels

2.0%

Chevron

Corp.

.......................................

United

States

146,094

15,301,885

EOG

Resources,

Inc.

..................................

United

States

116,661

9,734,194

Exxon

Mobil

Corp.

.....................................

United

States

141,761

8,942,284

33,978,363

Pharmaceuticals

2.5%

Johnson

&

Johnson

...................................

United

States

185,029

30,481,678

Pfizer,

Inc.

...........................................

United

States

323,015

12,649,267

43,130,945

Road

&

Rail

1.4%

Norfolk

Southern

Corp.

.................................

United

States

86,547

22,970,439

Semiconductors

&

Semiconductor

Equipment

6.9%

Analog

Devices,

Inc.

...................................

United

States

332,219

57,194,823

Texas

Instruments,

Inc.

.................................

United

States

307,768

59,183,787

116,378,610

Software

8.9%

Microsoft

Corp.

.......................................

United

States

554,628

150,248,725

Specialty

Retail

3.9%

Lowe's

Cos.,

Inc.

......................................

United

States

186,200

36,117,214

Ross

Stores,

Inc.

.....................................

United

States

234,930

29,131,320

65,248,534

Textiles,

Apparel

&

Luxury

Goods

2.5%

NIKE,

Inc.,

B

.........................................

United

States

273,884

42,312,339

Trading

Companies

&

Distributors

1.0%

WW

Grainger,

Inc.

.....................................

United

States

37,193

16,290,534

Total

Common

Stocks

(Cost

$603,002,618)

.....................................

1,670,384,604

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Rising

Dividends

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FRD-11

Short

Term

Investments

0.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.9%

a,b

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

15,489,195

$

15,489,195

Total

Money

Market

Funds

(Cost

$15,489,195)

..................................

15,489,195

Total

Short

Term

Investments

(Cost

$15,489,195

)

................................

15,489,195

a

Total

Investments

(Co

st

$618,491,813)

99.9%

...................................

$1,685,873,799

Other

Assets,

less

Liabilities

0.1%

.............................................

2,090,166

Net

Assets

100.0%

...........................................................

$1,687,963,965

a

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

b

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-12

Franklin

Rising

Dividends

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$603,002,618

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

15,489,195

Value

-

Unaffiliated

issuers

..................................................................

$1,670,384,604

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

15,489,195

Receivables:

Investment

securities

sold

...................................................................

3,900,018

Capital

shares

sold

........................................................................

200,859

Dividends

...............................................................................

972,457

Total

assets

..........................................................................

1,690,947,133

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

1,703,476

Management

fees

.........................................................................

839,219

Distribution

fees

..........................................................................

314,454

Accrued

expenses

and

other

liabilities

...........................................................

126,019

Total

liabilities

.........................................................................

2,983,168

Net

assets,

at

value

.................................................................

$1,687,963,965

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$571,571,929

Total

distributable

earnings

(losses)

.............................................................

1,116,392,036

Net

assets,

at

value

.................................................................

$1,687,963,965

Franklin

Rising

Dividends

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$167,061,568

Shares

outstanding

........................................................................

5,120,127

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$32.63

Class

2:

Net

assets,

at

value

.......................................................................

$1,458,138,652

Shares

outstanding

........................................................................

46,301,363

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$31.49

Class

4:

Net

assets,

at

value

.......................................................................

$62,763,745

Shares

outstanding

........................................................................

1,987,803

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$31.57

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

intergral

part

of

these

financial

statments.

Semiannual

Report

FRD-13

Franklin

Rising

Dividends

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$12,628,337

Non-controlled

affiliates

(Note

3e)

.............................................................

560

Total

investment

income

...................................................................

12,628,897

Expenses:

Management

fees

(Note

3a)

...................................................................

4,938,796

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

1,735,614

    Class

4

................................................................................

99,161

Custodian

fees

(Note

4)

......................................................................

4,119

Reports

to

shareholders

......................................................................

73,778

Professional

fees

...........................................................................

27,411

Trustees'

fees

and

expenses

..................................................................

4,616

Other

....................................................................................

12,888

Total

expenses

.........................................................................

6,896,383

Expense

reductions

(Note

4)

...............................................................

(7)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(6,853)

Net

expenses

.........................................................................

6,889,523

Net

investment

income

................................................................

5,739,374

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

47,034,664

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

141,936,187

Net

realized

and

unrealized

gain

(loss)

............................................................

188,970,851

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$194,710,225

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-14

Franklin

Rising

Dividends

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$5,739,374

$13,661,769

Net

realized

gain

(loss)

.................................................

47,034,664

54,763,744

Net

change

in

unrealized

appreciation

(depreciation)

...........................

141,936,187

120,578,165

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

194,710,225

189,003,678

Distributions

to

shareholders:

Class

1

.............................................................

(6,930,364)

(9,363,148)

Class

2

.............................................................

(59,905,574)

(76,921,977)

Class

4

.............................................................

(2,534,485)

(2,888,656)

Total

distributions

to

shareholders

..........................................

(69,370,423)

(89,173,781)

Capital

share

transactions:

(Note

2)

Class

1

.............................................................

(1,959,154)

(6,915,276)

Class

2

.............................................................

(16,137,007)

(105,113,819)

Class

4

.............................................................

7,253,878

574,344

Total

capital

share

transactions

............................................

(10,842,283)

(111,454,751)

Net

increase

(decrease)

in

net

assets

...................................

114,497,519

(11,624,854)

Net

assets:

Beginning

of

period

.....................................................

1,573,466,446

1,585,091,300

End

of

period

..........................................................

$1,687,963,965

$1,573,466,446

Franklin

Templeton

Variable

Insurance

Products

Trust

FRD-15

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Franklin

Rising

Dividends

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

 Franklin

Templeton

Variable

Insurance

Products

Trust

(Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Rising

Dividends

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund’s

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m

Eastern

time. 

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the Fund

for

financial

reporting

purposes.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FRD-16

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

 financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FRD-17

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

e.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

f.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote

.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

107,877

$3,450,187

144,545

$3,628,818

Shares

issued

in

reinvestment

of

distributions

..........

215,162

6,930,364

386,747

9,363,148

Shares

redeemed

...............................

(392,186)

(12,339,705)

(749,651)

(19,907,242)

Net

increase

(decrease)

..........................

(69,147)

$(1,959,154)

(218,359)

$(6,915,276)

Class

2

Shares:

Shares

sold

...................................

835,578

$25,743,755

6,981,462

$173,231,502

Shares

issued

in

reinvestment

of

distributions

..........

1,926,843

59,905,574

3,284,457

76,921,977

Shares

redeemed

...............................

(3,325,555)

(101,786,336)

(14,809,098)

(355,267,298)

Net

increase

(decrease)

..........................

(563,134)

$(16,137,007)

(4,543,179)

$(105,113,819)

Class

4

Shares:

Shares

sold

...................................

244,179

$7,399,528

261,260

$6,613,767

Shares

issued

in

reinvestment

of

distributions

..........

81,312

2,534,485

122,974

2,888,656

Shares

redeemed

...............................

(87,868)

(2,680,135)

(352,750)

(8,928,079)

Net

increase

(decrease)

..........................

237,623

$7,253,878

31,484

$574,344

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FRD-18

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.615%

of

the

Fund’s

average

daily

net

assets.

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FRD-19

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

2021,

aggregated

$37,823,401

and

$111,814,984,

respectively.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Rising

Dividends

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$18,135,871

$66,959,443

$(69,606,119)

$—

$—

$15,489,195

15,489,195

$560

Total

Affiliated

Securities

....

$18,135,871

$66,959,443

$(69,606,119)

$—

$—

$15,489,195

$560

Cost

of

investments

..........................................................................

$621,107,381

Unrealized

appreciation

........................................................................

$1,071,375,940

Unrealized

depreciation

........................................................................

(6,609,522)

Net

unrealized

appreciation

(depreciation)

..........................................................

$1,064,766,418

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FRD-20

Semiannual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

9.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

At

June

30,

2021,

all

of

the

Fund’s

investments

in

financial

instruments

carried

at

fair

value

were

valued

using

Level

1

inputs.

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

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.

FSV-1

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

This

semiannual

report

for

Franklin

Small

Cap

Value

VIP

Fund

covers

the

period

ended

June

30,

2021

.

The

Fund

closed

to

new

insurance

company

subaccounts

on

June

20,

2021.

Existing

insurance

company

subaccounts

who

had

an

open

and

funded

account

on

June

20,

2021,

can

continue

to

make

additional

purchases.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Clas

s

1

Shares

posted

a

+20.35%

total

return

for

the

six-month

period

ended

June

30,

2021.

Performance

reflects

the

Fund’s

Class

1

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.

FSV-2

Semiannual

Report

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).

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

investments

in

smaller

company

stocks

carry

special

risks

as

such

stocks

have

historically

exhibited

greater

price

volatility

than

large-company

stocks,

particularly

over

the

short

term.

Additionally,

smaller

companies

often

have

relatively

small

revenues,

limited

product

lines

and

a

small

market

share.

Value

securities

may

not

increase

in

price

as

anticipated,

or

may

decline

further

in

value.

In

addition,

the

Fund

may

invest

up

to

25%

of

its

total

assets

in

foreign

securities,

which

involve

special

risks,

including

currency

fluctuations

and

economic

and

political

uncertainty.

The

Fund

also

may

invest

in

equity

real

estate

investment

trusts

(REITs).

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

In

comparison,

the

Russell

2000

®

Value

Index

posted

a

+26.69%

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.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-pandemic

levels,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

bolstered

growth.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

5.9%

in

June

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Machinery

14.1%

Insurance

11.2%

Banks

10.7%

Chemicals

8.8%

Hotels,

Restaurants

&

Leisure

6.7%

Oil,

Gas

&

Consumable

Fuels

4.9%

Specialty

Retail

4.0%

Building

Products

3.8%

Construction

&

Engineering

3.4%

Software

3.3%

Construction

Materials

2.9%

Health

Care

Equipment

&

Supplies

2.9%

Electronic

Equipment,

Instruments

&

Components

2.8%

Communications

Equipment

2.1%

Other*

17.4%

Short-Term

Investments

&

Other

Net

Assets

1.0%

Franklin

Small

Cap

Value

VIP

Fund

FSV-3

Semiannual

Report

2021

as

job

openings

grew,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

2

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

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

REITs.

Manager’s

Discussion

For

the

six-month

period

ending

June

30,

2021,

the

utilities,

real

estate

and

consumer

staples

sectors

contributed

to

relative

returns.

An

underweighting

in

the

utilities

sector

was

a

leading

contributor

to

relative

performance.

Stock

selection

within

real

estate

was

also

accretive,

as

was

an

underweighted

position

in

and

stock

selection

within

the

consumer

staples

sector.

Conversely,

the

consumer

discretionary,

communication

services

and

industrials

sectors

detracted

from

relative

results.

Stock

selection

within

the

consumer

discretionary

sector

was

a

major

detractor

from

relative

returns.

An

underweighted

exposure

to

the

communication

services

sector

also

weighed

on

performance.

Within

industrials,

our

stock

selection

and

an

overweighted

position

in

the

sector

detracted.

Holdings

that

contributed

to

absolute

Fund

performance

during

the

period

included

Crescent

Point

Energy,

First

Horizon

and

Old

Republic

International.

Crescent

Point

Energy,

a

Canada-based

exploration

and

production

company,

was

a

leading

contributor

to

returns

during

the

period.

The

stock

rose

along

with

the

price

of

oil

due

to

an

anticipated

increase

in

oil

demand

as

the

global

economy

emerged

from

novel

coronavirus

(COVID-19)

lockdowns,

supply

reductions

from

the

Organization

of

the

Petroleum

Exporting

Countries

and

the

company’s

ability

to

generate

positive

free

cash

flow.

In

addition,

the

market

reacted

favorably

to

an

announcement

in

February

2021

that

Crescent

Point

was

acquiring

certain

Canadian

assets

from

Royal

Dutch

Shell

(not

a

Fund

holding)

for

approximately

$900

million.

Shares

of

First

Horizon,

a

regional

bank

with

a

southeastern

U.S.

footprint,

rose

during

the

period

as

economic

indicators

improved

and

the

yield

curve

steepened,

resulting

in

an

improved

profitability

forecast

for

the

commercial

banking

industry.

With

improving

economic

activity

levels,

First

Horizon’s

asset

quality

results

improved,

resulting

in

a

lower

credit

loss

outlook.

Additionally,

First

Horizon

is

positioned

to

be

a

net

beneficiary

of

higher

interest

rates

which

could

drive

higher

spread-based

income.

Shares

of

Old

Republic,

a

multi-line

property

and

casualty

insurer,

rose

during

the

period

following

the

publication

of

an

activist

letter

calling

for

a

strategic

review

of

alternatives

for

its

title

segment

which

was

followed

by

the

company

reporting

higher

than

expected

first

quarter

2021

results.

Both

general

insurance

and

title

segment

results

2.

Source:

Bureau

of

Labor

Statistics.

Top

10

Holdings

6/30/21

Company

Industry

%

of

Total

Net

Assets

a

aa

Crescent

Point

Energy

Corp.

3.4%

Oil,

Gas

&

Consumable

Fuels

Hanover

Insurance

Group,

Inc.

(The)

3.1%

Insurance

Summit

Materials,

Inc.

2.9%

Construction

Materials

Old

Republic

International

Corp.

2.6%

Insurance

Timken

Co.

(The)

2.6%

Machinery

Avient

Corp.

2.4%

Chemicals

Greenbrier

Cos.,

Inc.

(The)

2.3%

Machinery

Minerals

Technologies,

Inc.

2.3%

Chemicals

Ashland

Global

Holdings,

Inc.

2.2%

Chemicals

ACI

Worldwide,

Inc.

2.2%

Software

Franklin

Small

Cap

Value

VIP

Fund

FSV-4

Semiannual

Report

exceeded

investor

expectations

in

the

first

quarter

with

strong

underlying

trends

contributing

to

a

more

favorable

profitability

outlook.

Detractors

from

performance

included

Horace

Mann

Educators,

ACI

Worldwide

and

IDACORP.

Horace

Mann

Educators,

a

multi-line

insurer

focused

on

the

educator

market,

declined

during

the

period

as

remote

learning

remained

prevalent

in

many

markets.

Although

lower

claim

frequency

in

supplemental

and

personal

auto

lines

benefited

Horace

Mann’s

2021

profitability

outlook,

policy

sales

have

been

under

pressure

as

leads

are

often

generated

through

in-person

meetings.

Although

sales

activity

is

likely

to

remain

at

depressed

levels

in

the

near-term,

retention

has

remained

relatively

stable,

and

management

expects

a

return

to

more

normalized

sales

levels

by

the

end

of

2021.

Shares

of

ACI

Worldwide,

a

provider

of

software

products

and

solutions

that

facilitate

electronic

payments,

detracted

from

results

for

the

period.

The

company

anticipated

the

challenging

COVID-19

related

conditions

to

endure

through

the

first

half

of

2021,

which

led

to

a

softer

than

expected

guidance

for

the

second

quarter

of

2021.

Management

expects

revenue

growth

to

accelerate

to

mid-single

digits

in

the

second

half

of

2021

and

maintained

their

guidance

for

the

year.

Shares

of

IDACORP,

an

electric

utility

in

Idaho

and

eastern

Oregon,

underperformed

the

benchmark

during

the

period

as

interest

rates

rose.

With

rising

interest

rates,

shares

of

companies

with

higher

dividend

yields

are

typically

viewed

as

less

attractive

by

investors.

We

continue

to

view

IDACORP

as

a

well-managed,

regulated

utility

with

what

we

consider

an

attractive

growth

footprint.

Thank

you

for

your

participation

in

Franklin

Small

Cap

Value

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Small

Cap

Value

VIP

Fund

FSV-5

Semiannual

Report

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.

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

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,203.50

$3.57

$1,021.55

$3.28

0.65%

FSV-6

Semiannual

Report

Please

keep

this

supplement

with

your

prospectus

for

future

reference.

FSV

P1

P2

P4

05/21

SUPPLEMENT

DATED

MAY

21,

2021

TO

THE

PROSPECTUSES

DATED

MAY

1,

2021

FOR

FRANKLIN

SMALL

CAP

VALUE

VIP

FUND

(a

series

of

Franklin

Templeton

Variable

Insurance

Products

Trust)

The

prospectuses

are

amended

as

follows:

I.

The

following

paragraph

is

added

under

the

“Fund

Summaries

–

Franklin

Small

Cap

Value

VIP

Fund”

and

“Fund

Details

–

Franklin

Small

Cap

Value

VIP

Fund”

sections

of

the

prospectuses:

Effective

at

the

close

of

market

(1:00

p.m.

Pacific

time

or

the

close

of

the

New

York

Stock

Exchange,

whichever

is

earlier)

on

June

20,

2021,

the

Fund

will

be

closed

to

new

insurance

company

subaccounts.

Existing

insurance

company

subaccounts

that

have

open

accounts

on

June

20,

2021

may

continue

to

make

additional

purchases.

The

Fund

may

restrict,

reject

or

cancel

any

purchase

order

and

reserves

the

right

to

modify

this

policy

at

any

time.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small

Cap

Value

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSV-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

..........

$15.20

$15.73

$15.14

$20.43

$19.93

$18.12

Income

from

investment

operations

a

:

Net

investment

income

b

..................

0.10

0.20

0.24

c

0.21

0.21

d

0.15

Net

realized

and

unrealized

gains

(losses)

....

3.03

0.31

3.35

(2.29)

1.82

4.79

Total

from

investment

operations

.............

3.13

0.51

3.59

(2.08)

2.03

4.94

Less

distributions

from:

Net

investment

income

...................

(0.21)

(0.23)

(0.22)

(0.23)

(0.15)

(0.21)

Net

realized

gains

......................

(0.47)

(0.81)

(2.78)

(2.98)

(1.38)

(2.92)

Total

distributions

........................

(0.68)

(1.04)

(3.00)

(3.21)

(1.53)

(3.13)

Net

asset

value,

end

of

period

...............

$17.65

$15.20

$15.73

$15.14

$20.43

$19.93

Total

return

e

............................

20.35%

5.41%

26.72%

(12.69)%

10.92%

30.54%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

0.65%

0.68%

0.67%

0.66%

0.66%

0.66%

Expenses

net

of

waiver

and

payments

by

affiliates

0.65%

g

0.68%

g,h

0.67%

g,h

0.65%

h

0.65%

h

0.64%

h

Net

investment

income

....................

1.12%

1.54%

1.58%

c

1.13%

1.06%

d

0.84%

Supplemental

data

Net

assets,

end

of

period

(000’s)

.............

$72,143

$50,572

$46,980

$40,644

$51,245

$47,831

Portfolio

turnover

rate

.....................

29.43%

69.40%

54.36%

47.82%

33.36%

34.60%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.05

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.23%.

d

Net

investment

income

per

share

includes

approximately

$0.06

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.75%.

e

Total

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.

f

Ratios

are

annualized

for

periods

less

than

one

year.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.50

$15.05

$14.60

$19.80

$19.36

$17.68

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.08

0.16

0.20

c

0.16

0.15

d

0.10

Net

realized

and

unrealized

gains

(losses)

2.87

0.30

3.20

(2.20)

1.77

4.66

Total

from

investment

operations

........

2.95

0.46

3.40

(2.04)

1.92

4.76

Less

distributions

from:

Net

investment

income

..............

(0.17)

(0.19)

(0.17)

(0.18)

(0.10)

(0.16)

Net

realized

gains

.................

(0.47)

(0.82)

(2.78)

(2.98)

(1.38)

(2.92)

Total

distributions

...................

(0.64)

(1.01)

(2.95)

(3.16)

(1.48)

(3.08)

Net

asset

value,

end

of

period

..........

$16.81

$14.50

$15.05

$14.60

$19.80

$19.36

Total

return

e

.......................

20.15%

5.19%

26.35%

(12.88)%

10.65%

30.19%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.90%

0.93%

0.92%

0.91%

0.91%

0.91%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.90%

g

0.93%

g,h

0.92%

g,h

0.90%

h

0.90%

h

0.89%

h

Net

investment

income

...............

0.90%

1.28%

1.33%

c

0.88%

0.81%

d

0.59%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,253,904

$1,103,373

$1,123,093

$978,675

$1,302,055

$1,366,807

Portfolio

turnover

rate

................

29.43%

69.40%

54.36%

47.82%

33.36%

34.60%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.05

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.98%.

d

Net

investment

income

per

share

includes

approximately

$0.06

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.50%.

e

Total

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.

f

Ratios

are

annualized

for

periods

less

than

one

year.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSV-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.99

$15.51

$14.96

$20.22

$19.74

$17.96

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.07

0.15

0.19

c

0.15

0.14

d

0.09

Net

realized

and

unrealized

gains

(losses)

2.97

0.32

3.30

(2.28)

1.81

4.75

Total

from

investment

operations

........

3.04

0.47

3.49

(2.13)

1.95

4.84

Less

distributions

from:

Net

investment

income

..............

(0.16)

(0.18)

(0.16)

(0.15)

(0.09)

(0.14)

Net

realized

gains

.................

(0.47)

(0.81)

(2.78)

(2.98)

(1.38)

(2.92)

Total

distributions

...................

(0.63)

(0.99)

(2.94)

(3.13)

(1.47)

(3.06)

Net

asset

value,

end

of

period

..........

$17.40

$14.99

$15.51

$14.96

$20.22

$19.74

Total

return

e

.......................

20.07%

5.13%

26.23%

(13.01)%

10.56%

30.12%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.00%

1.03%

1.02%

1.01%

1.01%

1.01%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.00%

g

1.03%

g,h

1.02%

g,h

1.00%

h

1.00%

h

0.99%

h

Net

investment

income

...............

0.79%

1.18%

1.23%

c

0.78%

0.71%

d

0.49%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$34,186

$29,461

$29,238

$24,592

$32,053

$32,751

Portfolio

turnover

rate

................

29.43

%

69.40%

54.36%

47.82%

33.36%

34.60%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.05

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.88%.

d

Net

investment

income

per

share

includes

approximately

$0.06

per

share

related

to

income

received

in

the

form

of

special

dividends

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.40%.

e

Total

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.

f

Ratios

are

annualized

for

periods

less

than

one

year.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Small

Cap

Value

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

99.0%

Aerospace

&

Defense

1.7%

a

Meggitt

plc

..........................................

United

Kingdom

3,711,440

$

23,710,404

Auto

Components

0.7%

LCI

Industries

........................................

United

States

71,671

9,419,003

Automobiles

0.6%

Thor

Industries,

Inc.

...................................

United

States

71,754

8,108,202

Banks

10.7%

Atlantic

Union

Bankshares

Corp.

..........................

United

States

335,212

12,141,379

Bryn

Mawr

Bank

Corp.

.................................

United

States

316,201

13,340,520

Camden

National

Corp.

.................................

United

States

65,553

3,130,811

Columbia

Banking

System,

Inc.

...........................

United

States

455,366

17,558,913

First

Horizon

Corp.

....................................

United

States

1,660,169

28,687,720

First

of

Long

Island

Corp.

(The)

...........................

United

States

361,411

7,672,756

German

American

Bancorp,

Inc.

..........................

United

States

197,571

7,349,641

Glacier

Bancorp,

Inc.

...................................

United

States

60,096

3,310,088

Lakeland

Financial

Corp.

................................

United

States

130,439

8,040,260

Peoples

Bancorp,

Inc.

..................................

United

States

205,028

6,072,929

South

State

Corp.

.....................................

United

States

228,522

18,683,959

TriCo

Bancshares

.....................................

United

States

193,311

8,231,182

Washington

Trust

Bancorp,

Inc.

...........................

United

States

224,451

11,525,559

145,745,717

Building

Products

3.8%

Apogee

Enterprises,

Inc.

................................

United

States

407,815

16,610,305

Insteel

Industries,

Inc.

..................................

United

States

313,210

10,069,701

a

Masonite

International

Corp.

.............................

United

States

20,620

2,305,110

UFP

Industries,

Inc.

....................................

United

States

299,520

22,266,317

51,251,433

Chemicals

8.8%

Ashland

Global

Holdings,

Inc.

............................

United

States

342,017

29,926,487

Avient

Corp.

.........................................

United

States

664,629

32,673,162

Cabot

Corp.

.........................................

United

States

268,324

15,275,685

a

Elementis

plc

........................................

United

Kingdom

4,817,705

10,043,873

Minerals

Technologies,

Inc.

..............................

United

States

400,489

31,506,470

119,425,677

Communications

Equipment

2.1%

a

NetScout

Systems,

Inc.

.................................

United

States

978,746

27,933,411

Construction

&

Engineering

3.4%

Argan

,

Inc.

..........................................

United

States

193,069

9,226,767

a

Great

Lakes

Dredge

&

Dock

Corp.

........................

United

States

885,541

12,937,754

a

WillScot

Mobile

Mini

Holdings

Corp.

.......................

United

States

859,011

23,940,637

46,105,158

Construction

Materials

2.9%

a

Summit

Materials,

Inc.,

A

................................

United

States

1,146,544

39,957,058

Electric

Utilities

0.7%

IDACORP,

Inc.

.......................................

United

States

98,964

9,648,990

Electrical

Equipment

0.7%

Regal

Beloit

Corp.

.....................................

United

States

75,428

10,070,392

Electronic

Equipment,

Instruments

&

Components

2.8%

Benchmark

Electronics,

Inc.

.............................

United

States

594,860

16,929,715

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSV-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Electronic

Equipment,

Instruments

&

Components

(continued)

a

Knowles

Corp.

.......................................

United

States

1,066,928

$

21,061,159

37,990,874

Energy

Equipment

&

Services

1.8%

Hunting

plc

..........................................

United

Kingdom

1,395,634

4,269,656

a

Natural

Gas

Services

Group,

Inc.

.........................

United

States

173,987

1,788,586

a

NexTier

Oilfield

Solutions,

Inc.

............................

United

States

890,440

4,238,495

a

TechnipFMC

plc

......................................

United

Kingdom

1,483,315

13,424,001

23,720,738

Equity

Real

Estate

Investment

Trusts

(REITs)

0.8%

Alexander

&

Baldwin,

Inc.

...............................

United

States

7,750

141,980

Healthcare

Realty

Trust,

Inc.

.............................

United

States

146,090

4,411,918

Highwoods

Properties,

Inc.

..............................

United

States

90,459

4,086,033

a

Sunstone

Hotel

Investors,

Inc.

............................

United

States

172,690

2,144,810

10,784,741

Food

&

Staples

Retailing

0.1%

a

BJ's

Wholesale

Club

Holdings,

Inc.

........................

United

States

20,543

977,436

Food

Products

1.8%

Glanbia

plc

..........................................

Ireland

1,533,544

24,978,545

Gas

Utilities

0.2%

Spire,

Inc.

...........................................

United

States

30,218

2,183,855

Health

Care

Equipment

&

Supplies

2.9%

a

Envista

Holdings

Corp.

.................................

United

States

435,276

18,808,276

a

Integer

Holdings

Corp.

.................................

United

States

218,344

20,568,005

39,376,281

Hotels,

Restaurants

&

Leisure

6.7%

a

Dalata

Hotel

Group

plc

.................................

Ireland

2,082,520

9,491,152

a

Denny's

Corp.

........................................

United

States

1,520,103

25,066,498

a

Hilton

Grand

Vacations,

Inc.

.............................

United

States

660,632

27,343,559

Jack

in

the

Box,

Inc.

...................................

United

States

259,775

28,949,326

90,850,535

Household

Durables

0.2%

a

M/I

Homes,

Inc.

.......................................

United

States

54,909

3,221,511

Insurance

11.2%

CNO

Financial

Group,

Inc.

..............................

United

States

1,068,442

25,236,600

Hanover

Insurance

Group,

Inc.

(The)

.......................

United

States

310,675

42,139,957

Horace

Mann

Educators

Corp.

...........................

United

States

693,652

25,956,458

Old

Republic

International

Corp.

..........................

United

States

1,415,825

35,268,201

Selective

Insurance

Group,

Inc.

...........................

United

States

297,517

24,143,504

152,744,720

Leisure

Products

1.9%

BRP,

Inc.

............................................

United

States

61,123

4,782,360

Brunswick

Corp.

......................................

United

States

215,421

21,460,240

26,242,600

Machinery

14.1%

Astec

Industries,

Inc.

...................................

United

States

186,512

11,739,065

Columbus

McKinnon

Corp.

..............................

United

States

260,316

12,557,644

Flowserve

Corp.

......................................

United

States

21,623

871,839

Greenbrier

Cos.,

Inc.

(The)

..............................

United

States

723,275

31,520,324

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Machinery

(continued)

Hillenbrand,

Inc.

......................................

United

States

377,408

$

16,636,145

Mueller

Industries,

Inc.

.................................

United

States

233,931

10,131,552

Mueller

Water

Products,

Inc.,

A

...........................

United

States

1,469,069

21,183,975

Oshkosh

Corp.

.......................................

United

States

215,435

26,851,818

REV

Group,

Inc.

......................................

United

States

164,897

2,587,234

Rexnord

Corp.

.......................................

United

States

444,449

22,240,228

Timken

Co.

(The)

.....................................

United

States

436,447

35,173,264

191,493,088

Metals

&

Mining

0.5%

Kaiser

Aluminum

Corp.

.................................

United

States

52,094

6,433,088

Multi-Utilities

1.7%

Black

Hills

Corp.

......................................

United

States

352,721

23,149,079

Oil,

Gas

&

Consumable

Fuels

4.9%

Crescent

Point

Energy

Corp.

.............................

Canada

10,313,887

46,671,431

a

Green

Plains,

Inc.

.....................................

United

States

607,312

20,417,829

67,089,260

Professional

Services

1.3%

a,b

Intertrust

NV,

144A,

Reg

S

..............................

Netherlands

100,535

1,811,675

Kforce

,

Inc.

..........................................

United

States

150,858

9,493,494

Stantec

,

Inc.

.........................................

Canada

145,861

6,507,419

17,812,588

Software

3.3%

a

ACI

Worldwide,

Inc.

....................................

United

States

801,416

29,764,590

Software

AG

.........................................

Germany

329,486

14,824,067

44,588,657

Specialty

Retail

4.0%

a

Bed

Bath

&

Beyond,

Inc.

................................

United

States

364,473

12,133,306

a

Children's

Place,

Inc.

(The)

..............................

United

States

30,648

2,852,103

a

Dufry

AG

............................................

Switzerland

333,158

19,769,025

Group

1

Automotive,

Inc.

................................

United

States

126,100

19,473,623

54,228,057

Textiles,

Apparel

&

Luxury

Goods

0.5%

Carter's,

Inc.

.........................................

United

States

65,579

6,765,786

Thrifts

&

Mortgage

Finance

0.4%

TrustCo

Bank

Corp.

...................................

United

States

156,540

5,381,845

Trading

Companies

&

Distributors

1.8%

a

Herc

Holdings,

Inc.

....................................

United

States

26,241

2,940,829

McGrath

RentCorp

....................................

United

States

271,297

22,129,696

25,070,525

Total

Common

Stocks

(Cost

$1,003,335,112)

....................................

1,346,459,254

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSV-13

Short

Term

Investments

1.2%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.2%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

15,840,318

$

15,840,318

Total

Money

Market

Funds

(Cost

$15,840,318)

..................................

15,840,318

Total

Short

Term

Investments

(Cost

$15,840,318

)

................................

15,840,318

a

Total

Investments

(Cost

$1,019,175,430)

100.2%

................................

$1,362,299,572

Other

Assets,

less

Liabilities

(0.2)%

...........................................

(2,065,995)

Net

Assets

100.0%

...........................................................

$1,360,233,577

a

Non

-income

producing.

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

value

of

this

security

was

$1,811,675,

representing

0.1%

of

net

assets.

c

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

d

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-14

Franklin

Small

Cap

Value

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$1,003,335,112

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

15,840,318

Value

-

Unaffiliated

issuers

..................................................................

$1,346,459,254

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

15,840,318

Receivables:

Investment

securities

sold

...................................................................

509,012

Capital

shares

sold

........................................................................

643,584

Dividends

...............................................................................

835,749

Total

assets

..........................................................................

1,364,287,917

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

1,381,637

Capital

shares

redeemed

...................................................................

1,434,170

Management

fees

.........................................................................

713,298

Distribution

fees

..........................................................................

274,522

Reports

to

shareholders

....................................................................

230,262

Accrued

expenses

and

other

liabilities

...........................................................

20,451

Total

liabilities

.........................................................................

4,054,340

Net

assets,

at

value

.................................................................

$1,360,233,577

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$917,819,742

Total

distributable

earnings

(losses)

.............................................................

442,413,835

Net

assets,

at

value

.................................................................

$1,360,233,577

Franklin

Small

Cap

Value

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$72,143,406

Shares

outstanding

........................................................................

4,087,651

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.65

Class

2:

Net

assets,

at

value

.......................................................................

$1,253,903,685

Shares

outstanding

........................................................................

74,572,510

Net

asset

value

and

maximum

offer

ing

price

per

share

.............................................

$16.81

Class

4:

Net

assets,

at

value

.......................................................................

$34,186,486

Shares

outstanding

........................................................................

1,964,311

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.40

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSV-15

Franklin

Small

Cap

Value

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$51,855)

Unaffiliated

issuers

........................................................................

$11,995,969

Non-controlled

affiliates

(Note

3e)

.............................................................

562

Interest:

Unaffiliated

issuers

........................................................................

2,378

Total

investment

income

...................................................................

11,998,909

Expenses:

Management

fees

(Note

3

a

)

...................................................................

4,189,270

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,547,230

    Class

4

................................................................................

58,611

Custodian

fees

(Note

4

)

......................................................................

3,854

Reports

to

shareholders

......................................................................

136,545

Professional

fees

...........................................................................

29,499

Trustees'

fees

and

expenses

..................................................................

3,410

Other

....................................................................................

13,450

Total

expenses

.........................................................................

5,981,869

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(6,926)

Net

expenses

.........................................................................

5,974,943

Net

investment

income

................................................................

6,023,966

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

98,766,940

Foreign

currency

transactions

................................................................

32,786

Net

realized

gain

(loss)

..................................................................

98,799,726

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

129,311,041

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(8,652)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

129,302,389

Net

realized

and

unrealized

gain

(loss)

............................................................

228,102,115

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$234,126,081

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-16

Franklin

Small

Cap

Value

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$6,023,966

$12,966,525

Net

realized

gain

(loss)

.................................................

98,799,726

35,583,469

Net

change

in

unrealized

appreciation

(depreciation)

...........................

129,302,389

9,897,496

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

234,126,081

58,447,490

Distributions

to

shareholders:

Class

1

.............................................................

(2,642,045)

(3,163,057)

Class

2

.............................................................

(45,737,885)

(74,826,606)

Class

4

.............................................................

(1,174,804)

(1,993,248)

Total

distributions

to

shareholders

..........................................

(49,554,734)

(79,982,911)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

13,992,954

3,879,512

Class

2

.............................................................

(21,770,743)

1,523,597

Class

4

.............................................................

34,098

226,802

Total

capital

share

transactions

............................................

(7,743,691)

5,629,911

Net

increase

(decrease)

in

net

assets

...................................

176,827,656

(15,905,510)

Net

assets:

Beginning

of

period

.....................................................

1,183,405,921

1,199,311,431

End

of

period

..........................................................

$1,360,233,577

$1,183,405,921

Franklin

Templeton

Variable

Insurance

Products

Trust

FSV-17

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Franklin

Small

Cap

Value

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

 Franklin

Templeton

Variable

Insurance

Products

Trust

(Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Small

Cap

Value

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time. In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-18

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-19

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

e.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

f.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote

.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

891,179

$16,288,463

455,233

$5,805,187

Shares

issued

in

reinvestment

of

distributions

..........

136,633

2,503,125

275,768

3,163,057

Shares

redeemed

...............................

(266,271)

(4,798,634)

(392,293)

(5,088,732)

Net

increase

(decrease)

..........................

761,541

$13,992,954

338,708

$3,879,512

Class

2

Shares:

Shares

sold

...................................

4,998,394

$86,115,776

9,825,906

$112,925,732

Shares

issued

in

reinvestment

of

distributions

..........

2,619,581

45,737,885

6,827,245

74,826,606

Shares

redeemed

...............................

(9,128,116)

(153,624,404)

(15,190,634)

(186,228,741)

Net

increase

(decrease)

..........................

(1,510,141)

$(21,770,743)

1,462,517

$1,523,597

Class

4

Shares:

Shares

sold

...................................

302,123

$5,285,789

422,087

$4,787,696

Shares

issued

in

reinvestment

of

distributions

..........

65,014

1,174,804

175,927

1,993,248

Shares

redeemed

...............................

(368,376)

(6,426,495)

(517,251)

(6,554,142)

Net

increase

(decrease)

..........................

(1,239)

$34,098

80,763

$226,802

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-20

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.627%

of

the

Fund’s

average

daily

net

assets.

b.

Administrative

Fees

Under

an

agreement

with

Franklin

Mutual,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Franklin

Mutual

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

asset

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

Subsidiary

Affiliation

Franklin

Mutual

Advisers,

LLC

(Franklin

Mutual)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-21

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

2021,

aggregated

$382,221,553

and

$429,970,791,

respectively.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19,

has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general,

and

may

continue

for

an

unpredictable

duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Fund, its

ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its

ability

to

achieve its

investment

objectives.

a

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

a

a

a

a

a

a

a

a

a

Franklin

Small

Cap

Value

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$21,360,711

$162,986,662

$(168,507,055)

$

—

$

—

$

15,840,318

15,840,318

$

562

Total

Affiliated

Securities

....

$21,360,711

$162,986,662

$(168,507,055)

$—

$—

$15,840,318

$562

Cost

of

investments

..........................................................................

$1,023,368,448

Unrealized

appreciation

........................................................................

$353,237,040

Unrealized

depreciation

........................................................................

(14,305,916)

Net

unrealized

appreciation

(depreciation)

..........................................................

$338,931,124

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-22

Semiannual

Report

Franklin

Small

Cap

Value

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

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

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.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Small

Cap

Value

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

23,710,404

$

—

$

23,710,404

Auto

Components

......................

9,419,003

—

—

9,419,003

Automobiles

..........................

8,108,202

—

—

8,108,202

Banks

...............................

145,745,717

—

—

145,745,717

Building

Products

......................

51,251,433

—

—

51,251,433

Chemicals

...........................

119,425,677

—

—

119,425,677

Communications

Equipment

..............

27,933,411

—

—

27,933,411

Construction

&

Engineering

...............

46,105,158

—

—

46,105,158

Construction

Materials

..................

39,957,058

—

—

39,957,058

Electric

Utilities

........................

9,648,990

—

—

9,648,990

Electrical

Equipment

....................

10,070,392

—

—

10,070,392

Electronic

Equipment,

Instruments

&

Components

........................

37,990,874

—

—

37,990,874

Energy

Equipment

&

Services

.............

19,451,082

4,269,656

—

23,720,738

Equity

Real

Estate

Investment

Trusts

(REITs)

.

10,784,741

—

—

10,784,741

Food

&

Staples

Retailing

.................

977,436

—

—

977,436

Food

Products

........................

—

24,978,545

—

24,978,545

Gas

Utilities

..........................

2,183,855

—

—

2,183,855

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSV-23

Semiannual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

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.

Level

1

Level

2

Level

3

Total

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Health

Care

Equipment

&

Supplies

.........

$

39,376,281

$

—

$

—

$

39,376,281

Hotels,

Restaurants

&

Leisure

.............

81,359,383

9,491,152

—

90,850,535

Household

Durables

....................

3,221,511

—

—

3,221,511

Insurance

............................

152,744,720

—

—

152,744,720

Leisure

Products

.......................

26,242,600

—

—

26,242,600

Machinery

............................

191,493,088

—

—

191,493,088

Metals

&

Mining

.......................

6,433,088

—

—

6,433,088

Multi-Utilities

..........................

23,149,079

—

—

23,149,079

Oil,

Gas

&

Consumable

Fuels

.............

67,089,260

—

—

67,089,260

Professional

Services

...................

16,000,913

1,811,675

—

17,812,588

Software

.............................

29,764,590

14,824,067

—

44,588,657

Specialty

Retail

........................

34,459,032

19,769,025

—

54,228,057

Textiles,

Apparel

&

Luxury

Goods

..........

6,765,786

—

—

6,765,786

Thrifts

&

Mortgage

Finance

...............

5,381,845

—

—

5,381,845

Trading

Companies

&

Distributors

..........

25,070,525

—

—

25,070,525

Short

Term

Investments

...................

15,840,318

—

—

15,840,318

Total

Investments

in

Securities

...........

$1,263,445,048

$98,854,524

a

$—

$1,362,299,572

a

Includes

foreign

securities

valued

at

$98,854,524,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

9.

Fair

Value

Measurements

(continued)

FSC-1

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

This

semi

annual

report

for

Franklin

Small-Mid

Cap

Growth

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+10.42

%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

4/30/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

FSC-2

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

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

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

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

+10.44%

total

return,

and

its

broad

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

)

posted

a

+15.25

total

return

for

the

same

period.

2

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund's

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+15.25%

total

return

for

the

six

months

ended

June

30,

2021.

2

Stocks

benefited

from

the

continued

economic

recovery,

accommodative

monetary

policy,

additional

fiscal

stimulus

measures,

implementation

of

novel

coronavirus

(COVID-19)

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

The

progress

toward

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

aiding

equities

to

reach

new

all-time

price

highs

toward

period-end.

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-pandemic

levels,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

bolstered

growth.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

5.9%

in

June

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Software

20.0%

IT

Services

7.6%

Health

Care

Equipment

&

Supplies

6.7%

Semiconductors

&

Semiconductor

Equipment

5.9%

Professional

Services

5.4%

Capital

Markets

5.1%

Specialty

Retail

4.9%

Life

Sciences

Tools

&

Services

4.4%

Biotechnology

3.5%

Hotels,

Restaurants

&

Leisure

3.3%

Entertainment

2.9%

Interactive

Media

&

Services

2.5%

Textiles,

Apparel

&

Luxury

Goods

2.5%

Health

Care

Technology

2.4%

Other*

18.8%

Short-Term

Investments

&

Other

Net

Assets

4.1%

1.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

2.

Source:

Morningstar.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-3

Semiannual

Report

2021

as

job

openings

grew,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

3

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

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,

the

Fund

benefited

from

stock

selection

and

an

overweighting

in

the

consumer

discretionary

sector.

Stock

selection

in

the

information

technology

(IT),

communication

services

and

financials

sectors

also

supported

relative

performance.

In

consumer

discretionary,

a

leading

contributor

was

vertically

integrated

e-commerce

health

care

apparel

company

Figs

(not

part

of

the

index),

which

went

public

in

May

2021.

Our

participation

in

the

company’s

initial

public

offering

(IPO)

was

rewarded

by

the

stock’s

rally

following

its

debut.

The

IT

sector

benefited

from

a

position

in

Marqeta

(not

part

of

the

index),

which

also

had

a

fruitful

IPO

during

the

period.

Marqeta

is

a

payment

platform

that

allows

businesses

to

create

customized

credit

cards

that

provide

innovative

payment

experiences

for

end

users.

Elsewhere,

health

care

companies

GW

Pharmaceuticals

(not

part

of

the

index;

not

held

at

period-end),

Penumbra

and

Bio-Techne

contributed

to

relative

returns.

In

the

case

of

GW

Pharmaceuticals,

the

cannabinoid-focused

drugmaker

received

an

acquisition

offer

that

rallied

its

shares.

In

contrast,

stock

selection

in

the

industrials,

health

care

and

real

estate

sectors

detracted

from

relative

performance.

Performance

in

those

sectors

was

hurt

by

a

lack

of

positions

in

well-performing

companies.

Relative

performance

in

health

care

was

also

hurt

by

medical

device

company

iRhythm

Technologies

(not

part

of

the

index;

not

held

at

period-end),

which

fell

in

part

due

to

negative

news

impacting

Medicare

reimbursement

rates.

Iovance

Biotherapeutics

hurt

performance

as

well,

with

shares

falling

after

the

company

announced

a

delay

in

submitting

an

approval

application

to

the

U.S.

Food

and

Drug

Administration

for

a

cancer

drug.

The

announcement

was

followed

by

the

unexpected

departure

of

the

company’s

chief

executive

officer.

Elsewhere,

individual

relative

detractors

included

data

analytics

platform

specialist

Alteryx

and

mortgage

data

company

Black

Knight.

Top

10

Holdings

6/30/21

Company

Industry

%

of

Total

Net

Assets

a

aa

IDEXX

Laboratories,

Inc.

2.4%

Health

Care

Equipment

&

Supplies

Synopsys,

Inc.

2.4%

Software

DocuSign,

Inc.

2.3%

Software

Roku,

Inc.

1.9%

Entertainment

MSCI,

Inc.

1.8%

Capital

Markets

CoStar

Group,

Inc.

1.7%

Professional

Services

SBA

Communications

Corp.

1.6%

Equity

Real

Estate

Investment

Trusts

(REITs)

Veeva

Systems,

Inc.

1.6%

Health

Care

Technology

Okta

,

Inc.

1.6%

IT

Services

ANSYS,

Inc.

1.5%

Software

3.

Bureau

of

Labor

Statistics.

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-4

Semiannual

Report

Thank

you

for

your

participation

in

Franklin

Small-Mid

Cap

Growth

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,104.20

$4.28

$1,020.73

$4.11

0.82%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$26.99

$19.74

$17.04

$19.71

$17.77

$19.09

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.08)

(0.07)

(0.04)

(0.05)

(0.04)

(0.03)

Net

realized

and

unrealized

gains

(losses)

2.77

9.96

5.31

(0.70)

3.74

0.77

Total

from

investment

operations

........

2.69

9.89

5.27

(0.75)

3.70

0.74

Less

distributions

from:

Net

realized

gains

.................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

(2.06)

Net

asset

value,

end

of

period

..........

$26.77

$26.99

$19.74

$17.04

$19.71

$17.77

Total

return

c

.......................

10.42%

55.52%

31.80%

(5.15)%

21.75%

4.40%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.82%

0.85%

0.84%

0.86%

0.85%

0.84%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.82%

e

0.84%

f

0.83%

f

0.85%

f

0.84%

f

0.82%

f

Net

investment

(loss)

................

(0.55)%

(0.33)%

(0.19)%

(0.24)%

(0.24)%

(0.16)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$76,464

$72,039

$43,169

$33,518

$36,864

$31,756

Portfolio

turnover

rate

................

20.98%

48.93%

59.07%

44.78%

40.49%

32.23%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$23.11

$17.29

$15.22

$17.83

$16.27

$17.69

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.09)

(0.11)

(0.08)

(0.09)

(0.08)

(0.07)

Net

realized

and

unrealized

gains

(losses)

2.35

8.57

4.72

(0.60)

3.40

0.71

Total

from

investment

operations

........

2.26

8.46

4.64

(0.69)

3.32

0.64

Less

distributions

from:

Net

realized

gains

.................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

(2.06)

Net

asset

value,

end

of

period

..........

$22.46

$23.11

$17.29

$15.22

$17.83

$16.27

Total

return

c

.......................

10.31%

55.09%

31.44%

(5.37)%

21.40%

4.17%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.07%

1.10%

1.09%

1.11%

1.10%

1.09%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.07%

e

1.09%

f

1.08%

f

1.10%

f

1.09%

f

1.07%

f

Net

investment

(loss)

................

(0.80)%

(0.61)%

(0.44)%

(0.49)%

(0.49)%

(0.41)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$509,411

$503,032

$372,442

$310,300

$390,094

$392,777

Portfolio

turnover

rate

................

20.98%

48.93%

59.07%

44.78%

40.49%

32.23%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.26

$18.04

$15.81

$18.47

$16.81

$18.23

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.11)

(0.14)

(0.10)

(0.11)

(0.10)

(0.09)

Net

realized

and

unrealized

gains

(losses)

2.47

9.00

4.90

(0.63)

3.52

0.73

Total

from

investment

operations

........

2.36

8.86

4.80

(0.74)

3.42

0.64

Less

distributions

from:

Net

realized

gains

.................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

(2.06)

Net

asset

value,

end

of

period

..........

$23.71

$24.26

$18.04

$15.81

$18.47

$16.81

Total

return

c

.......................

10.23%

55.01%

31.26%

(5.46)%

21.30%

4.04%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.17%

1.20%

1.19%

1.21%

1.20%

1.19%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.17%

e

1.19%

f

1.18%

f

1.20%

f

1.19%

f

1.17%

f

Net

investment

(loss)

................

(0.90)%

(0.71)%

(0.54)%

(0.59)%

(0.59)%

(0.51)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$28,001

$25,580

$17,662

$13,759

$15,829

$13,825

Portfolio

turnover

rate

................

20.98

%

48.93%

59.07%

44.78%

40.49%

32.23%

g

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Small-Mid

Cap

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

94.3%

Aerospace

&

Defense

1.6%

a

Mercury

Systems,

Inc.

..................................

United

States

61,300

$

4,062,964

a

TransDigm

Group,

Inc.

.................................

United

States

9,300

6,019,797

10,082,761

Airlines

0.4%

a

Southwest

Airlines

Co.

.................................

United

States

52,100

2,765,989

Banks

0.5%

a

SVB

Financial

Group

...................................

United

States

5,400

3,004,722

Biotechnology

3.5%

a

Centessa

Pharmaceuticals

plc,

ADR

.......................

United

States

32,900

730,709

a

Global

Blood

Therapeutics,

Inc.

...........................

United

States

71,700

2,510,934

a

Heron

Therapeutics,

Inc.

................................

United

States

143,500

2,227,120

a

Horizon

Therapeutics

plc

................................

United

States

59,900

5,609,036

a

Iovance

Biotherapeutics

,

Inc.

.............................

United

States

100,705

2,620,344

a

Mirati

Therapeutics,

Inc.

................................

United

States

8,000

1,292,240

a

PTC

Therapeutics,

Inc.

.................................

United

States

52,000

2,198,040

a

Rocket

Pharmaceuticals,

Inc.

............................

United

States

4,500

199,305

a

Seagen

,

Inc.

.........................................

United

States

26,600

4,199,608

21,587,336

Capital

Markets

5.1%

Ares

Management

Corp.

................................

United

States

91,500

5,818,485

a,b,c,d

Churchill

Capital

Corp.

IV

...............................

United

States

79,866

1,882,436

MarketAxess

Holdings,

Inc.

..............................

United

States

12,500

5,794,875

MSCI,

Inc.

...........................................

United

States

20,600

10,981,448

a

Soaring

Eagle

Acquisition

Corp.

..........................

United

States

123,300

1,305,747

a,b,c,d

Soaring

Eagle

Acquisition

Corp.,

A

.........................

United

States

28,800

288,000

a,b,c

Spartan

Acquisition

Corp.

II,

A

............................

United

States

108,057

1,080,570

Tradeweb

Markets,

Inc.,

A

...............................

United

States

51,700

4,371,752

31,523,313

Commercial

Services

&

Supplies

1.1%

a

Legalzoom.com,

Inc.

...................................

United

States

1,000

37,850

Republic

Services,

Inc.

.................................

United

States

60,900

6,699,609

6,737,459

Containers

&

Packaging

1.1%

Ball

Corp.

...........................................

United

States

80,300

6,505,906

Electrical

Equipment

0.3%

Rockwell

Automation,

Inc.

...............................

United

States

6,198

1,772,752

Electronic

Equipment,

Instruments

&

Components

1.8%

Cognex

Corp.

........................................

United

States

43,800

3,681,390

a

Keysight

Technologies,

Inc.

..............................

United

States

49,450

7,635,574

11,316,964

Entertainment

2.9%

a

Roku,

Inc.

...........................................

United

States

25,556

11,736,593

a

Zynga,

Inc.,

A

........................................

United

States

543,200

5,774,216

17,510,809

Equity

Real

Estate

Investment

Trusts

(REITs)

2.2%

SBA

Communications

Corp.

.............................

United

States

31,757

10,120,956

Terreno

Realty

Corp.

...................................

United

States

48,150

3,106,638

13,227,594

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

&

Staples

Retailing

0.5%

a

Grocery

Outlet

Holding

Corp.

............................

United

States

83,000

$

2,876,780

Food

Products

0.6%

a

Freshpet

,

Inc.

........................................

United

States

18,100

2,949,576

a

Oatly

Group

AB,

ADR

..................................

United

States

18,500

452,510

3,402,086

Health

Care

Equipment

&

Supplies

6.7%

a

DexCom

,

Inc.

........................................

United

States

7,988

3,410,876

a,e

Figs,

Inc.,

A

..........................................

United

States

60,400

3,026,040

a

IDEXX

Laboratories,

Inc.

................................

United

States

23,550

14,873,003

a

Inari

Medical,

Inc.

.....................................

United

States

31,400

2,928,992

a

Insulet

Corp.

.........................................

United

States

22,300

6,121,573

a

Penumbra,

Inc.

.......................................

United

States

12,000

3,288,720

Teleflex,

Inc.

.........................................

United

States

18,150

7,292,488

40,941,692

Health

Care

Providers

&

Services

1.3%

a

Guardant

Health,

Inc.

..................................

United

States

39,300

4,880,667

a

HealthEquity

,

Inc.

.....................................

United

States

32,100

2,583,408

a

LifeStance

Health

Group,

Inc.

............................

United

States

27,300

760,578

8,224,653

Health

Care

Technology

2.4%

a

Certara

,

Inc.

.........................................

United

States

40,400

1,144,532

a

Teladoc

Health,

Inc.

...................................

United

States

20,466

3,403,291

a

Veeva

Systems,

Inc.,

A

.................................

United

States

32,500

10,105,875

14,653,698

Hotels,

Restaurants

&

Leisure

3.3%

a

Chipotle

Mexican

Grill,

Inc.

..............................

United

States

5,230

8,108,278

a,e

DraftKings

,

Inc.,

A

.....................................

United

States

67,633

3,528,414

a

Vail

Resorts,

Inc.

......................................

United

States

13,300

4,209,716

a

Wynn

Resorts

Ltd.

....................................

United

States

37,100

4,537,330

20,383,738

Household

Durables

0.6%

a

NVR,

Inc.

...........................................

United

States

782

3,889,121

Interactive

Media

&

Services

2.5%

a,e

Bumble,

Inc.,

A

.......................................

United

States

38,100

2,194,560

a

Match

Group,

Inc.

.....................................

United

States

48,024

7,743,870

a

Pinterest,

Inc.,

A

......................................

United

States

70,800

5,589,660

15,528,090

Internet

&

Direct

Marketing

Retail

1.0%

a

Etsy,

Inc.

............................................

United

States

9,000

1,852,560

a,e

Wayfair,

Inc.,

A

.......................................

United

States

12,800

4,041,088

5,893,648

IT

Services

7.6%

a

BigCommerce

Holdings,

Inc.,

1

...........................

United

States

60,600

3,934,152

a

Black

Knight,

Inc.

.....................................

United

States

106,900

8,336,062

a

GoDaddy

,

Inc.,

A

......................................

United

States

71,017

6,175,638

a,b,c

Marqeta

,

Inc.

.........................................

United

States

129,178

3,490,500

a

Marqeta

,

Inc.,

A

.......................................

United

States

22,200

623,154

a

MongoDB,

Inc.

.......................................

United

States

23,700

8,568,024

a,f

Nuvei

Corp.,

144A,

Reg

S

...............................

Canada

25,300

2,087,250

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

IT

Services

(continued)

a

Okta

,

Inc.

...........................................

United

States

39,000

$

9,542,520

a

Paymentus

Holdings,

Inc.,

A

.............................

United

States

10,000

355,000

a

Wix.com

Ltd.

.........................................

Israel

12,600

3,657,528

46,769,828

Life

Sciences

Tools

&

Services

4.4%

a

10X

Genomics,

Inc.,

A

..................................

United

States

28,700

5,620,034

a

Avantor

,

Inc.

.........................................

United

States

43,100

1,530,481

Bio-

Techne

Corp.

.....................................

United

States

18,025

8,115,937

a

Maravai

LifeSciences

Holdings,

Inc.,

A

.....................

United

States

81,800

3,413,514

a

Mettler

-Toledo

International,

Inc.

..........................

United

States

5,980

8,284,333

26,964,299

Machinery

1.7%

Fortive

Corp.

.........................................

United

States

60,800

4,240,192

IDEX

Corp.

..........................................

United

States

12,450

2,739,622

Stanley

Black

&

Decker,

Inc.

.............................

United

States

16,446

3,371,266

10,351,080

Personal

Products

0.6%

a

BellRing

Brands,

Inc.,

A

.................................

United

States

122,800

3,848,552

Pharmaceuticals

0.7%

a

Jazz

Pharmaceuticals

plc

...............................

United

States

8,000

1,421,120

a

Reata

Pharmaceuticals,

Inc.,

A

...........................

United

States

19,500

2,759,835

4,180,955

Professional

Services

5.4%

Booz

Allen

Hamilton

Holding

Corp.

........................

United

States

69,700

5,937,046

a

CoStar

Group,

Inc.

....................................

United

States

126,350

10,464,307

TransUnion

..........................................

United

States

71,300

7,829,453

Verisk

Analytics,

Inc.

...................................

United

States

49,761

8,694,242

32,925,048

Road

&

Rail

1.1%

a,b,c

New

Starship

Parent,

Inc.

...............................

United

States

74,800

775,676

Old

Dominion

Freight

Line,

Inc.

...........................

United

States

24,450

6,205,410

6,981,086

Semiconductors

&

Semiconductor

Equipment

5.9%

a

Allegro

MicroSystems

,

Inc.

..............................

Japan

109,100

3,022,070

a

Alphawave

IP

Group

plc

................................

United

Kingdom

192,850

960,439

Entegris

,

Inc.

.........................................

United

States

35,528

4,368,878

KLA

Corp.

...........................................

United

States

9,737

3,156,833

a

Lattice

Semiconductor

Corp.

.............................

United

States

100,555

5,649,180

Monolithic

Power

Systems,

Inc.

...........................

United

States

13,450

5,022,902

a

Semtech

Corp.

.......................................

United

States

57,700

3,969,760

a

SiTime

Corp.

.........................................

United

States

63,300

8,013,147

a

SolarEdge

Technologies,

Inc.

............................

United

States

7,600

2,100,412

36,263,621

Software

19.2%

a

Alkami

Technology,

Inc.

.................................

United

States

11,703

417,446

a,b,c

Alkami

Technology,

Inc.

.................................

United

States

40,822

1,400,776

a

Alteryx

,

Inc.,

A

........................................

United

States

52,000

4,473,040

a

ANSYS,

Inc.

.........................................

United

States

27,000

9,370,620

a,e

AppLovin

Corp.,

A

.....................................

United

States

27,200

2,044,624

a

Avalara,

Inc.

.........................................

United

States

50,800

8,219,440

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

Bill.com

Holdings,

Inc.

..................................

United

States

29,148

$

5,339,331

a

BTRS

Holdings,

Inc.

...................................

United

States

140,300

1,770,586

a

Cloudflare

,

Inc.,

A

.....................................

United

States

55,000

5,821,200

a

Confluent,

Inc.,

A

......................................

United

States

4,122

195,795

a

Coupa

Software,

Inc.

...................................

United

States

26,600

6,972,126

a

Crowdstrike

Holdings,

Inc.,

A

.............................

United

States

6,000

1,507,860

a

DocuSign,

Inc.

.......................................

United

States

51,300

14,341,941

a

Duck

Creek

Technologies,

Inc.

...........................

United

States

51,770

2,252,513

a

HubSpot

,

Inc.

........................................

United

States

14,400

8,391,168

a

Lightspeed

POS,

Inc.

..................................

Canada

56,300

4,707,243

a

Monday.com

Ltd.

......................................

United

States

3,200

715,488

a

Paylocity

Holding

Corp.

.................................

United

States

45,050

8,595,540

a,e

Procore

Technologies,

Inc.

..............................

United

States

4,900

465,255

a

PTC,

Inc.

...........................................

United

States

34,300

4,845,218

a

Q2

Holdings,

Inc.

.....................................

United

States

34,796

3,569,374

a

SentinelOne

,

Inc.,

A

...................................

United

States

10,300

437,750

a

Synopsys,

Inc.

.......................................

United

States

52,750

14,547,922

a

Zendesk

,

Inc.

........................................

United

States

51,600

7,447,944

117,850,200

Specialty

Retail

4.9%

a

Burlington

Stores,

Inc.

..................................

United

States

23,400

7,534,566

a

Five

Below,

Inc.

.......................................

United

States

34,150

6,600,171

a

O'Reilly

Automotive,

Inc.

................................

United

States

10,800

6,115,068

a,e

Petco

Health

&

Wellness

Co.,

Inc.

.........................

United

States

135,300

3,032,073

Tractor

Supply

Co.

....................................

United

States

36,237

6,742,256

30,024,134

Textiles,

Apparel

&

Luxury

Goods

2.3%

Levi

Strauss

&

Co.,

A

..................................

United

States

88,400

2,450,448

a

Lululemon

Athletica

,

Inc.

................................

United

States

18,600

6,788,442

VF

Corp.

............................................

United

States

59,400

4,873,176

14,112,066

Trading

Companies

&

Distributors

1.1%

Fastenal

Co.

.........................................

United

States

127,700

6,640,400

Total

Common

Stocks

(Cost

$337,155,710)

.....................................

578,740,380

Convertible

Preferred

Stocks

0.8%

Diversified

Consumer

Services

0.2%

a,b,c

Newsela

,

Inc.,

0%,

D

...................................

United

States

48,915

1,040,875

a

Internet

&

Direct

Marketing

Retail

0.0%

†

a,b,c

Fanatics,

Inc.,

0%,

F

...................................

United

States

2,000

69,177

a

Software

0.6%

a,b,c

Databricks

,

Inc.,

0%,

G

.................................

United

States

8,626

1,893,538

a,b,c

OneTrust

LLC,

C

......................................

United

States

82,367

1,817,016

3,710,554

Total

Convertible

Preferred

Stocks

(Cost

$4,249,764)

............................

4,820,606

Preferred

Stocks

0.8%

Internet

&

Direct

Marketing

Retail

0.4%

a,b,c

Fanatics,

Inc.,

E

......................................

United

States

92,539

2,523,013

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-13

See

Abbreviations

on

page

FSC-

28

.

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Preferred

Stocks

(continued)

Software

0.2%

a,b,c

Blaize

,

Inc.,

D

........................................

United

States

141,632

$

1,478,993

a

Textiles,

Apparel

&

Luxury

Goods

0.2%

a,b,c

Allbirds

,

Inc.,

E

.......................................

United

States

92,392

1,140,726

a

Total

Preferred

Stocks

(Cost

$4,147,272)

.......................................

5,142,732

Warrants

Warrants

0.0%

Software

0.0%

a,b,c

Blaize

,

Inc.

Ltd.,

2/28/24

................................

United

Kingdom

7,082

—

Total

Warrants

(Cost

$—)

.....................................................

—

Total

Long

Term

Investments

(Cost

$345,552,746)

...............................

588,703,718

a

Short

Term

Investments

5.3%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

3.4%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

20,698,823

20,698,823

Total

Money

Market

Funds

(Cost

$20,698,823)

..................................

20,698,823

a

a

a

a

a

i

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.9%

Money

Market

Funds

1.9%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

11,593,660

11,593,660

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$11,593,660)

...........................................................

11,593,660

Total

Short

Term

Investments

(Cost

$32,292,483

)

................................

32,292,483

a

Total

Investments

(Cost

$377,845,229)

101.2%

..................................

$620,996,201

Other

Assets,

less

Liabilities

(1.2)%

...........................................

(7,120,417)

Net

Assets

100.0%

...........................................................

$613,875,784

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

10

regarding

fair

value

measurements.

c

See

Note

7

regarding

restricted

securities.

d

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(c).

e

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(d).

f

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

value

of

this

security

was

$2,087,250,

representing

0.3%

of

net

assets.

g

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-14

i

See

Note

1(d)

regarding

securities

on

loan.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-15

Franklin

Small-

Mid

Cap

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$345,552,746

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

32,292,483

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$14,785,902)

................................

$588,703,718

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

32,292,483

Cash

....................................................................................

18,241

Receivables:

Investment

securities

sold

(Includes

securities

loaned

of

$661,458)

....................................

12,581,649

Capital

shares

sold

........................................................................

744,381

Dividends

...............................................................................

54,775

Total

assets

..........................................................................

634,395,247

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

7,797,717

Capital

shares

redeemed

...................................................................

502,231

Management

fees

.........................................................................

378,045

Distribution

fees

..........................................................................

108,307

Payable

upon

return

of

securities

loaned

(Note

1

d

)

..................................................

11,593,660

Accrued

expenses

and

other

liabilities

...........................................................

139,503

Total

liabilities

.........................................................................

20,519,463

Net

assets,

at

value

.................................................................

$613,875,784

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$299,340,072

Total

distributable

earnings

(losses)

.............................................................

314,535,712

Net

assets,

at

value

.................................................................

$613,875,784

Franklin

Small-

Mid

Cap

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$76,463,797

Shares

outstanding

........................................................................

2,856,407

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$26.77

Class

2:

Net

assets,

at

value

.......................................................................

$509,411,109

Shares

outstanding

........................................................................

22,685,696

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$22.46

Class

4:

Net

assets,

at

value

.......................................................................

$28,000,878

Shares

outstanding

........................................................................

1,181,128

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$23.71

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-16

Franklin

Small-

Mid

Cap

Growth

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$753,191

Non-controlled

affiliates

(Note

3e)

.............................................................

632

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

43,117

Non-controlled

affiliates

(Note

3

e

)

.............................................................

247

Total

investment

income

...................................................................

797,187

Expenses:

Management

fees

(Note

3

a

)

...................................................................

2,303,481

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

611,687

    Class

4

................................................................................

46,486

Custodian

fees

(Note

4

)

......................................................................

2,874

Reports

to

shareholders

......................................................................

64,540

Professional

fees

...........................................................................

37,403

Trustees'

fees

and

expenses

..................................................................

1,710

Other

....................................................................................

10,153

Total

expenses

.........................................................................

3,078,334

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(8,251)

Net

expenses

.........................................................................

3,070,083

Net

investment

income

(loss)

............................................................

(2,272,896)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

73,551,836

Foreign

currency

transactions

................................................................

(1,090)

Net

realize

d

gain

(loss)

..................................................................

73,550,746

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(12,460,736)

Net

realized

and

unrealized

gain

(loss)

............................................................

61,090,010

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$58,817,114

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSC-17

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(2,272,896)

$(2,771,523)

Net

realized

gain

(loss)

.................................................

73,550,746

72,207,047

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(12,460,736)

144,395,647

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

58,817,114

213,831,171

Distributions

to

shareholders:

Class

1

.............................................................

(7,430,783)

(5,568,768)

Class

2

.............................................................

(58,482,161)

(53,710,860)

Class

4

.............................................................

(3,098,704)

(2,461,041)

Total

distributions

to

shareholders

..........................................

(69,011,648)

(61,740,669)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

4,624,272

11,218,927

Class

2

.............................................................

15,927,602

2,617,481

Class

4

.............................................................

2,866,244

1,452,781

Total

capital

share

transactions

............................................

23,418,118

15,289,189

Net

increase

(decrease)

in

net

assets

...................................

13,223,584

167,379,691

Net

assets:

Beginning

of

period

.....................................................

600,652,200

433,272,509

End

of

period

..........................................................

$613,875,784

$600,652,200

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-18

Semiannual

Report

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,

2021,

40.6%

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 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-19

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Purchased

on

a

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,

they

may

sell

the

securities

before

the

settlement

date.

d.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

e.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-20

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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,

2021,

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. 

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.

Estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

g.

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.

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-21

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

217,140

$6,007,861

706,229

$16,500,714

Shares

issued

in

reinvestment

of

distributions

..........

290,492

7,430,783

289,889

5,568,768

Shares

redeemed

...............................

(320,352)

(8,814,372)

(514,114)

(10,850,555)

Net

increase

(decrease)

..........................

187,280

$4,624,272

482,004

$11,218,927

Class

2

Shares:

Shares

sold

...................................

490,617

$11,553,503

2,526,425

$47,366,200

Shares

issued

in

reinvestment

of

distributions

..........

2,725,171

58,482,161

3,261,133

53,710,860

Shares

redeemed

...............................

(2,294,540)

(54,108,062)

(5,564,626)

(98,459,579)

Net

increase

(decrease)

..........................

921,248

$15,927,602

222,932

$2,617,481

Class

4

Shares:

Shares

sold

...................................

143,178

$3,575,279

319,307

$6,396,773

Shares

issued

in

reinvestment

of

distributions

..........

136,748

3,098,704

142,257

2,461,041

Shares

redeemed

...............................

(153,286)

(3,807,739)

(385,938)

(7,405,033)

Net

increase

(decrease)

..........................

126,640

$2,866,244

75,626

$1,452,781

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC.

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-22

Semiannual

Report

Franklin

Small-Mid

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.783%

of

the

Fund’s

average

daily

net

assets.

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-23

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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,

2021,

there

were

no

credits

earned.

5.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

2021,

aggregated

$121,080,104

and

$182,053,943,

respectively.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$11,593,660

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.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$12,671,175

$87,774,371

$(79,746,723)

$—

$—

$20,698,823

20,698,823

$632

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$8,418,420

$77,973,269

$(74,798,029)

$

—

$

—

$11,593,660

11,593,660

$247

Total

Affiliated

Securities

....

$21,089,595

$165,747,640

$(154,544,752)

$—

$—

$32,292,483

$879

Cost

of

investments

..........................................................................

$377,947,481

Unrealized

appreciation

........................................................................

$249,084,548

Unrealized

depreciation

........................................................................

(6,035,828)

Net

unrealized

appreciation

(depreciation)

..........................................................

$243,048,720

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-24

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

7.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

June

30,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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.

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Small-Mid

Cap

Growth

VIP

Fund

40,822

a

Alkami

Technology,

Inc.

.......................

9/24/20

$

653,142

$

1,400,776

92,392

Allbirds,

Inc.,

E

..............................

9/22/20

1,068,276

1,140,726

7,082

Blaize,

Inc.

Ltd.,

2/28/24

.......................

3/01/21

—

—

141,632

Blaize,

Inc.,

D

..............................

3/02/21

-

3/22/21

1,478,997

1,478,993

79,866

Churchill

Capital

Corp.

IV

......................

2/22/21

1,197,990

1,882,436

8,626

Databricks,

Inc.,

G

...........................

2/01/21

1,529,975

1,893,538

92,539

Fanatics,

Inc.,

E

.............................

8/13/20

1,599,999

2,523,013

2,000

Fanatics,

Inc.,

F

.............................

3/22/21

69,740

69,177

129,178

b

Marqeta,

Inc.

...............................

8/20/20

1,077,009

3,490,500

74,800

New

Starship

Parent,

Inc.

......................

2/02/21

748,000

775,676

48,915

Newsela,

Inc.,

D

.............................

1/21/21

1,034,807

1,040,875

82,367

OneTrust

LLC,

C

............................

4/01/21

1,615,242

1,817,016

28,800

c

Soaring

Eagle

Acquisition

Corp.,

A

...............

5/11/21

288,000

288,000

108,057

Spartan

Acquisition

Corp.

II,

A

..................

1/28/21

1,080,570

1,080,570

Total

Restricted

Securities

(Value

is

3.09%

of

Net

Assets)

.............

$13,441,747

$18,881,296

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$417,446

as

of

June

30,

2021.

b

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$623,154

as

of

June

30,

2021.

c

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$1,305,747

as

of

June

30,

2021.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-25

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

10.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

10,082,761

$

—

$

—

$

10,082,761

Airlines

..............................

2,765,989

—

—

2,765,989

Banks

...............................

3,004,722

—

—

3,004,722

Biotechnology

.........................

21,587,336

—

—

21,587,336

Capital

Markets

........................

28,272,307

—

3,251,006

31,523,313

Commercial

Services

&

Supplies

...........

6,737,459

—

—

6,737,459

Containers

&

Packaging

.................

6,505,906

—

—

6,505,906

Electrical

Equipment

....................

1,772,752

—

—

1,772,752

Electronic

Equipment,

Instruments

&

Components

........................

11,316,964

—

—

11,316,964

Entertainment

.........................

17,510,809

—

—

17,510,809

Equity

Real

Estate

Investment

Trusts

(REITs)

.

13,227,594

—

—

13,227,594

Food

&

Staples

Retailing

.................

2,876,780

—

—

2,876,780

Food

Products

........................

3,402,086

—

—

3,402,086

Health

Care

Equipment

&

Supplies

.........

40,941,692

—

—

40,941,692

Health

Care

Providers

&

Services

..........

8,224,653

—

—

8,224,653

Health

Care

Technology

.................

14,653,698

—

—

14,653,698

Hotels,

Restaurants

&

Leisure

.............

20,383,738

—

—

20,383,738

Household

Durables

....................

3,889,121

—

—

3,889,121

Interactive

Media

&

Services

..............

15,528,090

—

—

15,528,090

Internet

&

Direct

Marketing

Retail

..........

5,893,648

—

—

5,893,648

IT

Services

...........................

43,279,328

—

3,490,500

46,769,828

Life

Sciences

Tools

&

Services

............

26,964,299

—

—

26,964,299

Machinery

............................

10,351,080

—

—

10,351,080

9.

Credit

Facility

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-26

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

At

June

30,

2021,

the

reconciliation is

as follows:

Level

1

Level

2

Level

3

Total

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Personal

Products

.....................

$

3,848,552

$

—

$

—

$

3,848,552

Pharmaceuticals

.......................

4,180,955

—

—

4,180,955

Professional

Services

...................

32,925,048

—

—

32,925,048

Road

&

Rail

..........................

6,205,410

—

775,676

6,981,086

Semiconductors

&

Semiconductor

Equipment

.

36,263,621

—

—

36,263,621

Software

.............................

116,449,424

—

1,400,776

117,850,200

Specialty

Retail

........................

30,024,134

—

—

30,024,134

Textiles,

Apparel

&

Luxury

Goods

..........

14,112,066

—

—

14,112,066

Trading

Companies

&

Distributors

..........

6,640,400

—

—

6,640,400

Convertible

Preferred

Stocks

...............

—

—

4,820,606

4,820,606

Preferred

Stocks

........................

—

—

5,142,732

5,142,732

Warrants

..............................

—

—

—

a

—

Short

Term

Investments

...................

32,292,483

—

—

32,292,483

Total

Investments

in

Securities

...........

$602,114,905

$—

$18,881,296

$620,996,201

a

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

accretion

(amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Capital

Markets

.....

$

—

$

2,566,560

$

—

$

—

$

—

$

—

$

—

$

684,446

$

3,251,006

$

684,446

IT

Services

........

1,208,923

—

—

—

—

—

—

2,281,577

3,490,500

2,281,577

Road

&

Rail

.......

—

748,000

—

—

—

—

—

27,676

775,676

27,676

Software

..........

—

653,142

—

—

—

—

—

747,634

1,400,776

747,634

Convertible

Preferred

Stocks

:

Diversified

Consumer

Services

........

—

1,034,805

—

—

—

—

—

6,070

1,040,875

6,070

Internet

&

Direct

Marketing

Retail

...

—

69,740

—

—

—

—

—

(563)

69,177

(563)

Software

..........

—

3,145,217

—

—

—

—

—

565,337

3,710,554

565,337

Preferred

Stocks

:

Internet

&

Direct

Marketing

Retail

...

1,657,023

—

—

—

—

—

—

865,990

2,523,013

865,990

Software

..........

768,400

1,478,997

(768,400)

—

—

—

—

(4)

1,478,993

(4)

Textiles,

Apparel

&

Luxury

Goods

....

1,068,276

—

—

—

—

—

—

72,450

1,140,726

72,450

Warrants

:

Software

..........

—

—

c

—

—

—

—

—

—

—

c

—

Total

Investments

in

Securities

.

$4,702,622

$9,696,461

$(768,400)

$—

$—

$—

$—

$5,250,613

$18,881,296

$5,250,613

a

Purchases

include

all

purchases

of

securities

and

securities

received

in

corporate

actions.

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-27

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

June

30,

2021,

are

as

follows:

b

Sales

include

all

sales

of

securities,

maturities,

paydowns

and

securities

tendered

in

corporate

actions.

c

Includes

securities

determined

to

have

no

value.

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

Capital

Markets

..............

$2,963,006

Market

comparables

Discount

for

lack

of

marketability

0.6%

-

18.2%

(11.8%)

Decrease

c

IT

Services

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

3,490,500

Market

comparables

Discount

for

lack

of

marketability

3.7%

Decrease

c

Road

&

Rail

.................

775,676

Market

comparables

Discount

for

lack

of

marketability

0.0%

Decrease

Software

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1,400,776

Market

comparables

Discount

for

lack

of

marketability

3.8%

Decrease

Convertible

Preferred

Stocks

Diversified

Consumer

Services.

.

.

1,040,875

Discounted

cash

flow

Discount

for

lack

of

marketability

12.9%

Decrease

c

Weighted

average

cost

of

capital

14.8%

Decrease

d

 Long-term

growth

rate

5.0%

Increase

Software

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

3,710,554

Market

comparables

EV

/

revenue

multiple

17.1x

-

61.4x

(35.6x)

Increase

c

Discount

for

lack

of

marketability

6.9%

Decrease

c

Preferred

Stocks

Internet

&

Direct

Marketing

Retail.

2,523,013

Market

comparables

EV

/

EBITDA

multiple

45.6x

Increase

c

EV

/

revenue

multiple

3.4x

Increase

c

Discount

for

lack

of

marketability

11.1%

Decrease

c

Textiles,

Apparel

&

Luxury

Goods.

1,140,726

Market

comparables

EV

/

revenue

multiple

5.7x

Increase

c

Discount

for

lack

of

marketability

8.0%

Decrease

c

All

Other

Investments

..........

1,836,170

e,f

Total

$18,881,296

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments.

b

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

c

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

d

Represents

a

significant

impact

to

fair

value

and

net

assets.

e

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FSC-28

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Abbreviations

List

EBITDA

-

Earnings

before

interest,

taxes,

depreciation

and

amortization

EV

-

Enterprise

value

11.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

f

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

Selected

Portfolio

ADR

American

Depositary

Receipt

10.

Fair

Value

Measurements

(continued)

FSI-1

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

This

semi

annual

report

for

Franklin

Strategic

Income

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+1.80

%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

4/30/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

FSI-2

Semiannual

Report

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.

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).

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

High

yields

reflect

the

higher

credit

risks

associated

with

certain

lower

rated

securities

held

in

the

portfolio.

Floating

rate

loans

and

high

yield

corporate

bonds

are

rated

below

investment

grade

and

are

subject

to

greater

risk

of

default,

which

could

result

in

loss

of

principal—a

risk

that

may

be

heightened

in

a

slowing

economy.

The

risks

of

foreign

securities

include

currency

fluctuations

and

political

uncertainty.

Investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

their

relatively

small

size

and

lesser

liquidity.

Investing

in

derivative

securities

and

the

use

of

foreign

currency

techniques

involve

special

risks

as

such

may

not

achieve

the

anticipated

benefits

and/or

may

result

in

losses

to

the

Fund.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

a

-1.60%

total

return

for

the

period

under

review.

1

The

Fund’s

peers,

as

measured

by

the

Lipper

Multi-Sector

Income

Funds

Classification

Average,

posted

a

+1.64%

return.

2

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

a

-1.60%

total

return

for

the

six

months

ended

June

30,

2021.

1

The

economy

continued

to

recover

from

the

novel

coronavirus

(COVID-19)

pandemic,

aided

by

additional

fiscal

stimulus

measures,

and

yields

(which

move

inversely

to

prices)

increased

for

most

bonds.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

U.S.

Federal

Reserve

(Fed)

maintained

the

federal

funds

target

rate

at

a

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

purchasing

of

government-

backed

and

corporate

bonds

as

necessary

to

provide

liquidity

to

bond

markets.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

posted

a

-2.58%

total

return

for

the

six-month

period.

1

The

10-year

U.S.

Treasury

yield,

which

began

the

period

below

one

percent,

rose

notably

amid

many

investors’

increasing

inflation

expectations.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Corporate

Bonds

52.6%

Foreign

Government

and

Agency

Securities

13.8%

Residential

Mortgage-Backed

Securities

8.3%

Management

Investment

Companies

7.5%

Asset-Backed

Securities

7.3%

U.S.

Government

and

Agency

Securities

3.1%

Mortgage-Backed

Securities

2.8%

Senior

Floating

Rate

Interests

1.4%

Municipal

Bonds

1.0%

Other

1.0%

Short-Term

Investments

&

Other

Net

Assets

1.2

%

Franklin

Strategic

Income

VIP

Fund

FSI-3

Semiannual

Report

Bloomberg

Barclays

MBS

Index,

posted

a

-0.77%

total

return

for

the

period,

as

low

interest

rates

led

to

accelerated

prepayments

from

mortgage

refinancing.

1

U.S.

corporate

bond

performance

varied

significantly

based

on

credit

rating,

reflecting

the

continued

recovery

of

credit

markets

following

the

onset

of

COVID-19.

Although

the

strengthening

economy

pressured

corporate

bonds

generally,

it

helped

temper

investor

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+3.62%

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

posted

a

-1.27%

total

return.

1

Investment

Strategy

We

allocate

our

investments

among

the

various

types

of

debt

available

based

on

our

assessment

of

changing

economic,

global

market,

industry

and

issuer

conditions.

We

use

a

top-down

analysis

of

macroeconomic

trends,

combined

with

a

bottom-up

fundamental

analysis

of

market

sectors,

industries

and

issuers,

seeking

to

take

advantage

of

varying

sector

reactions

to

economic

events.

For

example,

we

may

evaluate

business

cycles,

yield

curves,

country

risk,

and

the

relative

interest

rates

among

currencies,

and

values

between

and

within

markets.

In

selecting

debt

securities,

we

generally

conduct

our

own

analysis

of

the

security’s

intrinsic

value

rather

than

simply

relying

on

the

coupon

rate

or

rating.

We

may

also

enter

into

various

transactions

involving

certain

currency-,

interest

rate-

or

credit-related

derivative

instruments.

Manager’s

Discussion

The

Fund

allocated

assets

across

the

broad

fixed

income

markets

seeking

the

best

relative

value

opportunities

for

income

and

capital

appreciation.

We

maintained

our

largest

exposure

in

high-yield

corporate

credit

and

increased

allocation

over

the

period.

The

U.S.

high-yield

market

continues

to

enjoy

a

positive

environment

for

leveraged

credit,

with

a

re-opening

economy

supported

by

fiscal

and

monetary

policy

combined

with

wide-open

capital

markets

leading

to

improving

credit

profiles

and

diminishing

default

risk,

which

we

believe

will

remain

for

the

balance

of

this

year

and

into

2022.

The

overall

technical

environment

remains

firm

despite

issuance

that

has

continued

at

a

record-setting

pace

through

the

period

and

mutual

fund

flows

that

have

turned

negative,

with

flows

from

institutional

and

non-traditional

high-yield

investors,

both

foreign

and

domestic,

along

with

elevated

call

and

tender

activity

and

natural

coupon

reinvestment

all

serving

to

keep

supply

and

demand

for

U.S.

high-yield

fairly

tight.

History

has

shown

that

U.S.

high-yield

spreads

can

remain

at

lows

for

extended

periods

of

time,

and

we

believe

that

current

conditions

are

conducive

to

such

an

outcome.

We

also

added

to

senior

secured

floating-rate

loan

exposure,

while

reducing

allocation

to

investment-grade

corporate

bonds.

The

portfolio’s

second

largest

allocation

remained

in

sovereign

emerging

market

debt

as

we

retained

our

positive

outlook

for

the

asset

class.

Emerging

market

debt

fundamentals

strengthened

as

a

stronger

economic

outlook

for

the

global

economy

and

the

reflationary

benefits

this

will

bring

in

terms

of

balance

sheet

repair

for

most

emerging

market

countries

gathered

momentum,

in

our

view.

We

remained

allocated

to

the

non-agency

residential

mortgage-backed

securities

(RMBS)

sector,

with

exposure

primarily

in

the

seasoned

credit

risk

transfer

securities.

We

pared

exposure

over

the

period

amid

continued

strength

in

the

sector.

Supply

and

demand

imbalances

combined

with

mortgage

rates

still

near

historic

lows

will

continue

to

support

a

strong

housing

market.

We

believe

this

fundamental

backdrop

should

bolster

solid

risk-adjusted

returns

for

the

RMBS

sector

in

the

near-term.

Our

foreign-currency

exposure

was

held

through

a

basket

of

longs

versus

a

short

position

in

the

Canadian

dollar.

Over

the

period,

we

closed

out

our

long

Japanese

yen

and

euro

positions.

We

moved

from

a

short

Australian

dollar

to

slight

long

position

and

reduced

our

short

Canadian

dollar

position.

Allocation

across

corporate

credit

boosted

performance

with

the

Fund’s

high

corporate

credit

allocation

being

the

most

significant

contributor

to

returns.

Additionally,

allocations

to

sovereign

emerging

markets

securities,

marketplace

loans

and

RMBS

boosted

performance.

In

contrast,

the

Fund’s

allocation

to

fixed-rate

agency

mortgage-backed

securities

(MBS)

was

a

slight

detractor

from

performance.

Foreign

currency

exposure

negatively

contributed

to

returns.

Gains

mainly

from

our

long

Mexican

peso

were

more

than

offset

by

negative

returns

from

Japanese

yen

and

Colombian

peso

positions.

The

Fund

utilized

derivatives,

including

credit

default

swaps,

currency

forwards

and

government

bond

futures,

primarily

as

a

tool

for

efficient

portfolio

management

and

to

manage

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.

Franklin

Strategic

Income

VIP

Fund

FSI-4

Semiannual

Report

Thank

you

for

your

participation

in

Franklin

Strategic

Income

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Franklin

Strategic

Income

VIP

Fund

FSI-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,018.00

$3.64

$1,021.19

$3.65

0.73%

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Highlights

Franklin

Strategic

Income

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-6

a

Six

Months

Ended

June

30,

2021*

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.76

$10.93

$10.65

$11.15

$11.01

$10.55

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.18

0.36

0.45

0.47

0.45

0.48

Net

realized

and

unrealized

gains

(losses)

0.01

0.01

0.43

(0.65)

0.04

0.37

Total

from

investment

operations

........

0.19

0.37

0.88

(0.18)

0.49

0.85

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.37)

(0.54)

(0.60)

(0.32)

(0.35)

(0.39)

Net

asset

value,

end

of

period

..........

$10.58

$10.76

$10.93

$10.65

$11.15

$11.01

Total

return

c

.......................

1.80%

3.75%

8.41%

(1.65)%

4.46%

8.25%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.76%

0.75%

0.71%

0.67%

0.68%

0.67%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.73%

0.73%

0.68%

0.63%

0.63%

0.60%

Net

investment

income

...............

3.40%

3.46%

4.09%

4.28%

4.00%

4.42%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$257,475

$261,409

$285,437

$302,610

$361,465

$396,170

Portfolio

turnover

rate

................

33.65%

f

114.19%

114.89%

f

107.90%

g

108.73%

128.51%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

........................

22.51%

f

73.45%

72.45%

f

40.38%

g

48.11%

77.93%

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

h

See

Note

1(g)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Highlights

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Semiannual

Report

FSI-7

a

Six

Months

Ended

June

30,

2021*

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.36

$10.55

$10.28

$10.76

$10.64

$10.21

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.33

0.40

0.42

0.40

0.43

Net

realized

and

unrealized

gains

(losses)

0.03

—

c

0.42

(0.61)

0.04

0.36

Total

from

investment

operations

........

0.19

0.33

0.82

(0.19)

0.44

0.79

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.35)

(0.52)

(0.55)

(0.29)

(0.32)

(0.36)

Net

asset

value,

end

of

period

..........

$10.20

$10.36

$10.55

$10.28

$10.76

$10.64

Total

return

d

.......................

1.81%

3.43%

8.05%

(1.77)%

4.17%

7.94%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.01%

1.01%

0.96%

0.92%

0.93%

0.92%

Expenses

net

of

waiver

and

payments

by

affiliates

f

..........................

0.98%

0.99%

0.93%

0.88%

0.88%

0.85%

Net

investment

income

...............

3.16%

3.23%

3.84%

4.03%

3.75%

4.17%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$92,523

$100,758

$94,928

$89,264

$214,271

$203,418

Portfolio

turnover

rate

................

33.65%

g

114.19%

114.89%

g

107.90%

h

108.73%

128.51%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

i

........................

22.51%

g

73.45%

72.45%

g

40.38%

h

48.11%

77.93%

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

i

See

Note

1(g)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Highlights

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-8

a

Six

Months

Ended

June

30,

2021*

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.66

$10.83

$10.56

$11.04

$10.90

$10.44

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.32

0.41

0.43

0.40

0.43

Net

realized

and

unrealized

gains

(losses)

0.03

0.01

0.42

(0.64)

0.04

0.38

Total

from

investment

operations

........

0.19

0.33

0.83

(0.21)

0.44

0.81

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.34)

(0.50)

(0.56)

(0.27)

(0.30)

(0.35)

Net

asset

value,

end

of

period

..........

$10.51

$10.66

$10.83

$10.56

$11.04

$10.90

Total

return

c

.......................

1.77%

3.34%

7.93%

(1.88)%

4.08%

7.86%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.11%

1.10%

1.06%

1.02%

1.03%

1.02%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

1.08%

1.09%

1.03%

0.98%

0.98%

0.95%

Net

investment

income

...............

3.05%

3.12%

3.74%

3.93%

3.65%

4.07%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$53,623

$51,709

$54,485

$60,763

$74,013

$80,175

Portfolio

turnover

rate

................

33.65%

f

114.19%

114.89%

f

107.90%

g

108.73%

128.51%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

........................

22.51%

f

73.45%

72.45%

f

40.38%

g

48.11%

77.93%

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

include

fees,

charges

or

expenses

imposed

by

the

variable

annuity

and

life

insurance

contracts

for

which

Franklin

Templeton

Variable

Insurance

Prod-

ucts

Trust

serves

as

an

underlying

investment

vehicle.

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

g

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

a

redemption

in-kind.

h

See

Note

1(g)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

Strategic

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.3%

Energy

Equipment

&

Services

0.1%

a

Weatherford

International

plc

.............................

United

States

13,794

$

251,051

Machinery

0.1%

a

Birch

Permian

Holdings,

Inc.

.............................

United

States

4,478

67,170

a

Birch

Permian

Holdings,

Inc.,

............................

United

States

34,907

519,242

586,412

Media

0.1%

a

Clear

Channel

Outdoor

Holdings,

Inc.

......................

United

States

20,804

54,923

a

iHeartMedia

,

Inc.,

A

....................................

United

States

8,384

225,781

a,b

iHeartMedia

,

Inc.,

B

...................................

United

States

142

3,556

284,260

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

14,792,309

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

1,472,041

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a

Amplify

Energy

Corp.

..................................

United

States

431

1,745

a,b

Riviera

Resources,

Inc.

.................................

United

States

6,620

1,710

3,455

Specialty

Retail

0.0%

†

a

Party

City

Holdco,

Inc.

..................................

United

States

16,831

157,030

Total

Common

Stocks

(Cost

$2,092,944)

.......................................

1,282,208

Management

Investment

Companies

7.5%

Capital

Markets

7.5%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

3,420,372

27,123,552

Invesco

Senior

Loan

ETF

...............................

United

States

135,000

2,990,250

30,113,802

Total

Management

Investment

Companies

(Cost

$34,650,957)

....................

30,113,802

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

879

249

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

1,098

175

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

1,412

104

528

Paper

&

Forest

Products

0.0%

†

a

Verso

Corp.,

7/25/23

...................................

United

States

592

1,616

Total

Warrants

(Cost

$—)

.....................................................

2,144

Principal

Amount

*

Convertible

Bonds

0.0%

†

Wireless

Telecommunication

Services

0.0%

†

e,f,g

Digicel

Group

Holdings

Ltd.

,

Sub.

Bond

,

144A,

PIK,

7

%

,

Perpetual

Bermuda

27,166

20,644

Total

Convertible

Bonds

(Cost

$5,773)

.........................................

20,644

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-10

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

52.6%

Aerospace

&

Defense

0.6%

Boeing

Co.

(The)

,

Senior

Note

,

2.196

%

,

2/04/26

..............

United

States

800,000

$

807,774

g

TransDigm

,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

3/15/26

....

United

States

1,400,000

1,478,750

2,286,524

Air

Freight

&

Logistics

0.6%

g

DAE

Funding

LLC

,

Senior

Note

,

144A,

1.55%,

8/01/24

......................

United

Arab

Emirates

300,000

299,961

Senior

Note

,

144A,

5%,

8/01/24

........................

United

Arab

Emirates

1,294,000

1,332,154

FedEx

Corp.

,

Senior

Bond

,

4.05

%

,

2/15/48

..................

United

States

650,000

747,895

2,380,010

Airlines

0.7%

g

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

4/20/29

............................

United

States

600,000

649,500

g

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

1,100,000

1,182,602

g

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

900,000

967,374

g

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

100,000

103,643

2,903,119

Auto

Components

1.3%

g

Allison

Transmission,

Inc.

,

Senior

Bond,

144A,

5.875%,

6/01/29

.....................

United

States

800,000

877,600

Senior

Bond,

144A,

3.75%,

1/30/31

......................

United

States

500,000

492,060

Dana,

Inc.

,

Senior

Note

,

5.625

%

,

6/15/28

...................

United

States

1,200,000

1,301,040

Goodyear

Tire

&

Rubber

Co.

(The)

,

Senior

Note

,

4.875

%

,

3/15/27

United

States

1,300,000

1,381,035

g

Real

Hero

Merger

Sub

2,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

2/01/29

United

States

1,000,000

1,038,600

5,090,335

Banks

2.6%

g

Akbank

TAS

,

Senior

Note

,

144A,

5.125%,

3/31/25

.....................

Turkey

1,200,000

1,209,000

Senior

Note

,

144A,

6.8%,

2/06/26

.......................

Turkey

400,000

423,086

Banco

Santander

SA

,

Sub.

Note

,

2.749

%

,

12/03/30

............

Spain

300,000

297,454

g

BNP

Paribas

SA

,

Senior

Note

,

144A,

2.219%

to

6/09/25,

FRN

thereafter

,

6/09/26

...................................

France

500,000

515,657

g

China

Construction

Bank

Corp.

,

Sub.

Note

,

Reg

S,

4.25%

to

2/27/24,

FRN

thereafter

,

2/27/29

...............................

China

800,000

858,403

f

Comerica,

Inc.

,

Junior

Sub.

Bond

,

5.625%

to

10/01/25,

FRN

thereafter

,

Perpetual

.................................

United

States

300,000

333,000

HSBC

Holdings

plc

,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

.....

United

Kingdom

800,000

831,133

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

300,000

300,480

Industrial

&

Commercial

Bank

of

China

Ltd.

,

Senior

Note

,

3.538

%

,

11/08/27

..........................................

China

900,000

996,147

JPMorgan

Chase

&

Co.

,

f

R,

Junior

Sub.

Bond,

6%

to

8/01/23,

FRN

thereafter,

Perpetual

.

United

States

213,000

226,579

Senior

Bond,

2.522%

to

4/22/30,

FRN

thereafter,

4/22/31

.....

United

States

1,000,000

1,029,877

Senior

Note

,

3.2%,

6/15/26

...........................

United

States

1,213,000

1,321,311

Sub.

Note,

3.375%,

5/01/23

...........................

United

States

309,000

325,389

Lloyds

Banking

Group

plc

,

Senior

Note

,

3.87%

to

7/09/24,

FRN

thereafter

,

7/09/25

...................................

United

Kingdom

200,000

216,765

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-11

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Banks

(continued)

g

Societe

Generale

SA

,

Senior

Bond

,

144A,

2.889%

to

6/09/31,

FRN

thereafter

,

6/09/32

...................................

France

800,000

$

810,536

SVB

Financial

Group

,

Senior

Note

,

3.125

%

,

6/05/30

...........

United

States

300,000

319,872

g

UniCredit

SpA

,

Senior

Bond

,

144A,

3.127%

to

6/03/31,

FRN

thereafter

,

6/03/32

...................................

Italy

500,000

502,164

10,516,853

Beverages

0.7%

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/30

Belgium

1,700,000

1,892,775

g

Primo

Water

Holdings,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

4/30/29

.

Canada

1,000,000

1,001,250

2,894,025

Biotechnology

0.2%

AbbVie,

Inc.

,

Senior

Note

,

3.2

%

,

11/21/29

..................

United

States

700,000

760,817

Building

Products

0.4%

Owens

Corning

,

Senior

Bond

,

4.3

%

,

7/15/47

.................

United

States

700,000

815,563

g

Standard

Industries,

Inc.

,

Senior

Bond,

144A,

4.75%,

1/15/28

......................

United

States

500,000

523,975

Senior

Bond,

144A,

4.375%,

7/15/30

.....................

United

States

200,000

206,841

Senior

Bond,

144A,

3.375%,

1/15/31

.....................

United

States

200,000

191,712

1,738,091

Capital

Markets

0.4%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note

,

3.75

%

,

2/25/26

..

United

States

600,000

664,057

Morgan

Stanley

,

Senior

Bond

,

3.591%

to

7/22/27,

FRN

thereafter

,

7/22/28

...........................................

United

States

809,000

896,727

1,560,784

Chemicals

3.3%

g

Alpek

SAB

de

CV

,

Senior

Note

,

144A,

4.25

%

,

9/18/29

.........

Mexico

800,000

870,624

Anagram,

Inc.

,

Secured

Note

,

10

%

,

8/15/26

.................

United

States

131,107

126,810

g

Axalta

Coating

Systems

LLC

,

Senior

Note

,

144A,

3.375

%

,

2/15/29

United

States

1,050,000

1,029,194

g

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

1,600,000

1,671,136

CF

Industries,

Inc.

,

Senior

Bond

,

5.15

%

,

3/15/34

..............

United

States

400,000

485,548

g

CNAC

HK

Finbridge

Co.

Ltd.

,

Senior

Note

,

Reg

S,

4.875

%

,

3/14/25

China

800,000

878,599

g

CVR

Partners

LP

/

CVR

Nitrogen

Finance

Corp.

,

Senior

Secured

Note

,

144A,

6.125

%

,

6/15/28

...........................

United

States

300,000

307,875

g

Element

Solutions,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

9/01/28

....

United

States

1,100,000

1,123,942

g

Gates

Global

LLC

/

Gates

Corp.

,

Senior

Note

,

144A,

6.25

%

,

1/15/26

United

States

1,200,000

1,261,068

HB

Fuller

Co.

,

Senior

Note

,

4.25

%

,

10/15/28

................

United

States

800,000

828,000

g

INEOS

Quattro

Finance

1

plc

,

Senior

Note

,

144A,

3.75

%

,

7/15/26

United

Kingdom

800,000

EUR

977,793

g

Ingevity

Corp.

,

Senior

Note

,

144A,

3.875

%

,

11/01/28

..........

United

States

400,000

397,516

Methanex

Corp.

,

Senior

Note

,

5.125

%

,

10/15/27

.............

Canada

500,000

540,695

g

SABIC

Capital

II

BV

,

Senior

Note

,

144A,

4.5

%

,

10/10/28

........

Saudi

Arabia

600,000

691,775

g

SCIH

Salt

Holdings,

Inc.

,

Senior

Note

,

144A,

6.625%,

5/01/29

.....................

United

States

500,000

501,875

Senior

Secured

Note,

144A,

4.875%,

5/01/28

..............

United

States

300,000

300,732

g

Syngenta

Finance

NV

,

Senior

Note

,

144A,

4.892

%

,

4/24/25

.....

Switzerland

800,000

887,299

Westlake

Chemical

Corp.

,

Senior

Note

,

3.375

%

,

6/15/30

.......

United

States

200,000

215,722

g

Yara

International

ASA

,

Senior

Note

,

144A,

3.148

%

,

6/04/30

....

Brazil

100,000

107,134

13,203,337

Commercial

Services

&

Supplies

1.3%

g

Allied

Universal

Holdco

LLC

/

Allied

Universal

Finance

Corp.

,

Senior

Note

,

144A,

6

%

,

6/01/29

..............................

United

States

1,200,000

1,218,132

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-12

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Commercial

Services

&

Supplies

(continued)

g

Allied

Universal

Holdco

LLC

/

Allied

Universal

Finance

Corp.

/

Atlas

LuxCo

4

SARL

,

Senior

Secured

Note

,

144A,

4.625

%

,

6/01/28

..

United

States

400,000

$

401,944

g

Nielsen

Finance

LLC

/

Nielsen

Finance

Co.

,

Senior

Bond

,

144A,

4.75

%

,

7/15/31

.....................................

United

States

1,200,000

1,204,500

g

Prime

Security

Services

Borrower

LLC

/

Prime

Finance,

Inc.

,

Senior

Secured

Note

,

144A,

3.375

%

,

8/31/27

....................

United

States

1,300,000

1,262,625

g

Stericycle,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

1/15/29

...........

United

States

1,000,000

1,001,515

5,088,716

Communications

Equipment

0.3%

g

CommScope

Technologies

LLC

,

Senior

Note

,

144A,

5

%

,

3/15/27

.

United

States

1,374,000

1,408,350

Construction

&

Engineering

0.2%

g

Arcosa

,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

4/15/29

.............

United

States

300,000

305,850

g

Great

Lakes

Dredge

&

Dock

Corp.

,

Senior

Note

,

144A,

5.25

%

,

6/01/29

...........................................

United

States

500,000

516,450

g

Rutas

2

and

7

Finance

Ltd.

,

Senior

Secured

Bond

,

144A,

Zero

Cpn

.,

9/30/36

...........................................

United

States

200,000

145,335

967,635

Consumer

Finance

0.4%

g

FirstCash

,

Inc.

,

Senior

Note

,

144A,

4.625

%

,

9/01/28

...........

United

States

1,000,000

1,046,855

OneMain

Finance

Corp.

,

Senior

Note

,

4

%

,

9/15/30

............

United

States

400,000

397,000

1,443,855

Containers

&

Packaging

1.6%

g

Ardagh

Metal

Packaging

Finance

USA

LLC

/

Ardagh

Metal

Packaging

Finance

plc

,

Senior

Note

,

144A,

4

%

,

9/01/29

......

United

States

800,000

795,000

g

Ardagh

Packaging

Finance

plc

/

Ardagh

Holdings

USA,

Inc.

,

Senior

Note

,

144A,

6%,

2/15/25

........................

United

States

248,000

256,488

Senior

Note

,

144A,

5.25%,

8/15/27

......................

United

States

300,000

306,399

Crown

Americas

LLC

/

Crown

Americas

Capital

Corp.

VI

,

Senior

Note

,

4.75

%

,

2/01/26

................................

United

States

1,066,000

1,107,579

g

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25

%

,

4/15/25

.....................................

United

States

1,278,000

1,254,996

g

Owens-Brockway

Glass

Container,

Inc.

,

Senior

Note

,

144A,

5.875%,

8/15/23

.....................

United

States

566,000

611,065

Senior

Note

,

144A,

6.625%,

5/13/27

.....................

United

States

100,000

108,950

g

Reynolds

Group

Issuer,

Inc.

/

Reynolds

Group

Issuer

LLC

/

Reynolds

Group

Issuer

Luxembourg

SA

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

..........................................

United

States

600,000

596,593

g

Sealed

Air

Corp.

,

Senior

Bond,

144A,

5.5%,

9/15/25

.......................

United

States

124,000

139,117

Senior

Note

,

144A,

5.125%,

12/01/24

....................

United

States

809,000

883,307

WRKCo

,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

400,000

419,501

6,478,995

Diversified

Financial

Services

0.4%

g

MPH

Acquisition

Holdings

LLC

,

Senior

Note

,

144A,

5.75

%

,

11/01/28

United

States

1,500,000

1,509,353

Diversified

Telecommunication

Services

1.2%

g

Altice

France

Holding

SA

,

Senior

Note

,

144A,

6

%

,

2/15/28

......

Luxembourg

900,000

897,462

g

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

1/15/28

....

France

200,000

207,790

g

AT&T,

Inc.

,

Senior

Bond

,

144A,

3.65

%

,

9/15/59

...............

United

States

800,000

812,495

Bell

Telephone

Co.

of

Canada

or

Bell

Canada

(The)

,

Senior

Bond

,

4.464

%

,

4/01/48

.....................................

Canada

150,000

186,944

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-13

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Telecommunication

Services

(continued)

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

g

Senior

Bond,

144A,

4.5%,

8/15/30

.......................

United

States

300,000

$

312,739

Senior

Bond,

4.5%,

5/01/32

............................

United

States

1,000,000

1,039,715

Telefonica

Emisiones

SA

,

Senior

Bond

,

4.895

%

,

3/06/48

........

Spain

150,000

180,103

TELUS

Corp.

,

Senior

Bond

,

4.6

%

,

11/16/48

..................

Canada

150,000

187,307

g

Virgin

Media

Secured

Finance

plc

,

Senior

Secured

Bond

,

144A,

4.5

%

,

8/15/30

......................................

United

Kingdom

900,000

907,875

4,732,430

Electric

Utilities

2.1%

g

CGNPC

International

Ltd.

,

Senior

Note

,

Reg

S,

3.75

%

,

12/11/27

..

China

300,000

324,214

Duke

Energy

Corp.

,

Senior

Bond

,

2.45

%

,

6/01/30

.............

United

States

400,000

404,904

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

1,300,000

1,482,167

g,h

Leeward

Renewable

Energy

Operations

LLC

,

Senior

Note

,

144A,

4.25

%

,

7/01/29

.....................................

United

States

1,000,000

1,015,000

Southern

Co.

(The)

,

Senior

Bond

,

3.25

%

,

7/01/26

.............

United

States

900,000

977,321

g

State

Grid

Overseas

Investment

2016

Ltd.

,

Senior

Note

,

144A,

3.5

%

,

5/04/27

......................................

China

1,651,000

1,821,044

g

Three

Gorges

Finance

I

Cayman

Islands

Ltd.

,

Senior

Note

,

144A,

3.15

%

,

6/02/26

.....................................

China

1,051,000

1,127,079

Virginia

Electric

and

Power

Co.

,

Senior

Bond

,

6.35

%

,

11/30/37

...

United

States

85,000

123,814

g

Vistra

Operations

Co.

LLC

,

Senior

Note

,

144A,

4.375

%

,

5/01/29

..

United

States

1,100,000

1,106,875

8,382,418

Electrical

Equipment

0.3%

g

Sensata

Technologies

BV

,

Senior

Note

,

144A,

4

%

,

4/15/29

......

United

States

1,000,000

1,016,333

Electronic

Equipment,

Instruments

&

Components

0.5%

CDW

LLC

/

CDW

Finance

Corp.

,

Senior

Note

,

3.25

%

,

2/15/29

...

United

States

900,000

913,005

Flex

Ltd.

,

Senior

Note

,

4.875

%

,

5/12/30

....................

United

States

800,000

929,587

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

..............

United

States

200,000

201,753

2,044,345

Energy

Equipment

&

Services

0.4%

g

Nabors

Industries

Ltd.

,

Senior

Note

,

144A,

7.25

%

,

1/15/26

......

United

States

800,000

785,612

g

Schlumberger

Holdings

Corp.

,

Senior

Note

,

144A,

3.9

%

,

5/17/28

.

United

States

400,000

447,213

g

Weatherford

International

Ltd.

,

Senior

Note

,

144A,

11

%

,

12/01/24

.

United

States

417,000

434,210

1,667,035

Entertainment

0.5%

g

Live

Nation

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

3.75

%

,

1/15/28

...........................................

United

States

600,000

603,516

Netflix,

Inc.

,

Senior

Bond,

4.375%,

11/15/26

.........................

United

States

300,000

341,541

Senior

Bond,

5.875%,

11/15/28

.........................

United

States

1,000,000

1,228,715

2,173,772

Equity

Real

Estate

Investment

Trusts

(REITs)

1.9%

AvalonBay

Communities,

Inc.

,

Senior

Bond

,

2.45

%

,

1/15/31

.....

United

States

500,000

513,707

g

Global

Net

Lease,

Inc.

/

Global

Net

Lease

Operating

Partnership

LP

,

Senior

Note

,

144A,

3.75

%

,

12/15/27

.....................

United

States

400,000

396,460

g

MGM

Growth

Properties

Operating

Partnership

LP

/

MGP

Finance

Co-Issuer,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

2/15/29

.........

United

States

300,000

305,456

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-14

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

MPT

Operating

Partnership

LP

/

MPT

Finance

Corp.

,

Senior

Bond,

5.25%,

8/01/26

...........................

United

States

247,000

$

255,079

Senior

Bond,

5%,

10/15/27

............................

United

States

889,000

943,531

Senior

Bond,

3.5%,

3/15/31

............................

United

States

300,000

303,374

g

Park

Intermediate

Holdings

LLC

/

PK

Domestic

Property

LLC

/

PK

Finance

Co-Issuer

,

Senior

Secured

Note,

144A,

5.875%,

10/01/28

.............

United

States

1,000,000

1,067,975

Senior

Secured

Note,

144A,

4.875%,

5/15/29

..............

United

States

300,000

310,710

SBA

Communications

Corp.

,

Senior

Note

,

3.875

%

,

2/15/27

.....

United

States

800,000

823,500

Simon

Property

Group

LP

,

Senior

Bond

,

4.25

%

,

11/30/46

.......

United

States

800,000

923,698

g

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Note

,

144A,

3.75

%

,

2/15/27

...........................................

United

States

1,400,000

1,428,609

g

XHR

LP

,

Senior

Secured

Note

,

144A,

4.875

%

,

6/01/29

.........

United

States

400,000

413,500

7,685,599

Food

&

Staples

Retailing

0.2%

g

Cencosud

SA

,

Senior

Note

,

144A,

4.375

%

,

7/17/27

...........

Chile

700,000

766,997

Food

Products

1.8%

B&G

Foods,

Inc.

,

Senior

Note

,

5.25

%

,

9/15/27

...............

United

States

1,500,000

1,564,185

g

Bimbo

Bakeries

USA,

Inc.

,

Senior

Bond

,

144A,

4

%

,

5/17/51

.....

Mexico

200,000

215,711

g

Chobani

LLC

/

Chobani

Finance

Corp.,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

11/15/28

...............................

United

States

1,200,000

1,245,900

g

JBS

Finance

Luxembourg

SARL

,

Senior

Bond

,

144A,

3.625

%

,

1/15/32

...........................................

United

States

400,000

400,276

Kraft

Heinz

Foods

Co.

,

Senior

Note

,

3.875

%

,

5/15/27

..........

United

States

1,200,000

1,319,410

g

MHP

Lux

SA

,

Senior

Note

,

144A,

6.95

%

,

4/03/26

.............

Ukraine

1,100,000

1,171,478

g

Post

Holdings,

Inc.

,

Senior

Bond

,

144A,

4.5

%

,

9/15/31

.........

United

States

1,500,000

1,499,400

7,416,360

Gas

Utilities

0.1%

Piedmont

Natural

Gas

Co.,

Inc.

,

Senior

Bond

,

3.35

%

,

6/01/50

....

United

States

300,000

310,044

Health

Care

Providers

&

Services

1.6%

Anthem,

Inc.

,

Senior

Bond

,

3.7

%

,

9/15/49

...................

United

States

150,000

166,583

Centene

Corp.

,

g

Senior

Note

,

144A,

5.375%,

6/01/26

.....................

United

States

324,000

338,985

Senior

Note

,

4.25%,

12/15/27

..........................

United

States

300,000

316,500

Senior

Note

,

4.625%,

12/15/29

.........................

United

States

200,000

220,204

Senior

Note

,

3.375%,

2/15/30

..........................

United

States

600,000

628,005

g

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

....................

United

States

800,000

839,508

Senior

Secured

Note,

144A,

5.625%,

3/15/27

..............

United

States

700,000

748,171

g

DaVita,

Inc.

,

Senior

Note

,

144A,

4.625

%

,

6/01/30

.............

United

States

1,200,000

1,235,364

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

330,000

367,192

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

2.8

%

,

6/30/31

...........

United

States

200,000

209,039

g

Tenet

Healthcare

Corp.

,

Senior

Secured

Note

,

144A,

4.25

%

,

6/01/29

United

States

1,200,000

1,216,500

6,286,051

Hotels,

Restaurants

&

Leisure

3.1%

g

Boyd

Gaming

Corp.

,

Senior

Bond

,

144A,

4.75

%

,

6/15/31

........

United

States

900,000

934,875

g

Caesars

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

7/01/25

...........................................

United

States

400,000

424,500

g

Caesars

Resort

Collection

LLC

/

CRC

Finco

,

Inc.

,

Senior

Secured

Note

,

144A,

5.75

%

,

7/01/25

............................

United

States

1,000,000

1,055,000

g

Carnival

Corp.

,

Senior

Note

,

144A,

5.75

%

,

3/01/27

............

United

States

400,000

419,500

g

Everi

Holdings,

Inc.

,

Senior

Note

,

144A,

5

%

,

7/15/29

..........

United

States

700,000

700,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-15

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Hotels,

Restaurants

&

Leisure

(continued)

g

Genting

New

York

LLC

/

GENNY

Capital,

Inc.

,

Senior

Note

,

144A,

3.3

%

,

2/15/26

......................................

United

States

200,000

$

202,315

g

Golden

Nugget,

Inc.

,

Senior

Note

,

144A,

6.75

%

,

10/15/24

......

United

States

1,132,000

1,144,984

g

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

5.25

%

,

1/15/29

.....................................

United

States

1,300,000

1,396,103

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

800,000

852,327

MGM

Resorts

International

,

Senior

Note

,

4.75

%

,

10/15/28

......

United

States

1,000,000

1,064,500

g

Motion

Bondco

DAC

,

Senior

Note

,

144A,

6.625

%

,

11/15/27

.....

United

Kingdom

200,000

203,292

g

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

..........

United

States

1,800,000

1,889,487

g,h

Penn

National

Gaming,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

7/01/29

.

United

States

300,000

300,375

g

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

5

%

,

1/15/29

.......

Macau

1,200,000

1,213,224

g

TUI

Cruises

GmbH

,

Senior

Note

,

144A,

6.5

%

,

5/15/26

.........

Germany

100,000

EUR

123,415

g

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

........

Macau

600,000

627,378

12,551,275

Household

Durables

0.6%

Mohawk

Industries,

Inc.

,

Senior

Note

,

3.625

%

,

5/15/30

.........

United

States

1,300,000

1,424,114

g

Williams

Scotsman

International,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

8/15/28

.....................................

United

States

1,000,000

1,034,700

2,458,814

Household

Products

0.8%

g

Central

Garden

&

Pet

Co.

,

Senior

Bond

,

144A,

4.125

%

,

4/30/31

..

United

States

1,100,000

1,115,455

g

Energizer

Holdings,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

3/31/29

...

United

States

1,300,000

1,303,107

g

Kimberly-Clark

de

Mexico

SAB

de

CV

,

Senior

Bond

,

144A,

2.431

%

,

7/01/31

...........................................

Mexico

300,000

297,947

g

Spectrum

Brands,

Inc.

,

Senior

Bond,

144A,

5.5%,

7/15/30

.......................

United

States

200,000

216,270

Senior

Bond,

144A,

3.875%,

3/15/31

.....................

United

States

500,000

493,027

3,425,806

Independent

Power

and

Renewable

Electricity

Producers

1.5%

g

Atlantica

Sustainable

Infrastructure

plc

,

Senior

Note

,

144A,

4.125

%

,

6/15/28

...........................................

Spain

400,000

408,020

g

Calpine

Corp.

,

Senior

Bond,

144A,

5%,

2/01/31

........................

United

States

600,000

598,200

Senior

Note

,

144A,

5.125%,

3/15/28

.....................

United

States

200,000

203,783

Senior

Note

,

144A,

4.625%,

2/01/29

.....................

United

States

700,000

690,161

g

Clearway

Energy

Operating

LLC

,

Senior

Note

,

144A,

3.75

%

,

2/15/31

...........................................

United

States

700,000

697,442

g

Colbun

SA

,

Senior

Note

,

144A,

3.95%,

10/11/27

.....................

Chile

800,000

875,316

Senior

Note

,

144A,

3.15%,

3/06/30

......................

Chile

300,000

306,595

g

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

1,100,000

1,095,782

g

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

7.25

%

,

5/15/27

...........................................

United

States

1,300,000

1,214,687

6,089,986

Insurance

0.3%

Arch

Capital

Group

Ltd.

,

Senior

Bond

,

3.635

%

,

6/30/50

.........

United

States

1,000,000

1,080,294

Interactive

Media

&

Services

0.5%

g

Tencent

Holdings

Ltd.

,

Senior

Note

,

144A,

2.39

%

,

6/03/30

......

China

2,100,000

2,094,687

Internet

&

Direct

Marketing

Retail

0.3%

JD.com,

Inc.

,

Senior

Note

,

3.375

%

,

1/14/30

.................

China

1,200,000

1,282,269

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-16

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

IT

Services

1.2%

g

Cablevision

Lightpath

LLC

,

Senior

Secured

Note

,

144A,

3.875

%

,

9/15/27

...........................................

United

States

900,000

$

892,503

g

Gartner,

Inc.

,

Senior

Note

,

144A,

4.5%,

7/01/28

.......................

United

States

700,000

740,204

Senior

Note

,

144A,

3.625%,

6/15/29

.....................

United

States

200,000

203,250

g

Northwest

Fiber

LLC

/

Northwest

Fiber

Finance

Sub,

Inc.

,

Senior

Note

,

144A,

6

%

,

2/15/28

..............................

United

States

1,100,000

1,103,938

g

Presidio

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

2/01/27

United

States

1,200,000

1,236,912

g

Tempo

Acquisition

LLC

/

Tempo

Acquisition

Finance

Corp.

,

Senior

Note

,

144A,

6.75

%

,

6/01/25

...........................

United

States

600,000

610,128

4,786,935

Life

Sciences

Tools

&

Services

0.0%

†

g

Charles

River

Laboratories

International,

Inc.

,

Senior

Note

,

144A,

3.75

%

,

3/15/29

.....................................

United

States

200,000

203,034

Machinery

0.6%

g

ATS

Automation

Tooling

Systems,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

12/15/28

..........................................

Canada

1,400,000

1,438,073

g

TK

Elevator

U.S.

Newco

,

Inc.

,

Senior

Secured

Note

,

144A,

5.25

%

,

7/15/27

...........................................

Germany

1,100,000

1,160,500

2,598,573

Marine

0.3%

g

ICTSI

Treasury

BV

,

Senior

Note

,

Reg

S,

4.625

%

,

1/16/23

.......

Philippines

1,200,000

1,275,000

Media

2.4%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

1,300,000

1,330,525

g

Clear

Channel

International

BV

,

Senior

Secured

Note

,

144A,

6.625

%

,

8/01/25

.....................................

United

Kingdom

300,000

316,302

g

Clear

Channel

Outdoor

Holdings,

Inc.

,

Senior

Note

,

144A,

7.75%,

4/15/28

......................

United

States

400,000

419,522

Senior

Note

,

144A,

7.5%,

6/01/29

.......................

United

States

300,000

310,976

g

Clear

Channel

Worldwide

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

8/15/27

................................

United

States

300,000

308,336

g

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Note

,

144A,

6.625%,

8/15/27

.....................

United

States

300,000

147,750

Senior

Secured

Note,

144A,

5.375%,

8/15/26

..............

United

States

400,000

259,520

DISH

DBS

Corp.

,

Senior

Note

,

5.875

%

,

11/15/24

.............

United

States

100,000

107,500

g

Gray

Television,

Inc.

,

Senior

Note

,

144A,

4.75

%

,

10/15/30

......

United

States

1,000,000

997,780

g

News

Corp.

,

Senior

Note

,

144A,

3.875

%

,

5/15/29

.............

United

States

200,000

202,250

g

Nexstar

Broadcasting,

Inc.

,

Senior

Note

,

144A,

4.75

%

,

11/01/28

..

United

States

800,000

823,000

g

Outfront

Media

Capital

LLC

/

Outfront

Media

Capital

Corp.

,

Senior

Note

,

144A,

4.25

%

,

1/15/29

...........................

United

States

1,100,000

1,109,075

g

Sinclair

Television

Group,

Inc.

,

Senior

Bond,

144A,

5.5%,

3/01/30

.......................

United

States

300,000

306,306

Senior

Secured

Note,

144A,

4.125%,

12/01/30

.............

United

States

800,000

787,000

g

Sirius

XM

Radio,

Inc.

,

Senior

Note

,

144A,

4

%

,

7/15/28

.........

United

States

600,000

618,750

g

Univision

Communications,

Inc.

,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

..............

United

States

1,321,000

1,351,720

Senior

Secured

Note,

144A,

4.5%,

5/01/29

................

United

States

100,000

100,981

9,497,293

Metals

&

Mining

1.6%

Commercial

Metals

Co.

,

Senior

Bond

,

3.875

%

,

2/15/31

.........

United

States

1,200,000

1,209,000

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-17

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Metals

&

Mining

(continued)

g

Constellium

SE

,

Senior

Note

,

144A,

3.75

%

,

4/15/29

...........

United

States

1,000,000

$

991,270

g

CSN

Inova

Ventures

,

Senior

Note

,

144A,

6.75

%

,

1/28/28

.......

Brazil

800,000

885,800

g

FMG

Resources

August

2006

Pty.

Ltd.

,

Senior

Bond

,

144A,

4.375

%

,

4/01/31

...........................................

Australia

1,500,000

1,606,748

g

Novelis

Corp.

,

Senior

Bond

,

144A,

5.875

%

,

9/30/26

...........

United

States

1,059,000

1,102,953

g

SunCoke

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

6/30/29

United

States

600,000

600,000

6,395,771

Mortgage

Real

Estate

Investment

Trusts

(REITs)

0.0%

†

g

Apollo

Commercial

Real

Estate

Finance,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

6/15/29

................................

United

States

100,000

98,735

Multiline

Retail

0.0%

b,e,g

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

1,005,954

—

b,e,g

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

446,180

—

—

Oil,

Gas

&

Consumable

Fuels

5.3%

g

Antero

Resources

Corp.

,

Senior

Note

,

144A,

8.375%,

7/15/26

.....................

United

States

200,000

227,750

Senior

Note

,

144A,

7.625%,

2/01/29

.....................

United

States

200,000

222,260

Apache

Corp.

,

Senior

Note

,

4.625%,

11/15/25

.........................

United

States

600,000

649,707

Senior

Note

,

4.875%,

11/15/27

.........................

United

States

500,000

542,197

Canadian

Natural

Resources

Ltd.

,

Senior

Bond

,

2.95

%

,

7/15/30

..

Canada

450,000

466,986

Cenovus

Energy,

Inc.

,

Senior

Note

,

5.375

%

,

7/15/25

..........

Canada

500,000

572,358

g

Cheniere

Energy

Partners

LP

,

Senior

Note

,

144A,

4

%

,

3/01/31

...

United

States

1,100,000

1,150,875

g

Continental

Resources,

Inc.

,

Senior

Bond

,

144A,

5.75

%

,

1/15/31

..

United

States

600,000

719,250

g

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.

,

Senior

Note

,

144A,

6

%

,

2/01/29

...................

United

States

1,500,000

1,573,125

g

CrownRock

LP

/

CrownRock

Finance,

Inc.

,

Senior

Note

,

144A,

5

%

,

5/01/29

...........................................

United

States

300,000

315,482

g

CVR

Energy,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

2/15/25

..........

United

States

500,000

501,255

g

DT

Midstream,

Inc.

,

Senior

Bond

,

144A,

4.375

%

,

6/15/31

.......

United

States

500,000

511,520

Energy

Transfer

LP

,

Senior

Note

,

4.05

%

,

3/15/25

.............

United

States

200,000

217,021

EnLink

Midstream

LLC

,

Senior

Bond,

5.375%,

6/01/29

..........................

United

States

1,100,000

1,149,428

g

Senior

Note

,

144A,

5.625%,

1/15/28

.....................

United

States

100,000

105,945

e,g

EnQuest

plc

,

Senior

Note

,

144A,

Reg

S,

PIK,

7

%

,

10/15/23

.....

United

Kingdom

909,763

837,262

g

Hilcorp

Energy

I

LP

/

Hilcorp

Finance

Co.

,

Senior

Bond,

144A,

6%,

2/01/31

........................

United

States

700,000

742,875

Senior

Note

,

144A,

5.75%,

2/01/29

......................

United

States

200,000

208,781

g

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

10%,

2/29/24

......................

United

States

307,101

315,930

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

1,394,630

1,452,347

MPLX

LP

,

Senior

Note

,

2.65

%

,

8/15/30

.....................

United

States

1,500,000

1,515,305

Occidental

Petroleum

Corp.

,

Senior

Bond,

6.125%,

1/01/31

..........................

United

States

600,000

706,668

Senior

Bond,

6.45%,

9/15/36

...........................

United

States

500,000

598,455

Senior

Note

,

8.875%,

7/15/30

..........................

United

States

700,000

937,086

g

Rattler

Midstream

LP

,

Senior

Note

,

144A,

5.625

%

,

7/15/25

......

United

States

1,400,000

1,473,500

Sabine

Pass

Liquefaction

LLC

,

Senior

Secured

Note

,

4.5

%

,

5/15/30

United

States

1,600,000

1,848,382

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-18

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Sunoco

LP

/

Sunoco

Finance

Corp.

,

Senior

Note

,

6%,

4/15/27

.............................

United

States

500,000

$

524,563

g

Senior

Note

,

144A,

4.5%,

5/15/29

.......................

United

States

1,200,000

1,224,624

21,310,937

Paper

&

Forest

Products

0.3%

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

700,000

735,000

Senior

Bond,

3.125%,

1/15/32

..........................

Brazil

400,000

396,648

1,131,648

Personal

Products

0.3%

g

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

800,000

822,840

g

Prestige

Brands,

Inc.

,

Senior

Bond

,

144A,

3.75

%

,

4/01/31

.......

United

States

600,000

579,675

1,402,515

Pharmaceuticals

1.8%

g

Bausch

Health

Cos.,

Inc.

,

Senior

Bond,

144A,

5.25%,

2/15/31

......................

United

States

300,000

280,890

Senior

Note

,

144A,

5%,

2/15/29

........................

United

States

200,000

186,754

Senior

Secured

Note,

144A,

4.875%,

6/01/28

..............

United

States

1,000,000

1,024,750

g

Bayer

US

Finance

II

LLC

,

Senior

Bond

,

144A,

4.375

%

,

12/15/28

..

Germany

889,000

1,019,489

g

Endo

Dac

/

Endo

Finance

LLC

/

Endo

Finco

,

Inc.

,

Secured

Note,

144A,

9.5%,

7/31/27

......................

United

States

652,000

665,865

Senior

Note

,

144A,

6%,

6/30/28

........................

United

States

659,000

445,253

g

Jazz

Securities

DAC

,

Senior

Secured

Note

,

144A,

4.375

%

,

1/15/29

United

States

1,200,000

1,245,660

g

Organon

&

Co.

/

Organon

Foreign

Debt

Co-Issuer

BV

,

Senior

Bond,

144A,

5.125%,

4/30/31

.....................

United

States

600,000

618,870

Senior

Secured

Note,

144A,

4.125%,

4/30/28

..............

United

States

1,100,000

1,123,155

g

Par

Pharmaceutical,

Inc.

,

Senior

Secured

Note

,

144A,

7.5

%

,

4/01/27

United

States

184,000

188,354

g

Royalty

Pharma

plc

,

Senior

Bond

,

144A,

3.3

%

,

9/02/40

.........

United

States

500,000

504,427

7,303,467

Real

Estate

Management

&

Development

0.9%

g

China

Overseas

Finance

Cayman

VI

Ltd.

,

Senior

Note

,

Reg

S,

5.95

%

,

5/08/24

.....................................

China

700,000

787,111

g

Five

Point

Operating

Co.

LP

/

Five

Point

Capital

Corp.

,

Senior

Note

,

144A,

7.875

%

,

11/15/25

...............................

United

States

800,000

847,088

g

Forestar

Group,

Inc.

,

Senior

Note

,

144A,

3.85

%

,

5/15/26

.......

United

States

500,000

505,150

g

Howard

Hughes

Corp.

(The)

,

Senior

Note

,

144A,

5.375

%

,

8/01/28

United

States

1,000,000

1,063,630

g

Vivion

Investments

SARL

,

Senior

Note

,

Reg

S,

3

%

,

8/08/24

.....

Luxembourg

200,000

EUR

236,940

3,439,919

Road

&

Rail

0.8%

CSX

Corp.

,

Senior

Bond

,

4.1

%

,

3/15/44

....................

United

States

550,000

649,004

g

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

1,500,000

2,065,530

g

NESCO

Holdings

II,

Inc.

,

Secured

Note

,

144A,

5.5

%

,

4/15/29

....

United

States

500,000

522,500

3,237,034

Semiconductors

&

Semiconductor

Equipment

0.0%

†

Maxim

Integrated

Products,

Inc.

,

Senior

Note

,

3.375

%

,

3/15/23

..

United

States

100,000

104,241

Software

0.3%

g

Blackboard,

Inc.

,

Secured

Note

,

144A,

10.375

%

,

11/15/24

.......

United

States

200,000

212,375

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-19

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Software

(continued)

g

Rocket

Software,

Inc.

,

Senior

Note

,

144A,

6.5

%

,

2/15/29

.......

United

States

1,100,000

$

1,093,026

1,305,401

Specialty

Retail

1.3%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

200,000

236,804

L

Brands,

Inc.

,

Senior

Bond,

5.25%,

2/01/28

...........................

United

States

500,000

560,120

g

Senior

Note

,

144A,

6.625%,

10/01/30

....................

United

States

200,000

231,750

g

Lithia

Motors,

Inc.

,

Senior

Bond,

144A,

4.375%,

1/15/31

.....................

United

States

500,000

536,247

Senior

Note

,

144A,

3.875%,

6/01/29

.....................

United

States

700,000

726,460

g

Magic

Mergeco

,

Inc.

,

Senior

Note

,

144A,

7.875%,

5/01/29

.....................

United

States

600,000

619,500

Senior

Secured

Note,

144A,

5.25%,

5/01/28

...............

United

States

300,000

308,154

g

Park

River

Holdings,

Inc.

,

Senior

Note

,

144A,

6.75

%

,

8/01/29

....

United

States

1,200,000

1,217,490

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

5.75

%

,

7/15/25

..

United

States

236,150

224,638

g

Victoria's

Secret

&

Co.

,

Senior

Note

,

144A,

4.625

%

,

7/15/29

.....

United

States

400,000

400,000

5,061,163

Thrifts

&

Mortgage

Finance

0.8%

g

Ladder

Capital

Finance

Holdings

LLLP

/

Ladder

Capital

Finance

Corp.

,

Senior

Note

,

144A,

4.75

%

,

6/15/29

.................

United

States

300,000

300,375

MGIC

Investment

Corp.

,

Senior

Note

,

5.25

%

,

8/15/28

..........

United

States

800,000

849,000

g

PennyMac

Financial

Services,

Inc.

,

Senior

Note

,

144A,

5.375

%

,

10/15/25

..........................................

United

States

1,200,000

1,266,558

g

United

Wholesale

Mortgage

LLC

,

Senior

Note

,

144A,

5.5

%

,

11/15/25

..........................................

United

States

900,000

934,619

3,350,552

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Note

,

3.4

%

,

5/06/30

................

United

States

1,200,000

1,266,944

BAT

Capital

Corp.

,

Senior

Bond

,

4.54

%

,

8/15/47

..............

United

Kingdom

50,000

53,270

1,320,214

Trading

Companies

&

Distributors

0.7%

g

H&E

Equipment

Services,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

12/15/28

..........................................

United

States

1,200,000

1,182,300

g

Herc

Holdings,

Inc.

,

Senior

Note

,

144A,

5.5

%

,

7/15/27

.........

United

States

1,000,000

1,055,470

g

WESCO

Distribution,

Inc.

,

Senior

Note

,

144A,

7.25

%

,

6/15/28

...

United

States

500,000

557,592

2,795,362

Wireless

Telecommunication

Services

1.0%

e,g

Digicel

Group

Holdings

Ltd.

,

Senior

Note

,

144A,

PIK,

8

%

,

4/01/25

Bermuda

165,262

137,897

Hughes

Satellite

Systems

Corp.

,

Senior

Note

,

6.625

%

,

8/01/26

..

United

States

800,000

899,572

Sprint

Communications,

Inc.

,

Senior

Note

,

6

%

,

11/15/22

........

United

States

405,000

429,300

Sprint

Corp.

,

Senior

Note

,

7.875

%

,

9/15/23

.................

United

States

405,000

460,617

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

500,000

499,800

Senior

Secured

Note,

3.875%,

4/15/30

...................

United

States

1,300,000

1,457,625

3,884,811

Total

Corporate

Bonds

(Cost

$208,058,924)

.....................................

212,197,919

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-20

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

1.4%

Aerospace

&

Defense

0.2%

Dynasty

Acquisition

Co.,

Inc.

,

2020

Term

Loan,

B1,

3.647%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

448,713

$

437,776

2020

Term

Loan,

B2,

3.647%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

241,244

235,363

673,139

a

a

a

a

a

a

Diversified

Consumer

Services

0.2%

KUEHG

Corp.

,

Term

Loan,

B3

,

4.75

%

,

(

3-month

USD

LIBOR

+

3.75

%

),

2/21/25

.....................................

United

States

728,467

718,717

Entertainment

0.2%

Diamond

Sports

Group

LLC

,

Term

Loan

,

3.36

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

447,149

272,763

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC)

,

First

Lien,

Term

Loan,

B1

,

2.86

%

,

(

1-month

USD

LIBOR

+

2.75

%

),

5/18/25

..............................

United

States

775,031

762,681

1,035,444

a

a

a

a

a

a

Leisure

Products

0.2%

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.)

,

First

Lien,

Initial

Term

Loan

,

4.5

%

,

(

1-month

USD

LIBOR

+

3.5

%

),

12/16/24

..........................................

United

States

788,391

772,048

Media

0.4%

Cengage

Learning,

Inc.

,

2016

Refinancing

Term

Loan,

5.25%,

(1-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%),

6/07/23

.............

United

States

745,452

747,584

h,k

Term

Loan,

B,

TBD,

6/01/28

............................

United

States

747,414

749,286

1,496,870

a

a

a

a

a

a

Personal

Products

0.2%

Coty,

Inc.

,

USD

Term

Loan,

B

,

2.331

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

860,755

830,538

Total

Senior

Floating

Rate

Interests

(Cost

$5,587,520)

...........................

5,526,756

l

Marketplace

Loans

0.2%

Diversified

Financial

Services

0.2%

b

Lending

Club

-

LCX

PM,

10.19%

-

20.49%,

10/08/23

-

2/03/26

....

United

States

165,451

155,047

b

Lending

Club

-

LCX,

7.56%

-

25.65%,

9/26/22

-

2/28/25

.........

United

States

671,643

607,530

762,577

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$813,345)

.......................................

762,577

m

Loan

Participations

and

Assignments

0.4%

g

Russian

Railways

Via

RZD

Capital

plc,

Senior

Note

,

Reg

S,

5.7%,

4/05/22

...........................................

Russia

1,500,000

1,557,548

Total

Loan

Participations

and

Assignments

(Cost

$1,524,980)

....................

1,557,548

Foreign

Government

and

Agency

Securities

13.8%

g

African

Export-Import

Bank

(The),

Senior

Note

,

144A,

3.994%,

9/21/29

...........................................

Supranational

n

2,000,000

2,109,606

g

Angola

Government

Bond,

Senior

Note

,

144A,

8.25%,

5/09/28

...

Angola

2,700,000

2,825,307

g

Banque

Centrale

de

Tunisie

,

Senior

Note,

Reg

S,

5.625%,

2/17/24

Tunisia

2,300,000

EUR

2,550,443

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-21

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

g

Banque

Ouest

Africaine

de

Developpement

,

Senior

Note

,

144A,

5%,

7/27/27

...........................................

Supranational

n

1,200,000

$

1,338,763

g

Belarus

Government

Bond

,

Senior

Note

,

144A,

7.625%,

6/29/27

.....................

Belarus

1,200,000

1,174,200

Senior

Bond,

144A,

6.2%,

2/28/30

.......................

Belarus

1,200,000

1,046,340

Colombia

Government

Bond

,

Senior

Bond,

3.875%,

4/25/27

..........................

Colombia

1,400,000

1,489,362

Senior

Bond,

9.85%,

6/28/27

...........................

Colombia

5,315,000,000

COP

1,693,026

Senior

Bond,

4.5%,

3/15/29

............................

Colombia

500,000

546,730

Senior

Bond,

5%,

6/15/45

.............................

Colombia

1,900,000

2,025,305

g

Dominican

Republic

Government

Bond,

Senior

Note,

144A,

8.9%,

2/15/23

...........................................

Dominican

Republic

81,500,000

DOP

1,508,016

Ecopetrol

SA,

Senior

Bond,

4.125%,

1/16/25

.................

Colombia

800,000

843,984

f,g

Electricite

de

France

SA,

Junior

Sub.

Bond,

144A,

5.25%

to

1/29/23,

FRN

thereafter,

Perpetual

.............................

France

2,425,000

2,546,905

Equinor

ASA,

Senior

Note

,

2.375%,

5/22/30

.................

Norway

700,000

722,399

g

Export-Import

Bank

of

India,

Senior

Note

,

144A,

3.875%,

2/01/28

.

India

1,655,000

1,794,746

g

Gabon

Government

Bond

,

144A,

6.375%,

12/12/24

...............................

Gabon

837,538

894,443

Senior

Bond,

144A,

6.625%,

2/06/31

.....................

Gabon

1,600,000

1,616,057

g

Indonesia

Asahan

Aluminium

Persero

PT,

Senior

Note

,

144A,

5.45%,

5/15/30

.....................................

Indonesia

1,400,000

1,629,432

Indonesia

Government

Bond

,

FR70,

8.375%,

3/15/24

...............................

Indonesia

19,648,000,000

IDR

1,482,096

g

Senior

Bond,

144A,

4.35%,

1/08/27

......................

Indonesia

900,000

1,020,633

g

Senior

Note

,

144A,

3.85%,

7/18/27

......................

Indonesia

2,200,000

2,455,598

FR64,

6.125%,

5/15/28

...............................

Indonesia

9,500,000,000

IDR

656,155

g

Senior

Bond,

144A,

4.625%,

4/15/43

.....................

Indonesia

700,000

812,223

g

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

2,362,500

2,293,054

g

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

1,000,000

1,122,860

g

Kazakhstan

Government

Bond,

Senior

Bond,

144A,

4.875%,

10/14/44

..........................................

Kazakhstan

1,800,000

2,264,760

Mexico

Government

Bond

,

Senior

Note

,

4.15%,

3/28/27

...........................

Mexico

2,900,000

3,282,350

Senior

Note

,

3.75%,

1/11/28

...........................

Mexico

500,000

545,438

Senior

Bond,

4.75%,

4/27/32

...........................

Mexico

600,000

688,500

Peru

Government

Bond,

Senior

Bond,

6.55%,

3/14/37

..........

Peru

800,000

1,104,444

Petroleos

Mexicanos

,

Senior

Bond,

6.625%,

6/15/35

...........

Mexico

700,000

676,900

g

Russia

Government

Bond

,

Senior

Note

,

Reg

S,

4.75%,

5/27/26

.....................

Russia

1,200,000

1,365,167

Senior

Bond,

144A,

5.625%,

4/04/42

.....................

Russia

600,000

771,753

South

Africa

Government

Bond,

Senior

Bond,

5.875%,

6/22/30

...

South

Africa

700,000

800,317

Turkey

Government

Bond,

Senior

Bond,

4.875%,

10/09/26

......

Turkey

800,000

785,030

g

Ukraine

Government

Bond

,

Senior

Note,

144A,

7.75%,

9/01/22

.......................

Ukraine

200,000

210,516

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

369,000

398,414

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

369,000

403,516

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

500,000

527,065

o

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

Reg

S,

Zero

Cpn

.,

5/31/40

...........................................

Ukraine

978,000

1,162,832

p

Uruguay

Government

Bond

,

Index

Linked,

Senior

Bond,

4.375%,

12/15/28

...............

Uruguay

5,373,145

UYU

146,731

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

.................

Uruguay

89,675,136

UYU

2,322,016

Total

Foreign

Government

and

Agency

Securities

(Cost

$54,527,481)

..............

55,653,432

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-22

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

3.1%

U.S.

Treasury

Notes

,

1.5%,

11/30/21

......................................

United

States

3,000,000

$

3,017,992

p

0.375%,

7/15/25

.....................................

United

States

3,200,000

3,958,121

1.125%,

2/28/27

.....................................

United

States

5,500,000

5,540,606

Total

U.S.

Government

and

Agency

Securities

(Cost

$12,109,823)

.................

12,516,719

Asset-Backed

Securities

7.3%

Airlines

0.0%

†

United

Airlines

Pass-Through

Trust

,

2020-1

,

B

,

4.875

%

,

7/15/27

..

United

States

97,050

103,069

Consumer

Finance

0.4%

q

Citibank

Credit

Card

Issuance

Trust

,

2017-A7

,

A7

,

FRN

,

0.451

%

,

(

1-month

USD

LIBOR

+

0.37

%

),

8/08/24

..................

United

States

1,494,000

1,501,465

Diversified

Financial

Services

6.9%

g,q

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.838

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

1,455,000

1,437,263

g,q

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.338

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

700,000

692,432

g,q

BlueMountain

CLO

Ltd.

,

2012-2A,

BR2,

144A,

FRN,

1.605%,

(3-month

USD

LIBOR

+

1.45%),

11/20/28

....................................

United

States

510,000

510,517

2012-2A,

CR2,

144A,

FRN,

2.155%,

(3-month

USD

LIBOR

+

2%),

11/20/28

..........................................

United

States

270,000

267,997

2018-1A,

D,

144A,

FRN,

3.236%,

(3-month

USD

LIBOR

+

3.05%),

7/30/30

...........................................

United

States

1,000,000

957,524

g,q

BlueMountain

Fuji

EUR

CLO

V

DAC

,

5A

,

B

,

144A,

FRN

,

1.55

%

,

(

3-month

EURIBOR

+

1.55

%

),

1/15/33

....................

Ireland

600,000

EUR

713,056

g,q

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.688

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

460,000

458,718

g,q

Buttermilk

Park

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.284

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

10/15/31

..................

United

States

1,408,860

1,412,453

g,q

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-4RA

,

C

,

144A,

FRN

,

3.084

%

,

(

3-month

USD

LIBOR

+

2.9

%

),

7/15/30

........

United

States

300,000

288,845

g,q

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

1,213,000

1,192,258

g,q

Carlyle

US

CLO

Ltd.

,

2021-1A

,

A2

,

144A,

FRN

,

1.641

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

4/15/34

..........................

United

States

1,500,000

1,498,016

g

CF

Hippolyta

LLC

,

2020-1

,

A1

,

144A,

1.69

%

,

7/15/60

..........

United

States

400,839

407,691

g,r

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2019-51,

PT,

144A,

FRN,

15.528%,

1/15/45

................

United

States

510,808

511,166

2019-52,

PT,

144A,

FRN,

16.061%,

1/15/45

................

United

States

543,480

548,262

2019-S8,

PT,

144A,

FRN,

8.792%,

1/15/45

.................

United

States

371,297

365,673

2020-2,

PT,

144A,

FRN,

16.339%,

3/15/45

.................

United

States

509,480

511,416

2020-7,

PT,

144A,

FRN,

15.608%,

4/17/45

.................

United

States

304,996

302,603

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-23

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

g,q

Dryden

38

Senior

Loan

Fund

,

2015-38A

,

CR

,

144A,

FRN

,

2.184

%

,

(

3-month

USD

LIBOR

+

2

%

),

7/15/30

.....................

United

States

863,000

$

864,526

g,q

Dryden

55

CLO

Ltd.

,

2018-55A

,

D

,

144A,

FRN

,

3.034

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/15/31

..........................

United

States

300,000

298,433

g,q

Galaxy

XVIII

CLO

Ltd.

,

2018-28A

,

C

,

144A,

FRN

,

2.134

%

,

(

3-month

USD

LIBOR

+

1.95

%

),

7/15/31

..........................

United

States

250,000

249,681

g,q

Galaxy

XXVII

CLO

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.956

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

5/16/31

...........................

United

States

400,000

399,997

g,q

LCM

26

Ltd.

,

26A

,

B

,

144A,

FRN

,

1.588

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/20/31

......................................

United

States

250,000

249,375

g,q

LCM

XVII

LP

,

17A,

BRR,

144A,

FRN,

1.784%,

(3-month

USD

LIBOR

+

1.6%),

10/15/31

..........................................

United

States

350,000

350,356

17A,

CRR,

144A,

FRN,

2.284%,

(3-month

USD

LIBOR

+

2.1%),

10/15/31

..........................................

United

States

320,000

319,219

g,q

LCM

XVIII

LP

,

18A

,

DR

,

144A,

FRN

,

2.988

%

,

(

3-month

USD

LIBOR

+

2.8

%

),

4/20/31

....................................

United

States

770,000

733,360

g,q

Madison

Park

Euro

Funding

VIII

DAC

,

8A

,

BRN

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

4/15/32

.....................

Ireland

400,000

EUR

475,738

g,q

Magnetite

XXIX

Ltd.

,

2021-29A

,

B

,

144A,

FRN

,

1.504

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/15/34

...........................

United

States

1,500,000

1,500,374

g,r

Mill

City

Mortgage

Loan

Trust

,

2018-4

,

A1B

,

144A,

FRN

,

3.5

%

,

4/25/66

...........................................

United

States

1,094,491

1,142,967

g,q

NZCG

Funding

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.691

%

,

(

3-month

USD

LIBOR

+

1.55

%

),

2/26/31

..........................

United

States

2,182,000

2,181,970

g,q

Octagon

Investment

Partners

28

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.976

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

10/24/30

............

United

States

250,000

250,495

g,q

Octagon

Investment

Partners

36

Ltd.

,

2018-1A

,

A1

,

144A,

FRN

,

1.154

%

,

(

3-month

USD

LIBOR

+

0.97

%

),

4/15/31

............

United

States

500,000

499,877

g,q

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

C

,

144A,

FRN

,

3.026

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

7/25/30

............

United

States

400,000

397,549

g,q

Octagon

Investment

Partners

38

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

3.138

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

7/20/30

............

United

States

1,000,000

974,984

g,r

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

333,023

329,450

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

367,109

360,843

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

103,174

103,681

g,q

Strata

CLO

I

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

1/15/31

...............................

United

States

1,300,000

1,297,602

g,r

Upgrade

Master

Pass-Thru

Trust

,

2019-PT2

,

A

,

144A,

FRN

,

14.198

%

,

2/15/26

....................................

United

States

289,594

292,415

g,q

Voya

CLO

Ltd.

,

2013-2A,

BR,

144A,

FRN,

2.026%,

(3-month

USD

LIBOR

+

1.85%),

4/25/31

.....................................

United

States

780,000

769,542

2014-1A,

CR2,

144A,

FRN,

2.99%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

...........................................

United

States

1,000,000

967,138

2015-2A,

BR,

144A,

FRN,

1.673%,

(3-month

USD

LIBOR

+

1.5%),

7/23/27

...........................................

United

States

820,000

820,204

27,905,666

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$29,489,136)

...............................

29,510,200

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-24

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

0.0%

Diversified

Financial

Services

0.0%

†

r

Commercial

Mortgage

Trust

,

2006-GG7

,

AJ

,

FRN

,

6.214

%

,

7/10/38

United

States

186,216

$

167,641

Total

Commercial

Mortgage-Backed

Securities

(Cost

$179,606)

...................

167,641

Mortgage-Backed

Securities

2.8%

s

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

2.348%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/01/33

..

United

States

5,049

5,035

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.0%

†

FHLMC

Gold

Pools,

20

Year,

7%,

9/01/21

...................

United

States

114

115

FHLMC

Gold

Pools,

30

Year,

5%,

4/01/34

-

8/01/35

............

United

States

129,653

146,918

FHLMC

Gold

Pools,

30

Year,

5.5%,

3/01/33

-

1/01/35

..........

United

States

82,193

93,098

FHLMC

Gold

Pools,

30

Year,

6%,

4/01/33

-

2/01/36

............

United

States

68,695

79,169

FHLMC

Gold

Pools,

30

Year,

6.5%,

11/01/27

-

7/01/32

..........

United

States

10,737

12,098

FHLMC

Gold

Pools,

30

Year,

7%,

4/01/30

...................

United

States

1,298

1,484

FHLMC

Gold

Pools,

30

Year,

7.5%,

8/01/30

..................

United

States

144

169

333,051

s

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.0%

†

FNMA,

2.331%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

12/01/34

..

United

States

45,216

46,213

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

2.5%

FNMA,

10

Year,

2.5%,

7/01/22

...........................

United

States

1,464

1,527

FNMA,

20

Year,

5%,

4/01/30

.............................

United

States

25,824

28,578

FNMA,

30

Year,

3%,

9/01/48

-

4/01/51

......................

United

States

2,715,225

2,856,296

FNMA,

30

Year,

4.5%,

5/01/48

...........................

United

States

2,327,504

2,555,197

FNMA,

30

Year,

6.5%,

6/01/28

-

10/01/37

...................

United

States

77,444

89,421

t

FNMA,

Single-family,

15

Year,

2%,

7/25/36

..................

United

States

1,001,000

1,032,535

t

FNMA,

Single-family,

30

Year,

2%,

7/25/51

..................

United

States

1,136,000

1,147,094

t

FNMA,

Single-family,

30

Year,

2.5%,

7/25/51

.................

United

States

2,228,000

2,304,587

10,015,235

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

0.3%

GNMA

I,

Single-family,

30

Year,

5%,

11/15/33

-

7/15/34

.........

United

States

113,957

131,035

GNMA

I,

Single-family,

30

Year,

7%,

10/15/28

-

6/15/32

.........

United

States

11,470

11,563

GNMA

I,

Single-family,

30

Year,

7.5%,

9/15/30

................

United

States

986

1,140

GNMA

II,

30

Year,

6.5%,

2/20/34

..........................

United

States

1,947

2,007

t

GNMA

II,

Single-family,

30

Year,

2%,

7/15/51

.................

United

States

447,000

455,276

t

GNMA

II,

Single-family,

30

Year,

2.5%,

7/15/51

...............

United

States

439,000

454,331

GNMA

II,

Single-family,

30

Year,

5%,

9/20/33

-

11/20/33

.........

United

States

31,584

35,611

GNMA

II,

Single-family,

30

Year,

6%,

11/20/34

................

United

States

47,248

55,332

GNMA

II,

Single-family,

30

Year,

6.5%,

4/20/31

-

1/20/33

........

United

States

19,645

23,215

GNMA

II,

Single-family,

30

Year,

7.5%,

1/20/28

-

4/20/32

........

United

States

6,970

7,947

1,177,457

Total

Mortgage-Backed

Securities

(Cost

$11,311,117)

............................

11,576,991

Municipal

Bonds

1.0%

California

0.1%

San

Bernardino

Community

College

District,

GO,

2019

A-1,

3.271%,

8/01/39

...........................................

United

States

210,000

223,028

Illinois

0.2%

State

of

Illinois,

GO,

2003,

5.1%,

6/01/33

...................

United

States

695,000

817,771

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-25

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

New

Jersey

0.3%

New

Jersey

Transportation

Trust

Fund

Authority,

Revenue,

2019

B,

Refunding,

4.131%,

6/15/42

............................

United

States

345,000

$

394,419

State

of

New

Jersey,

GO,

2020

A,

3%,

6/01/32

...............

United

States

670,000

761,677

1,156,096

New

York

0.2%

Metropolitan

Transportation

Authority,

Revenue,

2020

E,

Refunding,

4%,

11/15/45

.......................................

United

States

535,000

625,512

New

York

State

Dormitory

Authority,

State

University

of

New

York,

Revenue,

2019

B,

Refunding,

3.142%,

7/01/43

..............

United

States

305,000

315,739

941,251

Ohio

0.1%

State

of

Ohio,

Cleveland

Clinic

Health

System

Obligated

Group,

Revenue,

2019

G,

Refunding,

3.276%,

1/01/42

.............

United

States

190,000

206,360

Pennsylvania

0.1%

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education,

Revenue,

2017

C,

Refunding,

3.005%,

9/15/41

.....

United

States

535,000

561,418

Texas

0.0%

†

Texas

State

University

System,

Revenue,

2019

B,

Refunding,

3.289%,

3/15/40

.....................................

United

States

190,000

197,755

Total

Municipal

Bonds

(Cost

$3,716,460)

.......................................

4,103,679

Residential

Mortgage-Backed

Securities

8.3%

Capital

Markets

0.0%

†

q

Merrill

Lynch

Mortgage

Investors

Trust

,

2005-A6

,

2A3

,

FRN

,

0.852

%

,

(

1-month

USD

LIBOR

+

0.76

%

),

8/25/35

..................

United

States

421

422

Diversified

Financial

Services

0.8%

g

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

406,188

416,907

r

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

626,128

653,932

g,r

CIM

Trust

,

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

312,269

317,087

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

535,545

544,489

g,r

J.P.

Morgan

Mortgage

Trust

,

2021-6

,

A4

,

144A,

FRN

,

2.5

%

,

10/25/51

United

States

974,890

999,958

g,r

Provident

Funding

Mortgage

Trust

,

2019-1,

A2,

144A,

FRN,

3%,

12/25/49

....................

United

States

265,607

268,874

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

96,156

96,446

3,297,693

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

7.5%

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.341%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

1,078,516

1,108,845

2014-DN2,

M3,

FRN,

3.692%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

1,508,836

1,532,958

2014-DN3,

M3,

FRN,

4.092%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

69,720

71,186

2014-DN4,

M3,

FRN,

4.642%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

445,668

454,063

2014-HQ1,

M3,

FRN,

4.192%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

67,281

68,082

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-26

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes,

(continued)

2014-HQ3,

M3,

FRN,

4.841%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

108,989

$

109,889

2015-DNA1,

M3,

FRN,

3.391%,

(1-month

USD

LIBOR

+

3.3%),

10/25/27

..........................................

United

States

133,756

135,683

2015-DNA3,

M3,

FRN,

4.791%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

1,565,336

1,621,671

2015-HQA1,

M3,

FRN,

4.791%,

(1-month

USD

LIBOR

+

4.7%),

3/25/28

...........................................

United

States

1,311,902

1,355,034

2016-DNA2,

M3,

FRN,

4.741%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

1,142,378

1,194,438

2017-DNA1,

M2,

FRN,

3.341%,

(1-month

USD

LIBOR

+

3.25%),

7/25/29

...........................................

United

States

932,397

966,910

2017-DNA2,

M2,

FRN,

3.542%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

1,340,000

1,401,455

2017-DNA3,

M2,

FRN,

2.591%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

2,920,000

2,988,319

2017-HQA1,

M2,

FRN,

3.642%,

(1-month

USD

LIBOR

+

3.55%),

8/25/29

...........................................

United

States

987,016

1,022,231

2017-HQA2,

M2,

FRN,

2.742%,

(1-month

USD

LIBOR

+

2.65%),

12/25/29

..........................................

United

States

236,872

241,296

q

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.342%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

150,820

157,887

2014-C01,

M2,

FRN,

4.492%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

250,007

258,709

2014-C02,

1M2,

FRN,

2.692%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

761,522

766,608

2014-C02,

2M2,

FRN,

2.692%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

314,272

317,661

2014-C03,

1M2,

FRN,

3.092%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

1,487,455

1,500,099

2014-C03,

2M2,

FRN,

2.991%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

55,747

56,354

2015-C01,

1M2,

FRN,

4.391%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

384,997

394,486

2015-C01,

2M2,

FRN,

4.642%,

(1-month

USD

LIBOR

+

4.55%),

2/25/25

...........................................

United

States

51,116

51,428

2015-C02,

1M2,

FRN,

4.092%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

900,151

919,868

2015-C02,

2M2,

FRN,

4.092%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

186,397

188,793

2015-C03,

1M2,

FRN,

5.092%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

1,282,605

1,321,058

2015-C03,

2M2,

FRN,

5.092%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

282,496

286,452

2016-C02,

1M2,

FRN,

6.091%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

416,997

440,500

2016-C04,

1M2,

FRN,

4.341%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

1,407,118

1,470,133

2016-C05,

2M2,

FRN,

4.542%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

863,707

905,173

2016-C06,

1M2,

FRN,

4.341%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

320,756

333,770

2016-C07,

2M2,

FRN,

4.442%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

638,644

670,100

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FNMA

Connecticut

Avenue

Securities,

(continued)

2017-C01,

1M2,

FRN,

3.642%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

1,272,593

$

1,322,431

2017-C03,

1M2,

FRN,

3.092%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

2,424,492

2,502,382

2017-C04,

2M2,

FRN,

2.941%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

534,516

548,322

2017-C05,

1M2,

FRN,

2.292%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

1,551,025

1,577,379

30,261,653

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$35,087,692)

.................

33,559,768

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a

Mesquite

Energy,

Inc.,

Escrow

Account

.....................

United

States

243,000

6,075

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

950,432

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

950,432

—

Total

Escrows

and

Litigation

Trusts

(Cost

$243,000)

.............................

6,075

Total

Long

Term

Investments

(Cost

$399,398,758)

...............................

398,558,103

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.0%

†

Calls

-

Over-the-Counter

Interest

Rate

Swaptions

0.0%

†

Receive

Fixed

0.9%,

Pay

Floating

3-month

USD

LIBOR,

Counterparty

CITI,

Expires

9/16/21

.......................

1

21,500,000

61,778

Total

Options

Purchased

(Cost

$113,413)

.......................................

61,778

Short

Term

Investments

2.1%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.1%

d,u

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

8,598,814

8,598,814

Total

Money

Market

Funds

(Cost

$8,598,814)

...................................

8,598,814

Total

Short

Term

Investments

(Cost

$8,598,814

)

.................................

8,598,814

a

Total

Investments

(Cost

$408,110,985)

100.8%

..................................

$407,218,695

Options

Written

(0.0)%

†

......................................................

(30,009)

Other

Assets,

less

Liabilities

(0.8)%

...........................................

(3,567,947)

Net

Assets

100.0%

...........................................................

$403,620,739

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-28

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

v

Options

Written

(0.0)%

†

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

(0.0)%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.39%,

Counterparty

CITI,

Expires

9/16/21

.......................

1

(21,500,000)

$

(30,009)

(30,009)

Total

Options

Written

(Premiums

received

$111,263)

.............................

$

(30,009)

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

e

Income

may

be

received

in

additional

securities

and/or

cash.

f

Perpetual

security

with

no

stated

maturity

date.

g

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$217,273,379,

representing

53.8%

of

net

assets.

h

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(c).

i

See

Note

1(h)

regarding

senior

floating

rate

interests.

j

The

coupon

rate

shown

represents

the

rate

at

period

end.

k

A

portion

or

all

of

the

security

represents

an

unsettled

loan

commitment.

The

coupon

rate

is

to-be

determined

(TBD)

at

the

time

of

the

settlement

and

will

be

based

upon

a

reference

index/floor

plus

a

spread.

l

See

Note

1(i)

regarding

Marketplace

Lending.

m

See

Note

1(e)

regarding

loan

participations

and

assignments.

n

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

o

The

principal

represents

the

notional

amount.

See

Note

1(d)

regarding

value

recovery

instruments.

p

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(l).

q

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

r

Adjustable

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.

s

Adjustable

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).

t

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(c).

u

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

v

See

Note

1(d)

regarding

written

options.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-29

At

June

30,

2021,

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

10

Year

Notes

....................

Short

48

$

6,360,000

9/21/21

$

(37,566)

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

31

4,563,297

9/21/21

(58,959)

U.S.

Treasury

2

Year

Notes

.....................

Long

82

18,066,266

9/30/21

(30,850)

U.S.

Treasury

5

Year

Notes

.....................

Long

145

17,897,305

9/30/21

(56,299)

U.S.

Treasury

Long

Bonds

.....................

Short

83

13,342,250

9/21/21

(293,301)

Total

Futures

Contracts

......................................................................

$(476,975)

*

As

of

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-30

At

June

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(d). 

At

June

30,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1(d)

. 

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Japanese

Yen

......

CITI

Buy

112,185,200

1,022,224

7/12/21

$

—

$

(12,233)

Japanese

Yen

......

CITI

Sell

112,185,200

1,038,553

7/12/21

28,563

—

Euro

.............

JPHQ

Sell

3,960,000

4,796,254

7/19/21

98,481

—

Canadian

Dollar

....

JPHQ

Sell

1,650,000

1,348,895

8/09/21

18,055

—

Chinese

Yuan

......

JPHQ

Buy

6,500,000

988,909

8/17/21

12,681

—

Turkish

Lira

........

JPHQ

Buy

5,800,000

649,133

9/07/21

—

(5,394)

Euro

.............

JPHQ

Sell

450,000

549,392

9/13/21

14,916

—

Mexican

Peso

......

JPHQ

Buy

29,300,000

1,441,351

9/21/21

12,839

—

Australian

Dollar

....

JPHQ

Buy

1,200,000

909,750

9/27/21

—

(9,654)

South

Korean

Won

..

JPHQ

Buy

1,050,000,000

925,583

9/27/21

3,335

—

Total

Forward

Exchange

Contracts

...................................................

$188,870

$(27,281)

Net

unrealized

appreciation

(depreciation)

............................................

$161,589

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

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.EM.33

.

1.00%

Quarterly

6/20/25

2,150,000

$

(11,547)

$

(65,805)

$

54,258

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$(11,547)

$(65,805)

$54,258

OTC

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

20,000

EUR

1,046

400

646

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

60,000

EUR

3,140

1,047

2,093

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

660,000

EUR

34,280

697

33,583

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

800,000

13,721

(25,280)

39,001

CCC

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

200,000

2,672

(1,823)

4,495

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/25

800,000

(74,311)

(111,886)

37,575

B-

Macy's,

Inc.

...

1.00%

Quarterly

JPHQ

12/20/25

800,000

(52,214)

(133,270)

81,056

B

Nordstrom,

Inc.

.

1.00%

Quarterly

BNDP

6/20/26

500,000

(27,632)

(32,324)

4,692

BB+

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

6/20/26

500,000

(27,632)

(24,805)

(2,827)

BB+

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FSI-31

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)

Single

Name

(continued)

Royal

Caribbean

Cruises

Ltd.

..

5.00%

Quarterly

BZWS

12/20/25

800,000

$

60,587

$

(21,312)

$

81,899

B

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

FBCO

12/20/25

99,000

6,753

(185)

6,938

B

Traded

Index

(e)

Citibank

Bespoke

Franklin,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

1,000,000

(242,000)

(203,356)

(38,644)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach,

Mezzanine

Tranche

5-10%

2.42%

Quarterly

CITI

12/20/22

800,000

953

—

953

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach,

Mezzanine

Tranche

5-10%

1.97%

Quarterly

CITI

12/20/22

1,100,000

1,347

—

1,347

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

2,270,000

27,142

11,357

15,785

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

850,000

(409)

—

(409)

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

850,000

104

—

104

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(272,453)

$(540,740)

$268,287

Total

Credit

Default

Swap

Contracts

....................................

$(284,000)

$

(606,545)

$322,545

(a)

In

U.S.

dollars

unless

otherwise

indicated.

For

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.

(b)

Based

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.

(c)

Performance

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.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-32

At

June

30,

2021,

the

Fund

had

the

following inflation index

swap

contracts outstanding.

See

Note

1(d). 

At

June

30,

2021,

the

Fund

had

the

following total

return swap

contracts

outstanding.

See

Note

1(d). 

Inflation

Index

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Centrally

Cleared

Swap

Contracts

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

1.943%

.....

At

Maturity

1/15/29

$

3,700,000

$

207,303

$

—

$

207,303

Total

Inflation

Index

Swap

Contracts

..................................

$207,303

$—

$207,303

Total

Return

Swap

Contracts

Underlying

Instruments

Financing

Rate

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Value

*

Value/

Unrealized

Appreciation

(Depreciation)

OTC

Swap

Contracts

Short

(a)

Markit

iBoxx

USD

Liquid

Leveraged

Loans

Total

Return

Index

...........................

3-month

USD

LIBOR

Quarterly

MSCO

9/20/21

410,000

$

6,836

Markit

iBoxx

USD

Liquid

Leveraged

Loans

Total

Return

Index

...........................

3-month

USD

LIBOR

Quarterly

MSCO

12/20/21

890,000

3,199

Total

Return

Swap

Contracts

....................................................................

$10,035

*

In

U.S.

dollars

unless

otherwise

indicated.

(a)

The

Fund

receives

the

total

return

on

the

underlying

instrument

and

pays

a

variable

financing

rate.

See

Note 11

regarding

other

derivative

information.

See

Abbreviations

on

page

FSI-

55

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Semiannual

Report

FSI-33

Franklin

Strategic

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$367,869,350

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

40,241,635

Value

-

Unaffiliated

issuers

..................................................................

$371,496,329

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

35,722,366

Cash

....................................................................................

278,039

Receivables:

Investment

securities

sold

...................................................................

485,961

Capital

shares

sold

........................................................................

461,890

Dividends

and

interest

.....................................................................

3,630,293

Deposits

with

brokers

for:

OTC

derivative

contracts

..................................................................

510,000

Futures

contracts

........................................................................

343,857

Centrally

cleared

swap

contracts

............................................................

690,801

OTC

swap

contracts

(upfront

payments

$14,049)

...................................................

13,501

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

188,870

Unrealized

appreciation

on

OTC

swap

contracts

....................................................

320,202

Deferred

tax

benefit

(Note

1f)

..................................................................

309,566

Total

assets

..........................................................................

414,451,675

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

9,373,005

Capital

shares

redeemed

...................................................................

152,810

Management

fees

.........................................................................

194,376

Distribution

fees

..........................................................................

34,307

Variation

margin

on

futures

contracts

...........................................................

67,292

Variation

margin

on

centrally

cleared

swap

contracts

...............................................

146,724

OTC

swap

contracts

(upfront

receipts

$620,817)

...................................................

554,241

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

41,880

Options

written,

at

value

(premiums

received

$111,263)

..............................................

30,009

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

27,281

Deferred

tax

...............................................................................

23,810

Accrued

expenses

and

other

liabilities

...........................................................

185,201

Total

liabilities

.........................................................................

10,830,936

Net

assets,

at

value

.................................................................

$403,620,739

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$446,227,919

Total

distributable

earnings

(losses)

.............................................................

(42,607,180)

Net

assets,

at

value

.................................................................

$403,620,739

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-34

Franklin

Strategic

Income

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$257,474,547

Shares

outstanding

........................................................................

24,328,970

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.58

Class

2:

Net

assets,

at

value

.......................................................................

$92,522,732

Shares

outstanding

........................................................................

9,073,338

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.20

Class

4:

Net

assets,

at

value

.......................................................................

$53,623,460

Shares

outstanding

........................................................................

5,103,923

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.51

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Consolidated

Statement

of

Operations*

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Semiannual

Report

FSI-35

Franklin

Strategic

Income

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$33,504

Non-controlled

affiliates

(Note

3e)

.............................................................

344,564

Interest:

(net

of

foreign

taxes

of

$34,129)

Unaffiliated

issuers

........................................................................

7,987,375

Income

from

securities

loaned:

Non-controlled

affiliates

(Note

3e)

.............................................................

2

Total

investment

income

...................................................................

8,365,445

Expenses:

Management

fees

(Note

3a)

...................................................................

1,265,250

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

119,829

    Class

4

................................................................................

92,742

Custodian

fees

(Note

4)

......................................................................

3,744

Reports

to

shareholders

......................................................................

67,544

Registration

and

filing

fees

....................................................................

1,129

Professional

fees

...........................................................................

49,707

Trustees'

fees

and

expenses

..................................................................

1,616

Marketplace

lending

fees

(Note

1i)

..............................................................

92,054

Other

....................................................................................

53,730

Total

expenses

.........................................................................

1,747,345

Expense

reductions

(Note

4)

...............................................................

(1,286)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(58,236)

Net

expenses

.........................................................................

1,687,823

Net

investment

income

................................................................

6,677,622

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$24,097)

Unaffiliated

issuers

......................................................................

2,467,700

Foreign

currency

transactions

................................................................

(68,678)

Forward

exchange

contracts

.................................................................

(686,890)

Futures

contracts

.........................................................................

(54,995)

TBA

sale

commitments

.....................................................................

6,196

Swap

contracts

...........................................................................

526,073

Net

realized

gain

(loss)

..................................................................

2,189,406

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(3,088,301)

Non-controlled

affiliates

(Note

3e)

...........................................................

943,973

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(162,089)

Written

options

...........................................................................

81,254

Forward

exchange

contracts

.................................................................

453,743

Futures

contracts

.........................................................................

(511,939)

Swap

contracts

...........................................................................

458,301

Change

in

deferred

tax

benefit

(Note

1f)

........................................................

172,344

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

30,451

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(1,622,263)

Net

realized

and

unrealized

gain

(loss)

............................................................

567,143

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$7,244,765

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Consolidated

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-36

Franklin

Strategic

Income

VIP

Fund

Six

Months

Ended

June

30,

2021*

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$6,677,622

$13,770,916

Net

realized

gain

(loss)

.................................................

2,189,406

(11,417,686)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(1,622,263)

10,293,646

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

7,244,765

12,646,876

Distributions

to

shareholders:

Class

1

.............................................................

(8,780,267)

(13,266,507)

Class

2

.............................................................

(3,050,922)

(4,661,916)

Class

4

.............................................................

(1,678,261)

(2,304,505)

Total

distributions

to

shareholders

..........................................

(13,509,450)

(20,232,928)

Capital

share

transactions:

(Note

2)

Class

1

.............................................................

110,954

(18,953,107)

Class

2

.............................................................

(6,789,972)

7,309,317

Class

4

.............................................................

2,687,974

(1,743,816)

Total

capital

share

transactions

............................................

(3,991,044)

(13,387,606)

Net

increase

(decrease)

in

net

assets

...................................

(10,255,729)

(20,973,658)

Net

assets:

Beginning

of

period

.....................................................

413,876,468

434,850,126

End

of

period

..........................................................

$403,620,739

$413,876,468

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

Franklin

Templeton

Variable

Insurance

Products

Trust

FSI-37

Semiannual

Report

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,

2021,

78.2%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price

of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities.

Debt

securities

generally

trade

in

the OTC

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Certain

derivative

financial

instruments

are

centrally

cleared

or

trade

in

the

OTC

market.

The

Fund's

pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Fund's

net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-38

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

"market

level

fair

value").

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Consolidated

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Purchased

on

a

Delayed

Delivery

and

TBA

Basis

The

Fund

purchases

securities

on

a

delayed

delivery

and

to-be-announced

(TBA)

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Fund

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

it

may

sell

the

securities

before

the

settlement

date.

Sufficient

assets

have

been

segregated

for

these

securities

and

collateral

has

been

pledged

and/or

received

for

open

TBA

trades.

d.

Derivative

Financial

Instruments

The

Fund invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-39

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

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

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

Statement

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the

Fund

of

any

net

liability

owed

to

that

counterparty

under

the

ISDA

agreement.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

the

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

The

Fund

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

The

Fund entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date.

The

Fund

entered

into

credit

default

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

risk.

A

credit

default

swap

is

an

agreement

between

the

Fund

and

a

counterparty

whereby

the

buyer

of

the

contract

receives

credit

protection

and

the

seller

of

the

contract

guarantees

the

credit

worthiness

of

a

referenced

debt

obligation.

These

agreements

may

be

privately

negotiated

in

the

over-the-

counter

market

(OTC

credit

default

swaps)

or

may

be

executed

in

a

multilateral

trade

facility

platform,

such

as

a

registered

exchange

(centrally

cleared

credit

default

swaps).

The

underlying

referenced

debt

obligation

may

be

a

single

issuer

of

corporate

or

sovereign

debt,

a

credit

index,

a

basket

of

issuers

or

indices,

or

a

tranche

of

a

credit

index

or

basket

of

issuers

or

indices.

In

the

event

of

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-40

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

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 Consolidated

Statement

of

Operations.

The

Fund

entered

into

OTC

cross

currency

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

cross

currency

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

(determined

using

either

a

fixed

or

floating

rate)

based

on

the

notional

amounts

of

two

different

currencies.

The

notional

amounts

are

typically

determined

based

on

the

spot

exchange

rates

at

the

opening

of

the

contract.

Cross

currency

swaps

may

require

the

exchange

of

notional

amounts

at

the

opening

and/or

closing

of

the

contract.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the

Statement

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

cross

currency

swap

contract

and

prevailing

market

conditions

(interest

rate

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the

Consolidated

Statement

of

Operations.

The

Fund

entered

into

inflation

index

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

risk.

An

inflation

index

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

whereby

one

party

makes

payments

based

on

the

percentage

change

in

an

index

that

serves

as

a

measure

of

inflation

and

the

other

party

makes

a

regular

payment

based

on

a

compounded

fixed

rate,

applied

to

a

notional

amount.

These

agreements

may

be

privately

negotiated

in

the

over-the-counter

market

(OTC

inflation

index

swap)

or

may

be

executed

on

a

registered

exchange

(centrally

cleared

inflation

index

swap).

For

centrally

cleared

inflation

index

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Typically,

an

inflation

index

swap

has

payment

obligations

netted

and

exchanged

upon

maturity.

The

Fund

entered

into

OTC

total

return

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

and

other

market

risks

of

an

underlying

instrument

such

as

a

stock,

bond,

index

or

basket

of

securities

or

indices.

A

total

return

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

a

return

linked

to

an

underlying

instrument

for

a

floating

or

fixed

rate

payment,

both

based

upon

a

notional

amount.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

or

received

are

accrued

daily

and

recorded

as

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

recognized

as

realized

gain

or

loss.

The

Fund

purchased

or

wrote

OTC

option

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

and

credit

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-41

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

The

Fund

invests

in

value

recovery

instruments

(VRI)

primarily

to

gain

exposure

to

economic

growth.

Periodic

payments

from

VRI

are

dependent

on

established

benchmarks

for

underlying

variables.

VRI

has

a

notional

amount,

which

is

used

to

calculate

amounts

of

payments

to

holders.

Payments

are

recorded

upon

receipt

as

realized

gains

in

the

Consolidated

Statement

of

Operations.

The

risks

of

investing

in

VRI

include

growth

risk,

liquidity,

and

the

potential

loss

of

investment.

See

Note

11

other

derivative

information.

e.

Loan

Participation

Notes

The

Fund

invests

in

loan

participation

notes

(Participations).

Participations

are

loans

originally

issued

to

a

borrower

by

one

or

more

financial

institutions

(the

Lender)

and

subsequently

sold

to

other

investors,

such

as

the Fund.

Participations

typically

result

in

the

Fund

having

a

contractual

relationship

only

with

the

Lender

and

not

with

the

borrower.

The

Fund

has

the

right

to

receive

from

the

Lender

any

payments

of

principal,

interest

and

fees

which

the

Lender

received

from

the

borrower.

The

Fund

generally

has

no

rights

to

either

enforce

compliance

by

the

borrower

with

the

terms

of

the

loan

agreement

or

to

any

collateral

relating

to

the

original

loan.

As

a

result,

the Fund

assumes

the

credit

risk

of

both

the

borrower

and

the

Lender

that

is

selling

the

Participation.

The

Participations

may

also

involve

interest

rate

risk

and

liquidity

risk,

including

the

potential

default

or

insolvency

of

the

borrower

and/or

the

Lender.

f.

Investments

in

FT

Holdings

Corporation

III

(FT

Subsidiary)

Prior

to

April

27,

2021,

the

Fund

invested

in

FT

Subsidiary.

FT

Subsidiary

is

a

Delaware

Corporation,

was

a

wholly-

owned

subsidiary

of

the

Fund,

and

was

able

to

invest

in

certain

financial

instruments

consistent

with

the

investment

objective

of

the

Fund.

In

December

2020,

FT

Subsidiary’s

sole

investment,

Turtle

Bay

Resort,

liquidated

and

paid

a

final

distribution.

FT

Subsidiary,

which

is

a

tax

paying

entity,

recognized

a

realized

loss

on

its

Turtle

Bay

Resort

investment.

An

estimated

deferred

tax

asset

based

on

such

realized

loss

was

recorded.

The

estimated

benefit

was

calculated

using

the

federal

rates

applicable

at

the

time

the

tax

was

paid.

The

losses

will

be

carried-back

to

offset

prior

year

gains,

resulting

in

a

tax

refund

which

will

relieve

the

estimated

deferred

tax

asset

once

the

final

tax

filings

are

completed.

On

April

27,

2021,

the

Fund

redeemed

out

of

FT

Subsidiary.

FT

Subsidiary

ceased

operations

and

simultaneously

transferred

its

assets

and

liabilities

to

the

Fund

(including

the

deferred

tax

asset). 

The

results

of

operations

of

the

FT

Subsidiary

through

April

27,

2021

have

been

consolidated

into

the

Consolidated

Statement

of

Operations,

Consolidated

Statements

of

Changes

in

Net

Assets

and

Consolidated

Financial

Highlights.

g.

Mortgage

Dollar

Rolls

The

Fund

enters

into

mortgage

dollar

rolls,

typically

on

a

TBA

basis.

Mortgage

dollar

rolls

are

agreements

between

the

Fund

and

a

financial

institution

where

the

Fund

sells

(or

buys)

mortgage-backed

securities

for

delivery

on

a

specified

date

and

simultaneously

contracts

to

repurchase

(or

sell)

substantially

similar

(same

type,

coupon,

and

maturity)

securities

at

a

future

date

and

at

a

predetermined

price.

Gains

or

losses

are

realized

on

the

initial

sale,

and

the

difference

between

the

repurchase

price

and

the

sale

price

is

recorded

as

an

unrealized

gain

or

loss

to

the

Fund

upon

entering

into

the

mortgage

dollar

roll.

In

addition,

the

Fund

may

invest

the

cash

proceeds

that

are

received

from

the

initial

sale.

During

the

period

between

the

sale

and

repurchase,

the

Fund

is

not

entitled

to

principal

and

interest

paid

on

the

mortgage

backed

securities.

Transactions

in

mortgage

dollar

rolls

are

accounted

for

as

purchases

and

sales

and

may

result

in

an

increase

to

the

Fund's

portfolio

turnover

rate.

The

risks

of

mortgage

dollar

roll

transactions

include

the

potential

inability

of

the

counterparty

to

fulfill

its

obligations.

h.

Senior

Floating

Rate

Interests

The

Fund

invests

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-42

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

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.

i.

Marketplace

Lending

The

Fund

invests

in

loans

obtained

through

marketplace

lending.

Marketplace

lending,

sometimes

referred

to

as

peer-to-peer

lending,

is

a

method

of

financing

in

which

a

platform

facilitates

the

borrowing

and

lending

of

money.

It

is

considered

an

alternative

to

more

traditional

forms

of

debt

financing.

Prospective

borrowers

are

required

to

provide

certain

financial

information

to

the

platform,

including,

but

not

limited

to,

the

intended

purpose

of

the

loan,

income,

employment

information,

credit

score,

debt-to-income

ratio,

credit

history

(including

defaults

and

delinquencies)

and

home

ownership

status.

Based

on

this

and

other

information,

the

platform

assigns

its

own

credit

rating

to

the

borrower

and

sets

the

interest

rate

for

the

requested

loan.

The

platform

then

posts

the

borrowing

requests

online,

giving

investors

the

opportunity

to

purchase

the

loans

based

on

factors

such

as

the

interest

rates

and

expected

yields

of

the

loans,

the

borrower

background

data,

and

the

credit

rating

assigned

by

the

platform.

When

the

Fund

invests

in

these

loans,

it

usually

purchases

all

rights,

title

and

interest

in

the

loans

pursuant

to

a

loan

purchase

agreement

directly

from

the

platform.

The

platform

or

a

third-party

servicer

typically

continues

to

service

the

loans,

collecting

payments

and

distributing

them

to

the

Fund,

less

any

servicing

fees

assessed.

The

servicer

is

typically

responsible

for

taking

actions

against

a

borrower

in

the

event

of

a

default

on

the

loan.

Servicing

fees,

along

with

other

administration

fees,

are

included

in

marketplace

lending

fees

in

the

Consolidated

Statement

of

Operations.

The Fund,

as

an

investor

in

a

loan,

would

be

entitled

to

receive

payment

only

from

the

borrower

and

would

not

be

able

to

recover

any

deficiency

from

the

platform,

except

under

very

narrow

circumstances.

The

loans

in

which

the

Fund

may

invest

are

unsecured.

j.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Consolidated

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

At

June

30,

2021,

the Fund

had

no

securities

on

loan.

k.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Senior

Floating

Rate

Interests

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-43

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

consolidated

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. 

l.

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

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.

Distributions

to shareholders

are

recorded

on

the

ex-

dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Consolidated

Statement

of

Operations.

m.

Accounting

Estimates

The

preparation

of

consolidated

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

consolidated

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

n.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

k.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-44

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

610,224

$6,559,778

1,267,496

$13,449,214

Shares

issued

in

reinvestment

of

distributions

..........

830,678

8,780,267

1,318,738

13,266,507

Shares

redeemed

...............................

(1,413,937)

(15,229,091)

(4,401,405)

(45,668,828)

Net

increase

(decrease)

..........................

26,965

$110,954

(1,815,171)

$(18,953,107)

Class

2

Shares:

Shares

sold

...................................

998,168

$10,336,606

2,449,602

$24,706,622

Shares

issued

in

reinvestment

of

distributions

..........

299,697

3,050,922

480,115

4,661,916

Shares

redeemed

...............................

(1,946,329)

(20,177,500)

(2,205,780)

(22,059,221)

Net

increase

(decrease)

..........................

(648,464)

$(6,789,972)

723,937

$7,309,317

Class

4

Shares:

Shares

sold

...................................

493,438

$5,253,002

667,460

$6,966,802

Shares

issued

in

reinvestment

of

distributions

..........

159,987

1,678,261

230,681

2,304,505

Shares

redeemed

...............................

(398,271)

(4,243,289)

(1,079,161)

(11,015,123)

Net

increase

(decrease)

..........................

255,154

$2,687,974

(181,020)

$(1,743,816)

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-45

Semiannual

Report

Franklin

Strategic

Income

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:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.625%

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

0.25%

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-46

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

f.

Other

Affiliated

Transactions

On

March

5,

2021,

the

Fund

completed

a

non-taxable

exchange

of

securities

with

a

value

of

$17,697,927

(which

included

$2,872,749

of

net

unrealized

depreciation)

for

2,301,421

shares

(each

then

valued

at

$7.69

per

share)

of

Franklin

Floating

Rate

Income

Fund,

an

affiliated

entity.

This

is

considered

a

non-taxable

exchange

for

federal

income

tax

purposes,

with

no

gain

or

loss

recognized

by

the

Fund

or

its

shareholders.

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Consolidated

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Strategic

Income

VIP

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$8,481,652

$17,697,927

$—

$—

$943,973

$27,123,552

3,420,372

$344,223

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$12,853,316

$62,205,445

$(66,459,947)

$—

$—

$8,598,814

8,598,814

$341

Total

Non-Controlled

Affiliates

$21,334,968

$79,903,372

$(66,459,947)

$

—

$

943,973

$35,722,366

$

344,564

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$3,276,000

$(3,276,000)

$

—

$

—

$—

—

$2

Total

Affiliated

Securities

....

$21,334,968

$83,179,372

$(69,735,947)

$—

$943,973

$35,722,366

$344,566

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$2,303,755

Long

term

................................................................................

49,881,582

Total

capital

loss

carryforwards

...............................................................

$52,185,337

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-47

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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

investments

in

FT

Subsidiary.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$135,707,171

and

$146,025,980,

respectively.

Purchases

and

sales

of

investments

exclude

in-kind

transactions

of

$17,697,927.

See

Note

3f.

7.

Credit Risk

At

June

30,

2021,

the

Fund

had

43.2%

of

its

portfolio

invested

in

high

yield,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

and

unrated

securities,

if

any.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

June

30,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Cost

of

investments

..........................................................................

$409,103,189

Unrealized

appreciation

........................................................................

$14,327,582

Unrealized

depreciation

........................................................................

(16,624,137)

Net

unrealized

appreciation

(depreciation)

..........................................................

$(2,296,555)

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-48

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

10.

Other

Derivative

Information

At

June

30,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Strategic

Income

VIP

Fund

14,792,309

K2016470219

South

Africa

Ltd.,

A

...............

2/01/17

$

114,768

$

—

1,472,041

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

1,093

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$115,861

$—

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

Franklin

Strategic

Income

VIP

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

$

61,778

a

Options

written,

at

value

$

30,009

Variation

margin

on

futures

contracts

—

Variation

margin

on

futures

contracts

476,975

b

Variation

margin

on

centrally

cleared

swap

contracts

207,303

c

Variation

margin

on

centrally

cleared

swap

contracts

—

Foreign

exchange

contracts

..

Unrealized

appreciation

on

OTC

forward

exchange

contracts

188,870

Unrealized

depreciation

on

OTC

forward

exchange

contracts

27,281

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

54,258

c

Variation

margin

on

centrally

cleared

swap

contracts

—

OTC

swap

contracts

(upfront

payments)

13,501

OTC

swap

contracts

(upfront

receipts)

554,241

Unrealized

appreciation

on

OTC

swap

contracts

320,202

Unrealized

depreciation

on

OTC

swap

contracts

41,880

Value

recovery

instruments

...

Investments

in

securities,

at

value

1,162,832

d

Investments

in

securities,

at

value

—

Total

....................

$2,008,744

$1,130,386

a

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

b

This

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.

c

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

centrally

cleared

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.

d

VRI

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

9.

Restricted

Securities

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-49

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Consolidated

Statement

of

Operations

was

as

follows:

For

the period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

futures

contracts,

swap

contracts

and

options,

and

the

average

month

end

contract

value

for

forward

exchange

contracts,

and

average

month

end

fair

value

of

VRI,

were

as

follows:

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

Franklin

Strategic

Income

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Interest

rate

contracts

..........

Investments

$—

Investments

$(51,635)

a

Written

options

—

Written

options

81,254

Futures

contracts

(54,995)

Futures

contracts

(511,939)

Swap

contracts

73,908

Swap

contracts

141,561

Foreign

exchange

contracts

.....

Swap

contracts

(20,726)

Swap

contracts

30,316

Forward

exchange

contracts

(686,890)

Forward

exchange

contracts

453,743

Credit

contracts

...............

Swap

contracts

472,891

Swap

contracts

286,424

Value

recovery

instruments

Investments

—

Investments

$151,683

a

Total

.......................

$(215,812)

$581,407

a

Purchased

option

contracts

and

VRI

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Consolidated

Statement

of

Operations.

Franklin

Strategic

Income

VIP

Fund

Futures

contracts

.........................

$60,650,869

Swap

Contracts

..........................

20,436,645

Forward

exchange

contracts

.................

20,396,663

VRI

....................................

1,070,275

Options

.................................

12,285,714

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-50

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

At

June

30,

2021,

the

Fund's

OTC

derivative

assets

and

liabilities

are

as

follows:

At

June

30,

2021,

OTC

derivative

assets,

which

may

be

offset

against

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

as

follows:

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Franklin

Strategic

Income

VIP

Fund

Derivatives

Forward

exchange

contracts

.............................

$

188,870

$

27,281

Options

purchased

.....................................

61,778

—

Options

written

........................................

—

30,009

Swap

contracts

.......................................

333,703

596,121

Total

.............................................

$584,351

$653,411

a

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.

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)

Franklin

Strategic

Income

VIP

Fund

Counterparty

BNDP

...................

$4,692

$(4,692)

$—

$—

$—

BOFA

....................

1,046

—

—

—

1,046

BZWS

...................

81,899

(21,312)

—

—

60,587

CITI

.....................

196,359

(196,359)

—

—

—

FBCO

...................

6,938

(185)

—

—

6,753

GSCO

...................

4,495

(1,823)

—

—

2,672

JPHQ

...................

244,503

(175,950)

—

—

68,553

MSCO

...................

44,419

(409)

—

—

44,010

Total

...................

$584,351

$(400,730)

$

—

$—

$183,621

$

1

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-51

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

At

June

30,

2021,

OTC

derivative

liabilities,

which

may

be

offset

against

OTC

derivative

assets

and

collateral

pledged

to

the

counterparty,

are

as

follows:

See

Note

1(d)

regarding

derivative

financial

instruments. 

See

Abbreviations

on

page

FSI-

55

.

11.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Fund

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Fund

and

other

costs

incurred

by

the

Fund,

pay

its

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

its

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Consolidated

Statement

of

Operations.

During

the

period

ended

June

30,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

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

a

Cash

Collateral

Pledged

a

Net

Amount

(Not

less

than

zero)

Franklin

Strategic

Income

VIP

Fund

Counterparty

BNDP

...................

$32,324

$(4,692)

$—

$—

$27,632

BOFA

....................

—

—

—

—

—

BZWS

...................

21,312

(21,312)

—

—

—

CITI

.....................

421,408

(196,359)

—

(225,049)

—

FBCO

...................

185

(185)

—

—

—

GSCO

...................

1,823

(1,823)

—

—

—

JPHQ

...................

175,950

(175,950)

—

—

—

MSCO

...................

409

(409)

—

—

—

Total

...................

$653,411

$(400,730)

$—

$(225,049)

$27,632

a

In

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

over

collateralization. Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-52

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

12.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Energy

Equipment

&

Services

.............

$

251,051

$

—

$

—

$

251,051

Machinery

............................

—

586,412

—

586,412

Media

...............................

280,704

—

3,556

284,260

Multiline

Retail

........................

—

—

—

a

—

Oil,

Gas

&

Consumable

Fuels

.............

1,745

—

1,710

3,455

Specialty

Retail

........................

157,030

—

—

157,030

Management

Investment

Companies

.........

30,113,802

—

—

30,113,802

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

528

528

Paper

&

Forest

Products

.................

1,616

—

—

1,616

Convertible

Bonds

.......................

—

20,644

—

20,644

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

2,286,524

—

2,286,524

Air

Freight

&

Logistics

...................

—

2,380,010

—

2,380,010

Airlines

..............................

—

2,903,119

—

2,903,119

Auto

Components

......................

—

5,090,335

—

5,090,335

Banks

...............................

—

10,516,853

—

10,516,853

Beverages

...........................

—

2,894,025

—

2,894,025

Biotechnology

.........................

—

760,817

—

760,817

Building

Products

......................

—

1,738,091

—

1,738,091

Capital

Markets

........................

—

1,560,784

—

1,560,784

Chemicals

...........................

—

13,203,337

—

13,203,337

Commercial

Services

&

Supplies

...........

—

5,088,716

—

5,088,716

Communications

Equipment

..............

—

1,408,350

—

1,408,350

Construction

&

Engineering

...............

—

967,635

—

967,635

Consumer

Finance

.....................

—

1,443,855

—

1,443,855

Containers

&

Packaging

.................

—

6,478,995

—

6,478,995

Diversified

Financial

Services

.............

—

1,509,353

—

1,509,353

Diversified

Telecommunication

Services

.....

—

4,732,430

—

4,732,430

Electric

Utilities

........................

—

8,382,418

—

8,382,418

Electrical

Equipment

....................

—

1,016,333

—

1,016,333

Electronic

Equipment,

Instruments

&

Components

........................

—

2,044,345

—

2,044,345

Energy

Equipment

&

Services

.............

—

1,667,035

—

1,667,035

Entertainment

.........................

—

2,173,772

—

2,173,772

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-53

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Equity

Real

Estate

Investment

Trusts

(REITs)

.

$

—

$

7,685,599

$

—

$

7,685,599

Food

&

Staples

Retailing

.................

—

766,997

—

766,997

Food

Products

........................

—

7,416,360

—

7,416,360

Gas

Utilities

..........................

—

310,044

—

310,044

Health

Care

Providers

&

Services

..........

—

6,286,051

—

6,286,051

Hotels,

Restaurants

&

Leisure

.............

—

12,551,275

—

12,551,275

Household

Durables

....................

—

2,458,814

—

2,458,814

Household

Products

....................

—

3,425,806

—

3,425,806

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

6,089,986

—

6,089,986

Insurance

............................

—

1,080,294

—

1,080,294

Interactive

Media

&

Services

..............

—

2,094,687

—

2,094,687

Internet

&

Direct

Marketing

Retail

..........

—

1,282,269

—

1,282,269

IT

Services

...........................

—

4,786,935

—

4,786,935

Life

Sciences

Tools

&

Services

............

—

203,034

—

203,034

Machinery

............................

—

2,598,573

—

2,598,573

Marine

..............................

—

1,275,000

—

1,275,000

Media

...............................

—

9,497,293

—

9,497,293

Metals

&

Mining

.......................

—

6,395,771

—

6,395,771

Mortgage

Real

Estate

Investment

Trusts

(REITs)

............................

—

98,735

—

98,735

Multiline

Retail

........................

—

—

—

a

—

Oil,

Gas

&

Consumable

Fuels

.............

—

21,310,937

—

21,310,937

Paper

&

Forest

Products

.................

—

1,131,648

—

1,131,648

Personal

Products

.....................

—

1,402,515

—

1,402,515

Pharmaceuticals

.......................

—

7,303,467

—

7,303,467

Real

Estate

Management

&

Development

....

—

3,439,919

—

3,439,919

Road

&

Rail

..........................

—

3,237,034

—

3,237,034

Semiconductors

&

Semiconductor

Equipment

.

—

104,241

—

104,241

Software

.............................

—

1,305,401

—

1,305,401

Specialty

Retail

........................

—

5,061,163

—

5,061,163

Thrifts

&

Mortgage

Finance

...............

—

3,350,552

—

3,350,552

Tobacco

.............................

—

1,320,214

—

1,320,214

Trading

Companies

&

Distributors

..........

—

2,795,362

—

2,795,362

Wireless

Telecommunication

Services

.......

—

3,884,811

—

3,884,811

Senior

Floating

Rate

Interests

...............

—

5,526,756

—

5,526,756

Marketplace

Loans

......................

—

—

762,577

762,577

Loan

Participations

and

Assignments

.........

—

1,557,548

—

1,557,548

Foreign

Government

and

Agency

Securities

....

—

55,653,432

—

55,653,432

U.S.

Government

and

Agency

Securities

.......

—

12,516,719

—

12,516,719

Asset-Backed

Securities

..................

—

29,510,200

—

29,510,200

Commercial

Mortgage-Backed

Securities

......

—

167,641

—

167,641

Mortgage-Backed

Securities

................

—

11,576,991

—

11,576,991

Municipal

Bonds

.........................

—

4,103,679

—

4,103,679

Residential

Mortgage-Backed

Securities

......

—

33,559,768

—

33,559,768

Escrows

and

Litigation

Trusts

...............

—

6,075

—

a

6,075

Options

purchased

.......................

—

61,778

—

61,778

Short

Term

Investments

...................

8,598,814

—

—

8,598,814

Total

Investments

in

Securities

...........

$39,404,762

$367,045,562

$768,371

$407,218,695

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

188,870

$

—

$

188,870

Swap

contracts

.........................

—

581,763

—

581,763

Total

Other

Financial

Instruments

.........

$—

$770,633

$—

$770,633

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-54

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the

period.

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

14.

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.

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

VIP

Fund

(continued)

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

30,009

$

—

$

30,009

Forward

exchange

contracts

................

—

27,281

—

27,281

Futures

contracts

........................

476,975

—

—

476,975

Swap

contracts

..........................

—

41,880

—

41,880

Total

Other

Financial

Instruments

.........

$476,975

$99,170

$—

$576,145

a

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

(unaudited)

FSI-55

Semiannual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

Abbreviations

Counterparty

BNDP

BNP

Paribas

SA

BOFA

Bank

of

America,

N.A.

BZWS

Barclays

Bank

PLC

CITI

Citibank

NA

FBCO

Credit

Suisse

Group

AG

GSCO

Goldman

Sachs

Group,

Inc.

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Cu

r

rency

AUD

Australian

Dollar

COP

Colombian

Peso

DOP

Dominican

Peso

EUR

Euro

IDR

Indonesian

Rupiah

USD

United

States

Dollar

UYU

Uruguayan

Peso

Selected

Portfolio

CLO

Collateralized

Loan

Obligation

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

ETF

Exchange-Traded

Fund

EURIBOR

Euro

Inter-Bank

Offer

Rate

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GDP

Gross

Domestic

Product

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

LIBOR

London

Inter-Bank

Offered

Rate

MBS

Mortgage-Backed

Security

PIK

Payment-In-Kind

TBA

To-Be-Announced

TBD

To

Be

Determined

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

FUS-1

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,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

-1

.03

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

FUS-2

Semiannual

Report

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.

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).

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

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

-

Intermediate

Index,

posted

a

-1.12%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Lipper

VIP

General

U.S.

Government

Funds

Classification

Average,

posted

a

-1.41%

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

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

a

-1.60%

total

return

for

the

six

months

ended

June

30,

2021.

1

The

economy

continued

to

recover

from

the

novel

coronavirus

(COVID-19)

pandemic,

aided

by

additional

fiscal

stimulus

measures,

and

yields

(which

move

inversely

to

prices)

increased

for

most

bonds.

The

inflation

rate

surged

during

the

period

amid

increased

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

largely

from

the

areas

particularly

impacted

by

the

shutdown,

such

as

used

vehicles,

airfares,

semiconductors

and

building

materials.

The

U.S.

Federal

Reserve

(Fed)

maintained

the

federal

funds

target

rate

at

a

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

purchasing

of

government-

backed

and

corporate

bonds

as

necessary

to

provide

liquidity

to

bond

markets.

In

its

June

2021

meeting

statement,

the

Fed

indicated

that

rising

inflation

largely

reflected

transitory

factors

and

it

would

monitor

incoming

information

and

adjust

its

monetary

policy

stance

as

needed

to

attain

its

employment

and

price

stability

goals.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

posted

a

-2.58%

total

return

for

the

six-month

period.

1

The

10-year

U.S.

Treasury

yield,

which

began

the

period

below

one

percent,

rose

notably

amid

many

investors’

increasing

inflation

expectations.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

Barclays

MBS

Index,

posted

a

-0.77%

total

return

for

the

period,

as

low

interest

rates

led

to

accelerated

prepayments

from

mortgage

refinancing.

1

U.S.

corporate

bond

performance

varied

significantly

based

on

credit

rating,

reflecting

the

continued

recovery

of

credit

markets

following

the

onset

of

COVID-19.

Although

the

strengthening

economy

pressured

corporate

bonds

generally,

it

helped

temper

investor

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+3.62%

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

posted

a

-1.27%

total

return.

1

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.

Portfolio

Composition

6/30/21

%

of

Total

Net

Assets

Mortgage-Backed

Securities

72.8%

U.S.

Government

and

Agency

Securities

13.9%

Corporate

Bonds

2.1%

Foreign

Government

and

Agency

Securities

1.7%

Short-Term

Investments

&

Other

Net

Assets

9.5%

Franklin

U.S.

Government

Securities

VIP

Fund

FUS-3

Semiannual

Report

government

securities.

Analyzing

securities

using

proprietary

and

nonproprietary

research,

we

seek

to

identify

attractive

investment

opportunities.

Manager’s

Discussion

For

the

fixed

income

sectors

in

which

the

Fund

invests,

Treasury

Inflation-Protected

Securities

(TIPS)

was

the

best

performing

sector

on

an

excess

returns

basis,

as

measured

by

Bloomberg

Barclays

indexes.

U.S.

government

agency

securities

also

posted

positive

excess

returns,

while

the

other

major

fixed

income

sectors

in

which

the

Fund

allocates

posted

negative

excess

returns

and

underperformed

similar

duration

U.S.

Treasuries

during

the

period.

Within

the

agency

MBS

sector,

on

an

excess

return

basis,

all

posted

negative

excess

returns

with

Fannie

Mae

MBS

and

Freddie

Mac

MBS

performing

better,

while

Ginnie

Mae

(GNMA)

MBS

lagged.

For

the

GNMA

coupon

stack,

GNMA

I

5.0%

and

3.0%

were

the

best

performers,

while

GNMA

II

3.5%

and

2.5%

coupons

lagged.

Mortgage

rates

increased

over

the

reporting

period

but

have

slowed

their

steady

upward

trajectory.

Despite

the

higher

level

of

rates,

prepayments

have

remained

high

and

primary

and

secondary

spreads

have

retraced

from

their

wider

levels,

likely

keeping

prepayments

elevated

for

the

next

few

months,

in

our

view.

As

forbearance

requests

continue

to

decrease,

we

believe

involuntary

prepayments

will

decline.

Rates

have

increased

over

the

period,

leaving

less

than

half

of

the

agency

MBS

universe

with

an

economic

incentive

to

refinance,

compared

to

more

than

half

in

2020,

which

is

also

likely

to

lead

to

lower

levels

of

prepayments.

We

expect

prepayments

at

the

index

level

will

remain

elevated

over

the

next

three

months.

The

Fed’s

continued

purchases

of

agency

MBS

will

remain

a

key

support

for

the

market,

potentially

limiting

spread

widening

and

keeping

spreads

range

bound,

which

would

benefit

lower

coupons

and

their

mortgage

dollar

rolls.

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

agency

MBS,

primarily

in

30-year

GNMA

II

securities.

Over

the

period,

we

increased

our

exposure

to

U.S.

Treasuries

and

decreased

allocation

to

fixed-rate

agency

MBS,

TIPS,

agency

bonds

and

adjustable-rate

mortgage

securities.

The

Fund’s

largest

MBS

allocation

remained

in

3.5%

and

3.0%

coupons.

We

reduced

our

exposure

to

3.5%,

4.0%,

4.5%

and

5.0%

coupons,

while

adding

to

3.0%

and

2.5%

securities

over

the

period.

The

Fund’s

U.S.

yield

curve

positioning

was

the

top

contributor

to

performance.

The

Fund’s

allocation

to

TIPS

also

contributed.

Fixed-rate

agency

MBS

detracted

from

performance

over

the

period.

Thank

you

for

your

participation

in

Franklin

U.S.

Government

Securities

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,

2021,

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.

Class

1

Fund

Expenses

Franklin

U.S.

Government

Securities

VIP

Fund

FUS-4

Semiannual

Report

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.

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

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$989.70

$2.61

$1,022.18

$2.65

0.53%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

U.S.

Government

Securities

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FUS-5

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$12.37

$12.34

$12.07

$12.36

$12.51

$12.74

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.06

0.22

0.27

0.29

0.25

0.22

Net

realized

and

unrealized

gains

(losses)

(0.19)

0.28

0.38

(0.22)

(0.04)

(0.10)

Total

from

investment

operations

........

(0.13)

0.50

0.65

0.07

0.21

0.12

Less

distributions

from:

Net

investment

income

..............

(0.32)

(0.47)

(0.38)

(0.36)

(0.36)

(0.35)

Net

asset

value,

end

of

period

..........

$11.92

$12.37

$12.34

$12.07

$12.36

$12.51

Total

return

c

.......................

(1.03)%

4.08%

5.47%

0.60%

1.66%

0.90%

Ratios

to

average

net

assets

d

Expenses

e

........................

0.53%

0.53%

0.51%

0.50%

0.50%

0.50%

Net

investment

income

...............

0.98%

1.81%

2.23%

2.38%

2.00%

1.75%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$48,983

$52,307

$54,104

$59,213

$66,404

$73,695

Portfolio

turnover

rate

................

41.38%

56.32%

24.16%

22.25%

80.49%

86.28%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$12.08

$12.05

$11.79

$12.09

$12.24

$12.47

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.04

0.19

0.24

0.25

0.21

0.19

Net

realized

and

unrealized

gains

(losses)

(0.18)

0.27

0.37

(0.22)

(0.04)

(0.10)

Total

from

investment

operations

........

(0.14)

0.46

0.61

0.03

0.17

0.09

Less

distributions

from:

Net

investment

income

..............

(0.29)

(0.43)

(0.35)

(0.33)

(0.32)

(0.32)

Net

asset

value,

end

of

period

..........

$11.65

$12.08

$12.05

$11.79

$12.09

$12.24

Total

return

c

.......................

(1.15)%

3.83%

5.23%

0.34%

1.34%

0.66%

Ratios

to

average

net

assets

d

Expenses

e

........................

0.78%

0.78%

0.76%

0.75%

0.75%

0.75%

Net

investment

income

...............

0.73%

1.56%

1.98%

2.13%

1.75%

1.50%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$757,419

$771,332

$771,866

$1,105,627

$1,223,491

$1,268,963

Portfolio

turnover

rate

................

41.38%

56.32%

24.16%

22.25%

80.49%

86.28%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Franklin

U.S.

Government

Securities

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FUS-7

I

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

2.1%

Diversified

Financial

Services

0.2%

Private

Export

Funding

Corp.

,

BB

,

Senior

Bond

,

4.3

%

,

12/15/21

..

United

States

1,865,000

$

1,901,204

Oil,

Gas

&

Consumable

Fuels

1.9%

Petroleos

Mexicanos

,

Senior

Bond

,

2.378

%

,

4/15/25

...........

Mexico

1,316,000

1,366,005

Reliance

Industries

Ltd.

,

Senior

Bond,

2.512%,

1/15/26

..........................

India

6,562,500

6,851,204

Senior

Note,

1.87%,

1/15/26

...........................

India

3,684,210

3,792,396

Senior

Note,

2.06%,

1/15/26

...........................

India

3,125,000

3,230,435

15,240,040

Total

Corporate

Bonds

(Cost

$16,485,193)

......................................

17,141,244

a

Foreign

Government

and

Agency

Securities

1.7%

Israel

Government

Bond,

Senior

Bond,

5.5%,

9/18/23

..........

Israel

12,000,000

13,360,092

Total

Foreign

Government

and

Agency

Securities

(Cost

$12,772,017)

..............

13,360,092

U.S.

Government

and

Agency

Securities

13.9%

FHLB,

2.625%,

9/12/25

.................................

United

States

10,000,000

10,780,434

New

Valley

Generation

IV,

4.687%,

1/15/22

..................

United

States

160,544

162,098

Tennessee

Valley

Authority,

1.875%,

8/15/22

.................

United

States

6,000,000

6,117,894

U.S.

Treasury

Bonds,

2.5%,

2/15/46

.......................

United

States

6,000,000

6,501,563

U.S.

Treasury

Notes

,

a

0.125%,

7/15/24

.....................................

United

States

13,750,000

16,633,859

2.375%,

8/15/24

.....................................

United

States

22,000,000

23,295,508

2.25%,

8/15/27

.....................................

United

States

31,040,000

33,204,312

0.625%,

8/15/30

.....................................

United

States

8,500,000

7,920,273

United

States

International

Development

Finance

Corp.

,

2.12%,

3/20/24

.....................................

United

States

5,500,000

5,630,405

4.01%,

5/15/30

.....................................

United

States

1,507,500

1,704,693

Total

U.S.

Government

and

Agency

Securities

(Cost

$107,874,324)

................

111,951,039

Mortgage-Backed

Securities

72.8%

b

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.9%

FHLMC,

2.035%

-

2.233%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/36

-

4/01/40

....................................

United

States

6,346,178

6,684,173

FHLMC,

2.31%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/37

...

United

States

172,773

173,270

6,857,443

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

11.5%

FHLMC

Gold

Pools,

15

Year,

4.5%,

3/01/25

-

4/01/25

..........

United

States

411,043

432,140

FHLMC

Gold

Pools,

20

Year,

3.5%,

3/01/32

..................

United

States

1,643,427

1,771,028

FHLMC

Gold

Pools,

30

Year,

3%,

5/01/43

...................

United

States

226,238

239,847

FHLMC

Gold

Pools,

30

Year,

3.5%,

5/01/43

..................

United

States

36,050

38,874

FHLMC

Gold

Pools,

30

Year,

4%,

9/01/40

-

12/01/41

...........

United

States

3,083,980

3,371,523

FHLMC

Gold

Pools,

30

Year,

4.5%,

5/01/40

-

7/01/41

..........

United

States

1,058,423

1,180,366

FHLMC

Gold

Pools,

30

Year,

5%,

9/01/33

-

4/01/40

............

United

States

2,832,836

3,215,464

FHLMC

Gold

Pools,

30

Year,

5.5%,

7/01/33

-

5/01/38

..........

United

States

619,923

719,456

FHLMC

Gold

Pools,

30

Year,

6%,

1/01/24

-

8/01/35

............

United

States

500,229

573,804

FHLMC

Gold

Pools,

30

Year,

6.5%,

12/01/23

-

5/01/35

.........

United

States

171,039

192,487

FHLMC

Gold

Pools,

30

Year,

7%,

4/01/24

-

9/01/31

............

United

States

61,986

67,770

FHLMC

Gold

Pools,

30

Year,

7.5%,

12/01/22

.................

United

States

87

87

FHLMC

Gold

Pools,

30

Year,

8%,

5/01/22

...................

United

States

334

341

FHLMC

Gold

Pools,

30

Year,

8.5%,

7/01/31

..................

United

States

125,226

143,775

FHLMC

Pool,

15

Year,

1.5%,

1/01/36

.......................

United

States

5,670,426

5,745,910

FHLMC

Pool,

15

Year,

2%,

10/01/35

.......................

United

States

9,085,677

9,410,989

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-8

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

(continued)

FHLMC

Pool,

30

Year,

2%,

11/01/50

.......................

United

States

2,443,793

$

2,475,196

FHLMC

Pool,

30

Year,

2%,

1/01/51

........................

United

States

5,757,569

5,827,917

FHLMC

Pool,

30

Year,

2.5%,

10/01/50

......................

United

States

7,709,244

8,064,119

FHLMC

Pool,

30

Year,

2.5%,

12/01/50

......................

United

States

5,786,717

6,003,793

FHLMC

Pool,

30

Year,

2.5%,

7/01/51

.......................

United

States

12,851,000

13,308,242

FHLMC

Pool,

30

Year,

3%,

8/01/50

........................

United

States

5,412,072

5,766,328

FHLMC

Pool,

30

Year,

3%,

4/01/51

........................

United

States

18,763,403

19,625,970

FHLMC

Pool,

30

Year,

4.5%,

1/01/49

.......................

United

States

4,173,513

4,611,666

92,787,092

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

2.6%

FNMA,

2.3%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/37

...

United

States

6,928,067

7,354,371

FNMA,

1.175%

-

4.05%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

3/01/22

-

3/01/37

....................................

United

States

491,840

499,786

FNMA,

1.318%

-

2.491%,

(12-month

average

of

1-year

CMT

+/-

MBS

Margin),

9/01/35

-

10/01/44

........................

United

States

199,103

204,130

FNMA,

1.427%

-

2.665%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/32

-

4/01/41

....................................

United

States

8,565,884

8,990,189

FNMA,

1.593%

-

5.21%,

(COFI

11th

District

+/-

MBS

Margin),

6/01/25

-

6/01/38

....................................

United

States

77,263

79,938

FNMA,

1.726%

-

5.109%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

8/01/22

-

12/01/40

...................................

United

States

4,974,457

5,223,254

22,351,668

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

12.7%

FNMA,

2.64%,

7/01/25

.................................

United

States

2,370,435

2,528,430

FNMA,

2.77%,

4/01/25

.................................

United

States

3,500,000

3,748,109

FNMA,

3.28%,

7/01/27

.................................

United

States

4,000,000

4,437,980

FNMA,

3.51%,

8/01/23

.................................

United

States

3,000,000

3,148,862

FNMA,

5.5%,

4/01/34

..................................

United

States

536,633

582,346

FNMA,

15

Year,

2%,

9/01/35

.............................

United

States

6,655,914

6,895,162

FNMA,

15

Year,

5.5%,

1/01/25

...........................

United

States

194,914

202,317

FNMA,

30

Year,

2.5%,

7/01/51

...........................

United

States

16,178,000

16,753,618

FNMA,

30

Year,

3%,

12/01/42

............................

United

States

83,558

88,176

FNMA,

30

Year,

3%,

7/01/50

.............................

United

States

11,090,628

11,730,851

FNMA,

30

Year,

3%,

8/01/50

.............................

United

States

15,158,393

16,045,985

FNMA,

30

Year,

3%,

4/01/51

.............................

United

States

5,858,288

6,147,946

FNMA,

30

Year,

3.5%,

7/01/45

...........................

United

States

14,470,387

15,537,554

FNMA,

30

Year,

4%,

1/01/41

-

8/01/41

......................

United

States

3,563,905

3,895,083

FNMA,

30

Year,

4.5%,

8/01/40

-

6/01/41

....................

United

States

3,363,999

3,747,822

FNMA,

30

Year,

5%,

3/01/34

-

7/01/41

......................

United

States

2,360,344

2,679,020

FNMA,

30

Year,

5.5%,

12/01/32

-

8/01/35

...................

United

States

1,240,417

1,423,450

FNMA,

30

Year,

6%,

1/01/24

-

8/01/38

......................

United

States

1,252,811

1,443,900

FNMA,

30

Year,

6.5%,

1/01/24

-

9/01/36

....................

United

States

164,796

188,156

FNMA,

30

Year,

7.5%,

4/01/23

-

8/01/25

....................

United

States

1,643

1,764

FNMA,

30

Year,

8%,

3/01/23

-

12/01/24

.....................

United

States

17,620

17,911

FNMA,

30

Year,

9%,

10/01/26

............................

United

States

35,848

36,368

101,280,810

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

45.1%

GNMA

I,

30

Year,

5%,

9/15/40

............................

United

States

11,469,362

13,165,437

GNMA

I,

30

Year,

5.5%,

3/15/32

-

2/15/38

...................

United

States

348,939

409,802

GNMA

I,

30

Year,

6%,

7/15/29

-

11/15/38

....................

United

States

288,022

339,725

GNMA

I,

30

Year,

6.5%,

12/15/28

-

1/15/33

..................

United

States

139,986

162,829

GNMA

I,

30

Year,

7%,

12/15/28

...........................

United

States

8,176

9,320

GNMA

I,

30

Year,

7.5%,

12/15/31

-

8/15/33

..................

United

States

147,141

170,211

GNMA

I,

Single-family,

30

Year,

3%,

7/15/42

.................

United

States

262,232

277,868

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FUS-9

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

(continued)

GNMA

I,

Single-family,

30

Year,

4%,

10/15/40

-

8/15/46

.........

United

States

5,048,044

$

5,580,579

GNMA

I,

Single-family,

30

Year,

4.5%,

1/15/39

-

6/15/41

........

United

States

7,366,809

8,366,881

GNMA

I,

Single-family,

30

Year,

5.5%,

12/15/28

-

10/15/39

.......

United

States

2,593,821

2,976,231

GNMA

I,

Single-family,

30

Year,

6%,

11/15/23

-

9/15/38

.........

United

States

1,123,073

1,287,894

GNMA

I,

Single-family,

30

Year,

6.5%,

7/15/23

-

5/15/37

........

United

States

619,423

693,865

GNMA

I,

Single-family,

30

Year,

7%,

10/15/22

-

1/15/32

.........

United

States

108,331

112,043

GNMA

I,

Single-family,

30

Year,

7.5%,

2/15/22

-

11/15/27

........

United

States

33,027

33,606

GNMA

I,

Single-family,

30

Year,

8%,

1/15/22

-

7/15/23

..........

United

States

17,137

17,295

GNMA

I,

Single-family,

30

Year,

8.5%,

5/15/23

-

12/15/24

........

United

States

15,992

16,141

GNMA

II,

30

Year,

6.5%,

4/20/34

..........................

United

States

26,772

26,964

GNMA

II,

Single-family,

30

Year,

2%,

11/20/50

................

United

States

5,984,676

6,101,339

GNMA

II,

Single-family,

30

Year,

2.5%,

11/20/50

..............

United

States

5,906,401

6,116,537

GNMA

II,

Single-family,

30

Year,

2.5%,

1/20/51

...............

United

States

39,075,244

40,558,112

GNMA

II,

Single-family,

30

Year,

2.5%,

3/20/51

...............

United

States

13,061,022

13,533,357

GNMA

II,

Single-family,

30

Year,

2.5%,

6/20/51

...............

United

States

14,177,148

14,710,412

GNMA

II,

Single-family,

30

Year,

3%,

12/20/42

-

2/20/45

........

United

States

953,127

1,012,203

GNMA

II,

Single-family,

30

Year,

3%,

9/20/45

.................

United

States

4,087,475

4,334,113

GNMA

II,

Single-family,

30

Year,

3%,

4/20/46

.................

United

States

10,379,828

10,939,149

GNMA

II,

Single-family,

30

Year,

3%,

12/20/50

................

United

States

10,298,861

10,781,349

GNMA

II,

Single-family,

30

Year,

3%,

1/20/51

.................

United

States

9,584,411

10,027,835

GNMA

II,

Single-family,

30

Year,

3%,

2/20/51

.................

United

States

18,905,864

19,815,062

GNMA

II,

Single-family,

30

Year,

3%,

3/20/51

.................

United

States

22,160,160

23,215,092

GNMA

II,

Single-family,

30

Year,

3%,

4/20/51

.................

United

States

12,378,992

12,977,935

GNMA

II,

Single-family,

30

Year,

3.5%,

12/20/40

-

10/20/47

......

United

States

19,012,552

20,375,132

GNMA

II,

Single-family,

30

Year,

3.5%,

9/20/42

...............

United

States

9,762,529

10,473,252

GNMA

II,

Single-family,

30

Year,

3.5%,

11/20/42

..............

United

States

5,901,930

6,337,839

GNMA

II,

Single-family,

30

Year,

3.5%,

12/20/42

..............

United

States

4,624,369

4,951,803

GNMA

II,

Single-family,

30

Year,

3.5%,

1/20/43

...............

United

States

7,819,489

8,372,983

GNMA

II,

Single-family,

30

Year,

3.5%,

5/20/43

...............

United

States

6,341,876

6,808,600

GNMA

II,

Single-family,

30

Year,

3.5%,

5/20/47

...............

United

States

17,448,600

18,520,223

GNMA

II,

Single-family,

30

Year,

3.5%,

9/20/47

...............

United

States

30,784,597

32,585,036

GNMA

II,

Single-family,

30

Year,

3.5%,

11/20/47

..............

United

States

8,244,679

8,752,887

GNMA

II,

Single-family,

30

Year,

4%,

11/20/39

-

2/20/44

.........

United

States

10,609,093

11,618,083

GNMA

II,

Single-family,

30

Year,

4.5%,

10/20/39

-

10/20/44

......

United

States

14,155,212

15,669,974

GNMA

II,

Single-family,

30

Year,

5%,

9/20/33

-

6/20/44

.........

United

States

5,937,663

6,703,762

GNMA

II,

Single-family,

30

Year,

5.5%,

5/20/34

-

6/20/38

........

United

States

2,467,927

2,884,954

GNMA

II,

Single-family,

30

Year,

6%,

11/20/23

-

7/20/39

.........

United

States

1,636,670

1,914,258

GNMA

II,

Single-family,

30

Year,

6.5%,

12/20/27

-

4/20/32

.......

United

States

226,580

262,933

GNMA

II,

Single-family,

30

Year,

7%,

5/20/32

.................

United

States

4,993

5,977

GNMA

II,

Single-family,

30

Year,

7.5%,

9/20/22

-

11/20/26

.......

United

States

27,203

29,483

GNMA

II,

Single-family,

30

Year,

8%,

8/20/26

.................

United

States

2,324

2,588

364,038,953

Total

Mortgage-Backed

Securities

(Cost

$582,196,520)

...........................

587,315,966

Total

Long

Term

Investments

(Cost

$719,328,054)

...............................

729,768,341

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-10

See

Abbreviations

on

page

FUS-

19

.

Short

Term

Investments

9.4%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

9.4%

c

Joint

Repurchase

Agreement,

0.033%,

7/01/21

(Maturity

Value

$75,491,354)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$55,089,061)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$8,382,560)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$12,019,733)

Collateralized

by

U.S.

Government

Agency

Securities,

2.5%

-

5%,

6/20/47

-

3/20/51;

U.S.

Treasury

Bond,

Index

Linked,

2.38%,

1/15/25;

and

U.S.

Treasury

Note,

1.88%,

4/30/22

(valued

at

$77,054,710)

.......................................

75,491,284

$

75,491,284

Total

Repurchase

Agreements

(Cost

$75,491,284)

...............................

75,491,284

Total

Short

Term

Investments

(Cost

$75,491,284

)

................................

75,491,284

a

Total

Investments

(Cost

$794,819,338)

99.9%

...................................

$805,259,625

Other

Assets,

less

Liabilities

0.1%

.............................................

1,142,181

Net

Assets

100.0%

...........................................................

$806,401,806

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(d).

b

Adjustable

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).

c

See

Note

1(b)

regarding

joint

repurchase

agreement.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FUS-11

Franklin

U.S.

Government

Securities

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$719,328,054

Cost

-

Unaffiliated

repurchase

agreements

......................................................

75,491,284

Value

-

Unaffiliated

issuers

..................................................................

$729,768,341

Value

-

Unaffiliated

repurchase

agreements

......................................................

75,491,284

Receivables:

Investment

securities

sold

...................................................................

139,109

Capital

shares

sold

........................................................................

71,771

Interest

.................................................................................

2,497,927

Total

assets

..........................................................................

807,968,432

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

785,641

Management

fees

.........................................................................

318,996

Distribution

fees

..........................................................................

155,608

Reports

to

shareholders

....................................................................

114,613

Accrued

expenses

and

other

liabilities

...........................................................

191,768

Total

liabilities

.........................................................................

1,566,626

Net

assets,

at

value

.................................................................

$806,401,806

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$897,427,766

Total

distributable

earnings

(losses)

.............................................................

(91,025,960)

Net

assets,

at

value

.................................................................

$806,401,806

Franklin

U.S.

Government

Securities

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$48,982,744

Shares

outstanding

........................................................................

4,109,988

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.92

Class

2:

Net

assets,

at

value

.......................................................................

$757,419,062

Shares

outstanding

........................................................................

65,027,725

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.65

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-12

Franklin

U.S.

Government

Securities

VIP

Fund

Investment

income:

Interest:

Unaffiliated

issuers:

Paydown

gain

(loss)

.....................................................................

$(4,875,726)

Paid

in

cash

a

...........................................................................

10,983,721

Total

investment

income

...................................................................

6,107,995

Expenses:

Management

fees

(Note

3

a

)

...................................................................

1,942,610

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

947,401

Custodian

fees

(Note

4

)

......................................................................

2,713

Reports

to

shareholders

......................................................................

71,154

Professional

fees

...........................................................................

40,012

Trustees'

fees

and

expenses

..................................................................

2,840

Other

....................................................................................

76,291

Total

expenses

.........................................................................

3,083,021

Expense

reductions

(Note

4

)

...............................................................

(1,234)

Net

expenses

.........................................................................

3,081,787

Net

investment

income

................................................................

3,026,208

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

680,560

TBA

sale

commitments

.....................................................................

28,774

Net

realized

gain

(loss)

..................................................................

709,334

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(13,514,012)

Net

realized

and

unrealized

gain

(loss)

............................................................

(12,804,678)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(9,778,470)

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

FUS-13

Franklin

U.S.

Government

Securities

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$3,026,208

$13,015,951

Net

realized

gain

(loss)

.................................................

709,334

1,813,789

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(13,514,012)

16,480,201

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(9,778,470)

31,309,941

Distributions

to

shareholders:

Class

1

.............................................................

(1,306,180)

(2,038,214)

Class

2

.............................................................

(18,489,910)

(26,480,204)

Total

distributions

to

shareholders

..........................................

(19,796,090)

(28,518,418)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(1,470,185)

(1,952,576)

Class

2

.............................................................

13,807,316

(3,169,153)

Total

capital

share

transactions

............................................

12,337,131

(5,121,729)

Net

increase

(decrease)

in

net

assets

...................................

(17,237,429)

(2,330,206)

Net

assets:

Beginning

of

period

.....................................................

823,639,235

825,969,441

End

of

period

..........................................................

$806,401,806

$823,639,235

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Franklin

U.S.

Government

Securities

VIP

Fund

FUS-14

Semiannual

Report

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,

2021,

55.33%

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 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Debt

securities

generally

trade

in

the over-the-counter

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.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

b.

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-

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FUS-15

Semiannual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

June

30,

2021.

c.

Income

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

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,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Paydown

gains

and

losses

are

recorded

separately

in

the

Statement

of

Operations.

Distributions

to

shareholders

are

recorded

on

the

ex-

dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Statement

of

Operations.

e.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

f.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

b.

Joint

Repurchase

Agreement

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FUS-16

Semiannual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.481%

of

the

Fund’s

average

daily

net

assets.

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

214,445

$2,629,291

332,787

$4,150,714

Shares

issued

in

reinvestment

of

distributions

..........

109,579

1,306,180

165,439

2,038,214

Shares

redeemed

...............................

(441,809)

(5,405,656)

(653,755)

(8,141,504)

Net

increase

(decrease)

..........................

(117,785)

$(1,470,185)

(155,529)

$(1,952,576)

Class

2

Shares:

Shares

sold

...................................

3,639,684

$43,596,502

13,078,267

$159,400,701

Shares

issued

in

reinvestment

of

distributions

..........

1,585,755

18,489,910

2,197,527

26,480,204

Shares

redeemed

...............................

(4,033,328)

(48,279,096)

(15,470,648)

(189,050,058)

Net

increase

(decrease)

..........................

1,192,111

$13,807,316

(194,854)

$(3,169,153)

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FUS-17

Semiannual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

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

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

rate,

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

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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.

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$37,516,554

Long

term

................................................................................

63,317,605

Total

capital

loss

carryforwards

...............................................................

$100,834,159

Cost

of

investments

..........................................................................

$797,352,117

Unrealized

appreciation

........................................................................

$14,849,504

Unrealized

depreciation

........................................................................

(6,941,996)

Net

unrealized

appreciation

(depreciation)

..........................................................

$7,907,508

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FUS-18

Semiannual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$318,563,917

and

$358,602,986,

respectively.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

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

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

9.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments).

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

At

June

30,

2021,

all

of

the

Fund’s

investments

in

financial

instruments

carried

at

fair

value

were

valued

using

Level

2

inputs.

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

FUS-19

Semiannual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

11.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Cu

r

rency

USD

United

States

Dollar

Selected

Portfolio

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

COFI

Cost

of

Funds

Index

FHLB

Federal

Home

Loan

Banks

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

GNMA

Government

National

Mortgage

Association

LIBOR

London

Inter-Bank

Offered

Rate

MBS

Mortgage-Backed

Security

T-Note

Treasury

Note

10.

New

Accounting

Pronouncements

(continued)

TD-1

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

This

semiannual

report

for

Templeton

Developing

Markets

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+

7.93

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

TD-2

Semiannual

Report

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).

Templeton

Developing

Markets

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

appreciation.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

emerging

market

investments.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments.

Investments

in

developing

markets,

of

which

frontier

markets

are

a

subset,

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

smaller

size,

lesser

liquidity

and

lack

of

established

legal,

political,

business

and

social

frameworks

to

support

securities

markets.

Because

these

frameworks

are

typically

even

less

developed

in

frontier

markets,

as

well

as

various

factors

including

the

increased

potential

for

extreme

price

volatility,

illiquidity,

trade

barriers

and

exchange

controls,

the

risks

associated

with

developing

markets

are

magnified

in

frontier

markets.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

new

benchmark,

the

MSCI

Emerging

Markets

(EM)

Index-

NR,

posted

a

+7.45%

total

return

for

the

same

period.

1

The

Fund’s

old

benchmark,

the

MSCI

EM

Index,

posted

a

+7.58%

total

return.

1

The

investment

manager

believes

the

MSCI

EM

Index-NR

provides

a

more

consistent

basis

for

comparison

relative

to

the

Fund’s

peers.

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

economies

continued

to

recover

from

the

worst

effects

of

the

novel

coronavirus

(COVID-19)

pandemic

during

the

six

months

ended

June

30,

2021,

though

renewed

outbreaks

limited

growth

in

some

countries.

After

adopting

more

accommodative

monetary

policies

in

2020,

many

emerging

market

central

banks

held

or

raised

their

interest

rates

during

the

period

in

response

to

increased

inflation.

Emerging

market

equities

rose

modestly

during

the

six-

month

period

and

lagged

behind

developed

market

stocks.

Optimism

about

vaccine

rollouts,

economic

reopenings

and

additional

U.S.

fiscal

stimulus

measures

was

counterbalanced

by

concerns

over

renewed

COVID-19

outbreaks,

rising

inflation

and

signs

the

U.S.

Federal

Reserve

could

tighten

monetary

policy

sooner

than

expected.

Regarding

individual

countries,

China’s

year-on-year

growth

rate

accelerated

in

2021’s

first

quarter,

driven

by

increased

domestic

and

global

demand

and

government

fiscal

support.

Growth

was

less

robust

in

2021’s

second

quarter

as

higher

commodity

prices

hindered

economic

growth.

Taiwan’s

year-on-year

growth

rate

accelerated

in

2021’s

first

quarter,

as

a

surge

in

global

demand

for

electronic

and

audio-video

products

boosted

its

export-dependent

economy.

A

rebound

in

domestic

consumer

spending

and

continued

government

spending

also

supported

growth.

South

Korea’s

year-on-year

growth

rate

turned

positive

in

2021’s

first

quarter

following

three

straight

quarters

of

contraction.

Accelerating

private

consumption

and

gross

fixed

capital

formation,

as

well

as

continued

growth

in

government

spending,

contributed

to

the

recovery.

India’s

year-on-year

growth

rate

accelerated

in

2021’s

first

quarter,

the

country’s

second

straight

quarter

of

growth.

Private

and

government

spending

rebounded

and

gross

fixed

capital

formation

accelerated.

Russia’s

year-on-

year

growth

rate

contracted

in

2021’s

first

quarter

for

the

fourth

straight

quarter,

albeit

at

a

slower

rate

due

to

growth

in

industrial

output

and

wholesale

trade.

Brazil’s

year-on-year

growth

rate

turned

positive

in

2021’s

first

quarter

following

four

straight

quarters

of

contractions,

aided

by

accelerations

in

manufacturing,

transportation

and

storage,

and

finance

and

insurance.

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

Asia

76.5%

Latin

America

&

Caribbean

8.8%

Europe

8.8%

Middle East & Africa

4.5%

North

America

0.6%

Short-Term

Investments

&

Other

Net

Assets

0.8%

Templeton

Developing

Markets

VIP

Fund

TD-3

Semiannual

Report

Turning

to

specific

countries’

monetary

policies,

the

People’s

Bank

of

China

left

its

benchmark

loan

prime

rate

unchanged

during

the

period.

Taiwan’s

and

South

Korea’s

central

banks

held

their

record

low

benchmark

interest

rates

steady

during

the

period.

India’s

central

bank

also

left

its

benchmark

rate

unchanged.

In

contrast,

the

central

banks

of

Russia

and

Brazil

raised

their

respective

benchmark

interest

rates

three

times

during

the

period.

In

this

environment,

emerging

market

stocks,

as

measured

by

the

MSCI

EM

Index-NR,

posted

a

+7.45%

total

return

for

the

six

months

ended

June

30,

2021.

1

Chinese

equities

rose

only

slightly

during

the

period,

despite

the

country’s

continued

economic

recovery.

Gains

were

limited

by

concerns

over

increased

regulations

of

internet-related

companies,

U.S.-China

political

tensions

and

monetary

policy

concerns.

Equities

in

Taiwan

rose

significantly

during

the

period,

benefiting

from

strong

exports

by

its

technology-

related

companies.

Russian

equities

rose

as

well,

outpacing

most

emerging

market

peers,

boosted

by

higher

oil

prices

and

easing

geopolitical

tensions

with

the

U.S.

Brazilian

equities

also

gained

during

the

period.

Better-than-expected

economic

data

and

improved

vaccination

trends

in

2021’s

second

quarter

boosted

stocks

and

helped

offset

losses

early

in

the

period

due

to

concerns

about

increased

COVID-19

infections,

the

country’s

debt

level

and

rising

inflation.

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,

cash

flow

potential

and

sustainable

earnings

power

at

a

discount

to

intrinsic

worth.

This

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

a

company’s

profit

and

loss

outlook,

balance

sheet

strength,

cash

flow

trends

and

asset

value

in

relation

to

the

current

price

of

the

company’s

securities.

Our

analysis

considers

the

company’s

position

in

its

sector,

the

economic

framework

and

political

environment.

Manager’s

Discussion

Key

contributors

to

absolute

performance

during

the

period

were

Taiwan

Semiconductor

Manufacturing

Co.

(TSMC),

NAVER

and

MediaTek.

TSMC

is

one

of

the

world’s

leading

semiconductor

manufacturers,

with

major

technology

companies

among

its

clients.

The

company’s

stock

price

surged

as

investors

lifted

their

longer-term

outlook

for

the

chipmaker

in

a

robust

environment

for

technology

exports,

driven

by

increased

consumer

demand

for

computers,

game

consoles,

smartphones

and

tablets

during

the

pandemic.

Strong

demand

for

its

leading-edge

chips

coupled

with

production

setbacks

for

a

key

competitor

underpinned

the

optimism.

TSMC’s

better-than-expected

fourth-quarter

2020

profit,

upgraded

sales

growth

forecasts

and

increased

capital

spending

targets

sent

the

stock

soaring

in

January

2021,

before

signs

of

increased

industry

competition

erased

some

gains.

Investors

also

weighed

strong

first-quarter

2021

results

from

the

chipmaker

against

mixed

guidance,

which

projected

weaker

second-quarter

margins

while

upgrading

its

full-year

revenue

growth

forecast.

NAVER

is

South

Korea’s

largest

search

engine.

The

company

also

provides

services

including

LINE,

a

messenger

app

that

merged

with

SoftBank

subsidiary

Yahoo

Japan

(not

a

Fund

holding).

NAVER

benefited

from

increased

online

shopping

on

its

platform

amid

the

COVID-19

pandemic.

Moreover,

investors

remained

confident

of

NAVER’s

penetration

into

e-commerce,

digital

content

and

financial

services,

and

looked

positively

upon

its

substantial

research

and

development

investment.

NAVER

continued

to

report

strong

quarterly

revenues

and

earnings,

supporting

its

upward

share-price

trend.

Solid

e-commerce

trends,

expectations

of

a

recovery

in

the

advertising

market,

monetization,

increased

synergies

and

potential

new

investments

further

supported

market

confidence

in

the

company.

Top

10

Countries

6/30/21

a

%

of

Total

Net

Assets

a

a

China

28.6%

South

Korea

22.5%

Taiwan

16.4%

Brazil

6.9%

Russia

6.6%

India

6.5%

South

Africa

4.5%

Mexico

1.7%

United

Kingdom

1.4%

Thailand

1.1%

Templeton

Developing

Markets

VIP

Fund

TD-4

Semiannual

Report

MediaTek

is

a

major

Taiwanese

chip

designer

in

the

semiconductor

industry

and

develops

chips

for

smartphones

and

other

technology

devices.

Shares

reached

a

record

high

in

April

2021,

following

the

release

of

above-consensus

first-quarter

earnings

and

profit

margins,

and

management

guidance

for

the

company’s

second-quarter

growth

outlook.

Supply

constraints

also

raised

expectations

that

MediaTek

could

gain

market

share

in

the

fifth-generation

wireless

technology

(5G)

smartphone

business

from

its

competitors.

Signaling

commitment

to

enhancing

shareholder

returns,

the

company’s

announcement

of

a

special

dividend

payment

from

2021-2024

was

viewed

positively

by

the

market.

In

contrast,

key

detractors

from

absolute

performance

included

Brilliance

China

Automotive

Holdings,

Alibaba

Group

Holding

and

Ping

An

Insurance

Group.

Brilliance

China

Automotive

is

a

Chinese

carmaker

noted

for

its

joint

venture

with

German

luxury

carmaker

BMW

(not

a

Fund

holding).

The

company’s

stock

has

been

suspended

from

trading

since

March

31,

2021,

due

to

a

delay

in

the

company’s

2020

corporate

results,

along

with

the

provision

of

unauthorized

bank

guarantees

and

cash

balance

issues.

We

have

applied

a

fair

valuation

discount

on

the

holding,

and

we

continue

to

monitor

the

situation

closely.

Operationally,

its

joint

venture

with

BMW

continues

to

report

strong

earnings.

Alibaba

is

the

leading

e-commerce

company

in

China.

It

also

provides

cloud

computing

services

and

is

also

involved

in

payment,

financing

and

logistics

services.

Shares

fell

as

regulators

stepped

up

their

scrutiny

of

the

internet

industry

through

a

series

of

actions,

including

the

release

of

draft

online

microlending

and

anti-monopoly

rules.

Confidence

in

Alibaba

was

also

impacted

following

the

suspension

of

plans

to

list

its

financial

technology

arm

in

December

2020,

as

well

as

an

antitrust

probe

into

its

merchant

policy.

Although

Alibaba

reported

above-consensus

first-quarter

2021

revenues,

net

income

disappointed

due

to

higher

expenses

and

the

payment

of

an

anti-monopoly

fine

levied

against

the

company.

Ping

An

Insurance

is

a

leading

financial

conglomerate

involved

in

insurance,

banking,

brokerage,

trust

and

other

financial

service

businesses.

The

company

is

among

China’s

largest

life

and

property

and

casualty

insurers,

in

terms

of

premiums.

Increased

uncertainties

surrounding

the

company’s

investment

in

an

insolvent

state-controlled

conglomerate

with

interests

in

health

care,

finance,

information

technology

and

education

further

pressured

share-price

returns.

In

the

last

six

months,

the

Fund

increased

its

holdings

in

China,

Brazil

and

Indonesia

as

we

continued

to

identify

companies

with

sustainable

earnings

power

trading

at

a

discount

to

their

intrinsic

worth.

In

terms

of

sectors,

additions

were

undertaken

in

materials,

consumer

discretionary

and

real

estate.

New

additions

to

the

portfolio

included

Daqo

New

Energy,

a

Chinese

manufacturer

of

polysilicon

for

solar

power

equipment,

Soulbrain,

a

major

South

Korean

supplier

of

key

chemicals

for

semiconductor

and

display

manufacturing,

and

Guangzhou

Tinci

Materials

Technology,

a

leading

Chinese

supplier

of

battery

electrolytes.

We

also

added

to

our

existing

high-conviction

portfolio

holdings

with

purchases

in

Brazilian

stock

exchange

B3,

one

of

the

largest

financial

exchanges

in

South

America,

Tencent

Holdings,

one

of

the

largest

internet

services

companies

in

China,

and

the

aforementioned

Alibaba.

The

Fund

reduced

its

investments

in

Taiwan,

Russia

and

U.S.-

and

U.K.-listed

companies

with

exposure

to

emerging

markets

in

favor

of

opportunities

we

found

more

compelling.

Sectors

which

experienced

the

largest

sales

were

communication

services,

information

technology

and

energy.

In

terms

of

key

sales,

we

closed

positions

in

Prosus,

the

international

internet

assets

spinoff

of

South

African

internet

and

media

group

Naspers

(also

a

Fund

holding),

China

Mobile,

a

Chinese

wireless

telecommunications

provider,

and

CNOOC,

a

Chinese

energy

company.

We

also

reduced

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

12.3%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Samsung

Electronics

Co.

Ltd.

10.8%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Alibaba

Group

Holding

Ltd.

8.4%

Internet

&

Direct

Marketing

Retail,

China

Tencent

Holdings

Ltd.

7.6%

Interactive

Media

&

Services,

China

NAVER

Corp.

4.4%

Interactive

Media

&

Services,

South

Korea

Naspers

Ltd.

3.8%

Internet

&

Direct

Marketing

Retail,

South

Africa

ICICI

Bank

Ltd.

3.8%

Banks,

India

MediaTek

,

Inc.

2.8%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

LG

Corp.

2.3%

Industrial

Conglomerates,

South

Korea

China

Merchants

Bank

Co.

Ltd.

2.3%

Banks,

China

Templeton

Developing

Markets

VIP

Fund

TD-5

Semiannual

Report

positions

in

several

key

holdings,

including

Unilever,

a

U.K.-based

global

consumer

goods

giant

that

generates

more

than

half

of

its

sales

in

emerging

markets,

Cognizant

Technology

Solutions,

a

U.S.-listed

technology

services

provider

that

derives

most

of

its

earnings

from

services

produced

in

India,

and

the

aforementioned

NAVER.

Thank

you

for

your

participation

in

Templeton

Developing

Markets

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,

2021,

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.

Class

1

Fund

Expenses

Templeton

Developing

Markets

VIP

Fund

TD-6

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,079.30

$5.90

$1,019.12

$5.73

1.14%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Developing

Markets

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TD-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.73

$10.80

$8.62

$10.31

$7.42

$6.37

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.04

0.07

0.18

0.09

0.08

0.05

Net

realized

and

unrealized

gains

(losses)

0.89

1.57

2.12

(1.67)

2.92

1.08

Total

from

investment

operations

........

0.93

1.64

2.30

(1.58)

3.00

1.13

Less

distributions

from:

Net

investment

income

..............

(0.13)

(0.45)

(0.12)

(0.11)

(0.11)

(0.08)

Net

realized

gains

.................

(0.24)

(0.26)

—

—

—

—

Total

distributions

...................

(0.37)

(0.71)

(0.12)

(0.11)

(0.11)

(0.08)

Net

asset

value,

end

of

period

..........

$12.29

$11.73

$10.80

$8.62

$10.31

$7.42

Total

return

c

.......................

7.93%

17.39%

26.92%

(15.44)%

40.65%

17.79%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.14%

1.19%

1.15%

1.24%

1.36%

1.38%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.14%

e

1.19%

e

1.15%

e

1.24%

e

1.35%

f

1.36%

Net

investment

income

...............

0.67%

0.73%

1.83%

0.99%

0.86%

0.79%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$93,044

$89,165

$97,271

$85,397

$105,493

$82,596

Portfolio

turnover

rate

................

9.27%

11.60%

18.04%

9.22%

10.76%

26.78%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Developing

Markets

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.64

$10.71

$8.54

$10.23

$7.36

$6.32

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.03

0.05

0.15

0.07

0.05

0.04

Net

realized

and

unrealized

gains

(losses)

0.87

1.56

2.11

(1.68)

2.91

1.06

Total

from

investment

operations

........

0.90

1.61

2.26

(1.61)

2.96

1.10

Less

distributions

from:

Net

investment

income

..............

(0.11)

(0.42)

(0.09)

(0.08)

(0.09)

(0.06)

Net

realized

gains

.................

(0.24)

(0.26)

—

—

—

—

Total

distributions

...................

(0.35)

(0.68)

(0.09)

(0.08)

(0.09)

(0.06)

Net

asset

value,

end

of

period

..........

$12.19

$11.64

$10.71

$8.54

$10.23

$7.36

Total

return

c

.......................

7.69%

17.18%

26.70%

(15.79)%

40.41%

17.44%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.39%

1.45%

1.40%

1.49%

1.61%

1.63%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.39%

e

1.44%

1.40%

e

1.49%

e

1.60%

f

1.61%

Net

investment

income

...............

0.42%

0.49%

1.58%

0.74%

0.61%

0.54%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$256,691

$241,104

$231,645

$195,305

$270,433

$205,151

Portfolio

turnover

rate

................

9.27%

11.60%

18.04%

9.22%

10.76%

26.78%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Developing

Markets

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TD-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.71

$10.77

$8.59

$10.28

$7.39

$6.34

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.02

0.04

0.15

0.06

0.05

0.03

Net

realized

and

unrealized

gains

(losses)

0.88

1.57

2.11

(1.68)

2.92

1.06

Total

from

investment

operations

........

0.90

1.61

2.26

(1.62)

2.97

1.09

Less

distributions

from:

Net

investment

income

..............

(0.09)

(0.41)

(0.08)

(0.07)

(0.08)

(0.04)

Net

realized

gains

.................

(0.24)

(0.26)

—

—

—

—

Total

distributions

...................

(0.33)

(0.67)

(0.08)

(0.07)

(0.08)

(0.04)

Net

asset

value,

end

of

period

..........

$12.28

$11.71

$10.77

$8.59

$10.28

$7.39

Total

return

c

.......................

7.69%

17.05%

26.49%

(15.81)%

40.30%

17.32%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.49%

1.54%

1.50%

1.59%

1.71%

1.73%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.49%

e

1.54%

e

1.50%

e

1.59%

e

1.70%

f

1.71%

Net

investment

income

...............

0.32%

0.44%

1.48%

0.64%

0.51%

0.44%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$5,420

$5,518

$5,590

$5,203

$7,199

$6,377

Portfolio

turnover

rate

................

9.27

%

11.60%

18.04%

9.22%

10.76%

26.78%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

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.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Templeton

Developing

Markets

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-10

a

a

Industry

Shares

a

Value

a

Common

Stocks

96.0%

Brazil

3.7%

a

B2W

Cia

Digital

..................

Internet

&

Direct

Marketing

Retail

76,800

$

1,022,642

B3

SA

-

Brasil

Bolsa

Balcao

........

Capital

Markets

907,492

3,067,466

a

Lojas

Americanas

SA

.............

Multiline

Retail

582,936

2,420,260

a

M

Dias

Branco

SA

................

Food

Products

106,200

696,176

Vale

SA

........................

Metals

&

Mining

266,919

6,074,753

13,281,297

Cambodia

0.4%

NagaCorp

Ltd.

..................

Hotels,

Restaurants

&

Leisure

1,371,750

1,322,916

China

28.6%

a

Alibaba

Group

Holding

Ltd.

.........

Internet

&

Direct

Marketing

Retail

1,057,845

29,993,773

b

BAIC

Motor

Corp.

Ltd.,

H,

144A,

Reg

S

Automobiles

1,686,100

627,348

a

Baidu,

Inc.,

ADR

.................

Interactive

Media

&

Services

12,214

2,490,435

c

Brilliance

China

Automotive

Holdings

Ltd.

.........................

Automobiles

7,756,600

4,375,628

China

Merchants

Bank

Co.

Ltd.,

A

....

Banks

340,000

2,851,566

China

Merchants

Bank

Co.

Ltd.,

H

....

Banks

606,700

5,167,955

China

Resources

Cement

Holdings

Ltd.

Construction

Materials

3,360,915

3,193,308

China

Resources

Land

Ltd.

.........

Real

Estate

Management

&

Development

248,453

1,003,446

COSCO

SHIPPING

Ports

Ltd.

.......

Transportation

Infrastructure

286,759

223,891

a

Daqo

New

Energy

Corp.,

ADR

......

Semiconductors

&

Semiconductor

Equipment

57,815

3,759,131

Guangzhou

Tinci

Materials

Technology

Co.

Ltd.,

A

....................

Chemicals

186,918

3,080,946

d

Health

&

Happiness

H&H

International

Holdings

Ltd.

..................

Food

Products

455,300

1,908,726

Longshine

Technology

Group

Co.

Ltd.,

A

Software

384,457

1,000,759

NetEase

,

Inc.,

ADR

...............

Entertainment

21,265

2,450,791

a

New

Oriental

Education

&

Technology

Group,

Inc.

....................

Diversified

Consumer

Services

127,500

1,047,140

a

New

Oriental

Education

&

Technology

Group,

Inc.,

ADR

...............

Diversified

Consumer

Services

145,755

1,193,734

Ping

An

Bank

Co.

Ltd.,

A

...........

Banks

802,600

2,810,977

Ping

An

Insurance

Group

Co.

of

China

Ltd.,

A

.......................

Insurance

222,358

2,211,737

Ping

An

Insurance

Group

Co.

of

China

Ltd.,

H

.......................

Insurance

41,852

409,117

Tencent

Holdings

Ltd.

.............

Interactive

Media

&

Services

358,801

27,014,854

a

Tencent

Music

Entertainment

Group,

ADR

........................

Entertainment

154,960

2,398,781

Uni

-President

China

Holdings

Ltd.

....

Food

Products

1,516,351

1,673,043

Weifu

High-Technology

Group

Co.

Ltd.,

B

...........................

Auto

Components

306,139

608,969

101,496,055

Hungary

0.8%

Richter

Gedeon

Nyrt

.

.............

Pharmaceuticals

101,614

2,705,854

India

6.5%

ACC

Ltd.

.......................

Construction

Materials

9,600

260,443

a

Bajaj

Holdings

&

Investment

Ltd.

.....

Diversified

Financial

Services

63,532

3,090,709

ICICI

Bank

Ltd.

..................

Banks

1,579,654

13,441,936

Infosys

Ltd.

.....................

IT

Services

296,276

6,264,768

23,057,856

Indonesia

0.6%

Astra

International

Tbk

.

PT

.........

Automobiles

5,909,400

2,016,834

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Developing

Markets

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TD-11

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Mexico

1.7%

Banco

Santander

Mexico

SA

Institucion

de

Banca

Multiple

Grupo

Financiero

Santand

,

ADR

.................

Banks

840,830

$

5,280,412

a,b

Nemak

SAB

de

CV,

144A,

Reg

S

....

Auto

Components

1,928,900

676,364

5,956,776

Pakistan

0.2%

Habib

Bank

Ltd.

.................

Banks

1,013,500

784,676

Peru

0.2%

Intercorp

Financial

Services,

Inc.

.....

Banks

31,950

807,377

Philippines

0.2%

BDO

Unibank

,

Inc.

...............

Banks

327,469

758,688

Russia

6.6%

Gazprom

PJSC,

ADR

.............

Oil,

Gas

&

Consumable

Fuels

115,071

878,411

LUKOIL

PJSC,

ADR

..............

Oil,

Gas

&

Consumable

Fuels

85,254

7,912,631

a,b,d

Mail.Ru

Group

Ltd.,

GDR,

Reg

S

.....

Interactive

Media

&

Services

27,833

632,721

Sberbank

of

Russia

PJSC,

ADR

.....

Banks

432,289

7,183,345

a

Yandex

NV,

A

...................

Interactive

Media

&

Services

98,891

6,996,538

23,603,646

South

Africa

4.5%

a

Massmart

Holdings

Ltd.

............

Food

&

Staples

Retailing

580,084

2,557,913

Naspers

Ltd.,

N

..................

Internet

&

Direct

Marketing

Retail

64,244

13,538,876

16,096,789

South

Korea

22.5%

Fila

Holdings

Corp.

...............

Textiles,

Apparel

&

Luxury

Goods

75,091

3,866,910

KT

Skylife

Co.

Ltd.

...............

Media

92,351

880,513

a

LegoChem

Biosciences,

Inc.

........

Life

Sciences

Tools

&

Services

20,491

965,109

LG

Corp.

.......................

Industrial

Conglomerates

90,582

8,213,753

NAVER

Corp.

...................

Interactive

Media

&

Services

42,037

15,546,777

POSCO

.......................

Metals

&

Mining

13,480

4,152,145

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

536,300

38,264,069

Samsung

Life

Insurance

Co.

Ltd.

.....

Insurance

74,406

5,262,058

Soulbrain

Co.

Ltd.

................

Chemicals

9,420

2,739,219

79,890,553

Taiwan

16.4%

Hon

Hai

Precision

Industry

Co.

Ltd.

...

Electronic

Equipment,

Instruments

&

Components

1,108,545

4,442,365

Largan

Precision

Co.

Ltd.

..........

Electronic

Equipment,

Instruments

&

Components

2,850

316,295

MediaTek

,

Inc.

..................

Semiconductors

&

Semiconductor

Equipment

290,072

9,984,501

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

2,029,246

43,622,986

58,366,147

Thailand

1.1%

Kasikornbank

PCL

...............

Banks

629,678

2,324,808

Kiatnakin

Phatra

Bank

PCL

.........

Banks

549,194

956,489

Thai

Beverage

PCL

...............

Beverages

1,450,900

729,618

4,010,915

United

Kingdom

1.4%

Unilever

plc

.....................

Personal

Products

82,875

4,843,034

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Developing

Markets

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-12

See

Abbreviations

on

page

TD-

25

.

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

States

0.6%

Cognizant

Technology

Solutions

Corp.,

A

...........................

IT

Services

30,612

$

2,120,187

Total

Common

Stocks

(Cost

$188,607,912)

.....................................

341,119,600

a

Preferred

Stocks

3.2%

Brazil

3.2%

a

Banco

Bradesco

SA,

ADR

..........

Banks

1,129,552

5,794,602

e

Itau

Unibanco

Holding

SA,

ADR,

0.81%

Banks

897,443

5,393,632

11,188,234

Total

Preferred

Stocks

(Cost

$7,746,131)

.......................................

11,188,234

a

a

a

a

a

Escrows

and

Litigation

Trusts

0.0%

a,c

Hemisphere

Properties

India

Ltd.,

Escrow

Account

................

82,304

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$196,354,043)

...............................

352,307,834

Short

Term

Investments

1.3%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

1.3%

United

States

1.3%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

4,528,327

4,528,327

Total

Money

Market

Funds

(Cost

$4,528,327)

...................................

4,528,327

h

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.0%

†

Money

Market

Funds

0.0%

†

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

241,825

241,825

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$241,825)

...................................................................

241,825

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$4,770,152

)

.................................

4,770,152

a

a

a

a

Total

Investments

(Cost

$201,124,195)

100.5%

..................................

$357,077,986

Other

Assets,

less

Liabilities

(0.5)%

...........................................

(1,922,651)

Net

Assets

100.0%

...........................................................

$355,155,335

a

a

a

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Developing

Markets

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TD-13

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$1,936,433,

representing

0.5%

of

net

assets.

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

9

regarding

fair

value

measurements.

d

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(c).

e

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

f

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

h

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-14

Templeton

Developing

Markets

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$196,354,043

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

4,770,152

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$405,622)

...................................

$352,307,834

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

4,770,152

Foreign

currency,

at

value

(cost

$166,264)

........................................................

166,170

Receivables:

Investment

securities

sold

...................................................................

288

Capital

shares

sold

........................................................................

345,073

Dividends

...............................................................................

489,944

Total

assets

..........................................................................

358,079,462

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

1,053,059

Capital

shares

redeemed

...................................................................

104,679

Management

fees

.........................................................................

306,938

Distribution

fees

..........................................................................

54,399

Payable

upon

return

of

securities

loaned

(Note

1c)

..................................................

241,825

Deferred

tax

...............................................................................

1,038,787

Accrued

expenses

and

other

liabilities

...........................................................

124,440

Total

liabilities

.........................................................................

2,924,127

Net

assets,

at

value

.................................................................

$355,155,335

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$198,714,078

Total

distributable

earnings

(losses)

.............................................................

156,441,257

Net

assets,

at

value

.................................................................

$355,155,335

Templeton

Developing

Markets

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$93,044,223

Shares

outstanding

........................................................................

7,573,120

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$12.29

Class

2:

Net

assets,

at

value

.......................................................................

$256,690,721

Shares

outstanding

........................................................................

21,054,734

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$12.19

Class

4:

Net

assets,

at

value

.......................................................................

$5,420,391

Shares

outstanding

........................................................................

441,521

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$12.28

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TD-15

Templeton

Developing

Markets

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$492,941)

Unaffiliated

issuers

........................................................................

$3,203,544

Non-controlled

affiliates

(Note

3e)

.............................................................

59

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

9,811

Non-controlled

affiliates

(Note

3e)

.............................................................

6

Total

investment

income

...................................................................

3,213,420

Expenses:

Management

fees

(Note

3a)

...................................................................

1,856,703

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

318,162

    Class

4

................................................................................

9,802

Custodian

fees

.............................................................................

33,229

Reports

to

shareholders

......................................................................

62,771

Professional

fees

...........................................................................

52,778

Trustees'

fees

and

expenses

..................................................................

1,222

Other

....................................................................................

18,394

Total

expenses

.........................................................................

2,353,061

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(695)

Net

expenses

.........................................................................

2,352,366

Net

investment

income

................................................................

861,054

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$33,570)

Unaffiliated

issuers

......................................................................

9,183,292

Foreign

currency

transactions

................................................................

(27,125)

Net

realized

gain

(loss)

..................................................................

9,156,167

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

16,486,935

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

280

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

(487,445)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

15,999,770

Net

realized

and

unrealized

gain

(loss)

............................................................

25,155,937

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$26,016,991

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-16

Templeton

Developing

Markets

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$861,054

$1,602,657

Net

realized

gain

(loss)

.................................................

9,156,167

7,417,851

Net

change

in

unrealized

appreciation

(depreciation)

...........................

15,999,770

35,703,143

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

26,016,991

44,723,651

Distributions

to

shareholders:

Class

1

.............................................................

(2,736,269)

(5,313,566)

Class

2

.............................................................

(7,098,412)

(13,445,802)

Class

4

.............................................................

(145,812)

(329,902)

Total

distributions

to

shareholders

..........................................

(9,980,493)

(19,089,270)

Capital

share

transactions:

(Note

2)

Class

1

.............................................................

(357,922)

(15,688,037)

Class

2

.............................................................

4,058,324

(8,150,495)

Class

4

.............................................................

(368,247)

(515,345)

Total

capital

share

transactions

............................................

3,332,155

(24,353,877)

Net

increase

(decrease)

in

net

assets

...................................

19,368,653

1,280,504

Net

assets:

Beginning

of

period

.....................................................

335,786,682

334,506,178

End

of

period

..........................................................

$355,155,335

$335,786,682

Franklin

Templeton

Variable

Insurance

Products

Trust

TD-17

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Templeton

Developing

Markets

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust

(Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

Developing

Markets

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund’s

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-18

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

Additionally,

the

Fund

received

$178,960

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

received

as

collateral

are

held

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

received

as

collateral.

As

such,

the

non-cash

collateral

is

excluded

from

the

Statements

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and, if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-19

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

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,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-20

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

trustees

of

the

following

subsidiaries:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

405,945

$5,142,787

551,169

$5,176,244

Shares

issued

in

reinvestment

of

distributions

..........

221,740

2,736,269

605,880

5,313,565

Shares

redeemed

...............................

(654,250)

(8,236,978)

(2,564,863)

(26,177,846)

Net

increase

(decrease)

..........................

(26,565)

$(357,922)

(1,407,814)

$(15,688,037)

Class

2

Shares:

Shares

sold

...................................

1,554,849

$19,423,789

3,773,009

$36,677,695

Shares

issued

in

reinvestment

of

distributions

..........

579,935

7,098,412

1,543,720

13,445,802

Shares

redeemed

...............................

(1,799,859)

(22,463,877)

(6,223,836)

(58,273,992)

Net

increase

(decrease)

..........................

334,925

$4,058,324

(907,107)

$(8,150,495)

Class

4

Shares:

Shares

sold

...................................

20,206

$255,704

25,280

$230,224

Shares

issued

in

reinvestment

of

distributions

..........

11,826

145,812

37,660

329,902

Shares

redeemed

...............................

(61,777)

(769,763)

(110,712)

(1,075,471)

Net

increase

(decrease)

..........................

(29,745)

$(368,247)

(47,772)

$(515,345)

Subsidiary

Affiliation

Templeton

Asset

Management

Ltd.

(Asset

Management)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-21

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

administrative

fee

rate

was

1.050%

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.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Developing

Markets

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$1,250,033

$25,520,372

$(22,242,078)

$—

$—

$4,528,327

4,528,327

$59

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$518,425

$2,664,748

$(2,941,348)

$

—

$

—

$241,825

241,825

$6

Total

Affiliated

Securities

....

$1,768,458

$28,185,120

$(25,183,426)

$—

$—

$4,770,152

$65

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-22

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

4.

Income

Taxes

At

June

30,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$32,362,543

and

$39,312,955,

respectively.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$241,825

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.

6.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Current

political

and

financial

uncertainty

surrounding

the

European

Union

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

Europe.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

The

United

States

and

other

nations

have

imposed

and

could

impose

additional

sanctions

on

certain

issuers

in

Russia

due

to

regional

conflicts.

These

sanctions

could

result

in

the

devaluation

of

Russia’s

currency,

a

downgrade

in

Russian

issuers’

credit

ratings,

or

a

decline

in

the

value

and

liquidity

of

Russian

stocks

or

other

securities.

Such

sanctions

could

also

adversely

affect

Russia’s

economy.

The

Fund

may

be

prohibited

from

investing

in

securities

issued

by

companies

subject

to

such

sanctions.

In

addition,

if

the

Fund

holds

the

securities

of

an

issuer

that

is

subject

to

such

sanctions,

an

immediate

freeze

of

that

issuer’s

securities

could

result,

impairing

the

ability

of

the

Fund

to

buy,

sell,

receive

or

deliver

those

securities.

There

is

also

the

risk

that

countermeasures

could

be

taken

by

Russia’s

government,

which

could

involve

the

seizure

of

the

Fund’s

assets.

These

risks

could

affect

the

value

of

the

Fund's

portfolio.

While

the

Fund

holds

securities

of

certain

issuers

impacted

by

the

sanctions,

existing

investments

do

not

presently

violate

the

applicable

terms

and

conditions

of

the

sanctions.

The

sanctions

currently

do

not

affect

the

Fund's

ability

to

sell

these

securities.

At

June

30,

2021,

the

Fund

had

6.6%

of

its

net

assets

invested

in

Russia.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

Cost

of

investments

..........................................................................

$209,232,150

Unrealized

appreciation

........................................................................

$169,614,827

Unrealized

depreciation

........................................................................

(21,768,991)

Net

unrealized

appreciation

(depreciation)

..........................................................

$147,845,836

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-23

Semiannual

Report

Templeton

Developing

Markets

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

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

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.

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Developing

Markets

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Brazil

...............................

$

13,281,297

$

—

$

—

$

13,281,297

Cambodia

............................

—

1,322,916

—

1,322,916

China

...............................

14,201,598

82,918,829

4,375,628

101,496,055

Hungary

.............................

—

2,705,854

—

2,705,854

India

................................

—

23,057,856

—

23,057,856

Indonesia

............................

—

2,016,834

—

2,016,834

Mexico

..............................

5,956,776

—

—

5,956,776

Pakistan

.............................

784,676

—

—

784,676

Peru

................................

807,377

—

—

807,377

Philippines

...........................

758,688

—

—

758,688

Russia

..............................

6,996,538

16,607,108

—

23,603,646

South

Africa

..........................

2,557,913

13,538,876

—

16,096,789

South

Korea

..........................

—

79,890,553

—

79,890,553

Taiwan

..............................

—

58,366,147

—

58,366,147

Thailand

.............................

—

4,010,915

—

4,010,915

United

Kingdom

.......................

—

4,843,034

—

4,843,034

United

States

.........................

2,120,187

—

—

2,120,187

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-24

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

June

30,

2021,

are

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Developing

Markets

VIP

Fund

(continued)

Assets:

Investments

in

Securities:

Preferred

Stocks

........................

$

11,188,234

$

—

$

—

$

11,188,234

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

4,770,152

—

—

4,770,152

Total

Investments

in

Securities

...........

$63,423,436

$289,278,922

b

$4,375,628

$357,077,986

a

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

b

Includes

foreign

securities

valued

at

$289,278,922,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Balance

at

Beginning

of

Period

Purchases

Sales

Transfer

Into

Level

3

a

Transfer

Out

of

Level

3

Net

accretion

(amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciation

(Depreciation)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Templeton

Developing

Markets

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

China

...........

$

—

$

—

$

—

$

7,080,740

$

—

$

—

$

—

$

(2,705,112)

$

4,375,628

$

(2,705,112)

Escrows

and

Litigation

Trusts

...........

—

b

—

—

—

—

—

—

—

—

b

—

Total

Investments

in

Securities

.

$—

$—

$—

$7,080,740

$—

—

—

(2,705,112)

$4,375,628

$(2,705,112)

a

Transferred

into

level

3

as

a

result

of

the

unavailability

of

a

quoted

market

price

in

an

active

market

for

identical

securities

or

as

a

result

of

the

unreliability

of

the

foreign

exchange

rate

and

other

significant

observable

valuation

inputs.

May

include

amounts

related

to

a

corporate

action.

b

Includes

securities

determined

to

have

no

value.

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

Impact

to

Fair

Value

if

Input

Increases

a

Assets:

Investments

in

Securities:

Common

Stock:

China

.....................

$4,375,628

Discount

to

last

traded

price

Discount

40.0%

Decrease

b

All

other

investments

...........

—

c

Total

$4,375,628

a

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

b

Represents

a

significant

impact

to

fair

value

and

net

assets.

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TD-25

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

11.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

c

Includes

securities

determined

to

have

no

value

at

June

30,

2021.

Selected

Portfolio

ADR

American

Depositary

Receipt

GDR

Global

Depositary

Receipt

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TD-26

Semiannual

Report

Templeton

Developing

Markets

VIP

Fund

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

$1,096,318

of

foreign

taxes

paid

and

$6,344,338

of

foreign

source

income

earned

by

the

fund,

or

amounts

as

finally

determined,

during

the

fiscal

year

ended

December

31,

2020.

TF-1

Semiannual

Report

Templeton

Foreign

VIP

Fund

This

semi

annual

report

for

Templeton

Foreign

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+9.47%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

4/30/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

TF-2

Semiannual

Report

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).

Templeton

Foreign

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

investments

of

issuers

located

outside

the

U.S.,

including

those

in

emerging

markets.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments;

investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors.

Currency

rates

may

fluctuate

significantly

over

short

periods

of

time,

and

can

reduce

returns.

Because

the

Fund

may

invest

at

least

a

significant

portion

of

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Current

political

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

enable

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform

as

promised.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

new

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

posted

a

+9.16%

total

return

for

the

period

under

review.

1

Also

in

comparison,

the

Fund’s

former

benchmark,

the

MSCI

ACWI

ex

USA

Index,

posted

a

+9.45%

total

return

for

the

same

period.

The

MSCI

ACWI

ex

USA

Index-NR

(net

of

taxes

on

dividends)

is

replacing

the

MSCI

ACWI

ex

USA

Index

(gross

of

taxes

on

dividends)

because

the

investment

manager

believes

the

composition

of

the

MSCI

ACWI

ex

USA

Index-NR

provides

a

more

consistent

basis

for

comparison

relative

to

the

Fund’s

peers.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

ACWI-NR,

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

Asia

49.8%

Europe

40.8%

Latin

America

&

Caribbean

1.8%

North

America

1.5%

Short-Term

Investments

&

Other

Net

Assets

6.1%

Templeton

Foreign

VIP

Fund

TF-3

Semiannual

Report

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Investment

Strategy

When

choosing

equity

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

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

Our

analysis

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

a

company’s

price/earnings

ratio,

price/cash

flow

ratio,

profit

margins

and

liquidation

value.

The

Fund

may,

from

time

to

time,

engage

in

currency-related

derivatives

to

seek

to

hedge

(protect)

against

currency

risks.

The

Fund

may

also

use

a

variety

of

equity-related

derivatives

for

various

purposes

including

enhancing

Fund

returns,

increasing

liquidity

and

gaining

exposure

to

particular

markets

in

more

efficient

or

less

expensive

ways.

Manager’s

Discussion

During

the

six

months

under

review,

key

contributors

to

the

Fund’s

performance

relative

to

the

MSCI

ACWI

ex

USA

Index-NR

included

stock

selection

in

the

industrials,

consumer

discretionary

and

real

estate

sectors.

Within

industrials,

Japanese

industrial

equipment

firm

Hitachi’s

shares

rallied

as

the

firm

made

progress

with

its

ongoing

restructuring

initiatives.

Hitachi’s

information

technology

business

also

continued

to

perform

well,

and

we

believe

it

could

benefit

from

increasing

demand

for

digital

transformation.

In

our

view,

Hitachi

is

an

underappreciated

Japanese

restructuring

story

with

vastly

improved

governance,

value

accretive

divestments

and

merger

and

acquisition

activities,

as

well

as

improving

profitability

and

business

mix.

Overall,

Hitachi

is

continuing

to

evolve

into

a

more

simplified,

higher-return

company

generating

more

stable

cash

flows.

Based

on

our

long-term

fundamental

expectations,

we

continue

to

believe

the

stock

is

significantly

undervalued

at

recent

levels.

In

the

consumer

discretionary

sector,

our

investment

in

Japanese

automobile

manufacturer

Isuzu

Motors

contributed

to

relative

results.

In

the

real

estate

sector,

our

holding

in

Hong

Kong-based

property

developer

and

manager

CK

Asset

Holdings

benefited

results.

Other

notable

contributors

to

relative

performance

included

our

off-benchmark

position

in

Netherlands-based

chipmaker

NXP

Semiconductors,

which

has

operations

in

China,

and

our

investment

in

Luxembourg-based

steelmaking

company

ArcelorMittal.

NXP

Semiconductors’

shares

gained

positive

momentum

following

a

strong

earnings

report

and

guidance

upgrade

at

the

end

of

April

2021.

Both

revenues

and

earnings

exceeded

expectations

as

COVID-related

supply

backlogs

coincided

with

surging

chip

demand

from

the

firm’s

main

automotive

clients.

We

continue

to

like

NXP

for

reasons

that

are

both

specific

to

the

company

(margin

improvement,

capital

return,

exposure

to

growing

end

markets)

and

related

to

the

industry

(increased

semiconductor

content

in

automobiles,

industrial

equipment

and

internet-connected

devices).

Although

there

is

some

cyclicality

in

the

company’s

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Samsung

Electronics

Co.

Ltd.

4.8%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

4.0%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Hitachi

Ltd.

3.5%

Industrial

Conglomerates,

Japan

NXP

Semiconductors

NV

3.1%

Semiconductors

&

Semiconductor

Equipment,

China

Alibaba

Group

Holding

Ltd.

3.0%

Internet

&

Direct

Marketing

Retail,

China

Bayer

AG

2.6%

Pharmaceuticals,

Germany

Takeda

Pharmaceutical

Co.

Ltd.

2.4%

Pharmaceuticals,

Japan

CK

Hutchison

Holdings

Ltd.

2.3%

Industrial

Conglomerates,

United

Kingdom

KB

Financial

Group,

Inc.

2.1%

Banks,

South

Korea

BP

plc

2.1%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Templeton

Foreign

VIP

Fund

TF-4

Semiannual

Report

intermediate-term

demand

profile,

in

our

longer-term

view,

NXP

remains

an

attractive

structural

growth

story

and

interesting

portfolio

diversifier.

ArcelorMittal’s

stock

performed

strongly

during

the

period

as

global

economic

activity

continued

to

recover

and

steel

prices

rose

due

to

recovering

demand

and

tightened

industry

supply.

The

company’s

improved

financial

position

and

stated

strategy

toward

increased

cash

returns

further

supported

investor

sentiment.

In

contrast,

key

detractors

from

the

Fund’s

relative

performance

included

stock

selection

in

the

materials,

financials

and

consumer

staples

sectors,

as

well

as

an

underweighting

in

the

financials

sector.

Within

materials,

our

position

in

Sumitomo

Metal

Mining

(SMM),

Japan’s

largest

materials

company,

hindered

relative

results.

Its

stock

represents

an

undervalued

play

on

higher

nickel

and

copper

prices

over

our

investment

horizon,

driven

by

supply-and-demand

imbalance

and

an

increasing

appetite

for

electric

vehicle

battery

materials.

The

stock

languished

during

2021’s

second

quarter

due

to

news

of

increased

nickel

supply

in

Indonesia

and

uncertainty

around

the

scope

for

higher

mining

taxes

and

royalties

in

Chile

and

Peru,

two

countries

where

SMM

has

stakes

in

several

mining

projects.

The

stock

remains

attractively

valued,

in

our

analysis,

and

remains

a

core

holding

in

our

portfolios.

In

the

financials

sector,

our

position

in

India-based

thrift

and

mortgage

finance

company

Housing

Development

Finance

detracted

from

relative

results.

In

the

consumer

staples

sector,

our

holding

in

Japan-based

beverages

manufacturer

Kirin

Holdings

hurt

relative

results.

Other

key

detractors

from

relative

performance

included

our

holding

in

South

Korea-based

electronics

products

and

semiconductor

manufacturer

Samsung

Electronics

and

our

off-benchmark

position

in

Netherlands-based

energy

equipment

and

services

company

SBM

Offshore.

Samsung

Electronics’

share

price

declined

slightly

amid

little

news

flow.

In

our

view,

Samsung

remains

a

key

beneficiary

of

a

demand

uptrend

in

memory

chips.

Other

positive

catalysts

include

long-term

opportunities

in

the

firm’s

foundry

business,

optionality

around

capital

deployment

and

a

competitive

advantage

from

being

one

of

the

three

semiconductor

manufacturers

globally

that

can

compete

at

the

leading

edge.

Overall,

we

believe

Samsung

is

a

well-run

global

technology

leader

with

a

strong

balance

sheet.

SBM

Offshore’s

share

price

also

declined

amid

little

news

flow.

The

firm

reported

broadly

in-line

results

in

late

May

2021

and

confirmed

its

full-year

guidance.

Its

stock

valuation

remains

compelling,

in

our

analysis.

The

company

continues

to

have

one

of

the

most

fundamentally

defensive

business

models

in

a

highly

cyclical

boom-bust

sector

and

represents

an

opportunity

we

believe

is

significantly

misunderstood

by

the

market.

We

think

many

investors

seem

too

misfocused

on

a

balance

sheet

that

looks

superficially

overleveraged,

though

the

debt

at

the

lease

level

is

non-recourse

and

associated

with

individual

lease

contracts,

with

payments

matched

to

cash

flows.

We

continue

to

see

significant

upside

potential

for

SBM’s

stock

from

recent

price

levels.

From

a

geographic

perspective,

key

contributors

to

the

Fund’s

relative

performance

included

stock

selection

in

Asia,

notably

in

China,

Japan

and

Hong

Kong.

In

Europe,

stock

selection

in

the

U.K.

and

France,

as

well

as

an

overweighting

in

the

Netherlands,

benefited

relative

results.

In

contrast,

stock

selection

and

an

underweighting

in

Canada,

as

well

as

a

lack

of

exposure

to

the

Middle

East

and

Africa,

detracted

from

relative

results.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund’s

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

six

months

ended

June

30,

2021,

the

U.S.

dollar

rose

in

value

relative

to

most

currencies.

As

a

result,

the

Fund’s

performance

was

negatively

affected

by

the

portfolio’s

investment

predominantly

in

securities

with

non-U.S.

currency

exposure.

Thank

you

for

your

participation

in

Templeton

Foreign

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Templeton

Foreign

VIP

Fund

TF-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,094.70

$4.39

$1,020.61

$4.23

0.85%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Foreign

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-6

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$13.57

$14.23

$13.01

$15.80

$13.89

$13.46

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.16

0.32

c

0.44

0.29

0.30

0.33

Net

realized

and

unrealized

gains

(losses)

1.13

(0.54)

1.19

(2.64)

2.03

0.62

Total

from

investment

operations

........

1.29

(0.22)

1.63

(2.35)

2.33

0.95

Less

distributions

from:

Net

investment

income

..............

(0.29)

(0.44)

(0.27)

(0.44)

(0.42)

(0.29)

Net

realized

gains

.................

—

—

(0.14)

—

—

(0.23)

Total

distributions

...................

(0.29)

(0.44)

(0.41)

(0.44)

(0.42)

(0.52)

Net

asset

value,

end

of

period

..........

$14.57

$13.57

$14.23

$13.01

$15.80

$13.89

Total

return

d

.......................

9.47%

(0.92)%

12.84%

(15.27)%

17.02%

7.49%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.85%

0.86%

0.85%

0.83%

0.82%

0.80%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.85%

f

0.84%

0.83%

0.81%

0.81%

g

0.78%

Net

investment

income

...............

2.14%

2.68%

c

3.25%

1.96%

1.99%

2.38%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$120,309

$113,317

$121,948

$114,784

$152,684

$133,218

Portfolio

turnover

rate

................

15.54%

40.07%

28.52%

21.38%

26.81%

20.93%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.14

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.54%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Foreign

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TF-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$13.28

$13.93

$12.74

$15.47

$13.61

$13.20

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.13

0.28

c

0.40

0.25

0.26

0.28

Net

realized

and

unrealized

gains

(losses)

1.12

(0.53)

1.16

(2.58)

1.98

0.62

Total

from

investment

operations

........

1.25

(0.25)

1.56

(2.33)

2.24

0.90

Less

distributions

from:

Net

investment

income

..............

(0.26)

(0.40)

(0.23)

(0.40)

(0.38)

(0.26)

Net

realized

gains

.................

—

—

(0.14)

—

—

(0.23)

Total

distributions

...................

(0.26)

(0.40)

(0.37)

(0.40)

(0.38)

(0.49)

Net

asset

value,

end

of

period

..........

$14.27

$13.28

$13.93

$12.74

$15.47

$13.61

Total

return

d

.......................

9.37%

(1.16)%

12.53%

(15.44)%

16.69%

7.18%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.10%

1.11%

1.10%

1.08%

1.07%

1.05%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.10%

f

1.09%

1.08%

1.06%

1.06%

g

1.03%

Net

investment

income

...............

1.87%

2.42%

c

3.00%

1.71%

1.74%

2.13%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,090,603

$1,084,789

$1,117,813

$1,060,101

$1,394,475

$1,436,518

Portfolio

turnover

rate

................

15.54%

40.07%

28.52%

21.38%

26.81%

20.93%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.28%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Foreign

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$13.54

$14.20

$12.96

$15.71

$13.71

$13.29

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.13

0.28

c

0.39

0.24

0.23

0.26

Net

realized

and

unrealized

gains

(losses)

1.14

(0.55)

1.20

(2.63)

2.03

0.63

Total

from

investment

operations

........

1.27

(0.27)

1.59

(2.39)

2.26

0.89

Less

distributions

from:

Net

investment

income

..............

(0.24)

(0.39)

(0.21)

(0.36)

(0.26)

(0.24)

Net

realized

gains

.................

—

—

(0.14)

—

—

(0.23)

Total

distributions

...................

(0.24)

(0.39)

(0.35)

(0.36)

(0.26)

(0.47)

Net

asset

value,

end

of

period

..........

$14.57

$13.54

$14.20

$12.96

$15.71

$13.71

Total

return

d

.......................

9.35%

(1.34)%

12.49%

(15.54)%

16.62%

7.09%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.20%

1.21%

1.20%

1.18%

1.17%

1.15%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.20%

f

1.19%

1.18%

1.16%

1.16%

g

1.13%

Net

investment

income

...............

1.75%

2.33%

c

2.90%

1.61%

1.64%

2.03%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$100,602

$106,224

$113,681

$125,265

$159,944

$484,763

Portfolio

turnover

rate

................

15.54

%

40.07%

28.52%

21.38%

26.81%

20.93%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.19%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Templeton

Foreign

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TF-9

I

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

93.8%

Aerospace

&

Defense

2.4%

BAE

Systems

plc

.....................................

United

Kingdom

2,629,361

$

19,001,192

Dassault

Aviation

SA

...................................

France

10,152

11,959,899

30,961,091

Airlines

0.9%

a

International

Consolidated

Airlines

Group

SA

.................

United

Kingdom

4,644,176

11,214,490

Auto

Components

3.2%

Continental

AG

.......................................

Germany

111,315

16,378,173

Toyota

Industries

Corp.

.................................

Japan

147,500

12,756,239

Valeo

SA

............................................

France

422,358

12,740,868

41,875,280

Automobiles

5.3%

Bayerische

Motoren

Werke

AG

...........................

Germany

205,138

21,749,649

Honda

Motor

Co.

Ltd.

..................................

Japan

771,700

24,822,609

Isuzu

Motors

Ltd.

.....................................

Japan

1,765,500

23,429,691

70,001,949

Banks

9.2%

ING

Groep

NV

.......................................

Netherlands

1,186,686

15,753,816

Kasikornbank

PCL

....................................

Thailand

1,860,000

6,867,228

KB

Financial

Group,

Inc.,

ADR

...........................

South

Korea

568,206

28,012,556

Shinhan

Financial

Group

Co.

Ltd.

.........................

South

Korea

619,076

22,277,142

Standard

Chartered

plc

.................................

United

Kingdom

4,207,691

26,854,600

Sumitomo

Mitsui

Financial

Group,

Inc.

......................

Japan

606,500

20,909,135

120,674,477

Beverages

0.7%

b

Kirin

Holdings

Co.

Ltd.

.................................

Japan

438,700

8,562,367

Biotechnology

0.3%

a

Galapagos

NV

.......................................

Belgium

62,230

4,302,993

Chemicals

2.0%

c

Covestro

AG,

144A,

Reg

S

..............................

Germany

256,597

16,592,578

Tosoh

Corp.

.........................................

Japan

574,100

9,899,992

26,492,570

Construction

&

Engineering

1.9%

Sinopec

Engineering

Group

Co.

Ltd.,

H

.....................

China

11,734,000

7,594,787

Taisei

Corp.

.........................................

Japan

531,500

17,445,614

25,040,401

Diversified

Financial

Services

0.6%

EXOR

NV

...........................................

Netherlands

101,772

8,168,237

Electronic

Equipment,

Instruments

&

Components

0.6%

a

Landis+Gyr

Group

AG

..................................

Switzerland

120,834

8,439,256

Energy

Equipment

&

Services

1.5%

b

SBM

Offshore

NV

.....................................

Netherlands

1,267,226

19,281,011

Food

&

Staples

Retailing

1.2%

Sundrug

Co.

Ltd.

......................................

Japan

502,600

15,976,893

Health

Care

Providers

&

Services

2.3%

Fresenius

Medical

Care

AG

&

Co.

KGaA

....................

Germany

265,350

22,051,451

Sinopharm

Group

Co.

Ltd.,

H

............................

China

2,794,800

8,291,387

30,342,838

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Foreign

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Household

Durables

1.4%

Sony

Group

Corp.

.....................................

Japan

189,200

$

18,347,858

Industrial

Conglomerates

5.8%

CK

Hutchison

Holdings

Ltd.

..............................

United

Kingdom

3,873,500

30,154,265

Hitachi

Ltd.

..........................................

Japan

796,900

45,672,202

75,826,467

Insurance

3.1%

AIA

Group

Ltd.

.......................................

Hong

Kong

2,117,000

26,262,441

Prudential

plc

........................................

United

Kingdom

785,351

14,942,994

41,205,435

Interactive

Media

&

Services

0.4%

a

Baidu,

Inc.,

ADR

......................................

China

27,630

5,633,757

Internet

&

Direct

Marketing

Retail

4.5%

a

Alibaba

Group

Holding

Ltd.

..............................

China

1,383,700

39,232,954

a,c

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...................

Germany

210,573

19,476,199

58,709,153

IT

Services

0.6%

a

Amadeus

IT

Group

SA

.................................

Spain

104,548

7,370,904

Machinery

1.2%

Komatsu

Ltd.

........................................

Japan

655,000

16,228,143

Media

1.5%

a

Informa

plc

..........................................

United

Kingdom

1,217,196

8,459,832

Nippon

Television

Holdings,

Inc.

..........................

Japan

338,900

3,953,443

TBS

Holdings,

Inc.

....................................

Japan

441,700

6,804,971

19,218,246

Metals

&

Mining

5.7%

Alamos

Gold,

Inc.,

A

...................................

Canada

1,135,752

8,688,503

ArcelorMittal

SA

......................................

Luxembourg

658,756

20,282,871

Sumitomo

Metal

Mining

Co.

Ltd.

..........................

Japan

554,300

21,559,091

Wheaton

Precious

Metals

Corp.

..........................

Brazil

544,400

23,993,560

74,524,025

Multi-Utilities

1.7%

E.ON

SE

............................................

Germany

1,870,641

21,644,537

Oil,

Gas

&

Consumable

Fuels

6.7%

BP

plc

..............................................

United

Kingdom

6,357,681

27,882,958

Cenovus

Energy,

Inc.

..................................

Canada

912,844

8,732,672

Equinor

ASA

.........................................

Norway

899,949

19,052,023

Galp

Energia

SGPS

SA,

B

..............................

Portugal

565,429

6,148,238

Royal

Dutch

Shell

plc,

B

................................

Netherlands

1,333,243

25,883,846

87,699,737

Pharmaceuticals

7.7%

AstraZeneca

plc

......................................

United

Kingdom

132,637

15,936,721

Bayer

AG

...........................................

Germany

552,576

33,596,820

Roche

Holding

AG

....................................

Switzerland

54,982

20,719,315

Takeda

Pharmaceutical

Co.

Ltd.

..........................

Japan

933,094

31,317,990

101,570,846

Real

Estate

Management

&

Development

3.8%

China

Overseas

Land

&

Investment

Ltd.

....................

China

4,264,000

9,669,086

CK

Asset

Holdings

Ltd.

.................................

Hong

Kong

3,560,500

24,506,815

Mitsui

Fudosan

Co.

Ltd.

................................

Japan

266,600

6,165,326

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Foreign

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TF-11

See

Abbreviations

on

page

TF-

24

.

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Real

Estate

Management

&

Development

(continued)

Swire

Pacific

Ltd.,

A

...................................

Hong

Kong

1,341,000

$

9,086,023

49,427,250

Semiconductors

&

Semiconductor

Equipment

8.9%

Infineon

Technologies

AG

...............................

Germany

590,665

23,760,471

NXP

Semiconductors

NV

...............................

China

197,900

40,711,988

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

...............

Taiwan

2,456,000

52,796,978

117,269,437

Technology

Hardware,

Storage

&

Peripherals

4.8%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

880,121

62,795,097

Thrifts

&

Mortgage

Finance

2.1%

Housing

Development

Finance

Corp.

Ltd.

...................

India

822,605

27,439,999

Tobacco

1.8%

Imperial

Brands

plc

....................................

United

Kingdom

1,122,761

24,211,552

Total

Common

Stocks

(Cost

$967,796,801)

.....................................

1,230,456,296

Warrants

Warrants

0.1%

Oil,

Gas

&

Consumable

Fuels

0.1%

a

Cenovus

Energy,

Inc.,

1/01/26

............................

Canada

75,750

409,377

Total

Warrants

(Cost

$255,280)

................................................

409,377

Total

Long

Term

Investments

(Cost

$968,052,081)

...............................

1,230,865,673

a

Short

Term

Investments

5.6%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

4.9%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

64,844,912

64,844,912

Total

Money

Market

Funds

(Cost

$64,844,912)

..................................

64,844,912

a

a

a

a

a

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.7%

Money

Market

Funds

0.7%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

8,838,734

8,838,734

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$8,838,734)

............................................................

8,838,734

Total

Short

Term

Investments

(Cost

$73,683,646

)

................................

73,683,646

a

Total

Investments

(Cost

$1,041,735,727)

99.5%

..................................

$1,304,549,319

Other

Assets,

less

Liabilities

0.5%

.............................................

6,965,055

Net

Assets

100.0%

...........................................................

$1,311,514,374

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Foreign

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-12

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(c).

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$36,068,777,

representing

2.8%

of

net

assets.

d

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

e

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

f

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TF-13

Templeton

Foreign

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$968,052,081

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

73,683,646

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$8,364,515)

.................................

$1,230,865,673

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

73,683,646

Cash

....................................................................................

30,277

Foreign

currency,

at

value

(cost

$68,643)

.........................................................

68,644

Receivables:

Capital

shares

sold

........................................................................

1,022,507

Dividends

...............................................................................

4,252,909

European

Union

tax

reclaims

(Note

1

d

)

.........................................................

13,463,529

Total

assets

..........................................................................

1,323,387,185

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

52

Capital

shares

redeemed

...................................................................

412,418

Management

fees

.........................................................................

878,637

Distribution

fees

..........................................................................

259,307

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

8,838,734

Deferred

tax

...............................................................................

1,021,154

Accrued

expenses

and

other

liabilities

...........................................................

462,509

Total

liabilities

.........................................................................

11,872,811

Net

assets,

at

value

.................................................................

$1,311,514,374

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$1,113,699,417

Total

distributable

earnings

(losses)

.............................................................

197,814,957

Net

assets,

at

value

.................................................................

$1,311,514,374

Templeton

Foreign

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$120,308,875

Shares

outstanding

........................................................................

8,255,335

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.57

Class

2:

Net

assets,

at

value

.......................................................................

$1,090,603,073

Shares

outstanding

........................................................................

76,423,936

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.27

Class

4:

Net

assets,

at

value

.......................................................................

$100,602,426

Shares

outstanding

........................................................................

6,905,469

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.57

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-14

Templeton

Foreign

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$2,195,842)

Unaffiliated

issuers

........................................................................

$19,392,765

Non-controlled

affiliate

s

(Note

3e)

.............................................................

2,448

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

33,277

Non-controlled

affiliates

(Note

3

e

)

.............................................................

391

Other

income

(Note

1

d

)

......................................................................

249,913

Total

investment

income

...................................................................

19,678,794

Expenses:

Management

fees

(Note

3

a

)

...................................................................

5,318,647

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,378,662

    Class

4

................................................................................

182,219

Custodian

fees

.............................................................................

52,512

Reports

to

shareholders

......................................................................

149,695

Professional

fees

...........................................................................

57,913

Trustees'

fees

and

expenses

..................................................................

3,842

Other

....................................................................................

55,775

Total

expenses

.........................................................................

7,199,265

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(34,834)

Net

expenses

.........................................................................

7,164,431

Net

investment

income

................................................................

12,514,363

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

56,836,572

Foreign

currency

transactions

................................................................

(418,798)

Net

realized

gain

(loss)

..................................................................

56,417,774

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

50,418,793

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(466,744)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

488,631

Net

change

in

unrealized

appreciation

(depreciation)

............................................

50,440,680

Net

realized

and

unrealized

gain

(loss)

............................................................

106,858,454

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$119,372,817

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TF-15

Templeton

Foreign

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$12,514,363

$28,247,734

Net

realized

gain

(loss)

.................................................

56,417,774

(91,749,700)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

50,440,680

51,110,547

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

119,372,817

(12,391,419)

Distributions

to

shareholders:

Class

1

.............................................................

(2,381,077)

(3,651,171)

Class

2

.............................................................

(19,729,840)

(32,735,824)

Class

4

.............................................................

(1,653,598)

(3,189,135)

Total

distributions

to

shareholders

..........................................

(23,764,515)

(39,576,130)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(1,291,573)

(3,329,454)

Class

2

.............................................................

(73,652,298)

9,474,525

Class

4

.............................................................

(13,480,262)

(3,288,883)

Total

capital

share

transactions

............................................

(88,424,133)

2,856,188

Net

increase

(decrease)

in

net

assets

...................................

7,184,169

(49,111,361)

Net

assets:

Beginning

of

period

.....................................................

1,304,330,205

1,353,441,566

End

of

period

..........................................................

$1,311,514,374

$1,304,330,205

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Templeton

Foreign

VIP

Fund

TF-16

Semiannual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

Foreign

VIP

Fund

(Fund)

is

included

in

this

report. Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-17

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to

any

cash

collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-18

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

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).

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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-19

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

116,937

$1,724,029

806,359

$9,224,666

Shares

issued

in

reinvestment

of

distributions

..........

158,422

2,381,077

325,707

3,651,171

Shares

redeemed

...............................

(370,830)

(5,396,679)

(1,349,400)

(16,205,291)

Net

increase

(decrease)

..........................

(95,471)

$(1,291,573)

(217,334)

$(3,329,454)

Class

2

Shares:

Shares

sold

...................................

1,385,319

$19,852,942

11,015,042

$124,442,450

Shares

issued

in

reinvestment

of

distributions

..........

1,341,254

19,729,840

2,981,404

32,735,824

Shares

redeemed

...............................

(7,980,279)

(113,235,080)

(12,535,323)

(147,703,749)

Net

increase

(decrease)

..........................

(5,253,706)

$(73,652,298)

1,461,123

$9,474,525

Class

4

Shares:

Shares

sold

...................................

215,982

$3,139,205

1,219,556

$13,736,529

Shares

issued

in

reinvestment

of

distributions

..........

110,093

1,653,598

284,490

3,189,135

Shares

redeemed

...............................

(1,263,333)

(18,273,065)

(1,669,364)

(20,214,547)

Net

increase

(decrease)

..........................

(937,258)

$(13,480,262)

(165,318)

$(3,288,883)

Subsidiary

Affiliation

Templeton

Investment

Counsel,

LLC

(TIC)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-20

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

TIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.802%

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.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-21

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

EU

reclaims,

corporate

actions,

passive

foreign

investment

company

shares

and

foreign

capital

gain

taxes.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$188,894,270

and

$237,500,116,

respectively.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Foreign

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$120,292,539

$89,253,728

$(144,701,355)

$—

$—

$64,844,912

64,844,912

$2,448

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$131,037,278

$(122,198,544)

$

—

$

—

$8,838,734

8,838,734

$391

Total

Affiliated

Securities

....

$120,292,539

$220,291,006

$(266,899,899)

$—

$—

$73,683,646

$2,839

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$13,644,309

Long

term

................................................................................

121,820,664

Total

capital

loss

carryforwards

...............................................................

$135,464,973

Cost

of

investments

..........................................................................

$1,050,698,957

Unrealized

appreciation

........................................................................

$330,730,614

Unrealized

depreciation

........................................................................

(76,880,252)

Net

unrealized

appreciation

(depreciation)

..........................................................

$253,850,362

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-22

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$8,838,734

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.

6.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Current

political

and

financial

uncertainty

surrounding

the

European

Union

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

Europe.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

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.

5.

Investment

Transactions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-23

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's

assets

carried

at

fair

value,

is

as

follows:

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

Level

1

Level

2

Level

3

Total

Templeton

Foreign

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

30,961,091

$

—

$

30,961,091

Airlines

..............................

—

11,214,490

—

11,214,490

Auto

Components

......................

—

41,875,280

—

41,875,280

Automobiles

..........................

—

70,001,949

—

70,001,949

Banks

...............................

28,012,556

92,661,921

—

120,674,477

Beverages

...........................

—

8,562,367

—

8,562,367

Biotechnology

.........................

—

4,302,993

—

4,302,993

Chemicals

...........................

—

26,492,570

—

26,492,570

Construction

&

Engineering

...............

—

25,040,401

—

25,040,401

Diversified

Financial

Services

.............

—

8,168,237

—

8,168,237

Electronic

Equipment,

Instruments

&

Components

........................

—

8,439,256

—

8,439,256

Energy

Equipment

&

Services

.............

—

19,281,011

—

19,281,011

Food

&

Staples

Retailing

.................

—

15,976,893

—

15,976,893

Health

Care

Providers

&

Services

..........

—

30,342,838

—

30,342,838

Household

Durables

....................

—

18,347,858

—

18,347,858

Industrial

Conglomerates

................

—

75,826,467

—

75,826,467

Insurance

............................

—

41,205,435

—

41,205,435

Interactive

Media

&

Services

..............

5,633,757

—

—

5,633,757

Internet

&

Direct

Marketing

Retail

..........

—

58,709,153

—

58,709,153

IT

Services

...........................

—

7,370,904

—

7,370,904

Machinery

............................

—

16,228,143

—

16,228,143

Media

...............................

—

19,218,246

—

19,218,246

Metals

&

Mining

.......................

32,682,063

41,841,962

—

74,524,025

Multi-Utilities

..........................

—

21,644,537

—

21,644,537

Oil,

Gas

&

Consumable

Fuels

.............

8,732,672

78,967,065

—

87,699,737

Pharmaceuticals

.......................

—

101,570,846

—

101,570,846

Real

Estate

Management

&

Development

....

—

49,427,250

—

49,427,250

Semiconductors

&

Semiconductor

Equipment

.

40,711,988

76,557,449

—

117,269,437

Technology

Hardware,

Storage

&

Peripherals

.

—

62,795,097

—

62,795,097

Thrifts

&

Mortgage

Finance

...............

—

27,439,999

—

27,439,999

Tobacco

.............................

—

24,211,552

—

24,211,552

Warrants

..............................

409,377

—

—

409,377

Short

Term

Investments

...................

73,683,646

—

—

73,683,646

Total

Investments

in

Securities

...........

$189,866,059

$1,114,683,260

a

$—

$1,304,549,319

a

Includes

foreign

securities

valued

at

$1,114,683,260,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TF-24

Semiannual

Report

Templeton

Foreign

VIP

Fund

(continued)

11.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TF-25

Semiannual

Report

Templeton

Foreign

VIP

Fund

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

$679,423

of

foreign

taxes

paid

and

$17,597,243

of

foreign

source

income

earned

by

the

fund,

or

amounts

as

finally

determined,

during

the

fiscal

year

ended

December

31,

2020.

TGB-1

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

This

semi

annual

report

for

Templeton

Global

Bond

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

-2.62

%

total

return*

for

the

six-month

period

ended

June

30,

2021.

*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

4/30/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

Performance

reflects

the

Fund’s

Class

1

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.

TGB-2

Semiannual

Report

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).

Templeton

Global

Bond

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

high

current

income,

consistent

with

preservation

of

capital.

Capital

appreciation

is

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Foreign

securities

involve

special

risks,

including

currency

fluctuations

and

economic

and

political

uncertainties.

Currency

rates

may

fluctuate

significantly

over

short

periods

of

time,

and

can

reduce

returns.

Sovereign

debt

securities

are

subject

to

various

risks

in

addition

to

those

relating

to

debt

securities

and

foreign

securities

generally,

including,

but

not

limited

to,

the

risk

that

a

governmental

entity

may

be

unwilling

or

unable

to

pay

interest

and

repay

principal

on

its

sovereign

debt,

or

otherwise

meet

its

obligations

when

due.

Adverse

conditions

in

a

certain

region

or

country

can

adversely

affect

securities

of

issuers

in

other

countries

whose

economies

appear

to

be

unrelated.

Investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets’

smaller

size,

lesser

liquidity

and

lack

of

established

legal,

political,

business

and

social

frameworks

to

support

securities

market.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

For

comparison,

the

J.P.

Morgan

Global

Government

Bond

Index

posted

a

-4.64%

total

return

and

the

FTSE

World

Government

Bond

Index

posted

a

-4.75%

total

return

for

the

same

period.

1

Economic

and

Market

Overview

Sovereign

bond

yields

rose

across

much

of

the

world

during

the

first

three

months

of

the

six-month

period

ended

June

30,

2021,

as

vaccine

distributions,

ongoing

stimulus

measures

and

optimism

for

improving

economic

conditions

appeared

to

fuel

reflation

expectations

across

financial

markets.

In

April,

sovereign

bond

yields

in

much

of

Asia

and

the

Americas

pulled

back

from

their

March

peaks,

while

many

areas

of

Europe

saw

yields

continue

to

rise.

In

June,

sovereign

bond

yields

declined

across

developed

markets

but

shifted

in

varying

directions

in

emerging

markets.

On

the

whole,

most

countries

around

the

world

saw

yields

rise

significantly

over

the

six-month

period,

despite

the

general

trend

of

declining

yields

over

the

final

months

of

the

period.

The

yield

on

the

10-year

U.S.

Treasury

(UST)

note

finished

the

six-month

period

55

basis

points

(bps)

higher

at

1.47%.

It

reached

an

intra-period

peak

of

1.74%

on

March

31,

its

highest

level

since

January

2020.

In

Europe,

the

yield

on

the

10-year

German

Bund

finished

the

six-month

period

36

bps

higher

at

-0.21%.

In

Asia,

the

yield

on

the

10-year

Japanese

government

bond

rose

three

bps

to

0.05%.

Sovereign

bond

yields

also

notably

rose

in

the

U.K.,

Canada,

Australia,

Sweden

and

Norway.

In

emerging

markets,

yields

rose

in

India,

Indonesia,

Thailand,

Brazil,

Mexico,

Chile,

Colombia

and

Peru.

Rising

yields

strained

valuations

across

many

areas

of

the

global

fixed

income

markets

during

2021’s

first

quarter.

U.S.

dollar

(USD)-denominated

sovereign

credit

sectors

broadly

saw

negative

returns

in

January,

February

and

March,

before

sharply

reversing

to

generate

offsetting

positive

returns

in

April,

May

and

June

as

yields

declined.

Conditions

were

somewhat

different

in

corporate

credit

sectors

as

U.S.

investment-grade

credit

tiers

initially

saw

negative

returns

on

rate

pressures,

while

high-yield

credit

tiers

performed

better,

benefiting

from

greater

spread

cushioning.

Investment-grade

corporate

credits

returned

to

positive

performance

in

April,

May

and

June,

modestly

outpacing

similar

positive

returns

in

the

high-yield

credit

tiers.

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

Asia

32.8%

North

America

20.9%

Latin

America

&

Caribbean

16.6%

Europe

3.8%

Middle East & Africa

1.7%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

23.7%

Templeton

Global

Bond

VIP

Fund

TGB-3

Semiannual

Report

In

currency

markets,

the

USD

broadly

strengthened

against

a

number

of

major

developed

market

and

emerging

market

currencies

in

the

first

quarter,

with

a

few

notable

exceptions.

That

trend

reversed

in

April

and

May

as

the

USD

broadly

depreciated,

before

returning

to

a

strengthening

pattern

in

June.

On

the

whole,

the

USD

finished

the

six-month

period

broadly

stronger

against

most

currencies,

with

some

exceptions.

In

Asia,

the

Chinese

yuan

appreciated

1.08%

against

the

USD

in

the

six-month

period,

while

the

Indonesian

rupiah

depreciated

3.10%,

the

Indian

rupee

1.76%,

the

Singapore

dollar

1.78%,

the

South

Korean

won

3.71%

and

the

Japanese

yen

7.05%.

In

Europe,

the

euro

depreciated

2.93%

against

the

USD.

The

Norwegian

krone

appreciated

2.60%

against

the

euro,

and

the

Canadian

dollar

appreciated

5.71%.

The

Swedish

krona

depreciated

0.96%

against

the

euro.

In

Latin

America,

the

Brazilian

real

appreciated

4.38%

against

the

USD,

while

the

Mexican

peso

depreciated

0.25%,

the

Colombian

peso

8.79%

and

the

Chilean

peso

3.25%.

Vaccine

distributions

progressively

accelerated

in

many

countries

during

the

period,

though

supply

setbacks

affected

areas

of

Europe

in

March

and

April.

Novel

coronavirus

(COVID-19)

infection

levels

peaked

in

January

in

the

U.S.

and

Europe

before

declining

in

February

and

plateauing

in

March.

Cases

continued

to

trend

lower

in

April,

May

and

June.

Governments

continued

to

struggle

with

balancing

the

needs

of

their

economies

with

the

health

of

their

citizens

during

much

of

the

first

half

of

the

period

before

higher

vaccination

rates

and

lower

case

levels

enabled

many

regions

to

progressively

reopen

their

economies

in

the

second

quarter.

Business

and

consumer

confidence

surveys

strengthened

in

multiple

regions

during

the

period,

particularly

in

the

second

quarter,

despite

some

growing

concerns

over

the

proliferation

of

the

COVID-19

delta

variant

in

several

parts

of

the

world

in

June,

notably

in

the

U.K.

and

Australia.

Economic

activity

continued

to

broadly

expand

in

many

countries

during

the

second

half

of

the

period,

largely

driven

by

strength

in

goods

sectors

and

manufacturing.

Historically

high

savings

rates

in

many

countries

also

fueled

resurgent

growth

in

the

spring

and

summer

months.

Labor

market

conditions

generally

continued

to

improve

in

many

countries

during

the

period,

though

unemployment

broadly

remained

above

pre-pandemic

levels.

Inflation

figures

surged

higher

in

many

countries

in

April,

May

and

June,

driven

by

a

combination

of

factors

that

included

cyclical

upswings

associated

with

resurgent

economic

activity,

supply

bottlenecks

in

certain

sectors

and

base

effects

off

of

the

pandemic

shocks

in

2020.

Headline

Consumer

Price

Index

(CPI)

inflation

in

the

U.S.

rose

from

2.6%

year-over-year

in

March

to

4.2%

in

April

and

5.0%

in

May,

its

highest

level

since

2008.

In

Europe,

euro

area

(EA)

inflation

rose

from

0.9%

in

February

to

1.3%

in

March,

1.6%

in

April

and

2.0%

in

May,

before

levelling

off

at

1.9%

(estimated)

in

June;

the

EA

had

previously

endured

deflationary

pressures

through

the

third

and

fourth

quarters

of

2020.

Areas

of

non-core

Europe,

such

as

Hungary

and

Russia,

experienced

above-target

levels

of

inflation

in

May

and

June.

Globally,

areas

of

Latin

America,

such

as

Brazil

and

Mexico,

also

experienced

above-target

inflation

during

the

period,

while

inflation

levels

remained

relatively

more

contained

in

areas

of

Asia,

such

as

China,

South

Korea,

Indonesia

and

Thailand.

Pent-up

demand

outpaced

supply

recoveries

in

certain

sectors

during

the

spring

and

summer

months,

adding

to

pricing

pressures.

Supply

bottlenecks

have

intermittently

surfaced

across

a

myriad

of

industries

due

to

accelerating

demand,

as

well

as

logistical

disruptions

and

ongoing

uncertainties

(economic,

health

and

policy)

that

make

it

difficult

to

accurately

schedule

production.

Most

central

banks

around

the

world

signaled

during

the

middle

of

the

six-month

period

that

they

had

reached

the

end

of

their

rate-cutting

cycles,

with

several

banks

beginning

to

pivot

towards

plans

for

policy

normalization.

The

Bank

of

Canada

began

tapering

its

asset

purchases

in

April

and

indicated

that

interest

rates

could

be

raised

in

the

second

half

of

2022.

The

Bank

of

England

headed

towards

concluding

its

quantitative

easing

program

by

the

end

of

2021.

Norges

Bank

(Norway)

indicated

that

a

rate

hike

could

arrive

in

the

second

half

of

2021.

Riksbank

(Sweden)

was

on

pace

to

wind

down

its

asset

purchase

program

in

2021

but

intended

to

keep

rates

on

hold

at

0%

for

the

foreseeable

future.

The

Reserve

Bank

of

New

Zealand

intended

to

end

its

asset

purchases

by

September

and

begin

hiking

rates

by

mid-2022.

Other

developed

market

central

banks—including

the

U.S.

Federal

Reserve

(Fed),

the

European

Central

Bank

(ECB)

and

the

Bank

of

Japan

(BOJ)—had

not

yet

signaled

a

normalization

schedule

as

of

the

end

of

June.

In

emerging

markets,

several

countries

faced

persistent

inflation

pressures

that

may

force

a

faster

tightening

response

from

their

central

banks.

Notably,

Brazil’s

central

bank

hiked

rates

75

bps

three

times

during

the

period

(March,

May

and

June)

to

4.25%,

and

Mexico’s

central

bank

hiked

its

policy

rate

25

bps

in

June

to

4.25%,

its

first

rate

hike

since

December

2018.

Other

countries

indicated

they

may

begin

pursuing

tightening

policies

in

the

second

half

of

2021.

Templeton

Global

Bond

VIP

Fund

TGB-4

Semiannual

Report

The

Fed

kept

the

federal

funds

target

rate

unchanged

at

0.00%–0.25%,

at

each

of

its

policy

meetings

during

the

period.

In

March,

the

Fed

notably

upgraded

its

growth

forecast

for

2021

to

6.5%

from

its

prior

estimate

of

4.2%

in

December.

The

core

inflation

forecast

was

upgraded

to

2.2%

for

2021,

from

the

prior

estimate

of

1.8%.

However,

Fed

Chair

Jay

Powell

cautioned

that

a

full

recovery

was

still

distant

and

that

economic

conditions

continued

to

warrant

extraordinary

monetary

accommodation,

citing

the

uncertainty

related

to

the

course

of

the

pandemic.

In

June,

the

overall

policy

tone

shifted

in

a

hawkish

direction

as

the

Fed

raised

its

2021

growth

forecast

for

the

U.S.

economy

to

7.0%

and

increased

its

inflation

forecast

to

3.4%.

Powell

commented

that

“the

economy

has

clearly

made

progress,”

and

a

majority

of

Fed

officials

brought

forward

their

projected

expectations

for

rate

hikes.

The

Fed’s

dot

plot

survey

had

previously

indicated

expectations

for

no

hikes

until

2024

at

the

March

meeting.

In

June,

13

of

18

Fed

officials

indicated

expectations

for

a

rate

hike

by

the

end

of

2023,

with

11

indicating

expectations

for

two

hikes.

Seven

officials

indicated

expectations

for

at

least

one

hike

by

the

end

of

2022.

Powell

cautioned

that

the

dot

surveys

do

not

reflect

forward

guidance

from

the

committee

and

that

any

discussion

about

raising

rates

is

still

“highly

premature.”

Powell

also

indicated

in

June

that

discussions

of

when

to

begin

tapering

its

asset

purchase

program

had

begun,

but

that

the

timeline

is

yet

to

be

determined.

The

Fed

continued

to

purchase

“at

least

$80

billion

per

month”

in

USTs

and

“at

least

$40

billion

per

month

in

agency

mortgage-backed

securities”

during

the

reporting

period.

The

Fed’s

balance

sheet

reached

US$8.1

trillion

at

the

end

of

June.

Despite

higher

U.S.

inflation

figures

during

the

period,

Powell

continued

to

dispel

the

notion

that

higher

inflation

figures

in

2021

would

necessitate

near-term

rate

hikes,

reiterating

the

Fed’s

view

that

the

figures

largely

reflect

“transitory

factors”

that

would

not

affect

the

course

of

monetary

policy.

Core

personal

consumption

expenditures

(PCE)

inflation

surged

to

3.4%

year-over-year

in

May,

its

highest

level

since

1992,

up

from

3.1%

in

April

and

1.9%

in

March.

The

Fed

continued

to

indicate

it

will

let

inflation

run

above

2.0%

for

periods

of

time

to

counterbalance

prior

periods

of

prolonged

below-target

inflation,

implying

that

the

Fed

will

allow

the

U.S.

economy

to

run

hot

in

upcoming

years.

However,

Powell

directly

addressed

Fed

credibility

concerns,

stating

that

“if

we

see

inflation

moving

materially

above

2%

in

a

persistent

way

that

risks

inflation

expectations

drifting

up,

then

we

will

use

our

tools

to

guide

inflation

expectations

back

down.”

As

of

the

June

meeting,

the

Fed

projected

core

PCE

will

be

3.0%

in

2021,

and

2.1%

in

2022

and

2023.

The

ECB

kept

monetary

policy

unchanged

at

each

of

its

policy

meetings

during

the

period,

leaving

the

main

refinancing

operations

rate

at

0.0%,

and

the

main

deposit

facility

rate

at

-0.5%.

In

March,

the

ECB

announced

that

it

would

accelerate

the

pace

of

its

bond

purchases

under

the

Pandemic

Emergency

Purchase

Programme

(PEPP).

In

June,

it

recommitted

to

those

levels,

stating

that

the

pace

and

volume

of

bond

purchases

under

the

PEPP

would

“continue

to

be

conducted

at

a

significantly

higher

pace

than

during

the

first

months

of

the

year.”

The

PEPP

is

currently

scheduled

to

run

through

March

2022

and

has

around

€700

billion

in

capacity

remaining

of

its

total

€1.85

trillion

size.

The

ECB

raised

its

2021

growth

forecast

for

the

EA

to

4.6%

at

its

June

meeting,

describing

conditions

as

“balanced”

and

removing

prior

comments

that

risks

were

“titled

to

the

downside.”

The

ECB

also

increased

its

2021

inflation

forecast

for

the

EA

to

1.9%

(harmonized

index

of

consumer

prices)

from

1.5%.

ECB

President

Christine

Lagarde

commented

in

June

that

inflation

remained

distant

from

the

ECB’s

target

and

is

expected

to

diminish

in

2022.

Lagarde

warned

that

monetary

tightening

would

jeopardize

the

economic

recovery

and

the

inflation

outlook.

The

BOJ

kept

monetary

policy

unchanged

at

each

of

its

policy

meetings

during

the

period,

leaving

the

overnight

interest

rate

at

-0.1%

and

the

yield

target

on

the

10-year

Japanese

government

bond

at

0.0%.

The

BOJ

published

the

results

of

its

monetary

framework

review

in

March,

the

first

of

its

kind

since

2016.

The

findings

indicated

a

shift

of

emphasis

from

aggressive

stimulus

towards

more

“sustainable”

policy.

The

BOJ

said

it

plans

to

intervene

as

needed

during

events

that

require

financial

market

support,

but

will

shift

away

from

continuous

balance

sheet

expansion

solely

to

stimulate

economic

activity.

Japan

continued

to

struggle

against

deflationary

pressures

that

have

persisted

since

April

2020.

Core

inflation

(National

CPI

ex-fresh

food)

rose

to

0.1%

year-over-year

in

May,

from

-0.1%

in

April

and

March,

-0.4%

in

February

and

-0.6%

in

January.

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

enter

into

various

currency-related

derivative

instruments,

such

as

currency

and

cross-currency

forwards,

currency

and

currency

index

futures

contracts

and

currency

options.

Templeton

Global

Bond

VIP

Fund

TGB-5

Semiannual

Report

Manager’s

Discussion

The

successful

development

of

vaccines

against

COVID-19

in

the

final

months

of

2020

substantially

changed

our

outlook

and

positioning

for

2021.

In

the

weeks

before

the

six-month

reporting

period

began,

we

significantly

shifted

the

emphasis

of

the

Fund’s

strategic

positioning

from

a

safe-haven

stance

toward

an

increasing

allocation

in

risk

assets.

We

expected

a

rebound

in

global

economic

activity

and

improving

economic

conditions

in

the

spring

and

summer

months

of

2021

as

vaccines

were

progressively

distributed

and

people

increasingly

reengaged

with

the

world.

We

were

actively

constructive

in

a

number

of

regions

throughout

the

period,

particularly

in

areas

of

Asia

that

appeared

to

be

at

the

forefront

of

the

global

economic

recovery.

The

Fund

was

focused

on

three

core

themes

during

the

six-month

period:

(1)

weakness

in

the

euro

and

USD,

on

excessive

fiscal

and

monetary

policies

in

Europe

and

the

U.S.,

against

currencies

in

countries

with

strong

trade

dynamics,

current

account

surpluses,

better

fiscal

management

and

stronger

growth

potential,

notably

in

Asia;

(2)

avoiding

interest-rate

risks

in

low-yielding

developed

markets;

and

(3)

pursuing

sovereign

bonds

with

relatively

higher

yields

in

a

select

set

of

resilient

emerging

markets.

At

the

beginning

of

the

period,

the

Fund

held

overweighted

positions

in

specific

currencies

that

showed

medium-term

value

against

the

USD

and

the

euro.

We

held

notable

exposures

to

the

Chinese

yuan,

the

South

Korean

won,

the

Indian

rupee

and

the

Indonesian

rupiah

against

the

USD.

We

added

exposure

to

the

Singapore

dollar

in

April

and

the

New

Zealand

dollar

in

June.

In

Europe,

we

held

exposures

in

the

Norwegian

krone

and

Swedish

krona

against

the

euro.

In

the

Americas,

we

held

long

exposure

to

the

Canadian

dollar

against

the

euro,

and

long

exposures

to

the

Colombian

peso

and

Brazilian

real

against

the

USD.

In

May,

we

added

exposure

to

the

Chilean

peso

against

the

USD.

During

the

period,

we

used

currency

forwards

and

currency

options

to

actively

manage

currency

exposures.

We

also

continued

to

focus

on

compelling

risk-adjusted

yields

in

various

local-currency

bond

markets,

specifically

in

countries

with

resilient

economies

and

strong

trade

dynamics.

We

continued

to

largely

avoid

developed

market

duration

exposures

in

preference

for

higher

yields

available

in

select

emerging

markets,

notably

including

Indonesia,

India,

Mexico,

Colombia,

Brazil

and

Ghana,

among

others.

We

saw

pockets

of

value

in

certain

USD-denominated

sovereign

credits,

but

we

continued

to

largely

prefer

specific

valuations

in

the

local-currency

markets

over

the

more

fully

valued

credit

markets.

During

the

period,

the

Fund’s

negative

absolute

performance

was

primarily

due

to

currency

positions.

Interest-rate

strategies

contributed

to

absolute

results,

while

sovereign

credit

exposures

had

a

largely

neutral

effect.

Among

currencies,

the

Fund’s

net-positive

position

in

the

Japanese

yen

detracted

from

absolute

performance,

as

did

currency

positions

in

Latin

America

and

Asia

ex-Japan.

The

Fund

maintained

a

defensive

approach

regarding

interest

rates

in

developed

markets,

while

holding

duration

exposures

in

select

emerging

markets.

Select

duration

exposures

in

Latin

America

(Argentina)

and

Africa

(Ghana)

contributed

to

absolute

results.

On

a

relative

basis,

the

Fund’s

performance

fared

better

than

that

of

its

benchmark

index

primarily

due

to

interest-rate

strategies.

Currency

positions

detracted

from

relative

results,

while

sovereign

credit

exposures

had

a

largely

neutral

effect.

The

Fund

maintained

a

defensive

approach

regarding

interest

rates

in

developed

markets,

while

holding

duration

exposures

in

select

emerging

markets.

Select

underweighted

duration

exposures

in

Europe

contributed

to

relative

performance,

as

did

underweighted

duration

exposure

in

the

U.S.

Select

overweighted

duration

exposures

in

Latin

America

(Argentina)

and

Africa

(Ghana)

also

contributed

to

relative

results.

Among

currencies,

the

Fund’s

overweighted

position

in

the

Japanese

yen

during

most

of

the

period

detracted

from

relative

performance,

as

did

overweighted

currency

positions

in

Latin

America

and

Asia

ex-Japan.

However,

the

Fund’s

underweighted

exposure

to

the

euro

contributed

to

relative

results.

Thank

you

for

your

participation

in

Templeton

Global

Bond

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Class

1

Fund

Expenses

Templeton

Global

Bond

VIP

Fund

TGB-6

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$973.77

$2.44

$1,022.33

$2.50

0.50%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Global

Bond

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.49

$16.63

$17.54

$17.17

$16.85

$16.34

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.24

0.52

0.89

0.88

0.83

0.62

Net

realized

and

unrealized

gains

(losses)

(0.62)

(1.31)

(0.54)

(0.51)

(0.46)

(0.10)

Total

from

investment

operations

........

(0.38)

(0.79)

0.35

0.37

0.37

0.52

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

—

(1.35)

(1.26)

—

—

—

Net

realized

gains

.................

—

—

—

—

(0.05)

(0.01)

Tax

return

of

capital

................

—

(—)

c

—

—

—

—

Total

distributions

...................

—

(1.35)

(1.26)

—

(0.05)

(0.01)

Net

asset

value,

end

of

period

..........

$14.11

$14.49

$16.63

$17.54

$17.17

$16.85

Total

return

d

.......................

(2.62)%

(4.73)%

1.89%

2.15%

2.15%

3.21%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.51%

0.51%

0.53%

0.56%

0.53%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.50%

0.46%

0.44%

0.47%

0.46%

0.48%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.50%

f

0.45%

0.42%

0.45%

0.46%

f

0.48%

f

Net

investment

income

...............

3.41%

3.43%

5.22%

5.09%

4.81%

3.88%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$225,124

$224,704

$322,794

$285,046

$286,502

$241,792

Portfolio

turnover

rate

................

18.33%

52.84%

22.58%

18.22%

37.97%

59.00%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$13.82

$15.91

$16.83

$16.51

$16.25

$15.80

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.21

0.46

0.82

0.81

0.76

0.56

Net

realized

and

unrealized

gains

(losses)

(0.60)

(1.24)

(0.53)

(0.49)

(0.45)

(0.10)

Total

from

investment

operations

........

(0.39)

(0.78)

0.29

0.32

0.31

0.46

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

—

(1.31)

(1.21)

—

—

—

Net

realized

gains

.................

—

—

—

—

(0.05)

(0.01)

Tax

return

of

capital

................

—

(—)

c

—

—

—

—

Total

distributions

...................

—

(1.31)

(1.21)

—

(0.05)

(0.01)

Net

asset

value,

end

of

period

..........

$13.43

$13.82

$15.91

$16.83

$16.51

$16.25

Total

return

d

.......................

(2.82)%

(4.92)%

1.63%

1.94%

1.93%

2.94%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.76%

0.75%

0.78%

0.81%

0.78%

0.78%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.75%

0.71%

0.69%

0.72%

0.71%

0.73%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.75%

f

0.70%

0.67%

0.70%

0.71%

f

0.73%

f

Net

investment

income

...............

3.16%

3.16%

4.97%

4.84%

4.56%

3.63%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,964,221

$2,022,487

$2,389,610

$2,544,900

$2,730,081

$2,812,535

Portfolio

turnover

rate

................

18.33%

52.84%

22.58%

18.22%

37.97%

59.00%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-9

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.17

$16.27

$17.19

$16.88

$16.62

$16.18

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.21

0.46

0.82

0.81

0.76

0.56

Net

realized

and

unrealized

gains

(losses)

(0.61)

(1.27)

(0.55)

(0.50)

(0.45)

(0.11)

Total

from

investment

operations

........

(0.40)

(0.81)

0.27

0.31

0.31

0.45

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

—

(1.29)

(1.19)

—

—

—

Net

realized

gains

.................

—

—

—

—

(0.05)

(0.01)

Tax

return

of

capital

................

—

(—)

c

—

—

—

—

Total

distributions

...................

—

(1.29)

(1.19)

—

(0.05)

(0.01)

Net

asset

value,

end

of

period

..........

$13.77

$14.17

$16.27

$17.19

$16.88

$16.62

Total

return

d

.......................

(2.82)%

(5.00)%

1.48%

1.84%

1.76%

2.87%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.86%

0.85%

0.88%

0.91%

0.88%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.85%

0.81%

0.79%

0.82%

0.81%

0.83%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.85%

f

0.80%

0.77%

0.80%

0.81%

f

0.83%

f

Net

investment

income

...............

3.06%

3.06%

4.87%

4.74%

4.46%

3.53%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$77,148

$76,771

$90,272

$94,312

$98,934

$96,798

Portfolio

turnover

rate

................

18.33%

52.84%

22.58%

18.22%

37.97%

59.00%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Templeton

Global

Bond

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-10

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

55.4%

Argentina

2.0%

a,b

Argentina

BONCER

,

Index

Linked,

1%,

8/05/21

........

249,130,883

ARS

$

1,486,902

Index

Linked,

1.2%,

3/18/22

.......

2,455,117,453

ARS

14,569,772

Index

Linked,

1.3%,

9/20/22

.......

21,183,218

ARS

124,140

Index

Linked,

1.4%,

3/25/23

.......

1,691,875,461

ARS

9,659,776

Index

Linked,

1.5%,

3/25/24

.......

1,523,527,863

ARS

8,259,252

b,c

Argentina

Bonos

del

Tesoro

Nacional

en

Pesos

Badlar

,

FRN,

36.104%,

(ARS

BADLAR

+

2%),

4/03/22

.........

24,036,000

ARS

137,730

b

Argentina

Government

Bond

,

18.2%,

10/03/21

................

820,823,000

ARS

4,602,703

16%,

10/17/23

.................

884,455,900

ARS

3,216,712

15.5%,

10/17/26

................

1,668,306,000

ARS

3,962,633

46,019,620

Brazil

1.0%

Brazil

Notas

do

Tesouro

Nacional

,

10%,

1/01/25

..................

41,020,000

BRL

8,738,317

10%,

1/01/27

..................

17,680,000

BRL

3,787,342

10%,

1/01/29

..................

17,690,000

BRL

3,801,556

10%,

1/01/31

..................

28,220,000

BRL

6,019,799

22,347,014

Colombia

3.4%

Colombia

Government

Bond

,

Senior

Bond,

4.375%,

3/21/23

.....

362,000,000

COP

98,818

Senior

Bond,

9.85%,

6/28/27

......

576,000,000

COP

183,478

Colombia

Titulos

de

Tesoreria

,

B,

7%,

5/04/22

.................

17,524,600,000

COP

4,826,943

B,

10%,

7/24/24

................

67,868,000,000

COP

20,627,945

B,

6.25%,

11/26/25

..............

32,036,000,000

COP

8,663,013

B,

7.5%,

8/26/26

...............

96,649,700,000

COP

27,297,950

B,

5.75%,

11/03/27

..............

22,036,000,000

COP

5,627,555

B,

6%,

4/28/28

.................

29,113,600,000

COP

7,457,799

B,

7.75%,

9/18/30

..............

8,450,000,000

COP

2,350,121

77,133,622

Ghana

1.7%

Ghana

Government

Bond

,

24.75%,

7/19/21

................

1,190,000

GHS

203,382

18.75%,

1/24/22

................

26,990,000

GHS

4,673,944

17.6%,

11/28/22

................

520,000

GHS

90,160

Senior

Note,

17.6%,

2/20/23

......

3,310,000

GHS

574,721

19%,

9/18/23

..................

150,000

GHS

26,760

18.85%,

9/28/23

................

2,790,000

GHS

497,893

19.25%,

11/27/23

...............

1,350,000

GHS

242,591

Senior

Note,

17.7%,

3/18/24

......

1,080,000

GHS

187,704

19.75%,

3/25/24

................

26,840,000

GHS

4,861,416

Senior

Note,

18.3%,

3/02/26

......

690,000

GHS

118,911

19%,

11/02/26

.................

80,510,000

GHS

14,090,081

19.75%,

3/15/32

................

80,510,000

GHS

14,189,838

39,757,401

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-11

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

India

4.4%

India

Government

Bond

,

8.2%,

2/15/22

.................

500,000,000

INR

$

6,903,524

6.84%,

12/19/22

................

98,000,000

INR

1,366,716

7.16%,

5/20/23

................

133,700,000

INR

1,880,635

8.83%,

11/25/23

................

1,468,100,000

INR

21,467,893

Senior

Note,

5.22%,

6/15/25

......

313,000,000

INR

4,159,252

8.2%,

9/24/25

.................

297,100,000

INR

4,357,441

Senior

Note,

5.15%,

11/09/25

......

2,459,900,000

INR

32,495,534

7.59%,

1/11/26

.................

1,629,000,000

INR

23,381,085

7.27%,

4/08/26

................

214,000,000

INR

3,040,000

99,052,080

Indonesia

9.8%

Indonesia

Government

Bond

,

FR61,

7%,

5/15/22

..............

244,849,000,000

IDR

17,415,856

FR35,

Senior

Bond,

12.9%,

6/15/22

.

71,229,000,000

IDR

5,346,203

FR43,

10.25%,

7/15/22

..........

147,832,000,000

IDR

10,877,478

FR63,

5.625%,

5/15/23

..........

289,067,000,000

IDR

20,420,092

FR46,

9.5%,

7/15/23

............

226,780,000,000

IDR

17,165,682

FR39,

11.75%,

8/15/23

..........

5,491,000,000

IDR

433,861

FR70,

8.375%,

3/15/24

..........

53,132,000,000

IDR

4,007,875

FR44,

10%,

9/15/24

.............

4,454,000,000

IDR

350,174

FR81,

6.5%,

6/15/25

............

599,166,000,000

IDR

43,423,419

FR40,

11%,

9/15/25

.............

46,856,000,000

IDR

3,886,657

FR86,

5.5%,

4/15/26

............

1,421,313,000,000

IDR

98,501,892

221,829,189

Mexico

10.2%

Mexican

Bonos

Desarr

Fixed

Rate

,

M,

Senior

Note,

7.25%,

12/09/21

...

1,301,510,000

MXN

65,914,754

M,

6.5%,

6/09/22

...............

2,147,994,000

MXN

108,818,204

M,

Senior

Note,

6.75%,

3/09/23

....

229,144,000

MXN

11,711,839

M,

Senior

Bond,

8%,

12/07/23

.....

836,490,000

MXN

44,002,004

230,446,801

Norway

3.8%

d

Norway

Government

Bond

,

144A,

Reg

S,

2%,

5/24/23

........

315,007,000

NOK

37,528,887

144A,

Reg

S,

3%,

3/14/24

........

265,052,000

NOK

32,546,643

144A,

Reg

S,

1.75%,

3/13/25

......

89,312,000

NOK

10,656,702

144A,

Reg

S,

1.5%,

2/19/26

.......

52,969,000

NOK

6,269,893

87,002,125

South

Korea

18.6%

Korea

Monetary

Stabilization

Bond

,

1.285%,

2/02/22

................

33,410,000,000

KRW

29,637,646

Senior

Note,

0.87%,

2/02/23

......

59,850,000,000

KRW

52,669,588

Senior

Note,

0.905%,

4/02/23

......

61,390,000,000

KRW

53,974,799

Korea

Treasury

Bond

,

1.25%,

12/10/22

................

77,860,000,000

KRW

69,026,579

3%,

3/10/23

...................

3,919,000,000

KRW

3,571,224

2.25%,

9/10/23

................

88,312,000,000

KRW

79,607,810

0.875%,

12/10/23

...............

22,287,000,000

KRW

19,485,286

1.875%,

3/10/24

................

33,811,000,000

KRW

30,255,160

1.375%,

9/10/24

................

75,881,910,000

KRW

66,793,900

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-12

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

South

Korea

(continued)

Korea

Treasury

Bond,

(continued)

3%,

9/10/24

...................

18,500,000,000

KRW

$

17,109,290

422,131,282

Supranational

0.5%

e

Inter-American

Development

Bank,

Senior

Bond,

7.5%,

12/05/24

......

200,000,000

MXN

10,295,291

Total

Foreign

Government

and

Agency

Securities

(Cost

$1,472,838,190)

...........

1,256,014,425

U.S.

Government

and

Agency

Securities

20.9%

United

States

20.9%

U.S.

Treasury

Notes

,

1.125%,

9/30/21

................

3,497,000

3,506,439

1.5%,

9/30/21

.................

15,768,000

15,824,832

2.125%,

12/31/21

...............

3,953,000

3,993,556

1.5%,

10/31/24

................

64,160,000

66,217,631

1.5%,

11/30/24

.................

50,420,000

52,035,016

1.75%,

12/31/24

................

22,672,000

23,597,478

2%,

2/15/25

...................

49,140,000

51,604,678

2.125%,

5/15/25

................

58,760,000

62,060,660

2.875%,

5/31/25

................

76,680,000

83,260,701

2.625%,

12/31/25

...............

44,803,000

48,443,244

1.625%,

2/15/26

................

24,220,000

25,112,166

2.125%,

5/31/26

................

11,063,000

11,735,423

1.625%,

10/31/26

...............

24,220,000

25,091,352

472,483,176

Total

U.S.

Government

and

Agency

Securities

(Cost

$462,077,913)

................

472,483,176

Total

Long

Term

Investments

(Cost

$1,934,916,103)

.............................

1,728,497,601

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.3%

Calls

-

Over-the-Counter

Currency

Options

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

86.50

JPY,

Expires

12/20/21

..

1

22,983,000

AUD

146,883

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

February

Strike

Price

107.45

JPY,

Expires

2/23/22

..

1

9,453,000

369,123

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

August

Strike

Price

115.95

JPY,

Expires

8/11/21

.......

1

27,911,000

6,855

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

20.98

MXN,

Expires

10/07/21

.

1

62,508,000

667,604

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

21.65

MXN,

Expires

8/20/21

.......

1

15,371,000

32,794

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-13

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

aa

a

a

Options

Purchased

(continued)

Calls

-

Over-the-Counter

(continued)

Currency

Options

(continued)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

22.26

MXN,

Expires

8/02/21

.......

1

23,397,000

$

11,618

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

December

Strike

Price

22.36

MXN,

Expires

12/28/21

.

1

34,580,000

304,427

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

16,875,000

470,664

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

9,033,000

251,941

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

9,033,000

251,941

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

29.19

MXN,

Expires

8/29/24

..

1

21,864,000

622,571

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

29.71

MXN,

Expires

8/09/24

..

1

21,864,000

555,498

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

December

Strike

Price

29.73

MXN,

Expires

12/07/21

.

1

31,535,000

10,922

3,702,841

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

July

Strike

Price

71.10

JPY,

Expires

7/15/21

.......

1

6,388,000

AUD

3

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

75.00

JPY,

Expires

12/20/21

..

1

45,967,000

AUD

123,112

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

77.45

JPY,

Expires

9/14/21

...

1

20,340,000

AUD

25,423

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

July

Strike

Price

78.50

JPY,

Expires

7/15/21

.......

1

25,550,000

AUD

1,518

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

80.55

JPY,

Expires

9/14/21

...

1

38,709,000

AUD

154,849

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

81.61

JPY,

Expires

12/14/21

..

1

40,680,000

AUD

489,983

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

82.66

JPY,

Expires

9/14/21

...

1

87,181,000

AUD

784,343

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

August

Strike

Price

102.65

JPY,

Expires

8/11/21

.......

1

41,892,000

1,311

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-14

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

aa

a

a

Options

Purchased

(continued)

Puts

-

Over-the-Counter

(continued)

Currency

Options

(continued)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

18.76

MXN,

Expires

10/27/21

.

1

34,913,000

$

68,778

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

19.23

MXN,

Expires

8/20/21

.......

1

11,528,000

23,271

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

19.35

MXN,

Expires

8/02/21

.......

1

8,189,000

13,441

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

19.43

MXN,

Expires

8/30/21

..

1

16,398,000

71,551

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.58

MXN,

Expires

10/07/21

.

1

30,864,000

259,338

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

September

Strike

Price

19.59

MXN,

Expires

9/03/21

..

1

31,654,000

210,254

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

4,517,000

59,655

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

8,437,000

111,426

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

4,517,000

59,655

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

19.88

MXN,

Expires

8/11/21

..

1

16,398,000

170,065

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

21.15

MXN,

Expires

8/20/21

.......

1

14,780,000

854,060

3,482,036

Total

Options

Purchased

(Cost

$16,956,898)

....................................

7,184,877

Short

Term

Investments

21.8%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

11.4%

Argentina

0.2%

a,b,f

Argentina

Letras

de

la

Nacion

Argentina

con

Ajuste

por

CER

,

Index

Linked,

9/13/21

............

141,577,316

ARS

838,364

Index

Linked,

2/28/22

............

205,019,790

ARS

1,201,812

Index

Linked,

4/18/22

............

588,251,810

ARS

3,435,393

5,475,569

Brazil

2.3%

f

Brazil

Letras

do

Tesouro

Nacional

,

1/01/24

......................

71,110,000

BRL

11,812,692

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-15

Short

Term

Investments

(continued)

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

Brazil

(continued)

f

Brazil

Letras

do

Tesouro

Nacional,

(continued)

7/01/24

......................

248,380,000

BRL

$

39,535,540

51,348,232

Japan

4.5%

f

Japan

Treasury

Bills

,

7/19/21

......................

290,700,000

JPY

2,617,045

8/10/21

......................

1,179,000,000

JPY

10,614,683

9/13/21

......................

906,500,000

JPY

8,162,126

11/22/21

.....................

4,069,650,000

JPY

36,651,514

12/20/21

.....................

4,837,300,000

JPY

43,569,542

101,614,910

Singapore

4.4%

f

Singapore

Treasury

Bills

,

7/16/21

......................

45,410,000

SGD

33,765,024

8/13/21

......................

6,460,000

SGD

4,802,454

8/20/21

......................

43,100,000

SGD

32,039,507

8/24/21

......................

40,540,000

SGD

30,135,573

100,742,558

Total

Foreign

Government

and

Agency

Securities

(Cost

$263,553,212)

............

259,181,269

U.S.

Government

and

Agency

Securities

2.8%

United

States

2.8%

f

U.S.

Treasury

Bills,

8/03/21

.........

64,460,000

64,457,530

Total

U.S.

Government

and

Agency

Securities

(Cost

$64,459,291)

.................

64,457,530

Industry

Shares

Money

Market

Funds

7.6%

United

States

7.6%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

171,901,075

171,901,075

Total

Money

Market

Funds

(Cost

$171,901,075)

.................................

171,901,075

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$499,913,578

)

...............................

495,539,874

a

a

a

a

Total

Investments

(Cost

$2,451,786,579)

98.4%

..................................

$2,231,222,352

Options

Written

(0.3)%

.......................................................

(7,431,765)

Other

Assets,

less

Liabilities

1.9%

.............................................

42,702,655

Net

Assets

100.0%

...........................................................

$2,266,493,242

a

a

a

a

Number

of

Contracts

Notional

Amount

#

i

Options

Written

(0.3)%

a

Calls

-

Over-the-Counter

a

Currency

Options

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

81.20

JPY,

Expires

12/20/21

..

1

22,983,000

AUD

(675,225)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-16

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

a

i

Options

Written

(continued)

a

Calls

-

Over-the-Counter

(continued)

a

Currency

Options

(continued)

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

85.74

JPY,

Expires

9/14/21

...

1

58,121,000

AUD

$

(182,822)

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

August

Strike

Price

109.90

JPY,

Expires

8/11/21

.......

1

41,892,000

(583,332)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

September

Strike

Price

21.10

MXN,

Expires

9/03/21

..

1

31,654,000

(178,996)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

21.15

MXN,

Expires

8/20/21

.......

1

14,780,000

(57,261)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.61

MXN,

Expires

10/07/21

.

1

31,254,000

(90,217)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

23.43

MXN,

Expires

8/20/21

.......

1

15,371,000

(5,661)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

24.62

MXN,

Expires

8/02/21

.......

1

5,849,000

(290)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

December

Strike

Price

25.33

MXN,

Expires

12/28/21

.

1

22,150,000

(46,773)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

26.61

MXN,

Expires

8/30/21

..

1

16,398,000

(1,021)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

27.38

MXN,

Expires

8/11/21

..

1

16,398,000

(312)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

December

Strike

Price

27.93

MXN,

Expires

12/07/21

.

1

10,512,000

(6,353)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

34.95

MXN,

Expires

10/19/23

.

1

4,517,000

(33,634)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

34.95

MXN,

Expires

10/19/23

.

1

4,517,000

(33,633)

(1,895,530)

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

68.40

JPY,

Expires

12/20/21

..

1

22,983,000

AUD

(15,342)

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

July

Strike

Price

75.90

JPY,

Expires

7/15/21

.......

1

25,550,000

AUD

(210)

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

December

Strike

Price

78.33

JPY,

Expires

12/14/21

..

1

61,082,000

AUD

(333,901)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-17

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

a

i

Options

Written

(continued)

a

Puts

-

Over-the-Counter

(continued)

a

Currency

Options

(continued)

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

80.56

JPY,

Expires

9/14/21

...

1

43,591,000

AUD

$

(175,052)

Foreign

Exchange

AUD/JPY,

Counterparty

CITI,

September

Strike

Price

82.09

JPY,

Expires

9/14/21

...

1

19,354,000

AUD

(140,203)

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

February

Strike

Price

95.85

JPY,

Expires

2/23/22

...

1

9,453,000

(6,492)

Foreign

Exchange

USD/JPY,

Counterparty

CITI,

August

Strike

Price

98.00

JPY,

Expires

8/11/21

........

1

13,980,000

(41)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.05

MXN,

Expires

10/07/21

.

1

30,864,000

(88,971)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.32

MXN,

Expires

10/07/21

.

1

56,224,000

(287,266)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.71

MXN,

Expires

10/27/21

.

1

34,913,000

(407,047)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

August

Strike

Price

19.86

MXN,

Expires

8/20/21

.......

1

23,056,000

(245,294)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

20.94

MXN,

Expires

8/30/21

..

1

16,398,000

(795,357)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

21.43

MXN,

Expires

8/11/21

..

1

16,398,000

(1,172,359)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

16,875,000

(902,502)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

9,033,000

(483,099)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

9,033,000

(483,099)

(5,536,235)

Total

Options

Written

(Premiums

received

$10,250,539)

..........................

$

(7,431,765)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-18

At

June

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(c). 

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Chilean

Peso

......

JPHQ

Buy

862,040,000

1,186,566

7/01/21

$

—

$

(12,732)

Chilean

Peso

......

JPHQ

Sell

862,040,000

1,162,547

7/01/21

—

(11,287)

Chilean

Peso

......

GSCO

Buy

1,056,100,000

1,456,690

7/02/21

—

(18,606)

Chilean

Peso

......

GSCO

Sell

1,056,100,000

1,434,918

7/02/21

—

(3,165)

Chilean

Peso

......

JPHQ

Buy

1,697,900,000

2,341,091

7/02/21

—

(29,073)

Chilean

Peso

......

JPHQ

Sell

1,697,900,000

2,289,756

7/02/21

—

(22,262)

Chilean

Peso

......

JPHQ

Buy

2,963,390,000

4,125,704

7/06/21

—

(90,915)

Chilean

Peso

......

JPHQ

Sell

2,963,390,000

4,023,612

7/06/21

—

(11,177)

Mexican

Peso

......

CITI

Buy

985,173,000

49,675,426

7/08/21

—

(294,040)

Mexican

Peso

......

CITI

Sell

985,173,000

45,889,746

7/08/21

—

(3,491,641)

Indian

Rupee

......

HSBK

Buy

241,380,400

3,221,197

7/12/21

20,870

—

Australian

Dollar

....

JPHQ

Sell

5,931,544

451,307,483

JPY

7/13/21

—

(384,621)

Japanese

Yen

......

JPHQ

Sell

472,283,477

5,931,544

AUD

7/13/21

195,775

—

Chinese

Yuan

......

CITI

Buy

125,329,450

19,205,224

7/14/21

154,615

—

Chilean

Peso

......

GSCO

Buy

1,956,400,000

2,709,207

7/15/21

—

(46,134)

Euro

.............

DBAB

Sell

13,568,350

138,688,215

SEK

7/15/21

114,025

—

South

Korean

Won

..

CITI

Buy

8,470,100,000

7,578,152

7/21/21

—

(82,697)

Singapore

Dollar

....

MSCO

Buy

4,660,000

3,508,957

7/22/21

—

(43,715)

South

Korean

Won

..

JPHQ

Buy

8,539,200,000

7,657,483

7/22/21

—

(100,923)

South

Korean

Won

..

JPHQ

Buy

8,365,800,000

7,499,664

7/26/21

—

(96,726)

Euro

.............

CITI

Sell

4,519,702

7,054,790

CAD

8/03/21

326,646

—

Euro

.............

HSBK

Sell

50,388,544

78,404,584

CAD

8/03/21

3,442,635

—

Chilean

Peso

......

GSCO

Buy

6,050,669,723

8,422,641

8/06/21

—

(191,298)

Euro

.............

CITI

Sell

20,106,927

2,646,976,443

JPY

8/06/21

—

(26,953)

Chilean

Peso

......

GSCO

Buy

1,056,100,000

1,434,178

8/09/21

2,430

—

Australian

Dollar

....

CITI

Sell

2,393,000

202,124,745

JPY

8/10/21

25,551

—

Mexican

Peso

......

CITI

Sell

96,651,200

4,750,939

8/13/21

—

(71,010)

Australian

Dollar

....

MSCO

Sell

34,166,000

26,604,039

8/16/21

981,163

—

Chilean

Peso

......

GSCO

Buy

3,439,478,985

4,870,817

8/16/21

—

(192,975)

Chilean

Peso

......

GSCO

Buy

3,292,433,571

4,653,881

8/17/21

—

(176,141)

Chilean

Peso

......

JPHQ

Buy

6,650,900,000

9,331,231

8/17/21

—

(285,947)

Euro

.............

JPHQ

Sell

13,349,845

16,142,686

8/23/21

293,928

—

Mexican

Peso

......

CITI

Sell

539,656,000

24,938,584

8/23/21

—

(1,950,767)

Euro

.............

CITI

Sell

15,587,141

2,000,157,581

JPY

8/24/21

—

(491,504)

Japanese

Yen

......

CITI

Buy

990,030,000

9,397,050

8/24/21

—

(480,692)

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Redemption

price

at

maturity

is

adjusted

for

inflation.

See

Note

1(f)

.

b

Securities

denominated

in

Argentine

Peso

have

been

designated

as

Level

3

investments.

See

Note

12

regarding

fair

value

measurements.

c

The

coupon

rate

shown

represents

the

rate

at

period

end.

d

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

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.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

June

30,

2021,

the

aggregate

value

of

these

securities

was

$87,002,125,

representing

3.8%

of

net

assets.

e

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

f

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

g

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

i

See

Note

1(c)

regarding

written

options.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-19

Forward

Exchange

Contracts

(continued)

Currency

Counter-

party

a

Type

Quantity

Contract

Amount*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

(continued)

Japanese

Yen

......

CITI

Sell

990,030,000

9,036,089

8/24/21

$

119,730

$

—

Euro

.............

BOFA

Sell

1,336,000

1,639,816

8/25/21

53,670

—

Euro

.............

MSCO

Sell

30,744,500

37,728,574

8/27/21

1,226,142

—

Chilean

Peso

......

GSCO

Buy

4,501,164,023

6,182,651

9/01/21

—

(63,476)

Mexican

Peso

......

CITI

Sell

861,862,000

42,727,354

9/01/21

—

(166,848)

Indian

Rupee

......

JPHQ

Buy

205,911,800

2,737,497

9/07/21

8,948

—

Indian

Rupee

......

CITI

Buy

200,059,600

2,660,544

9/08/21

7,499

—

Indian

Rupee

......

JPHQ

Buy

266,347,200

3,564,031

9/08/21

—

(11,961)

Indian

Rupee

......

CITI

Buy

241,153,200

3,253,770

9/09/21

—

(38,110)

Chinese

Yuan

......

BOFA

Buy

184,017,140

28,648,603

9/10/21

—

(342,453)

Chinese

Yuan

......

CITI

Buy

284,452,570

44,280,509

9/10/21

—

(525,035)

Chinese

Yuan

......

BOFA

Buy

220,626,460

34,296,045

9/13/21

—

(366,061)

Indian

Rupee

......

HSBK

Buy

242,055,750

3,278,023

9/13/21

—

(52,000)

Chilean

Peso

......

GSCO

Buy

6,082,809,783

8,382,043

9/15/21

—

(116,344)

Euro

.............

DBAB

Sell

5,298,436

54,526,200

SEK

9/15/21

83,061

—

Euro

.............

DBAB

Sell

6,199,272

66,742,600

NOK

9/15/21

393,732

—

Mexican

Peso

......

MSCO

Sell

720,230,800

36,259,920

9/15/21

484,254

—

Euro

.............

DBAB

Sell

17,057,650

173,360,316

SEK

9/16/21

12,232

—

Euro

.............

JPHQ

Sell

19,578,885

198,445,700

NOK

9/16/21

—

(191,669)

Euro

.............

JPHQ

Sell

19,009,633

202,667,400

NOK

9/20/21

973,420

—

Japanese

Yen

......

JPHQ

Buy

1,180,260,000

11,507,883

9/21/21

—

(875,466)

Japanese

Yen

......

JPHQ

Sell

1,180,260,000

10,778,223

9/21/21

145,806

—

Japanese

Yen

......

MSCO

Buy

9,526,876,470

92,355,861

9/21/21

—

(6,532,632)

Japanese

Yen

......

MSCO

Sell

9,526,876,470

86,971,585

9/21/21

1,148,356

—

New

Zealand

Dollar

.

BOFA

Buy

10,600,000

7,515,533

9/21/21

—

(109,133)

Chilean

Peso

......

JPHQ

Buy

3,427,420,000

4,617,796

9/24/21

38,265

—

Euro

.............

HSBK

Sell

25,254,215

3,347,323,238

JPY

9/24/21

152,964

—

Australian

Dollar

....

CITI

Sell

16,628,000

12,601,114

9/28/21

128,729

—

Japanese

Yen

......

CITI

Buy

1,395,020,320

12,607,504

9/28/21

—

(39,547)

Chilean

Peso

......

GSCO

Buy

887,130,000

1,209,283

9/29/21

—

(4,331)

Euro

.............

CITI

Sell

67,857,227

8,983,686,158

JPY

9/29/21

311,777

—

Chilean

Peso

......

JPHQ

Buy

5,487,100,000

7,666,667

9/30/21

—

(214,000)

Euro

.............

JPHQ

Sell

22,781,770

230,077,650

NOK

9/30/21

—

(327,004)

Mexican

Peso

......

CITI

Sell

492,586,500

24,572,808

10/01/21

159,285

—

Chilean

Peso

......

JPHQ

Buy

2,963,390,000

4,018,210

10/04/21

6,127

—

Chinese

Yuan

......

HSBK

Buy

135,702,480

20,416,059

10/15/21

406,306

—

Euro

.............

DBAB

Sell

10,250,931

104,016,200

SEK

10/18/21

—

(16,589)

Euro

.............

DBAB

Sell

10,247,801

104,016,200

SEK

10/19/21

—

(13,004)

Euro

.............

JPHQ

Sell

19,692,104

198,445,700

NOK

10/19/21

—

(347,799)

Singapore

Dollar

....

MSCO

Buy

5,880,000

4,405,006

10/21/21

—

(32,692)

Euro

.............

HSBK

Sell

25,253,939

3,185,910,659

JPY

10/25/21

—

(1,311,047)

Singapore

Dollar

....

CITI

Buy

4,670,000

3,515,243

10/26/21

—

(42,678)

Mexican

Peso

......

CITI

Sell

492,586,500

24,467,837

11/01/21

160,839

—

Euro

.............

BOFA

Sell

5,729,854

8,949,000

CAD

11/02/21

404,923

—

Euro

.............

HSBK

Sell

26,238,721

39,218,884

CAD

11/03/21

432,896

—

Indian

Rupee

......

CITI

Buy

149,657,200

1,964,779

11/10/21

15,328

—

Euro

.............

DBAB

Sell

25,089,752

255,476,400

SEK

11/17/21

53,543

—

Chinese

Yuan

......

JPHQ

Buy

94,285,000

14,452,333

11/22/21

—

(21,994)

Euro

.............

GSCO

Sell

1,230,811

1,508,685

11/22/21

44,367

—

Euro

.............

JPHQ

Sell

13,349,846

16,345,818

11/24/21

462,491

—

Chinese

Yuan

......

JPHQ

Buy

109,163,880

16,884,842

12/10/21

—

(197,509)

Chinese

Yuan

......

JPHQ

Buy

188,842,190

29,198,440

12/13/21

—

(336,915)

Euro

.............

DBAB

Sell

27,506,859

277,376,415

SEK

12/13/21

—

(268,382)

Chinese

Yuan

......

HSBK

Buy

136,590,880

21,108,483

12/15/21

—

(235,551)

Euro

.............

DBAB

Sell

25,410,352

257,096,855

SEK

12/16/21

—

(148,103)

Euro

.............

JPHQ

Sell

2,485,319

25,140,000

SEK

12/17/21

—

(15,217)

Indian

Rupee

......

JPHQ

Buy

1,020,100,000

13,589,737

12/20/21

—

(159,805)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Global

Bond

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-20

Forward

Exchange

Contracts

(continued)

Currency

Counter-

party

a

Type

Quantity

Contract

Amount*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

(continued)

New

Zealand

Dollar

.

JPHQ

Buy

34,910,000

24,903,433

12/20/21

$

—

$

(522,848)

New

Zealand

Dollar

.

CITI

Buy

12,470,000

8,836,865

12/21/21

—

(128,065)

New

Zealand

Dollar

.

JPHQ

Buy

12,470,000

8,816,178

12/21/21

—

(107,377)

Chilean

Peso

......

GSCO

Buy

3,567,150,000

4,821,132

12/23/21

18,858

(9,844)

Indian

Rupee

......

JPHQ

Buy

205,330,400

2,660,065

1/27/22

29,606

—

Euro

.............

DBAB

Sell

5,386,204

54,462,600

SEK

6/15/22

—

(51,022)

Euro

.............

DBAB

Sell

6,540,211

66,595,700

NOK

6/15/22

—

(102,513)

Euro

.............

DBAB

Sell

2,971,000

30,252,800

NOK

6/16/22

—

(46,641)

Euro

.............

DBAB

Sell

9,278,905

95,003,000

NOK

6/20/22

—

(87,369)

Euro

.............

CITI

Sell

32,632,111

335,990,000

NOK

6/21/22

—

(90,759)

Total

Forward

Exchange

Contracts

...................................................

$13,040,792

$(22,876,794)

Net

unrealized

appreciation

(depreciation)

............................................

$(9,836,002)

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

*

In

U.S.

dollars

unless

otherwise

indicated.

See

Note 10 regarding

other

derivative

information.

See

A

bbreviations

on

page

TGB-

37

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-21

Templeton

Global

Bond

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,279,885,504

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

171,901,075

Value

-

Unaffiliated

issuers

..................................................................

$2,059,321,277

Va

lue

-

Non-controlled

affiliates

(Note

3e)

.......................................................

171,901,075

Cash

....................................................................................

410,000

Restricted

currency,

at

value

(cost

$3,375)

(Note

1d)

................................................

3,375

Foreign

currency,

at

value

(cost

$22,568,484)

......................................................

22,648,086

Receivables:

Capital

shares

sold

........................................................................

904,890

Dividends

and

interest

.....................................................................

16,542,156

Deposits

with

brokers

for:

OTC

derivative

contracts

..................................................................

16,942,807

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

13,040,792

Total

assets

..........................................................................

2,301,714,458

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

1,725,149

Management

fees

.........................................................................

850,910

Distribution

fees

..........................................................................

428,956

Options

written,

at

value

(premiums

received

$10,250,539)

............................................

7,431,765

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

22,876,794

Deferred

tax

...............................................................................

1,325,605

Accrued

expenses

and

other

liabilities

...........................................................

582,037

Total

liabilities

.........................................................................

35,221,216

Net

assets,

at

value

.................................................................

$2,266,493,242

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,750,110,202

Total

distributable

earnings

(losses)

.............................................................

(483,616,960)

Net

assets,

at

value

.................................................................

$2,266,493,242

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-22

Templeton

Global

Bond

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$225,124,269

Shares

outstanding

........................................................................

15,953,606

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.11

Class

2:

Net

assets,

at

value

.......................................................................

$1,964,221,156

Shares

outstanding

........................................................................

146,221,540

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.43

Class

4:

Net

assets,

at

value

.......................................................................

$77,147,817

Shares

outstanding

........................................................................

5,603,523

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.77

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TGB-23

Templeton

Global

Bond

VIP

Fund

Investment

income:

Dividends:

Non-controlled

affiliates

(Note

3e)

.............................................................

$7,559

Interest:

(net

of

foreign

taxes

of

$1,721,381)

Unaffiliated

issuers:

Inflation

principal

adjustments

..............................................................

9,143,901

Paid

in

cash

a

...........................................................................

35,248,863

Total

investment

income

...................................................................

44,400,323

Expenses:

Management

fees

(Note

3

a

)

...................................................................

5,234,558

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

2,465,272

    Class

4

................................................................................

134,519

Custodian

fees

(Note

4

)

......................................................................

225,770

Reports

to

shareholders

......................................................................

182,112

Professional

fees

...........................................................................

57,298

Trustees'

fees

and

expenses

..................................................................

7,935

Other

....................................................................................

34,835

Total

expenses

.........................................................................

8,342,299

Expense

reductions

(Note

4

)

...............................................................

(7,815)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(82,973)

Net

expenses

.........................................................................

8,251,511

Net

investment

income

................................................................

36,148,812

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

(45,092,072)

Written

options

...........................................................................

(1,076,434)

Foreign

currency

transactions

................................................................

2,090,341

Forward

exchange

contracts

.................................................................

(67,004,267)

Net

realized

gain

(loss)

..................................................................

(111,082,432)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(44,365,636)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(483,853)

Written

options

...........................................................................

4,494,684

Forward

exchange

contracts

.................................................................

50,651,861

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

406,652

Net

change

in

unrealized

appreciation

(depreciation)

............................................

10,703,708

Net

realized

and

unrealized

gain

(loss)

............................................................

(100,378,724)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(64,229,912)

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-24

Templeton

Global

Bond

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$36,148,812

$78,553,753

Net

realized

gain

(loss)

.................................................

(111,082,432)

(255,348,476)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

10,703,708

42,872,770

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(64,229,912)

(133,921,953)

Distributions

to

shareholders:

Class

1

.............................................................

—

(22,006,093)

Class

2

.............................................................

—

(177,353,662)

Class

4

.............................................................

—

(6,338,562)

Distributions

to

shareholders

from

tax

return

of

capital:

Class

1

.............................................................

—

(1,661)

Class

2

.............................................................

—

(13,386)

Class

4

.............................................................

—

(478)

Total

distributions

to

shareholders

..........................................

—

(205,713,842)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

6,427,950

(61,786,697)

Class

2

.............................................................

(2,250,697)

(74,631,398)

Class

4

.............................................................

2,584,371

(2,661,086)

Total

capital

share

transactions

............................................

6,761,624

(139,079,181)

Net

increase

(decrease)

in

net

assets

...................................

(57,468,288)

(478,714,976)

Net

assets:

Beginning

of

period

.....................................................

2,323,961,530

2,802,676,506

End

of

period

..........................................................

$2,266,493,242

$2,323,961,530

Franklin

Templeton

Variable

Insurance

Products

Trust

TGB-25

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Templeton

Global

Bond

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

Global

Bond

VIP

Fund

(Fund)

is

included

in

this

report. Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Debt

securities

generally

trade

in

the over-the-counter

(OTC)

market

rather

than

on

a

securities

exchange.

The

Fund's

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Certain

derivative

financial

instruments

are

centrally

cleared

or

trade

in

the

OTC

market.

The

Fund's

pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Fund's

net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-26

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Derivative

Financial

Instruments

The

Fund invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statement

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statement

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

The

Fund

attempts

to

reduce its

exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

possible,

by

entering

into

International

Swaps

and

Derivatives

Association

(ISDA)

master

agreements

with

certain

counterparties.

These

agreements

contain

various

provisions,

including

but

not

limited

to

collateral

requirements,

events

of

default,

or

early

termination.

Termination

events

applicable

to

the

counterparty

include

certain

deteriorations

in

the

credit

quality

of

the

counterparty.

Termination

events

applicable

to

the Fund

include

failure

of

the

Fund

to

maintain

certain

net

asset

levels

and/or

limit

the

decline

in

net

assets

over

various

periods

of

time.

In

the

event

of

default

or

early

termination,

the

ISDA

master

agreement

gives

the

non-defaulting

party

the

right

to

net

and

close-out

all

transactions

traded,

whether

or

not

arising

under

the

ISDA

agreement,

to

one

net

amount

payable

by

one

counterparty

to

the

other.

However,

absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statement

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the

Fund

of

any

net

liability

owed

to

that

counterparty

under

the

ISDA

agreement.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

terms

are

contract

specific

for

OTC

derivatives.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

the

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

1.

Organization

and

Significant

Accounting

Policies

(continued)

b.

Foreign

Currency

Translation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-27

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

The

Fund entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date.

The

Fund

purchased

or

wrote

OTC

option

contracts

primarily

to

manage

and/or

gain

exposure

to

foreign

exchange

rate

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

See

Note

10

regarding

other

derivative

information.

d.

Restricted

Currency

At

June

30,

2021,

the

Fund

held

currencies

in

certain

markets

in

which

the

ability

to

repatriate

such

currency

is

limited.

As

a

result

of

such

limitations

on

repatriation,

the

Fund

may

incur

substantial

delays

in

gaining

access

to

these

assets

and

may

be

exposed

to

potential

adverse

movements

in

currency

value.

e.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

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. 

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.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividend

income

is

recorded

on

the

ex-dividend

date.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-28

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

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

inflation

principal

adjustments

in

the

Statement

of

Operations.

g.

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.

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

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,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

1,738,179

$24,782,244

4,250,493

$64,180,339

Shares

issued

in

reinvestment

of

distributions

..........

—

—

1,520,923

22,007,754

Shares

redeemed

...............................

(1,286,788)

(18,354,294)

(9,677,321)

(147,974,790)

Net

increase

(decrease)

..........................

451,391

$6,427,950

(3,905,905)

$(61,786,697)

Class

2

Shares:

Shares

sold

...................................

7,108,620

$96,530,771

10,329,028

$147,468,530

Shares

issued

in

reinvestment

of

distributions

..........

—

—

12,843,378

177,367,048

Shares

redeemed

...............................

(7,277,729)

(98,781,468)

(26,982,602)

(399,466,976)

Net

increase

(decrease)

..........................

(169,109)

$(2,250,697)

(3,810,196)

$(74,631,398)

Class

4

Shares:

Shares

sold

...................................

554,419

$7,732,325

867,773

$12,730,613

Shares

issued

in

reinvestment

of

distributions

..........

—

—

447,356

6,339,040

Shares

redeemed

...............................

(370,012)

(5,147,954)

(1,443,142)

(21,730,739)

Net

increase

(decrease)

..........................

184,407

$2,584,371

(128,013)

$(2,661,086)

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-29

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.461%

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

0.25%

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

does

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-30

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

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,

options

sold,

swaps,

inflation

related

adjustments

on

foreign

securities

and

tax

straddles.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Global

Bond

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$221,215,254

$684,869,865

$(734,184,044)

$—

$—

$171,901,075

171,901,075

$7,559

Total

Affiliated

Securities

....

$221,215,254

$684,869,865

$(734,184,044)

$—

$—

$171,901,075

$7,559

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$9,962,453

Long

term

................................................................................

186,743,959

Total

capital

loss

carryforwards

...............................................................

$196,706,412

Cost

of

investments

..........................................................................

$2,429,308,662

Unrealized

appreciation

........................................................................

$120,814,127

Unrealized

depreciation

........................................................................

(336,168,204)

Net

unrealized

appreciation

(depreciation)

..........................................................

$(215,354,077)

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-31

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$498,292,393

and

$312,513,916,

respectively.

7.

Credit

Risk

At

June

30,

2021,

the

Fund

had

7.3%

of

its

portfolio

invested

in

high

yield

or

other

securities

rated

below

investment

grade

and

unrated

securities,

if

any.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

8.

Concentration

of

Risk

Investments

in

issuers

domiciled

or

with

significant

operations

in

developing

or

emerging

market

countries

may

be

subject

to

higher

risks

than

investments

in

developed

countries.

These

risks

include

fluctuating

currency

values,

underdeveloped

legal

or

business

systems,

and

changing

local

and

regional

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

Currencies

of

developing

or

emerging

market

countries

may

be

subject

to

significantly

greater

risks

than

currencies

of

developed

countries,

including

the

potential

inability

to

repatriate

those

currencies

into

U.S.

dollars.

At

June

30,

2021,

the

Fund

had

2.3%

of

its

net

assets

denominated

in

Argentine

Pesos. Argentina

has

restricted

currency

repatriation

since

September

2019,

and

had

restructured

certain

issues

of

its

debt.

Political

and

economic

conditions

in

Argentina

could

continue

to

affect

the

value

of

the

Fund's

holdings.

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

10.

Other

Derivative

Information

At

June

30,

2021,

the

Fund's

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

period

ended

June

30,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

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

Templeton

Global

Bond

VIP

Fund

Foreign

exchange

contracts

..

Investments

in

securities,

at

value

$

7,184,877

a

Options

written,

at

value

$

7,431,765

Unrealized

appreciation

on

OTC

forward

exchange

contracts

13,040,792

Unrealized

depreciation

on

OTC

forward

exchange

contracts

22,876,794

Total

....................

$20,225,669

$30,308,559

a

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-32

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

For

the

period

ended

June

30,

2021,

the

average

month

end

notional

amount

of

options

represented

$1,846,360,704.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$2,302,828,224.

See

Note

1(c)

regarding

derivative

financial

instruments.

At

June

30,

2021,

OTC

derivative

assets

and

liabilities

are

as

follows:

At

June

30

,

2021

,

OTC

derivative

assets,

which

may

be

offset

against

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

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

Templeton

Global

Bond

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Investments

$(14,780,893)

a

Investments

$3,655,583

a

Written

options

(1,076,434)

Written

options

4,494,684

Forward

exchange

contracts

(67,004,267)

Forward

exchange

contracts

50,651,861

Total

.......................

$(82,861,594)

$58,802,128

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statement

of

Operations.

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Templeton

Global

Bond

VIP

Fund

Derivatives

Forward

exchange

contracts

.............................

$

13,040,792

$

22,876,794

Options

purchased

.....................................

7,184,877

—

Options

written

........................................

—

7,431,765

Total

.............................................

$20,225,669

$30,308,559

a

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.

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-33

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

At

June

30,

2021,

OTC

derivative

liabilities,

which

may

be

offset

against

OTC

derivative

assets

and

collateral

pledged

to

the

counterparty,

are

as

follows:

See

Abbreviations

on

page

TGB-39.

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)

Templeton

Global

Bond

VIP

Fund

Counterparty

BOFA

....................

$458,593

$(458,593)

$—

$—

$—

CITI

.....................

7,175,191

(7,175,191)

—

—

—

DBAB

...................

656,593

(656,593)

—

—

—

GSCO

...................

65,655

(65,655)

—

—

—

HSBK

...................

4,455,671

(1,598,598)

(2,790,527)

—

66,546

JPHQ

...................

2,154,366

(2,154,366)

—

—

—

MSCO

...................

5,259,600

(5,259,600)

—

—

—

Total

...................

$20,225,669

$(17,368,596)

$

(2,790,527)

$—

$66,546

$

1

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)

Templeton

Global

Bond

VIP

Fund

Counterparty

BOFA

....................

$817,647

$(458,593)

$—

$(359,054)

$—

CITI

.....................

13,383,062

(7,175,191)

—

(6,207,871)

—

DBAB

...................

733,623

(656,593)

—

—

77,030

GSCO

...................

822,314

(65,655)

—

(380,000)

376,659

HSBK

...................

1,598,598

(1,598,598)

—

—

—

JPHQ

...................

4,375,227

(2,154,366)

—

(1,902,807)

318,054

MSCO

...................

8,578,088

(5,259,600)

—

(3,318,488)

—

Total

...................

$30,308,559

$(17,368,596)

$—

$(12,168,220)

$771,743

a

At

June

30,

2021,

the

Fund

received

U.S.

Treasury

Bonds

and

Notes

and

U.K

Treasury

Inflation-Linked

Gilt

Bonds

as

collateral

for

derivatives.

b

In

some

instances,

the

collateral

amounts

disclosed

in

the

table

above

were

adjusted

due

to

the

requirement

to

limit

the

collateral

amounts

to

avoid

the

effect

of

overcollateralization.

Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-34

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

11.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

12.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

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,

2021,

in

valuing

the

Fund's assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Global

Bond

VIP

Fund

Assets:

Investments

in

Securities:

Foreign

Government

and

Agency

Securities

:

Argentina

............................

$

—

$

—

$

46,019,620

$

46,019,620

Brazil

...............................

—

22,347,014

—

22,347,014

Colombia

............................

—

77,133,622

—

77,133,622

Ghana

..............................

—

39,757,401

—

39,757,401

India

................................

—

99,052,080

—

99,052,080

Indonesia

............................

—

221,829,189

—

221,829,189

Mexico

..............................

—

230,446,801

—

230,446,801

Norway

..............................

—

87,002,125

—

87,002,125

South

Korea

..........................

—

422,131,282

—

422,131,282

Supranational

.........................

—

10,295,291

—

10,295,291

U.S.

Government

and

Agency

Securities

.......

—

472,483,176

—

472,483,176

Options

purchased

.......................

—

7,184,877

—

7,184,877

Short

Term

Investments

...................

236,358,605

253,705,700

5,475,569

495,539,874

Total

Investments

in

Securities

...........

$236,358,605

$1,943,368,558

$51,495,189

$2,231,222,352

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

13,040,792

$

—

$

13,040,792

Restricted

Currency

(ARS)

.................

—

—

3,375

3,375

Total

Other

Financial

Instruments

.........

$—

$13,040,792

$3,375

$13,044,167

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-35

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

At

June

30,

2021,

the

reconciliation is

as follows:

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

June

30,

2021,

are

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Global

Bond

VIP

Fund

(continued)

Assets:

Restricted

Currency

(ARS)

Receivables:

Interest

(ARS)

...........................

$—

$—

$892,314

$892,314

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

7,431,765

$

—

$

7,431,765

Forward

exchange

contracts

................

—

22,876,794

—

22,876,794

Total

Other

Financial

Instruments

.........

$—

$30,308,559

$—

$30,308,559

Payables:

Deferred

Tax

(ARS)

.......................

$—

$—

$1,799

$1,799

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciation

(Depreciation)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Templeton

Global

Bond

VIP

Fund

Assets:

Investments

in

Securities:

Foreign

Government

and

Agency

Securities

:

Argentina

.....

$

43,034,720

$

10,408,028

$

(2,802,531)

$

—

$

—

$

1,864,771

$

(739,264)

$

(5,746,104)

$

46,019,620

$

(4,912,221)

Short

Term

Investments

...

3,010,391

5,585,353

(2,262,400)

—

—

34,051

(211,039)

(680,787)

5,475,569

(635,829)

Total

Investments

in

Securities

........

$46,045,111

$15,993,381

$(5,064,931)

$—

$—

$1,898,822

$(950,303)

$(6,426,891)

$51,495,189

$(5,548,050)

Other

Financial

Instruments:

Restricted

Currency

(ARS)

.......

$3,151

$20,560,298

$(20,378,457)

$—

$—

$—

$(181,659)

$42

$3,375

$—

Receivables:

Interest

(ARS)

..

$947,439

$11,031,600

$(10,987,304)

$—

$—

$—

$(10,859)

$(88,562)

$892,314

$(40,025)

Liabilities:

Payables:

Deferred

Tax

(ARS)

$2,124

$—

$—

$—

$—

$—

$—

$(325)

$1,799

$(325)

Investment

Securities

Purchased

(ARS)

$463,749

$—

$(467,633)

$—

$—

$—

$3,884

$—

$—

$—

a

Purchases

include

all

purchases

of

securities

and

securities

received

in

corporate

actions.

b

Sales

include

all

sales

of

securities,

maturities,

paydowns

and

securities

tendered

in

corporate

actions.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-36

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

See

Abbreviations

on

page

TGB-39.

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

14.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

Impact

to

Fair

Value

if

Input

Increases

a

Templeton

Global

Bond

VIP

Fund

Assets:

Investments

in

Securities:

Foreign

Government

and

Agency

Securities:

Argentina

..........

$46,019,620

Market

comparables

Implied

foreign

exchange

rate

169.8

ARS/USD

Decrease

b

Short

Term

Investments:

Argentina

..........

5,475,569

Market

comparables

Implied

foreign

exchange

rate

169.8

ARS/USD

Decrease

c

All

Other

............

895,689

d

Liabilities:

All

Other

............

1,799

d

Total

...............

$52,389,079

a

Represents

the

directional

change

in

the

fair

value

of

the

Level

3

financial

instruments

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

b

Represents

a

significant

impact

to

fair

value

and

net

assets.

c

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

d

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TGB-37

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

Abbreviations

Counterparty

BOFA

Bank

of

America

N.A.

CITI

Citibank

NA

DBAB

Deutsche

Bank

AG

GSCO

Goldman

Sachs

Group,

Inc.

HSBK

HSBC

Bank

plc

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Selected

Portfolio

BADLAR

Argentina

Deposit

Rates

Badlar

Private

Banks

ARS

CER

Reference

Stabilization

Coefficient

FRN

Floating

Rate

Note

Cu

r

rency

ARS

Argentine

Peso

AUD

Australian

Dollar

BRL

Brazilian

Real

COP

Colombian

Peso

GHS

Ghanaian

Cedi

IDR

Indonesian

Rupiah

INR

Indian

Rupee

JPY

Japanese

Yen

KRW

South

Korean

Won

MXN

Mexican

Peso

NOK

Norwegian

Krone

SEK

Swedish

Krona

SGD

Singapore

Dollar

USD

United

States

Dollar

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TGB-38

Semiannual

Report

Templeton

Global

Bond

VIP

Fund

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

$3,541,942

of

foreign

taxes

paid

and

$69,964,607

of

foreign

source

income

earned

by

the

fund,

or

amounts

as

finally

determined,

during

the

fiscal

year

ended

December

31,

202

0

.

TG-1

Semiannual

Report

Templeton

Growth

VIP

Fund

This

semiannual

report

for

Templeton

Growth

VIP

Fund

covers

the

period

ended

June

30,

2021

.

Class

1

Performance

Summary

as

of

June

30,

2021

The

Fund’s

Class

1

Shares

posted

a

+

7.30

%

total

return

for

the

six-month

period

ended

June

30,

202

1

.

Performance

reflects

the

Fund’s

Class

1

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.

TG-2

Semiannual

Report

Templeton

Growth

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

primarily

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments;

investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors.

Because

the

Fund

may

invest

at

least

a

significant

portion

of

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/

or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Political,

social

or

economic

disruptions

in

the

region,

even

in

countries

in

which

the

Fund

is

not

invested,

may

adversely

affect

the

value

of

securities

held

by

the

Fund.

Current

political

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Derivatives

involve

costs

and

can

create

economic

leverage

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(and

enable

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

In

addition,

securities

issued

by

small-

and

mid-capitalization

companies

have

historically

experienced

more

price

volatility

than

larger-company

stocks,

especially

over

the

short

term

and

may

involve

additional

risks.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

six-month

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

new

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

posted

a

+12.30%

total

return

for

the

period

under

review.

1

The

Fund’s

prior

benchmark,

the

MSCI

ACWI,

posted

a

+12.56%

total

return.

1

The

MSCI

ACWI-NR

(net

of

taxes

on

dividends)

is

replacing

the

MSCI

ACWI

(gross

of

taxes

on

dividends)

because

the

investment

manager

believes

the

actual

withholding

rates

for

the

Fund

are

closer

to

the

assumptions

of

the

MSCI

ACWI-NR.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

ACWI-NR,

posted

a

+12.30%

total

return

for

the

six

months

ended

June

30,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

rebounding

economic

activity

and

easing

novel

coronavirus

(COVID-19)

pandemic

restrictions

in

many

regions.

The

implementation

of

vaccination

programs

and

additional

fiscal

stimulus

measures

led

many

equity

markets

to

reach

new

all-time

price

highs.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

an

accommodative

monetary

policy,

additional

fiscal

stimulus

measures

and

ongoing

vaccination

programs.

The

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

also

supported

the

economy.

Gross

domestic

product

(GDP)

growth

accelerated

in

2021’s

first

quarter,

with

total

economic

output

nearly

reaching

pre-

pandemic

levels.

The

rebound

in

corporate

earnings

and

progress

toward

a

bipartisan

infrastructure

plan

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

bond

purchases

to

help

keep

markets

functioning.

The

economic

recovery

in

the

eurozone

was

relatively

weak,

as

quarter-over-quarter

GDP

growth

contracted

during

2021’s

first

quarter.

GDP

growth

rates

were

mostly

negative

among

the

region’s

largest

economies

amid

renewed

lockdowns,

delays

in

COVID-19

vaccine

distribution

and

weak

consumer

spending.

Nevertheless,

optimism

that

successful

vaccine

programs

would

lift

global

growth

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+11.80%

total

return

for

the

six

months

under

review.

1

Geographic

Composition

6/30/21

%

of

Total

Net

Assets

North

America

43.7%

Europe

26.7%

Asia

21.9%

Other

1.1%

Short-Term

Investments

&

Other

Net

Assets

6.6%

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).

Templeton

Growth

VIP

Fund

TG-3

Semiannual

Report

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

+4.54%

total

return

for

the

six-month

period.

1

The

region’s

economic

recovery

was

pressured

by

weak

domestic

demand,

most

notably

in

China,

despite

improvement

in

manufacturing

and

exports.

Asian

equity

markets

experienced

volatility

near

period-end

due

to

inflation

concerns,

rising

COVID-19

infection

rates

in

many

countries,

especially

India,

and

renewed

lockdowns.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

+7.45%

total

return

for

the

six

months

under

review.

1

The

recovery

in

oil

and

industrial

metals

prices

supported

global

emerging

market

equities.

Late

in

the

period,

higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

inflation

amid

higher

commodity

prices

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Investment

Strategy

When

choosing

equity

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

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

Our

analysis

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

a

company’s

price/earnings

ratio,

price/cash

flow

ratio,

profit

margins

and

liquidation

value.

The

Fund

may,

from

time

to

time,

seek

to

hedge

(protect)

against

currency

risks,

using

certain

currency-related

derivative

instruments.

The

Fund

may

also

use

a

variety

of

equity-related

derivatives

for

various

purposes

including

enhancing

Fund

returns,

increasing

liquidity

and

gaining

exposure

to

particular

markets

in

more

efficient

or

less

expensive

ways.

Manager’s

Discussion

During

the

six

months

under

review,

key

contributors

to

the

Fund’s

performance

relative

to

the

MSCI

ACWI-NR

included

stock

selection

in

the

materials,

information

technology

(IT)

and

energy

sectors.

Within

materials,

our

investments

in

U.S.

gold

and

copper

mining

company

Freeport-McMoRan

and

Luxembourg-

based

steelmaking

firm

ArcelorMittal

boosted

relative

results.

Freeport-McMoRan

is

a

liquid

play

on

higher

copper

prices

and

production

growth

over

our

investment

horizon.

Its

stock

performed

well

during

the

period

as

the

copper

price

remained

elevated

while

investors

anticipated

the

release

of

an

infrastructure

spending

plan

in

the

U.S.

Copper

fundamentals

are

well

supported,

with

relatively

tight

supply

and

long-term

demand

drivers.

Freeport-McMoRan

has

a

higher-than-average

production

growth

outlook

as

well,

driven

by

its

Indonesian

Grasberg

mine,

and

the

company’s

recent

operational

updates

have

increased

investor

confidence

that

a

potentially

sizable

Grasberg-driven

cash

inflection

is

on

track

for

2021.

In

the

IT

sector,

our

holdings

in

U.S.

software

engineering

solutions

and

technology

services

provider

EPAM

Systems

and

Netherlands-based

chipmaker

NXP

Semiconductors,

which

has

operations

in

China,

aided

relative

results.

EPAM

focuses

on

delivering

digital

product

and

platform

solutions

to

large

enterprises.

As

more

and

more

companies

embrace

digital

transformation

and

develop

their

own

software,

the

need

for

developers

has

outstripped

supply,

leading

to

greater

demand

for

skilled

outsourced

software

engineers

that

EPAM

can

provide.

EPAM

has

benefited

from

the

accelerated

shift

to

modern

technologies

such

as

cloud

services,

e-commerce

or

mobile

banking

caused

by

the

pandemic.

In

the

energy

sector,

our

investment

in

U.S.

oil

refiner

Marathon

Petroleum

helped

relative

results.

Its

stock

rallied

after

company

management

successfully

closed

the

sale

of

its

Speedway

fueling

station

business

and

announced

it

would

use

the

proceeds

to

buy

back

shares

and

pay

down

long-term

debt.

Furthermore,

the

stock

benefited

from

the

strength

in

oil

prices.

In

contrast,

stock

selection

in

the

communication

services,

consumer

discretionary

and

industrials

sectors,

as

well

as

an

overweighting

in

the

consumer

discretionary

sector,

detracted

from

the

Fund’s

relative

performance.

Within

communication

services,

key

relative

detractors

included

our

holdings

in

Japan-based

online

and

mobile

games

company

Nexon

and

U.S.-based

diversified

international

family

entertainment

and

media

enterprise

Walt

Disney.

In

consumer

discretionary,

U.S.-based

Dollar

Tree’s

share

price

declined

due

to

investor

concerns

that

rising

inflation

could

hurt

the

discount

variety

store

operator’s

profit

margin.

Templeton

Growth

VIP

Fund

TG-4

Semiannual

Report

In

the

industrials

sector,

our

investment

in

Japanese

construction

machinery

firm

Komatsu

hurt

relative

performance.

Although

the

company’s

recent

operating

results

have

been

positive,

investor

concerns

about

a

slowdown

in

China

and

weakness

in

Indonesia,

as

well

as

higher

costs

and

lower

growth

in

the

aftermarket

segment,

weighed

on

its

stock.

Such

issues

are

well

known

and,

in

our

view,

already

discounted

in

Komatsu’s

undemanding

valuation.

We

remain

optimistic

about

the

profitability

and

earnings

potential

from

the

firm’s

mining

equipment

division,

which

we

believe

should

outweigh

weakness

in

Chinese

construction,

a

lower

margin

business

that

accounts

for

a

small

portion

of

company

revenues.

We

continue

to

see

numerous

catalysts

for

the

stock,

including

accelerating

industrial

production,

healthy

residential

construction

fundamentals,

fiscal

stimulus

and

infrastructure,

equipment

replacement

requirements

and

increasing

mining

intensity.

Other

key

relative

detractors

included

our

positions

in

South

Korea-based

electronics

products

and

semiconductor

manufacturer

Samsung

Electronics

and

Japan-based

beverages

company

Kirin

Holdings

(not

held

at

period-

end).

Samsung

Electronics’

share

price

declined

slightly

amid

little

news

flow.

In

our

view,

Samsung

remains

a

key

beneficiary

of

a

demand

uptrend

in

memory

chips.

Other

positive

catalysts

include

long-term

opportunities

in

the

firm’s

foundry

business,

optionality

around

capital

deployment

and

a

competitive

advantage

from

being

one

of

the

three

semiconductor

manufacturers

globally

that

can

compete

at

the

leading

edge.

Overall,

we

believe

Samsung

is

a

well-run

global

technology

leader

with

a

strong

balance

sheet.

From

a

geographic

perspective,

major

detractors

from

the

Fund’s

relative

performance

included

stock

selection

and

an

underweighting

in

North

America,

particularly

in

the

U.S.

and

Canada.

In

Asia,

an

overweighting

in

Japan

and

stock

selection

in

South

Korea

hurt

relative

results.

In

Europe,

overweightings

in

Belgium

and

the

U.K.

hindered

relative

results.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund’s

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

six

months

ended

June

30,

2021,

the

U.S.

dollar

rose

in

value

relative

to

most

currencies.

As

a

result,

the

Fund’s

performance

was

negatively

affected

by

the

portfolio’s

substantial

investment

in

securities

with

non-U.S.

currency

exposure.

Thank

you

for

your

participation

in

Templeton

Growth

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

June

30,

2021,

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.

Top

10

Holdings

6/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Samsung

Electronics

Co.

Ltd.

2.8%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Walt

Disney

Co.

(The)

2.2%

Entertainment,

United

States

Sysco

Corp.

2.1%

Food

&

Staples

Retailing,

United

States

Anheuser-Busch

InBev

SA/NV

2.1%

Beverages,

Belgium

Roche

Holding

AG

2.1%

Pharmaceuticals,

Switzerland

AIA

Group

Ltd.

1.9%

Insurance,

Hong

Kong

E.ON

SE

1.9%

Multi-Utilities,

Germany

Marathon

Petroleum

Corp.

1.9%

Oil,

Gas

&

Consumable

Fuels,

United

States

Booking

Holdings,

Inc.

1.8%

Hotels,

Restaurants

&

Leisure,

United

States

Zimmer

Biomet

Holdings,

Inc.

1.8%

Health

Care

Equipment

&

Supplies,

United

States

Class

1

Fund

Expenses

Templeton

Growth

VIP

Fund

TG-5

Semiannual

Report

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.

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

any

ongoing

expenses

of

the

Contract

for

which

the

Fund

is

an

investment

option

or

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

1/1/21

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

Ending

Account

Value

6/30/21

Fund-Level

Expenses

Paid

During

Period

1/1/21–6/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

1

$1,000

$1,073.00

$4.56

$1,020.40

$4.44

0.89%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Growth

VIP

Fund

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-6

00

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.42

$11.15

$12.44

$16.24

$13.93

$13.54

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.05

0.24

c

0.30

0.28

0.29

0.26

Net

realized

and

unrealized

gains

(losses)

0.79

0.36

1.30

(2.42)

2.30

0.96

Total

from

investment

operations

........

0.84

0.60

1.60

(2.14)

2.59

1.22

Less

distributions

from:

Net

investment

income

..............

(0.16)

(0.33)

(0.40)

(0.35)

(0.28)

(0.31)

Net

realized

gains

.................

—

—

(2.49)

(1.31)

—

(0.52)

Total

distributions

...................

(0.16)

(0.33)

(2.89)

(1.66)

(0.28)

(0.83)

Net

asset

value,

end

of

period

..........

$12.10

$11.42

$11.15

$12.44

$16.24

$13.93

Total

return

d

.......................

7.30%

5.99%

15.43%

(14.61)%

18.77%

9.90%

Ratios

to

average

net

assets

e

Expenses

f

.........................

0.89%

0.91%

0.86%

0.83%

0.82%

g

0.82%

Net

investment

income

...............

0.92%

2.42%

c

2.52%

1.90%

1.94%

2.01%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$41,596

$92,653

$97,988

$354,164

$466,207

$453,997

Portfolio

turnover

rate

................

26.12%

h

63.65%

19.69%

29.25%

26.46%

22.88%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.08%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

9.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TG-7

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.17

$10.90

$12.21

$15.97

$13.70

$13.32

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.04

0.21

c

0.26

0.24

0.25

0.23

Net

realized

and

unrealized

gains

(losses)

0.76

0.36

1.28

(2.38)

2.26

0.94

Total

from

investment

operations

........

0.80

0.57

1.54

(2.14)

2.51

1.17

Less

distributions

from:

Net

investment

income

..............

(0.13)

(0.30)

(0.36)

(0.31)

(0.24)

(0.27)

Net

realized

gains

.................

—

—

(2.49)

(1.31)

—

(0.52)

Total

distributions

...................

(0.13)

(0.30)

(2.85)

(1.62)

(0.24)

(0.79)

Net

asset

value,

end

of

period

..........

$11.84

$11.17

$10.90

$12.21

$15.97

$13.70

Total

return

d

.......................

7.13%

5.80%

15.15%

(14.85)%

18.50%

9.62%

Ratios

to

average

net

assets

e

Expenses

f

.........................

1.14%

1.16%

1.11%

1.08%

1.07%

g

1.07%

Net

investment

income

...............

0.67%

2.17%

c

2.27%

1.65%

1.69%

1.76%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$439,554

$603,996

$659,412

$625,311

$879,521

$876,128

Portfolio

turnover

rate

................

26.12%

h

63.65%

19.69%

29.25%

26.46%

22.88%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.83%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

9.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-8

a

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

2019

2018

2017

2016

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.35

$11.07

$12.36

$16.13

$13.83

$13.44

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.03

0.20

c

0.26

0.23

0.24

0.22

Net

realized

and

unrealized

gains

(losses)

0.78

0.36

1.29

(2.40)

2.28

0.94

Total

from

investment

operations

........

0.81

0.56

1.55

(2.17)

2.52

1.16

Less

distributions

from:

Net

investment

income

..............

(0.12)

(0.28)

(0.35)

(0.29)

(0.22)

(0.25)

Net

realized

gains

.................

—

—

(2.49)

(1.31)

—

(0.52)

Total

distributions

...................

(0.12)

(0.28)

(2.84)

(1.60)

(0.22)

(0.77)

Net

asset

value,

end

of

period

..........

$12.04

$11.35

$11.07

$12.36

$16.13

$13.83

Total

return

d

.......................

7.07%

5.65%

14.97%

(14.88)%

18.38%

9.47%

Ratios

to

average

net

assets

e

Expenses

f

.........................

1.24%

1.26%

1.21%

1.18%

1.17%

g

1.17%

Net

investment

income

...............

0.57%

2.04%

c

2.17%

1.55%

1.59%

1.66%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$22,911

$23,213

$27,330

$28,238

$38,798

$43,286

Portfolio

turnover

rate

................

26.12%

h

63.65%

19.69%

29.25%

26.46%

22.88%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.70%.

d

Total

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.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

securities

delivered

as

a

result

of

redemption

in-kind.

See

Note

9.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited),

June

30,

2021

Templeton

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TG-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

93.4%

Aerospace

&

Defense

1.9%

BAE

Systems

plc

.....................................

United

Kingdom

726,495

$

5,250,048

a

Rolls-Royce

Holdings

plc

...............................

United

Kingdom

3,096,015

4,238,804

9,488,852

Air

Freight

&

Logistics

1.0%

United

Parcel

Service,

Inc.,

B

............................

United

States

23,711

4,931,177

Airlines

2.5%

a

International

Consolidated

Airlines

Group

SA

.................

United

Kingdom

1,666,353

4,023,814

a

Japan

Airlines

Co.

Ltd.

.................................

Japan

119,270

2,582,819

a

Southwest

Airlines

Co.

.................................

United

States

109,471

5,811,815

12,418,448

Auto

Components

3.3%

BorgWarner,

Inc.

......................................

United

States

110,195

5,348,865

Continental

AG

.......................................

Germany

44,363

6,527,287

Lear

Corp.

..........................................

United

States

26,540

4,651,931

16,528,083

Automobiles

1.8%

Honda

Motor

Co.

Ltd.

..................................

Japan

190,406

6,124,626

Isuzu

Motors

Ltd.

.....................................

Japan

212,400

2,818,729

8,943,355

Beverages

3.9%

Anheuser-Busch

InBev

SA/NV

...........................

Belgium

147,955

10,666,800

Pernod

Ricard

SA

.....................................

France

24,491

5,443,885

b

Suntory

Beverage

&

Food

Ltd.

...........................

Japan

92,177

3,474,678

19,585,363

Chemicals

4.6%

Albemarle

Corp.

......................................

United

States

50,518

8,510,262

DuPont

de

Nemours,

Inc.

...............................

United

States

117,210

9,073,226

Umicore

SA

.........................................

Belgium

94,680

5,792,833

23,376,321

Consumer

Finance

1.7%

American

Express

Co.

.................................

United

States

52,145

8,615,918

Diversified

Telecommunication

Services

1.7%

Verizon

Communications,

Inc.

............................

United

States

151,869

8,509,220

Electric

Utilities

1.0%

Southern

Co.

(The)

....................................

United

States

84,048

5,085,745

Electrical

Equipment

1.1%

Mitsubishi

Electric

Corp.

................................

Japan

395,100

5,736,278

Electronic

Equipment,

Instruments

&

Components

1.2%

Kyocera

Corp.

........................................

Japan

95,434

5,896,481

Entertainment

3.1%

Nexon

Co.

Ltd.

.......................................

Japan

199,587

4,442,112

a

Walt

Disney

Co.

(The)

..................................

United

States

63,435

11,149,970

15,592,082

Food

&

Staples

Retailing

2.1%

Sysco

Corp.

.........................................

United

States

139,167

10,820,234

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

Products

0.8%

Danone

SA

..........................................

France

55,564

$

3,909,532

Health

Care

Equipment

&

Supplies

3.6%

Medtronic

plc

........................................

United

States

72,715

9,026,113

Zimmer

Biomet

Holdings,

Inc.

............................

United

States

57,059

9,176,228

18,202,341

Health

Care

Providers

&

Services

3.7%

Fresenius

Medical

Care

AG

&

Co.

KGaA

....................

Germany

88,871

7,385,470

a

Laboratory

Corp.

of

America

Holdings

......................

United

States

19,922

5,495,484

UnitedHealth

Group,

Inc.

................................

United

States

14,403

5,767,537

18,648,491

Hotels,

Restaurants

&

Leisure

8.5%

a

Booking

Holdings,

Inc.

.................................

United

States

4,250

9,299,383

a

Compass

Group

plc

...................................

United

Kingdom

330,755

6,968,822

a

Galaxy

Entertainment

Group

Ltd.

.........................

Macau

498,234

3,983,899

a

Hyatt

Hotels

Corp.,

A

...................................

United

States

35,713

2,772,757

a

InterContinental

Hotels

Group

plc

.........................

United

Kingdom

88,277

5,884,140

Starbucks

Corp.

......................................

United

States

39,480

4,414,259

a

Whitbread

plc

........................................

United

Kingdom

82,912

3,584,373

Yum

China

Holdings,

Inc.

...............................

China

86,821

5,751,891

42,659,524

Household

Durables

3.7%

Gree

Electric

Appliances,

Inc.

of

Zhuhai,

A

...................

China

549,920

4,434,290

Panasonic

Corp.

......................................

Japan

537,516

6,189,798

Sony

Group

Corp.

.....................................

Japan

81,299

7,884,051

18,508,139

Industrial

Conglomerates

2.0%

Honeywell

International,

Inc.

.............................

United

States

22,039

4,834,255

Siemens

AG

.........................................

Germany

34,970

5,552,962

10,387,217

Insurance

1.9%

AIA

Group

Ltd.

.......................................

Hong

Kong

769,445

9,545,349

IT

Services

5.0%

a

DXC

Technology

Co.

...................................

United

States

195,934

7,629,670

a

EPAM

Systems,

Inc.

...................................

United

States

4,793

2,449,031

Fujitsu

Ltd.

..........................................

Japan

43,131

8,070,492

Visa,

Inc.,

A

..........................................

United

States

30,748

7,189,497

25,338,690

Machinery

4.5%

Komatsu

Ltd.

........................................

Japan

307,700

7,623,511

Makita

Corp.

.........................................

Japan

99,100

4,666,750

Stanley

Black

&

Decker,

Inc.

.............................

United

States

15,700

3,218,343

Westinghouse

Air

Brake

Technologies

Corp.

.................

United

States

86,726

7,137,550

22,646,154

Media

1.3%

Comcast

Corp.,

A

.....................................

United

States

114,348

6,520,123

Metals

&

Mining

2.9%

ArcelorMittal

SA

......................................

Luxembourg

162,723

5,010,185

Freeport-McMoRan,

Inc.

................................

United

States

119,704

4,442,215

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TG-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Metals

&

Mining

(continued)

Wheaton

Precious

Metals

Corp.

..........................

Brazil

120,754

$

5,322,040

14,774,440

Multiline

Retail

1.6%

a

Dollar

Tree,

Inc.

......................................

United

States

79,935

7,953,533

Multi-Utilities

2.4%

E.ON

SE

............................................

Germany

818,961

9,475,913

Public

Service

Enterprise

Group,

Inc.

......................

United

States

44,053

2,631,726

12,107,639

Oil,

Gas

&

Consumable

Fuels

4.2%

BP

plc

..............................................

United

Kingdom

1,355,750

5,945,929

Equinor

ASA

.........................................

Norway

281,662

5,962,817

Marathon

Petroleum

Corp.

..............................

United

States

155,369

9,387,395

21,296,141

Personal

Products

1.0%

Unilever

plc

..........................................

United

Kingdom

90,327

5,287,696

Pharmaceuticals

3.8%

AstraZeneca

plc

......................................

United

Kingdom

10,585

1,271,818

Johnson

&

Johnson

...................................

United

States

43,541

7,172,944

Roche

Holding

AG

....................................

Switzerland

27,927

10,523,959

18,968,721

Semiconductors

&

Semiconductor

Equipment

2.5%

Infineon

Technologies

AG

...............................

Germany

132,824

5,343,064

NXP

Semiconductors

NV

...............................

China

35,136

7,228,178

12,571,242

Specialty

Retail

3.2%

Ross

Stores,

Inc.

.....................................

United

States

66,763

8,278,612

TJX

Cos.,

Inc.

(The)

...................................

United

States

114,833

7,742,041

16,020,653

Technology

Hardware,

Storage

&

Peripherals

2.8%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

195,785

13,968,918

Textiles,

Apparel

&

Luxury

Goods

2.1%

adidas

AG

...........................................

Germany

13,495

5,036,190

a

Burberry

Group

plc

....................................

United

Kingdom

193,143

5,524,134

10,560,324

Wireless

Telecommunication

Services

1.0%

a

T-Mobile

US,

Inc.

.....................................

United

States

36,521

5,289,337

Total

Common

Stocks

(Cost

$352,907,193)

.....................................

470,691,761

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

(unaudited)

Templeton

Growth

VIP

Fund

(continued)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-12

Short

Term

Investments

0.5%

a

a

Country

Shares

a

Value

a

a

a

a

a

a

c

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.5%

Money

Market

Funds

0.5%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

2,491,848

$

2,491,848

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$2,491,848)

............................................................

2,491,848

Total

Short

Term

Investments

(Cost

$2,491,848

)

.................................

2,491,848

a

Total

Investments

(Cost

$355,399,041)

93.9%

...................................

$473,183,609

Other

Assets,

less

Liabilities

6.1%

.............................................

30,877,671

Net

Assets

100.0%

...........................................................

$504,061,280

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

June

30,

2021.

See

Note

1(c).

c

See

Note

1(c)

regarding

securities

on

loan.

d

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

e

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

June

30,

2021

(unaudited)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TG-13

Templeton

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$352,907,193

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

2,491,848

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$3,300,938)

.................................

$470,691,761

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

2,491,848

Cash

....................................................................................

23,654,747

Receivables:

Investment

securities

sold

...................................................................

722,582

Capital

shares

sold

........................................................................

20,797

Dividends

...............................................................................

1,009,571

European

Union

tax

reclaims

(Note

1

d

)

.........................................................

9,203,433

Total

assets

..........................................................................

507,794,739

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

318,214

Capital

shares

redeemed

...................................................................

56,787

Management

fees

.........................................................................

472,616

Distribution

fees

..........................................................................

123,090

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

2,491,848

Accrued

expenses

and

other

liabilities

...........................................................

270,904

Total

liabilities

.........................................................................

3,733,459

Net

assets,

at

value

.................................................................

$504,061,280

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$377,444,497

Total

distributable

earnings

(losses)

.............................................................

126,616,783

Net

assets,

at

value

.................................................................

$504,061,280

Templeton

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$41,596,369

Shares

outstanding

........................................................................

3,437,411

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$12.10

Class

2:

Net

assets,

at

value

.......................................................................

$439,554,211

Shares

outstanding

........................................................................

37,136,956

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.84

Class

4:

Net

assets,

at

value

.......................................................................

$22,910,700

Shares

outstanding

........................................................................

1,902,800

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$12.04

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

June

30,

2021

(unaudited)

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-14

Templeton

Growth

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$508,720)

Unaffiliated

issuers

........................................................................

$6,185,174

Interest:

Unaffiliated

issuers

........................................................................

3,055

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

77,349

Non-controlled

affiliates

(Note

3

e

)

.............................................................

54

Other

income

(Note

1

d

)

......................................................................

169,044

Total

investment

income

...................................................................

6,434,676

Expenses:

Management

fees

(Note

3

a

)

...................................................................

2,974,114

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

748,517

    Class

4

................................................................................

40,424

Custodian

fees

.............................................................................

18,725

Reports

to

shareholders

......................................................................

67,669

Professional

fees

...........................................................................

57,687

Trustees'

fees

and

expenses

..................................................................

2,403

Other

....................................................................................

35,077

Total

expenses

.........................................................................

3,944,616

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(45)

Net

expenses

.........................................................................

3,944,571

Net

investment

income

................................................................

2,490,105

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

+

Unaffiliated

issuers

......................................................................

82,445,079

Foreign

currency

transactions

................................................................

2,883

Net

realized

gain

(loss)

..................................................................

82,447,962

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(35,738,791)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(1,350,859)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(37,089,650)

Net

realized

and

unrealized

gain

(loss)

............................................................

45,358,312

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$47,848,417

+

Includes

gains

from

redemption

in-kind

(Note

9)

$43,506,810

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

TG-15

Templeton

Growth

VIP

Fund

Six

Months

Ended

June

30,

2021

(unaudited)

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$2,490,105

$14,481,288

Net

realized

gain

(loss)

.................................................

82,447,962

(64,187,228)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(37,089,650)

79,512,856

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

47,848,417

29,806,916

Distributions

to

shareholders:

Class

1

.............................................................

(1,223,678)

(2,680,578)

Class

2

.............................................................

(6,568,551)

(16,492,099)

Class

4

.............................................................

(217,527)

(659,619)

Total

distributions

to

shareholders

..........................................

(8,009,756)

(19,832,296)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(55,846,334)

(7,082,982)

Class

2

.............................................................

(198,111,506)

(63,376,754)

Class

4

.............................................................

(1,681,151)

(4,382,946)

Total

capital

share

transactions

............................................

(255,638,991)

(74,842,682)

Net

increase

(decrease)

in

net

assets

...................................

(215,800,330)

(64,868,062)

Net

assets:

Beginning

of

period

.....................................................

719,861,610

784,729,672

End

of

period

..........................................................

$504,061,280

$719,861,610

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

Templeton

Growth

VIP

Fund

TG-16

Semiannual

Report

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.

At

June

30,

2021,

41.93%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege. 

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in open-end

mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time. In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

June

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-17

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

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

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

 The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

 Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

Additionally,

the

Fund

received

$1,000,229

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

received

as

collateral

are

held

in

segregated

accounts

with

the

Funds’

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

received

as

collateral.

As

such,

the

non-cash

collateral

is

excluded

from

the

Statement

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-18

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims).

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

will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the

Fund’s

shareholders.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

June

30,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Income

and

Deferred

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-19

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

June

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

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:

Six

Months

Ended

June

30,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

33,673

$405,013

111,654

$1,099,154

Shares

issued

in

reinvestment

of

distributions

..........

98,763

1,223,678

287,000

2,680,578

Shares

redeemed

in-kind

(Note

9

)

...................

(4,433,957)

(53,015,936)

—

—

Shares

redeemed

...............................

(371,978)

(4,459,089)

(1,072,276)

(10,862,714)

Net

increase

(decrease)

..........................

(4,673,499)

$(55,846,334)

(673,622)

$(7,082,982)

Class

2

Shares:

Shares

sold

...................................

548,492

$6,441,988

4,395,675

$41,408,273

Shares

issued

in

reinvestment

of

distributions

..........

541,960

6,568,551

1,804,387

16,492,099

Shares

redeemed

in-kind

(Note

9

)

...................

(13,894,850)

(162,512,778)

—

—

Shares

redeemed

...............................

(4,155,151)

(48,609,267)

(12,576,995)

(121,277,126)

Net

increase

(decrease)

..........................

(16,959,549)

$(198,111,506)

(6,376,933)

$(63,376,754)

Class

4

Shares:

Shares

sold

...................................

27,948

$336,237

102,362

$966,885

Shares

issued

in

reinvestment

of

distributions

..........

17,642

217,527

71,003

659,619

Shares

redeemed

...............................

(188,280)

(2,234,915)

(596,081)

(6,009,450)

Net

increase

(decrease)

..........................

(142,690)

$(1,681,151)

(422,716)

$(4,382,946)

Subsidiary

Affiliation

Templeton

Global

Advisors

Limited

(Global

Advisors)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-20

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Global

Advisors

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

June

30,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.835%

of

the

Fund’s

average

daily

net

assets.

b.

Administrative

Fees

Under

an

agreement

with

Global

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Global

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

per

year

of

its

average

daily

net

assets

of

each

class.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rate,

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-21

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

December

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

At

June

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

wash

sales,

foreign

currency

transactions,

EU

reclaims

and

corporate

actions.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

June

30,

2021,

aggregated

$166,932,556

and

$209,980,814,

respectively.

Sales

of

investments

excludes

in-kind

transactions

of

$193,310,984.

At

June

30,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$2,491,848

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.

    aa

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

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Growth

VIP

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$39,297,231

$(36,805,383)

$

—

$

—

$2,491,848

2,491,848

$54

Total

Affiliated

Securities

....

$—

$39,297,231

$(36,805,383)

$—

$—

$2,491,848

$54

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$5,508,986

Long

term

................................................................................

78,076,436

Total

capital

loss

carryforwards

...............................................................

$83,585,422

Cost

of

investments

..........................................................................

$356,

306

,570

Unrealized

appreciation

........................................................................

$122,181,396

Unrealized

depreciation

........................................................................

(5,304,357)

Net

unrealized

appreciation

(depreciation)

..........................................................

$116,877,039

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-22

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

6.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

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,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

9.

Redemption

In-Kind

During

the

period

ended

June

30,

2021,

the

Fund

realized

$43,506,810

of

net

gains

resulting

from

redemptions

in-kind

in

which

a

shareholder

redeemed

fund

shares

for

cash

and

securities

held

by

the

Fund.

Because

such

gains

are

not

taxable

to

the

Fund

and

are

not

distributed

to

remaining

shareholders,

they

are

reclassified

from

accumulated

net

realized

gains

to

paid-

in

capital.

10.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-23

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

A

summary

of

inputs

used

as

of

June

30,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

11.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

Level

1

Level

2

Level

3

Total

Templeton

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

9,488,852

$

—

$

9,488,852

Air

Freight

&

Logistics

...................

4,931,177

—

—

4,931,177

Airlines

..............................

5,811,815

6,606,633

—

12,418,448

Auto

Components

......................

10,000,796

6,527,287

—

16,528,083

Automobiles

..........................

—

8,943,355

—

8,943,355

Beverages

...........................

—

19,585,363

—

19,585,363

Chemicals

...........................

17,583,488

5,792,833

—

23,376,321

Consumer

Finance

.....................

8,615,918

—

—

8,615,918

Diversified

Telecommunication

Services

.....

8,509,220

—

—

8,509,220

Electric

Utilities

........................

5,085,745

—

—

5,085,745

Electrical

Equipment

....................

—

5,736,278

—

5,736,278

Electronic

Equipment,

Instruments

&

Components

........................

—

5,896,481

—

5,896,481

Entertainment

.........................

11,149,970

4,442,112

—

15,592,082

Food

&

Staples

Retailing

.................

10,820,234

—

—

10,820,234

Food

Products

........................

—

3,909,532

—

3,909,532

Health

Care

Equipment

&

Supplies

.........

18,202,341

—

—

18,202,341

Health

Care

Providers

&

Services

..........

11,263,021

7,385,470

—

18,648,491

Hotels,

Restaurants

&

Leisure

.............

22,238,290

20,421,234

—

42,659,524

Household

Durables

....................

—

18,508,139

—

18,508,139

Industrial

Conglomerates

................

4,834,255

5,552,962

—

10,387,217

Insurance

............................

—

9,545,349

—

9,545,349

IT

Services

...........................

17,268,198

8,070,492

—

25,338,690

Machinery

............................

10,355,893

12,290,261

—

22,646,154

Media

...............................

6,520,123

—

—

6,520,123

Metals

&

Mining

.......................

9,764,255

5,010,185

—

14,774,440

Multiline

Retail

........................

7,953,533

—

—

7,953,533

Multi-Utilities

..........................

2,631,726

9,475,913

—

12,107,639

Oil,

Gas

&

Consumable

Fuels

.............

9,387,395

11,908,746

—

21,296,141

Personal

Products

.....................

5,287,696

—

—

5,287,696

Pharmaceuticals

.......................

7,172,944

11,795,777

—

18,968,721

Semiconductors

&

Semiconductor

Equipment

.

7,228,178

5,343,064

—

12,571,242

Specialty

Retail

........................

16,020,653

—

—

16,020,653

Technology

Hardware,

Storage

&

Peripherals

.

—

13,968,918

—

13,968,918

Textiles,

Apparel

&

Luxury

Goods

..........

—

10,560,324

—

10,560,324

Wireless

Telecommunication

Services

.......

5,289,337

—

—

5,289,337

Short

Term

Investments

...................

2,491,848

—

—

2,491,848

Total

Investments

in

Securities

...........

$246,418,049

$226,765,560

a

$—

$473,183,609

a

Includes

foreign

securities

valued

at

$226,765,560,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

(unaudited)

TG-24

Semiannual

Report

Templeton

Growth

VIP

Fund

(continued)

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements.

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.

11.

New

Accounting

Pronouncements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TG-25

Semiannual

Report

Templeton

Growth

VIP

Fund

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

$1,640,567

of

foreign

taxes

paid

and

$7,141,814

of

foreign

source

income

earned

by

the

fund,

or

amounts

as

finally

determined,

during

the

fiscal

year

ended

December

31,

2020.

Franklin

Templeton

Variable

Insurance

Products

Trust

Index

Descriptions

I-1

Semiannual

Report

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

For

Russell

Indexes:

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Bloomberg

Barclays

1-3

Month

U.S.

Treasury

Bill

Index

measures

the

performance

of

U.S.

Treasury

bills

that

have

a

remaining

maturity

of

greater

than

or

equal

to

one

month

and

less

than

three

months.

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

measures

the

investment-grade,

U.S.

dollar-denominated,

fixed-rate

taxable

bond

market.

The

index

includes

Treasuries,

government-related

and

corporate

securities,

mortgage-backed

securities

(agency

fixed-rate

and

hybrid

adjustable-rate

mortgage

pass-throughs),

asset-backed

securities

and

commercial

mortgage-backed

securities

(agency

and

nonagency).

Bloomberg

Barclays

U.S.

Corporate

Bond

Index

measures

the

performance

of

the

investment-grade,

fixed-

rate,

taxable

corporate

bond

market.

It

includes

U.S.

dollar-

denominated

securities

publicly

issued

by

U.S.

and

non-U.S.

industrial,

utility

and

financial

issuers.

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index

measures

the

performance

of

the

U.S.

dollar-

denominated,

high-yield,

fixed-rate

corporate

bond

market.

Securities

are

classified

as

high

yield

if

the

middle

rating

of

Moody’s,

Fitch

and

Standard

&

Poor’s

is

Ba1/BB+/BB+

or

below.

Bonds

from

issuers

with

an

emerging

markets

(EM)

country

of

risk,

based

on

Barclays

EM

country

definition,

are

excluded.

Bloomberg

Barclays

U.S.

Government

-

Intermediate

Index

is

the

intermediate

component

of

the

Barclays

U.S.

Government

Index,

which

includes

public

obligations

of

the

U.S.

Treasury

with

at

least

one

year

to

final

maturity

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

Bloomberg

Barclays

U.S.

High

Yield

Very

Liquid

Index

is

a

component

of

the

U.S.

Corporate

High

Yield

Index

that

is

designed

to

track

a

more

liquid

component

of

the

U.S.

dollar-

denominated,

high-yield

fixed-rate

corporate

bond

market.

Bloomberg

Barclays

U.S.

Treasury

Index

measures

the

performance

of

U.S.

dollar-denominated,

fixed-rate,

nominal

debt

issued

by

the

U.S.

Treasury

with

at

least

one

year

until

final

maturity.

FTSE

®

EPRA

®

/NAREIT

®

Developed

Index

is

a

free

float-

adjusted

index

designed

to

measure

the

performance

of

publicly

traded

real

estate

securities

in

the

North

American,

European

and

Asian

real

estate

markets.

FTSE

World

Government

Bond

Index

measures

the

performance

of

fixed-rate,

local

currency,

investment-grade

sovereign

bonds

and

is

stated

in

U.S.

dollar

terms.

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

allocating

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

6/30/21,

there

were

375

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

6/30/21,

there

were

24

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Index

Descriptions

I-2

Semiannual

Report

MSCI

All

Country

Asia

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

equity

market

performance

in

developed

and

emerging

markets

in

Asia.

MSCI

All

Country

World

Index

(ACWI)-NR

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-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

equity

market

performance

in

global

developed

and

emerging

markets,

excluding

the

U.S.

MSCI

Emerging

Markets

(EM)

Index-NR

is

a

free

float-

adjusted,

market

capitalization-weighted

index

designed

to

measure

equity

market

performance

in

global

emerging

markets.

MSCI

Europe

Index-NR

is

a

free

float-adjusted

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

developed

markets

in

Europe.

MSCI

USA

High

Dividend

Yield

Index

is

based

on

the

MSCI

USA

Index,

its

parent

index,

and

includes

large-

and

mid-capitalization

stocks.

The

index

is

designed

to

reflect

the

performance

of

equities

in

the

parent

index

(excluding

real

estate

investment

trusts)

with

higher

dividend

income

and

quality

characteristics

than

average

dividend

yields

that

are

both

sustainable

and

persistent.

MSCI

World

ex

USA

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

equity

market

performance

in

global

developed

markets,

excluding

the

U.S.

MSCI

World

Growth

Index-NR

measures

large

and

midcap

securities

exhibiting

overall

growth

style

characteristics

across

23

developed

markets

countries.

MSCI

World

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

equity

market

performance

in

global

developed

markets.

MSCI

World

Value

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

performance

of

stocks

exhibiting

overall

value

style

characteristics

in

global

developed

markets.

Russell

1000

®

Growth

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

1000

®

Index

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates.

Russell

1000

®

Index

is

market

capitalization

weighted

and

measures

the

performance

of

the

approximately

1,000

largest

companies

in

the

Russell

3000

®

Index,

which

represents

the

majority

of

the

U.S.

market’s

total

capitalization.

Russell

1000

®

Value

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

1000

®

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

rates.

Russell

2000

®

Index

is

market

capitalization

weighted

and

measures

the

performance

of

the

approximately

2,000

smallest

companies

in

the

Russell

3000

®

Index

that

represent

a

small

amount

of

the

total

market

capitalization

of

the

Russell

3000

®

Index.

Russell

2000

®

Value

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

2000

®

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

rates.

Russell

2500

TM

Index

is

market

capitalization

weighted

and

measures

the

performance

of

the

approximately

2,500

smallest

companies

in

the

Russell

3000

Index

®

that

represent

a

modest

amount

of

the

Russell

3000

®

Index’s

total

market

capitalization.

Russell

3000

®

Growth

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

3000

®

Index

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates.

Russell

3000

®

Index

is

market

capitalization

weighted

and

measures

the

performance

of

the

largest

3,000

U.S.

companies

representing

the

majority

of

the

U.S.

market’s

total

capitalization.

Russell

Midcap

®

Growth

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

Midcap

®

Index

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates.

Russell

Midcap

®

Index

is

market

capitalization

weighted

and

measures

the

performance

of

the

approximately

800

smallest

companies

in

the

Russell

1000

®

Index

that

represent

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-1

Semiannual

Report

Board

Approval

of

Investment

Management

Agreements

FRANKLIN

TEMPLETON

VARIABLE

INSURANCE

PRODUCTS

TRUST

Franklin

Allocation

VIP

Fund

Franklin

Flex

Cap

Growth

VIP

Fund

Franklin

Global

Real

Estate

VIP

Fund

Franklin

Growth

and

Income

VIP

Fund

Franklin

Income

VIP

Fund

Franklin

Large

Cap

Growth

VIP

Fund

Franklin

Mutual

Global

Discovery

VIP

Fund

Franklin

Mutual

Shares

VIP

Fund

Franklin

Rising

Dividends

VIP

Fund

Franklin

Small

Cap

Value

VIP

Fund

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Franklin

Strategic

Income

VIP

Fund

Franklin

U.S.

Government

Securities

VIP

Fund

Franklin

VolSmart

Allocation

VIP

Fund

Templeton

Developing

Markets

VIP

Fund

Templeton

Foreign

VIP

Fund

Templeton

Global

Bond

VIP

Fund

Templeton

Growth

VIP

Fund

(each

a

Fund)

At

a

meeting

held

on

April

20,

2021

(Meeting),

the

Board

of

Trustees

(Board)

of

Franklin

Templeton

Variable

Insurance

Products

Trust

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

(i)

investment

management

agreement

between

Franklin

Advisers,

Inc.

(FAI)

and

the

Trust,

on

behalf

of

each

of

Franklin

Allocation

VIP

Fund,

Franklin

Flex

Cap

Growth

VIP

Fund,

Franklin

Growth

and

Income

VIP

Fund,

Franklin

Income

VIP

Fund,

Franklin

Large

Cap

Growth

VIP

Fund,

Franklin

Rising

Dividends

VIP

Fund,

Franklin

Small-Mid

Cap

Growth

VIP

Fund,

Franklin

Strategic

Income

VIP

Fund,

Franklin

U.S.

Government

Securities

VIP

Fund,

Franklin

VolSmart

Allocation

VIP

Fund,

and

Templeton

Global

Bond

VIP

Fund;

(ii)

the

investment

sub-advisory

agreement

between

FAI

and

Franklin

Templeton

Institutional,

LLC

(FTIL),

an

affiliate

of

FAI,

on

behalf

of

Franklin

Allocation

VIP

Fund;

(iii)

the

investment

sub-advisory

agreement

between

FAI

and

Templeton

Global

Advisors

Limited

(TGAL),

an

affiliate

of

FAI,

on

behalf

of

Franklin

Allocation

VIP

Fund;

(iv)

the

investment

management

agreement

between

FTIL

and

the

Trust,

on

behalf

of

Franklin

Global

Real

Estate

VIP

Fund;

(v)

the

investment

management

agreement

between

Franklin

Mutual

Advisers,

LLC

(FMA)

and

the

Trust,

on

behalf

of

each

of

Franklin

Mutual

Global

Discovery

VIP

Fund,

Franklin

Mutual

Shares

VIP

Fund

and

Franklin

Small

Cap

Value

VIP

Fund;

(vi)

the

investment

management

agreement

between

Templeton

Asset

Management

Ltd.

(TAML)

and

the

Trust,

on

behalf

of

Templeton

Developing

Markets

VIP

Fund;

(vii)

the

investment

sub-advisory

agreement

between

TAML

and

Franklin

Templeton

Investment

Management

Ltd.

(FTIML),

on

behalf

of

Templeton

Developing

Markets

VIP

Fund;

(viii)

the

investment

management

agreement

between

Templeton

Investment

Counsel,

LLC

(TICL)

and

the

Trust,

on

behalf

of

Templeton

Foreign

VIP

Fund;

and

(ix)

the

investment

management

agreement

between

TGAL

and

the

Trust,

on

behalf

of

Templeton

Growth

VIP

Fund

(each

a

Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

Although

the

Management

Agreements

for

the

Funds

were

considered

at

the

same

Board

meeting,

the

Board

considered

the

information

provided

to

it

about

the

Funds

together

and

with

respect

to

each

Fund

separately

as

the

Board

deemed

appropriate.

FAI,

FTIL,

FTIML,

FMA,

TAML,

TICL

and

TGAL

are

each

referred

to

herein

as

a

Manager.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

each

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

each

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

telephonic

contract

renewal

meeting

at

which

the

Independent

Trustees

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters

and,

in

some

cases,

requested

additional

information

from

the

Managers

relating

to

the

contract.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

each

Manager;

(ii)

the

investment

performance

of

each

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

each

Manager

and

its

affiliates

from

the

relationship

with

each

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

each

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-2

Semiannual

Report

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

best

interests

of

the

applicable

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

each

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

each

Manager;

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

each

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

each

Manager

and

its

affiliates;

and

management

fees

charged

by

each

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Funds

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-

party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Funds.

The

Board

noted

management’s

continuing

efforts

and

expenditures

in

establishing

effective

business

continuity

plans

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

such

as

cybersecurity

in

the

current

work-from-home

environment

and

liquidity

risk

management.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Managers’

parent,

and

its

commitment

to

the

mutual

fund

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Funds

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

enhancing

services

and

controlling

costs,

as

reflected

in

its

outsourcing

of

certain

administrative

functions,

and

growth

opportunities,

as

evidenced

by

its

recent

acquisition

of

the

Legg

Mason

companies.

The

Board

also

noted

FT’s

attention

focused

on

expanding

the

distribution

opportunities

for

all

funds

in

the

FT

family

of

funds.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

each

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

each

Fund

over

various

time

periods

ended

January

31,

2021.

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

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

each

Fund’s

performance

results

is

below.

Franklin

Allocation

VIP

Fund,

Franklin

Income

VIP

Fund,

Franklin

Strategic

Income

VIP

Fund,

Franklin

U.S.

Government

Securities

VIP

Fund

and

Templeton

Global

Bond

VIP

Fund

-

The

Performance

Universe

for

the

Franklin

Allocation

VIP

Fund

included

the

Fund

and

all

mixed-asset

target

allocation

growth

funds

underlying

variable

insurance

products

(VIPs).

The

Performance

Universe

for

the

Franklin

Income

VIP

Fund

included

the

Fund

and

all

flexible

portfolio

funds

underlying

VIPs.

The

Performance

Universe

for

the

Franklin

Strategic

Income

VIP

Fund

included

the

Fund

and

all

multi-sector

income

funds

underlying

VIPs.

The

Performance

Universe

for

the

Franklin

U.S.

Government

Securities

VIP

Fund

included

the

Fund

and

all

intermediate

US

government

funds

underlying

VIPs.

The

Performance

Universe

for

the

Templeton

Global

Bond

VIP

Fund

included

the

Fund

and

all

global

income

funds

underlying

VIPs.

The

Board

noted

that

each

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

respective

Performance

Universe.

The

Board

also

noted

that

each

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

respective

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

each

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-3

Semiannual

Report

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

The

Board

concluded

that

each

Fund’s

performance

was

satisfactory.

Franklin

Growth

and

Income

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

equity

income

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

income

return

and

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

were

above

the

medians

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Flex

Cap

Growth

VIP

Fund

and

Franklin

Small-Mid

Cap

Growth

VIP

Fund

-

The

Performance

Universe

for

the

Franklin

Flex

Cap

Growth

VIP

Fund

included

the

Fund

and

all

large-cap

growth

funds

underlying

VIPs.

The

Performance

Universe

for

the

Franklin

Small-Mid

Cap

Growth

VIP

Fund

included

the

Fund

and

all

mid-cap

growth

funds

underlying

VIPs.

The

Board

noted

that

each

Fund’s

annualized

total

return

for

the

ten-year

period

was

below

the

median

of

its

respective

Performance

Universe,

but

for

the

one-,

three-

and

five-year

periods

was

above

the

median

of

its

respective

Performance

Universe.

The

Board

further

noted

that

it

had

approved

at

its

February

2021

Board

meeting

various

changes

to

the

Franklin

Flex

Cap

Growth

VIP

Fund

expected

to

be

effective

May

1,

2021,

including,

among

other

things,

changing

the

Fund’s

name,

investment

strategy,

and

primary

benchmark.

The

Board

concluded

that

each

Fund’s

performance

was

satisfactory.

Franklin

Global

Real

Estate

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

global

real

estate

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-

and

five-year

periods

was

below

the

median

of

its

Performance

Universe,

but

for

the

10-year

period

was

above

the

median

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

management

and

management

explained

that,

effective

September

3,

2019,

a

change

was

made

to

the

Fund’s

portfolio

management.

Management

represented

that

since

this

change

in

the

Fund’s

portfolio

management

team

relative

Fund

performance

has

generally

been

positive,

outperforming

the

Fund’s

benchmark

by

approximately

150

basis

points.

Management

explained

that

the

Fund’s

relative

performance

lagged

that

of

peers

due

to

the

Fund’s

focus

on

sustainable

cash

flow

growth

at

a

time

when

the

market

returned

to

a

focus

on

value

post

the

favorable

news

regarding

vaccine

results

in

mid-November.

Management

further

explained

that

key

detractors

that

contributed

to

the

Fund’s

one-year

underperformance

included

the

Fund’s

exposure

to

technology-adjacent

subsectors

such

as

logistics

and

cellular

towers,

which

outperformed

prior

to

the

favorable

vaccine

news,

but

underperformed

thereafter.

Management

reviewed

with

the

Board

the

enhancements

to

the

Fund’s

investment

processes

in

an

effort

to

improve

performance,

which

included

making

specific

portfolio

holding

changes.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

and

management’s

efforts

should

continue

to

be

closely

monitored.

Franklin

Large

Cap

Growth

VIP

Fund

and

Templeton

Developing

Markets

VIP

Fund

-

The

Performance

Universe

for

the

Franklin

Large

Cap

Growth

VIP

Fund

included

the

Fund

and

all

multi-cap

growth

funds

underlying

VIPs.

The

Performance

Universe

for

the

Templeton

Developing

Markets

VIP

Fund

included

the

Fund

and

all

emerging

markets

funds

underlying

VIPs.

The

Board

noted

that

each

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

respective

Performance

Universe.

The

Board

concluded

that

each

Fund’s

performance

was

satisfactory.

Franklin

Mutual

Global

Discovery

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

global

multi-cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-

and

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

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

further

explained

that

the

Fund

is

one

of

the

few

funds

in

its

Performance

Universe

that

hedges

exposures

to

non-US

currencies

which

detracted

81

basis

points

from

the

Fund’s

performance

relative

to

its

benchmark

index,

the

MSCI

World

Value

Index

-

NR,

in

2020.

Management

also

explained

that

key

detractors

from

the

Fund’s

one-year

performance

included

the

Fund’s

stock

selection

in

the

financials

and

industrials

sectors

and

the

Fund’s

underweight

position

in

the

industrials

sector.

Management

reviewed

with

the

Board

recent

leadership

changes

implemented

for

the

Manager,

as

well

as

enhancements

made

to

the

Fund’s

investment

processes

in

an

effort

to

improve

performance.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

and

management’s

efforts

should

continue

to

be

closely

monitored.

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-4

Semiannual

Report

Franklin

Mutual

Shares

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

multi-cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

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

also

explained

that

the

Fund’s

underweight

position

in

US

securities

as

compared

to

its

peers

detracted

from

the

Fund’s

relative

performance.

Management

further

explained

that

key

detractors

from

the

Fund’s

one-year

performance

included

the

Fund’s

stock

selection

in

the

financials

and

industrials

sectors

and

the

Fund’s

underweight

position

in

the

industrials

sector.

Management

reviewed

with

the

Board

recent

leadership

changes

implemented

for

the

Manager,

as

well

as

enhancements

made

to

the

Fund’s

investment

processes

in

an

effort

to

improve

performance.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

and

management’s

efforts

should

continue

to

be

closely

monitored.

Franklin

Rising

Dividends

VIP

Fund

-

The

Performance

Universe

for

the

Franklin

Rising

Dividends

VIP

Fund

included

the

Fund

and

all

large-cap

core

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe,

but

for

the

one-year

period

was

below

the

median

of

its

Performance

Universe.

The

Board

further

noted

that,

while

below

the

median,

the

Fund’s

one-year

annualized

total

return

was

14.22%

and

only

slightly

below

the

Performance

Universe

median

of

14.79%.

The

Board

concluded

that

the

Fund’s

performance

was

acceptable.

Franklin

Small

Cap

Value

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

small-

cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe,

but

for

the

one-year

period

was

below

the

median

of

its

Performance

Universe.

The

Board

further

noted

that,

while

below

the

median,

the

Fund’s

one-year

annualized

total

return

was

11.47%.

The

Board

concluded

that

the

Fund’s

performance

was

acceptable.

Franklin

VolSmart

Allocation

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

flexible

portfolio

funds

underlying

VIPs.

The

Board

noted

that

the

Fund

incepted

on

April

1,

2013

and

has

been

in

operation

for

less

than

10

years.

The

Board

further

noted

that

its

annualized

total

return

for

the

one-,

three-

and

five-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Templeton

Foreign

VIP

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

international

multi-

cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

management

and

management

explained

that

the

Fund

has

a

more

intense

value

tilt

than

the

Performance

Universe,

which

has

negatively

impacted

the

Fund’s

relative

returns

during

a

period

of

historic

and

sustained

outperformance

of

growth

over

value.

Management

further

explained

that

the

Fund’s

shorter-term

relative

returns

were

also

negatively

impacted

by

the

Fund’s

larger

allocation

to

the

energy

sector

versus

peers,

which

underperformed

the

broader

market.

Management

also

explained

that

the

Fund’s

one-year

relative

underperformance

was

primarily

attributable

to

the

Fund’s

health

care

holdings.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken

in

an

effort

to

address

the

sources

of

the

Fund’s

underperformance,

including

enhancements

to

the

Fund’s

portfolio

management

team

and

a

focus

on

constructing

a

more

diversified

and

high-conviction

portfolio.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

and

management’s

efforts

should

continue

to

be

closely

monitored.

Templeton

Growth

VIP

Fund

-

The

Performance

Universe

for

this

Fund

included

the

Fund

and

all

global

multi-cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe,

but

for

the

one-year

period

was

above

the

median

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

management

and

management

explained

that

the

Fund’s

higher

exposure

to

value

stocks,

which

have

experienced

a

period

of

historic

underperformance,

and

underweight

position

in

US

stocks,

which

have

led

market

returns

in

recent

years,

contributed

to

the

Fund’s

relative

longer-term

underperformance

versus

its

Performance

Universe.

Management

also

explained

that

weightings

in

particular

sectors

(such

as

consumer

discretionary,

energy,

financials,

information

technology

and

health

care)

and

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-5

Semiannual

Report

overall

stock

selection

contributed

to

the

Fund’s

relative

underperformance.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken/have

been

taken

in

an

effort

to

address

the

sources

of

the

Fund’s

underperformance,

including

enhancements

to

the

Fund’s

portfolio

management

team

and

a

focus

on

constructing

a

more

diversified

and

high-conviction

portfolio.

The

Board

noted

that

the

Fund’s

one-year

annualized

total

return

was

6.84%

and

in

the

second

quintile

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

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

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

each

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

Franklin

Allocation

VIP

Fund,

Franklin

Growth

and

Income

VIP

Fund,

Franklin

Income

VIP

Fund,

Franklin

Small

Cap

Value

VIP

Fund

and

Templeton

Global

Bond

VIP

Fund

–

The

Expense

Group

for

the

Franklin

Allocation

VIP

Fund

included

the

Fund

and

10

other

mixed-asset

target

allocation

growth

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

Growth

and

Income

VIP

Fund

included

the

Fund

and

12

other

equity

income

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

Income

VIP

Fund

included

the

Fund

and

10

other

flexible

portfolio

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

Small

Cap

Value

VIP

Fund

included

the

Fund

and

10

other

small-cap

value

funds

underlying

VIPs.

The

Expense

Group

for

the

Templeton

Global

Bond

VIP

Fund

included

the

Fund

and

11

other

global

income

funds

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

each

Fund

were

below

the

medians

of

its

respective

Expense

Group.

The

Board

also

noted

that

the

Franklin

Allocation

VIP

Fund

and

Franklin

Growth

and

Income

VIP

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

In

doing

so,

the

Board

noted

that

the

Franklin

Allocation

VIP

Fund’s

sub-advisers,

FTIL

and

TGAL,

are

paid

by

FAI

out

of

the

management

fee

FAI

receives

from

the

Fund.

Franklin

Small-Mid

Cap

Growth

VIP

Fund

and

Franklin

U.S.

Government

Securities

VIP

Fund

-

The

Expense

Group

for

the

Franklin

Small-Mid

Cap

Growth

VIP

Fund

included

the

Fund

and

11

other

mid-cap

growth

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

U.S.

Government

Securities

VIP

Fund

included

the

Fund,

two

other

intermediate

US

government

funds

underlying

VIPs

and

10

inflation-protected

bond

funds

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

for

each

Fund

was

below

the

median

of

its

respective

Expense

Group,

and

the

actual

total

expense

ratio

for

each

Fund

was

equal

to

the

median

of

its

respective

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

Franklin

Rising

Dividends

VIP

Fund

-

The

Expense

Group

for

the

Fund

included

the

Fund

and

12

other

large-cap

core

funds

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

for

the

Fund

was

equal

to

the

median

of

its

Expense

Group,

and

the

actual

total

expense

ratio

for

the

Fund

was

below

the

median

of

its

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Franklin

Large

Cap

Growth

VIP

Fund

and

Franklin

VolSmart

Allocation

VIP

Fund

-

The

Expense

Group

for

the

Franklin

Large

Cap

Growth

VIP

Fund

included

the

Fund

and

10

other

multi-cap

growth

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

VolSmart

Allocation

VIP

Fund

included

the

Fund,

three

other

flexible

portfolio

funds

underlying

VIPs,

and

one

mixed-asset

target

allocation

growth

fund

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

for

each

Fund

was

equal

to

the

median

of

its

respective

Expense

Group,

and

the

actual

total

expense

ratio

for

each

Fund

was

above

the

median

of

its

respective

Expense

Group.

The

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-6

Semiannual

Report

Board

also

noted

that

the

Franklin

VolSmart

Allocation

VIP

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

Franklin

Flex

Cap

Growth

VIP

Fund

and

Templeton

Foreign

VIP

Fund

-

The

Expense

Group

for

the

Franklin

Flex

Cap

Growth

VIP

Fund

included

the

Fund

and

12

other

large-

cap

growth

funds

underlying

VIPs.

The

Expense

Group

for

the

Templeton

Foreign

VIP

Fund

included

the

Fund,

seven

other

international

multi-cap

value

funds

underlying

VIPs

and

five

international

large-cap

value

funds

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

for

each

Fund

was

above

the

median

of

its

respective

Expense

Group,

but

its

actual

total

expense

ratio

was

below

the

median

of

its

respective

Expense

Group.

The

Board

further

noted

that

the

Management

Rate

for

the

Templeton

Foreign

VIP

Fund

was

approximately

six

basis

points

above

the

median

of

its

Expense

Group

and

that

the

Franklin

Flex

Cap

Growth

VIP

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management.

The

Board

also

noted

that,

in

connection

with

the

changes

discussed

above

that

are

expected

to

be

made

to

the

Franklin

Flex

Cap

Growth

VIP

Fund,

the

Fund

would

experience

a

reduction

in

its

Management

Rate.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

Franklin

Global

Real

Estate

VIP

Fund,

Franklin

Mutual

Global

Discovery

VIP

Fund,

Franklin

Mutual

Shares

VIP

Fund,

Franklin

Strategic

Income

VIP

Fund,

Templeton

Developing

Markets

VIP

Fund

and

Templeton

Growth

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

Mutual

Global

Discovery

VIP

Fund

included

the

Fund,

one

other

global

multi-cap

value

fund

underlying

VIPs,

three

global

multi-cap

core

funds

underlying

VIPs,

and

four

global

multi-cap

growth

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

Mutual

Shares

VIP

Fund

included

the

Fund

and

12

other

multi-cap

value

funds

underlying

VIPs.

The

Expense

Group

for

the

Franklin

Strategic

Income

VIP

Fund

included

the

Fund

and

11

other

multi-sector

income

funds

underlying

VIPs.

The

Expense

Group

for

the

Templeton

Developing

Markets

VIP

Fund

included

the

Fund

and

14

other

emerging

markets

funds

underlying

VIPs.

The

Expense

Group

for

the

Templeton

Growth

VIP

Fund

included

the

Fund,

one

other

global

multi-

cap

fund

underlying

VIPs,

three

global

multi-cap

core

funds

underlying

VIPs,

and

four

global

multi-cap

growth

funds

underlying

VIPs.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

each

Fund

was

above

the

median

of

its

respective

Expense

Group.

With

respect

to

the

Franklin

Global

Real

Estate

VIP

Fund,

the

Board

noted

management’s

explanation

that

the

Fund

was

the

second

smallest

fund

in

its

Expense

Group

and

had

experienced

declining

assets

under

management

resulting

in

higher

other

expenses.

The

Board

then

noted

that

the

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management

and

that

management

agreed

to

decrease

the

current

expense

cap

on

the

Fund’s

total

annual

operating

expenses

from

1.00%

to

0.90%,

effective

May

1,

2021.

With

respect

to

the

Franklin

Mutual

Global

Discovery

VIP

Fund,

the

Board

noted

management’s

explanation

that

the

portfolio

management

team

makes

investments

in

the

debt

and

equity

of

distressed

companies

and

merger

arbitrage

securities

that

are

specialized

in

nature

and

therefore

require

additional

expertise

and

resources,

whereas

the

Fund’s

Expense

Group

generally

does

not

make

such

investments.

With

respect

to

the

Franklin

Mutual

Shares

VIP

Fund,

the

Board

noted

that

the

Fund’s

Management

Rate

and

actual

total

expense

ratio

were

each

less

than

3

basis

points

above

the

respective

median

of

the

Fund’s

Expenses

Group.

With

respect

to

the

Franklin

Strategic

Income

VIP

Fund,

the

Board

noted

that

the

Fund’s

Management

Rate

and

actual

total

expense

ratio

were

less

than

2

basis

points

and

5

basis

points,

respectively,

above

the

applicable

median

of

the

Fund’s

Expenses

Group.

With

respect

to

the

Templeton

Developing

Markets

VIP

Fund,

the

Board

noted

that

the

Fund’s

Management

Rate

was

three

basis

points

and

the

Fund’s

actual

total

expense

ratio

was

less

than

three

basis

points

above

the

respective

median

of

the

Fund’s

Expenses

Group.

With

respect

to

the

Templeton

Growth

VIP

Fund,

the

Board

noted

management’s

explanation

that

the

Fund’s

total

expense

ratio

is

above

median

due

to

the

depth

of

the

Fund’s

fundamental

research

process

which

includes

extensive

fundamental

research

to

model

a

company’s

potential

future

earnings,

cash

flow,

and

asset

value

relative

to

its

stock

price.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

In

doing

so,

the

Board

noted

that

the

Templeton

Developing

Markets

VIP

Fund’s

sub-adviser

is

paid

by

TAML

out

of

the

management

fee

TAML

receives

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

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2020,

being

the

most

recent

fiscal

year-end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-7

Semiannual

Report

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.

The

Board

further

noted

management’s

representation

that

the

profitability

analysis

excluded

the

impact

of

the

recent

acquisition

of

the

Legg

Mason

companies

and

that

management

expects

to

incorporate

the

legacy

Legg

Mason

companies

into

the

profitability

analysis

beginning

next

year.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

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.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

up-front

expenditures

by

the

Managers

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Funds,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

each

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

each

Manager

and

its

affiliates

from

providing

services

to

each

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

each

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

each

Manager

may

realize

economies

of

scale,

if

any,

as

each

Fund

grows

larger

and

whether

each

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints

for

each

Fund

(except

for

the

Franklin

Allocation

VIP

Fund

and

the

Franklin

VolSmart

Allocation

VIP

Fund),

which

operate

generally

to

share

any

economies

of

scale

with

a

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

management’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

each

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

each

Manager

and

its

affiliates,

each

Fund’s

management

fee

structure

(except

for

the

Franklin

Allocation

VIP

Fund

and

the

Franklin

VolSmart

Allocation

VIP

Fund)

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

The

Board

recognized

that

there

would

not

likely

be

any

economies

of

scale

for

the

Franklin

Flex

Cap

Growth

VIP

Fund,

Franklin

Global

Real

Estate

VIP

Fund,

Franklin

Growth

and

Income

VIP

Fund,

Franklin

Large

Cap

Growth

VIP

Fund

and

Franklin

VolSmart

Allocation

VIP

Fund

until

each

Fund’s

assets

grow.

The

Board

also

recognized

that

given

the

decline

in

assets

over

the

past

three

calendar

years

for

each

of

the

Franklin

Allocation

VIP

Fund,

Franklin

Income

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

Strategic

Income

VIP

Fund,

Franklin

U.S.

Government

Securities

VIP

Fund,

Templeton

Foreign

VIP

Fund,

Templeton

Global

Bond

VIP

Fund

and

Templeton

Growth

VIP

Fund,

these

Funds

are

not

expected

to

experience

additional

economies

of

scale

in

the

foreseeable

future.

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

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

Liquidity

Risk

Management

Program-

Funds

no

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-8

Semiannual

Report

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

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.

VIP1

S

08/21

©

2021

Franklin

Templeton

Investments.

All

rights

reserved.

Franklin

Templeton

Variable

Insurance

Products

Trust

(FTVIP)

shares

are

not

offered

to

the

public;

they

are

offered

and

sold

only

to:

(1)

insurance

company

separate

accounts

(Separate

Account)

to

serve

as

the

underlying

investment

vehicle

for

variable

contracts;

(2)

certain

qualified

plans;

and

(3)

other

mutual

funds

(funds

of

funds).

Authorized

for

distribution

to

investors

in

Separate

Accounts

only

when

accompanied

or

preceded

by

the

current

prospectus

for

the

applicable

contract,

which

includes

the

Separate

Account

and

the

FTVIP

prospectuses.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

The

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

Franklin

Templeton

Variable

Insurance

Products

Trust

Investment

Managers

Fund

Administrator

Distributor

Franklin

Advisers,

Inc.

Franklin

Mutual

Advisers,

LLC

Franklin

Templeton

Institutional,

LLC

Templeton

Asset

Management

Ltd.

Templeton

Global

Advisors

Limited

Templeton

Investment

Counsel,

LLC

Franklin

Templeton

Services,

LLC

Franklin

Distributors,

LLC

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services.             N/A  

Item 5. Audit Committee

of Listed Registrants.             

N/A

Item 6. Schedule of Investments.                           

N/A

Item 7

. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.              N/A

Item 8

. Portfolio Managers of Closed-End Management Investment Companies.                                              N/A

Item 9

. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.       N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a)   Evaluation

of Disclosure Controls and Procedures

.  The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls

.  There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12

. Disclosure of Securities Lending Activities for Closed-End    Management Investment Company.                    N/A

Item 13. Exhibits.

(a)(1)

Code of Ethics

codeofethics

(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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

section302

(b)

Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Franklin Templeton Variable Insurance Products Trust

By S\Matthew T. Hinkle__________________________

     Matthew T. Hinkle

     Chief Executive Officer - Finance and Administration

Date August 25, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By S\Matthew T. Hinkle____________________________

     Matthew T. Hinkle

     Chief Executive Officer - Finance and Administration

Date August 25, 2021

By S\Robert G. Kubilis_______________________________

     Robert G. Kubilis

     Chief Financial Officer and Chief Accounting Officer

Date August 25, 2021

EX-99.CODE ETH

Code of Ethics for Principal Executives & Senior Financial Officers

  Procedures   Revised December 19, 2014

FRANKLIN TEMPLETON FUNDS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVES AND SENIOR FINANCIAL OFFICERS

I.Covered Officers and Purpose of theCode

This code of ethics (the "Code") applies to the Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer (the "Covered Officers," each of whom is set forth in Exhibit A) of each investment company advised by a Franklin Resources subsidiary and that is registered with the United States Securities & Exchange Commission (“SEC”) (collectively, "FT Funds") for the purpose of promoting:

·

Honest and ethical conduct, including the ethical resolution of actual or apparent conflicts of interest between personal and professionalrelationships;

·

Full, fair, accurate, timely and understandable disclosure in reports and documentsthat a registrant files with, or submits to, the SEC and in other public communications made by or on behalf of the FTFunds;

·

Compliance with applicable laws and governmental rules andregulations;

·

The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code;and

·

Accountability for adherence to theCode.

Each Covered Officer will be expected to adhere to a high standard of business ethics and must be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

*

Rule38a-1underthe InvestmentCompanyActof1940(“1940Act”)andRule206(4)-7undertheInvestmentAdvisersActof 1940 (“Advisers Act”) (together the “Compliance Rule”) require registered investment companies and registered investment advisers to, among other things, adopt and implement written policies and procedures reasonably designed to prevent violations of the federal securities laws (“Compliance Rule Policies andProcedures”).

CONFIDENTIAL INFORMATION. This document is the proprietary product of Franklin Templeton Investments. It may NOT be distributed outside the company unless it is made subject to a non-disclosure agreement and/or such release receives authorization by an FTI Chief Compliance Officer. Any unauthorized use, reproduction or transfer of this document is strictly prohibited. Franklin Templeton Investments © 2014. All RightsReserved.

II.Other Policies andProcedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.

Franklin Resources, Inc. has separately adopted the Code of Ethics and Business Conduct (“Business Conduct”), which is applicable to all officers, directors and employees of Franklin Resources, Inc., including Covered Officers. It summarizes the values, principles and business practices that guide the employee’s business conduct and also provides a set of basic principles to guide officers, directors and employees regarding the minimum ethical requirements expected of them. It supplements the values, principles and business conduct identified in the Code and other existing employeepolicies.

Additionally, the Franklin Templeton Funds have separately adopted the FTI Personal Investments and Insider Trading Policy governing personal securities trading and other related matters. The Code for Insider Trading provides for separate requirements that apply to the Covered Officers and others, and therefore is not part of this Code.

Insofar as other policies or procedures of Franklin Resources, Inc., the Funds, the Funds’ adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. Please review these other documents or consult with the Legal Department if have questions regarding the applicability of these policies toyou.

III.Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the FT Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of apposition with the FT Funds.

Certain conflicts of interest arise out of the relationships between Covered Officers and the FT Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the FT Funds because of their status as "affiliated persons" of the FT Funds. The FT Funds’ and the investment advisers’ compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the FT Funds, the investment advisers and the fund administrator of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the FT Funds, for the adviser, the administrator, or

2

for all three), be involved in establishing policies and implementing decisions that will have different effects on the adviser, administrator and the FT Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the FT Funds, the adviser, and the administrator and is consistent with the performance by the Covered Officers of their duties as officers of the FT Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the FT Funds' Boards of Directors ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the FT Funds.

Each Covered Officer must:

·

Not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the FT Funds whereby the CoveredOfficer would benefit personally to the detriment of the FTFunds;

·

Not cause the FT Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the FTFunds;

·

Not retaliate against any other Covered Officer or any employee of the FT Funds or their affiliated persons for reports of potential violations that are made in goodfaith;

·

Report at least annually the following affiliations or otherrelationships:

1

o

all directorships for public companies and all companies that are required to file reports with theSEC;

o

any direct or indirect business relationship with any independent directors ofthe FTFunds;

o

any direct or indirect business relationship with any independent public accounting firm (which are not related to the routine issues related to thefirm’s service as the Covered Persons accountant);and

o

any direct or indirect interest in any transaction with any FT Fund that will benefit the officer (not including benefits derived from the advisory, sub-advisory, distribution or service agreements with affiliates of FranklinResources).

These reports will be reviewed by the Legal Department for compliance with the Code.

There are some conflict of interest situations that should always be approved in writing by Franklin Resources General Counsel or Deputy General Counsel, if material. Examples of these include

2

:

·

Service as a director on the board of any public or privateCompany.

1

ReportingoftheseaffiliationsorotherrelationshipsshallbemadebycompletingtheannualDirectorsandOfficersQuestionnaire and returning the questionnaire to Franklin Resources Inc, General Counsel or Deputy GeneralCounsel.

2

AnyactivityorrelationshipthatwouldpresentaconflictforaCovered OfficermayalsopresentaconflictfortheCovered Officer

if a member of the Covered Officer's immediate family engages in such an activity or has such a relationship. The Cover Person should also obtain written approval by FT’s General Counsel in such situations.

3

·

The receipt of any gifts in excess of $100 from any person, from any corporationor association.

·

The receipt of any entertainment from any Company with which the FT Funds has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raiseany question of impropriety. Notwithstanding the foregoing, the Covered Officers must obtain prior approval from the Franklin Resources General Counsel for any entertainment with a value in excess of$1000.

·

Any ownership interest in, or any consulting or employment relationship with, any ofthe FT Fund’s service providers, other than an investment adviser, principal underwriter, administrator or any affiliated personthereof.

·

A direct or indirect financial interest in commissions, transaction charges or spreads paid by the FT Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equityownership.

·

Franklin Resources General Counsel or Deputy General Counsel will provide a reportto the FT Funds Audit Committee of any approvals granted at the next regularly scheduled meeting.

IV.Disclosure andCompliance

·

Each Covered Officer should familiarize himself with the disclosurerequirements generally applicable to the FTFunds;

·

Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the FT Funds to others, whether within or outside the FT Funds, including to the FT Funds’ directors and auditors, and to governmentalregulators and self-regulatoryorganizations;

·

Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the FT Funds, the FT Fund’s adviser and the administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the FT Funds file with, or submit to, the SEC and in other public communications made by the FT Funds;and

·

It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules andregulations.

V.Reporting and Accountability

Each Covered Officer must:

·

Upon becoming a covered officer affirm in writing to the Board that he or she has received, read, and understands the Code (see ExhibitB);

·

Annually thereafter affirm to the Board that he has complied with the requirements ofthe Code;and

·

Notify Franklin Resources’ General Counsel or Deputy General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself is a violation ofthis

4

Code.

Franklin Resources’ General Counsel and Deputy General Counsel are responsible for applying this Code to specific situations in which questions are presented under it and have the authority to interpret this Code in any particular situation.

3

However, the Independent Directors of the respective FT Funds will consider any approvals or waivers

4

sought by any Chief Executive Officers of the Funds.

The FT Funds will follow these procedures in investigating and enforcing this Code:

·

Franklin Resources General Counsel or Deputy General Counsel will take allappropriate action to investigate any potential violations reported to the LegalDepartment;

·

If, after such investigation, the General Counsel or Deputy General Counsel believes that no violation has occurred, The General Counsel is not required to take anyfurther action;

·

Any matter that the General Counsel or Deputy General Counsel believes is aviolation will be reported to the Independent Directors of the appropriate FTFund;

·

If the Independent Directors concur that a violation has occurred, it will inform and make a recommendation to the Board of the appropriate FT Fund or Funds, which willconsider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the CoveredOfficer;

·

The Independent Directors will be responsible for granting waivers, as appropriate;and

·

Any changes to or waivers of this Code will, to the extent required, are disclosedas provided by SECrules.

5

VI.Other Policies andProcedures

This Code shall be the sole code of ethics adopted by the FT Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the FT Funds, the FT Funds' advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The FTI Personal Investments and Insider Trading Policy, adopted by the FT Funds, FT investment advisers and FT Fund’s principal underwriter pursuant to Rule 17j-1 under the Investment Company Act, the Code of Ethics and Business Conduct and more detailed policies and procedures set forth in FT’s Employee Handbook are separate requirements applying to the Covered Officers and others, and are not part of thisCode.

3

FranklinResourcesGeneralCounselandDeputyGeneralCounselareauthorizedtoconsult,asappropriate,withmembersofthe AuditCommittee, counseltotheFTFundsandcounseltotheIndependentDirectors,andareencouragedtodoso.

4

Item2ofFormN-CSRdefines"waiver"as"theapprovalbytheregistrantofamaterialdeparturefromaprovisionofthecodeof

ethics" and "implicit waiver," which must also be disclosed, as "the registrant's failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer" of the registrant. See Part X.

5

See PartX.

VII.Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the FT Funds’ Board including a majority of independent directors.

VIII.Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the FT Funds’ Board and their counsel.

IX.InternalUse

The Code is intended solely for the internal use by the FT Funds and does not constitute an admission, by or on behalf of any FT Funds, as to any fact, circumstance, or legal conclusion.

X.Disclosure on FormN-CSR

Item 2 of Form N-CSR requires a registered management investment company to disclose annually whether, as of the end of the period covered by the report, it has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these officers are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, it must explain why it has not done so.

The registrant must also: (1) file with the SEC a copy of the code as an exhibit to its annual report; (2) post the text of the code on its Internet website and disclose, in its most recent report on Form N-CSR, its Internet address and the fact that it has posted the code on its Internet website; or (3) undertake in its most recent report on Form N-CSR to provide to any person without charge, upon request, a copy of the code and explain the manner in which such request may be made. Disclosure is also required of amendments to, or waivers (including implicit waivers) from, a provision of the code in the registrant's annual report on Form N-CSR or on its website. If the registrant intends to satisfy the requirement to disclose amendments and waivers by posting such information on its website, it will be required to disclose its Internet address and thisintention.

The Legal Department shall be responsible for ensuring that:

·

a copy of the Code is filed with the SEC as an exhibit to each Fund’s annual report;and

·

any amendments to, or waivers (including implicit waivers) from, a provision of theCode is disclosed in the registrant's annual report on FormN-CSR.

In the event that the foregoing disclosure is omitted or is determined to be incorrect, the Legal Department shall promptly file such information with the SEC as an amendment to Form N-CSR.

In such an event, the Fund Chief Compliance Officer shall review the Code and propose such changes to the Code as are necessary or appropriate to prevent reoccurrences.

EXHIBIT A

Persons Covered by the Franklin Templeton Funds Code of Ethics

July 2021

FRANKLIN GROUP OF FUNDS

EdwardPerks                           President and Chief Executive Officer – Investment Management

Rupert H.Johnson,Jr.               Chairman of the Board and VicePresident

MichaelMcCarthy                      President and Chief Executive Officer – Investment Management

Sonal Desai,PhD                     President and Chief Executive Officer – Investment Management

MatthewHinkle                          Chief Executive Officer – Finance andAdministration

RobertG.Kubilis                       Chief Financial Officer and Chief Accounting Officer andTreasurer

FRANKLIN MUTUAL SERIES FUNDS

Christian Correa                        Chief Executive Officer – Investment Management

MatthewHinkle                          Chief Executive Officer – Finance and Administration

RobertG.Kubilis                       Chief Financial Officer and Chief AccountingOfficer

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

BrooksRitchey                          President and Chief Executive Officer – Investment Management

MatthewHinkle                          Chief Executive Officer – Finance andAdministration

RobertG.Kubilis                       Chief Financial Officer, Chief Accounting Officer andTreasurer

TEMPLETON GROUP OF FUNDS

Rupert H.JohnsonJr.                Chairman of the Board and VicePresident

ManrajS.Sekhon                      President and Chief Executive Officer – Investment Management

Michael Hasenstab, Ph.D.          President and Chief Executive Officer – Investment Management

AlanBartlett                              President and Chief Executive Officer – Investment Management

MatthewHinkle                          Chief Executive Officer – Finance andAdministration

RobertG.Kubilis                       Chief Financial Officer, Chief Accounting Officer andTreasurer

Exhibit B ACKNOWLEDGMENT FORM

Franklin Templeton Funds Code of Ethics

For Principal Executives and Senior Financial Officers

Instructions:

1.Complete all sections of thisform.

2.Print the completed form, sign, anddate.

3.

Submit completed form to FT’s General Counsel c/o Code of Ethics Administration within 10

4.

days of becoming a Covered Officer and by February 15

th

of each subsequentyear.

E-mail:      Code of Ethics Inquiries & Requests (internal address);

lpreclear@franklintempleton.com

(externaladdress)

Covered Officer’s Name:

Title:

Department:

Location:

Certification for Year Ending:

To: Franklin Resources General Counsel, Legal Department

I acknowledge receiving, reading and understanding the Franklin Templeton Fund’s Code of Ethics for Principal Executive Officers and Senior Financial Officers (the “Code”). I will comply fully with all provisions of the Code to the extent they apply to me during the period of my employment. I further understand and acknowledge that any violation of the Code may subject me to disciplinary action, including termination of employment.

Signature Date signed

EX-99.CERT

I, Matthew T. Hinkle, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Templeton Variable Insurance Products Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

8/25/2021

S\MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

I, Robert G. Kubilis, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Templeton Variable Insurance Products Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

8/25/2021

S\ROBERT G. KUBILIS

Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer

EX-99.906 CERT

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew T. Hinkle, Chief Executive Officer of the Franklin Templeton Variable Insurance Products Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 6/30/2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  8/25/2021

                                                S\MATTHEW T. HINKLE

                                                Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert G. Kubilis, Chief Financial Officer of the Franklin Templeton Variable Insurance Products Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 6/30/2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

1.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  8/25/2021

                                                S\ROBERT G. KUBILIS

                                                Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer