UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

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: 12/31/21

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

.

Annual

Report

Franklin

Templeton

Variable

Insurance

Products

Trust

December

31,

2021

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

MASTER

CLASS

-

2

Franklin

Templeton

Variable

Insurance

Products

Trust

Annual

Report

Table

of

Contents

Important

Notes

to

Performance

Information

...........

i

*Statement

of

Additional

Information

Supplement

for

All

Funds

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

SAI-2

Fund

Summaries

Franklin

Allocation

VIP

Fund

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

FA-1

Franklin

DynaTech

VIP

Fund

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

FD-1

*Prospectus

Supplement

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

FD-7

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

Franklin

Small-Mid

Cap

Growth

VIP

Fund

..........

FSC-1

Franklin

Strategic

Income

VIP

Fund

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

FSI-1

Franklin

U.S.

Government

Securities

VIP

Fund

.......

FUS-1

Franklin

VolSmart

Allocation

VIP

Fund

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

FVA-1

Templeton

Developing

Markets

VIP

Fund

..........

TD-1

*Prospectus

Supplement

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

TD-8

Templeton

Foreign

VIP

Fund

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

TF-1

Templeton

Global

Bond

VIP

Fund

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

TGB-1

Templeton

Growth

VIP

Fund

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

TG-1

Index

Descriptions

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

I-1

Board

Members

and

Officers

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

BOD-1

Shareholder

Information

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

SI-1

*Not

part

of

the

annual

report.

Retain

for

your

records

.

i

Annual

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.

SAI-2

Annual

Report

VIP1

SA1

SA2

SA4

SA5

02/22

SUPPLEMENT

DATED

FEBRUARY

4,

2022

TO

THE

STATEMENT

OF

ADDITIONAL

INFORMATION

DATED

MAY

1,

2021

FOR

FRANKLIN

ALLOCATION

VIP

FUND

FRANKLIN

DYNATECH

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

series

of

Franklin

Templeton

Variable

Insurance

Products

Trust)

The

statement

of

additional

information

(SAI)

of

each

Fund

is

amended

as

follows:

I.

For

all

Funds,

the

name

“Franklin

Templeton

Distributors,

Inc.”

is

replaced

throughout

the

SAI

with

“Franklin

Distributors,

LLC.”

II.

For

Franklin

Allocation

VIP

Fund,

Templeton

Developing

Markets

VIP

Fund

and

Templeton

Foreign

VIP

Fund,

the

following

bullet

is

added

to

the

list

of

securities

in

which

each

Fund

may

invest

under

“The

Funds

–

Goals,

Additional

Strategies

and

Risks:”

Chinese

securities

including

Chinese

variable

interest

entities

III.

The

following

is

added

to

the

“Goals,

Strategies

and

Risks

–

Glossary

of

Investments,

Techniques,

Strategies

and

Their

Risks

–

Foreign

securities:”

China

companies.

Investing

in

China,

Hong

Kong

and

Taiwan

involves

a

high

degree

of

risk

and

special

considerations

not

typically

associated

with

investing

in

other

more

established

economies

or

securities

markets.

Such

risks

may

include:

(a)

the

risk

of

nationalization

or

expropriation

of

assets

or

confiscatory

taxation;

(b)

greater

social,

economic

and

political

uncertainty

(including

the

risk

of

war);

(c)

dependency

on

exports

and

the

corresponding

importance

of

international

trade;

(d)

the

increasing

competition

from

Asia’s

other

low-cost

emerging

economies;

(e)

greater

price

volatility

and

significantly

smaller

market

capitalization

of

securities

markets,

particularly

in

China;

(f)

substantially

less

liquidity,

particularly

of

certain

share

classes

of

Chinese

securities;

(g)

currency

exchange

rate

fluctuations

and

the

lack

of

available

currency

hedging

instruments;

(h)

higher

rates

of

inflation;

(i)

controls

on

foreign

investment

and

limitations

on

repatriation

of

invested

capital

and

on

the

Fund’s

ability

to

exchange

local

currencies

for

U.S.

dollars;

(j)

greater

governmental

involvement

in

and

control

over

the

economy;

(k)

the

risk

that

the

Chinese

government

may

decide

not

to

continue

to

support

the

economic

reform

programs

implemented

since

1978

and

could

return

to

the

prior,

completely

centrally

planned,

economy;

(l)

the

fact

that

China

companies,

particularly

those

located

in

China,

may

be

smaller,

less

seasoned

and

newly-organized

companies;

(m)

the

difference

in,

or

lack

of,

auditing

and

financial

reporting

standards

which

may

result

in

unavailability

of

material

information

about

issuers,

particularly

in

China;

(n)

the

fact

that

statistical

information

regarding

the

economy

of

China

may

be

inaccurate

or

not

comparable

to

statistical

information

regarding

SAI-3

Annual

Report

the

U.S.

or

other

economies;

(o)

the

less

extensive,

and

still

developing,

regulation

of

the

securities

markets,

business

entities

and

commercial

transactions;

(p)

the

fact

that

the

settlement

period

of

securities

transactions

in

foreign

markets

may

be

longer;

(q)

the

willingness

and

ability

of

the

Chinese

government

to

support

the

Chinese

and

Hong

Kong

economies

and

markets

is

uncertain;

(r)

the

risk

that

it

may

be

more

difficult,

or

impossible,

to

obtain

and/or

enforce

a

judgment

than

in

other

countries

and

that

there

may

be

significant

obstacles

to

obtaining

information

necessary

for

investigations

into

or

litigation

against

Chinese

companies;

and

(s)

the

rapidity

and

erratic

nature

of

growth,

particularly

in

China,

resulting

in

inefficiencies

and

dislocations;

and

(t)

the

risk

that

because

of

the

degree

of

interconnectivity

between

the

economies

and

financial

markets

of

China,

Hong

Kong

and

Taiwan,

any

sizable

reduction

in

the

demand

for

goods

from

China,

or

an

economic

downturn

in

China,

could

negatively

affect

the

economies

and

financial

markets

of

Hong

Kong

and

Taiwan,

as

well.

The

Public

Company

Accounting

Oversight

Board

(PCAOB)

has

warned

that

positions

taken

by

Chinese

authorities

impair

the

PCAOB's

ability

to

conduct

inspections

and

investigations

of

the

audits

of

public

companies

with

China-based

operations.

The

PCAOB's

impaired

ability

to

oversee

PCAOB-registered

audit

firms

in

China

may

result

in

inaccurate

or

incomplete

financial

records

of

an

issuer's

operations

within

China,

which

may

negatively

impact

the

Fund's

investments

in

such

companies.

Investment

in

China,

Hong

Kong

and

Taiwan

is

subject

to

certain

political

risks.

Following

the

establishment

of

the

People’s

Republic

of

China

by

the

Communist

Party

in

1949,

the

Chinese

government

renounced

various

debt

obligations

incurred

by

China’s

predecessor

governments,

which

obligations

remain

in

default,

and

expropriated

assets

without

compensation.

There

can

be

no

assurance

that

the

Chinese

government

will

not

take

similar

action

in

the

future.

An

investment

in

the

Fund

involves

risk

of

a

total

loss.The

political

reunification

of

China

and

Taiwan

is

a

highly

problematic

issue

and

is

unlikely

to

be

settled

in

the

near

future.

This

situation

poses

a

threat

to

Taiwan’s

economy

and

could

negatively

affect

its

stock

market.

The

equity

securities

of

China

companies

the

Fund

may

invest

in

include

securities

issued

by

Hong

Kong

and

Taiwan

domiciled

companies,

as

well

as

China

H

shares

(shares

of

China-incorporated,

Hong

Kong-listed

companies),

Shanghai

and

Shenzhen-listed

B

shares

(shares

of

China-incorporated

companies

that

are

traded

in

foreign

currencies

-

U.S.

Dollar

for

the

Shanghai

Stock

Exchange

and

Hong

Kong

dollar

for

the

Shenzhen

Stock

Exchange),

and

China

“red

chip”

shares

(shares

of

companies

based

in

Mainland

China

that

are

incorporated

outside

China

and

listed

in

Hong

Kong).

The

Fund

may

also

invest

in

eligible

China

A

shares

(shares

of

publicly

traded

companies

based

in

Mainland

China)

listed

and

traded

on

the

Shanghai

Stock

Exchange

("SSE")

through

the

Shanghai

–

Hong

Kong

Stock

Connect

program,

as

well

as

eligible

China

A

shares

listed

and

traded

on

the

Shenzhen

Stock

Exchange

(“SZSE”)

through

the

Shenzhen

–

Hong

Kong

Stock

Connect

program

(both

programs

collectively

referred

to

as

“Stock

Connect”).

The

Fund

may

also

invest

in

China

A

shares

through

any

other

means

permitted

by

applicable

law

or

regulation.

Chinese

variable

interest

entities

.

In

China,

equity

ownership

of

companies

by

foreign

individuals

and

entities

is

restricted

or

prohibited

in

certain

sectors,

such

as

internet,

media,

education

and

telecommunications.

To

circumvent

these

limits,

starting

in

the

early

2000s

many

Chinese

companies,

including

most

of

the

well-known

Chinese

Internet

companies,

have

used

a

special

structure

known

as

a

variable

interest

entity

(VIE)

to

raise

capital

from

foreign

investors.

In

a

typical

VIE

structure,

a

shell

company

is

set

up

in

an

offshore

jurisdiction,

such

as

the

Cayman

Islands.

The

shell

company,

through

a

wholly

foreign-owned

enterprise

(WFOE)

based

in

China,

enters

into

service

and

other

contracts

with

another

Chinese

company

known

as

the

VIE.

The

VIE

must

be

owned

by

Chinese

nationals

(and/or

other

Chinese

companies),

which

often

are

the

VIE’s

founders,

in

order

to

obtain

the

licenses

and/or

assets

required

to

operate

in

the

restricted

or

prohibited

industry

in

China.

The

contractual

arrangements

entered

into

between

the

WFOE

and

VIE

(which

often

include

powers

of

attorney,

loan

and

equity

pledge

agreements,

call

option

agreements

and

exclusive

services

or

business

cooperation

agreements)

are

designed

to

allow

the

shell

company

to

exert

a

degree

of

control

over,

and

obtain

economic

benefits

arising

from,

the

VIE

without

formal

legal

ownership.

The

contractual

arrangements

are

structured

to

require

the

shell

company

to

consolidate

the

VIE

into

its

financial

statements,

pursuant

to

U.S.

generally

accepted

accounting

principles,

despite

the

absence

of

equity

ownership.

Such

consolidation

provides

the

shell

company

with

the

ability

to

issue

shares

on

a

foreign

exchange,

such

as

the

New

York

SAI-4

Annual

Report

Stock

Exchange

or

NASDAQ,

often

with

the

same

name

as

the

VIE.

Accordingly,

foreign

investors,

such

as

the

Fund,

will

only

own

stock

in

the

shell

company

rather

than

directly

in

the

VIE.

Further,

the

ability

of

the

WFOE

to

easily

extract

profits

from

the

VIE

structure

through

service

agreements

will

partially

depend

on

the

proportion

of

the

business

that

can

legally

be

conducted

by

the

WFOE

versus

the

VIE,

which

varies

based

on

the

industry.

While

VIEs

are

a

longstanding

industry

practice

that

is

well

known

to

Chinese

officials

and

regulators,

historically

they

have

not

been

formally

recognized

under

Chinese

law.

In

late

December

2021,

the

China

Securities

Regulatory

Commission

(CSRC)

released

draft

rules

that

would

permit

the

use

of

VIE

structures,

provided

they

abide

by

Chinese

laws

and

register

with

the

CSRC.

The

new

draft

rules,

however,

may

cause

Chinese

companies

to

undergo

greater

scrutiny

and

may

make

the

process

to

create

VIEs

more

difficult

and

costly.

Guidance

or

further

rulemaking

prohibiting

or

restricting

these

structures

by

the

Chinese

government,

generally

or

with

respect

to

specific

industries,

would

likely

cause

impacted

VIE-structured

holding(s)

to

suffer

significant,

detrimental,

and

possibly

permanent

losses,

and

in

turn,

adversely

affect

the

Fund’s

returns

and

net

asset

value.

The

future

of

the

VIE

structure

generally

and

with

respect

to

certain

industries

remains

uncertain.

Further,

if

a

Chinese

court

or

arbitration

body

chose

not

to

enforce

the

contracts,

the

value

of

the

shell

company

would

significantly

decline,

since

it

derives

its

value

from

the

ability

to

consolidate

the

VIE

into

its

financials

pursuant

to

such

contracts,

and

in

turn,

adversely

affect

the

Fund’s

returns

and

net

asset

value.

The

contractual

arrangements

with

the

VIE

may

not

be

as

effective

in

providing

operational

control

as

direct

equity

ownership.

The

Chinese

equity

owner(s)

of

the

VIE

could

decide

to

breach

the

contractual

arrangement

and

may

have

conflicting

interests

and

fiduciary

duties

as

compared

to

investors

in

the

shell

company.

Accordingly,

VIEs

depend

heavily

on

executives

who

are

Chinese

nationals

and

own

the

underlying

business

licenses

and/or

assets

required

to

operate

in

China.

In

addition

to

creating

“key

person”

succession

risk,

the

structure

can

restrict

the

ability

of

outside

shareholders

to

challenge

executives

for

poor

decision-making,

weak

management,

or

equity-eroding

actions.

Any

breach

or

dispute

under

these

contracts

will

likely

fall

under

Chinese

jurisdiction

and

law.

IV.

For

all

Funds,

the

following

replaces

Robert

G.

Kubilis

in

the

section

“Officers

and

Trustees

–

Interested

Board

Members

and

Officers:”

Christopher

Kings

(1974)

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

January

2022

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Please

keep

this

supplement

with

your

SAI

for

future

reference.

FA-1

Annual

Report

Franklin

Allocation

VIP

Fund

This

annual

report

for

Franklin

Allocation

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+11.68%

5-Year

+8.64%

10-Year

+8.96%

FA-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

Bloomberg

U.S.

Aggregate

Bond

Index,

MSCI

World

ex

USA

Index-NR

and

Linked

Allocation

VIP

Fund

Benchmark.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

***Source:

FactSet.

The

Linked

Allocation

VIP

Fund

Benchmark

was

calculated

internally

and

was

composed

of

40%

S&P

500,

40%

Bloomberg

U.S.

Aggregate

Bond

Index

and

20%

MSCI

World

ex

USA

Index-NR.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FA-3

Annual

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

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

Fund

is

actively

managed

and

could

experience

losses

if

the

investment

manager’s

or

subadvisors’

judgment

about

markets,

future

volatility,

interest

rates,

industries,

sectors

and

regions

or

the

attractiveness,

relative

values,

liquidity,

effectiveness

or

potential

appreciation

of

particular

investments

made

for

the

Fund’s

portfolio

prove

to

be

incorrect.

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.

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.

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

benchmark,

the

Standard

&

Poor’s

500

®

Index

(S&P

500

®

),

posted

a

+28.71%

total

return.

1

The

Fund’s

other

benchmarks

performed

as

follows:

the

Bloomberg

U.S.

Aggregate

Bond

Index

posted

a

-1.54%

total

return,

the

MSCI

World

ex

USA

Index-NR

posted

a

+12.62%

total

return,

and

the

Linked

Allocation

VIP

Fund

Benchmark

posted

a

+12.81%

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

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Common

Stocks

59.0%

U.S.

Government

and

Agency

Securities

18.3%

Corporate

Bonds

10.4%

Mortgage-Backed

Securities

4.1%

Management

Investment

Companies

3.0%

Other

2.3%

Short-Term

Investments

&

Other

Net

Assets

2.9%

Franklin

Allocation

VIP

Fund

FA-4

Annual

Report

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-

related

businesses,

and

concerns

about

a

large

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

outperformed

the

Fund’s

foreign

equity

benchmark,

the

MSCI

World

ex

USA

Index-NR,

while

the

Franklin

International

Growth

Strategy

and

the

Templeton

Foreign

Strategy

underperformed

the

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

North

America

75.4%

Europe

13.8%

Asia

5.8%

Latin

America

&

Caribbean

1.1%

Other

1.0%

Short-Term

Investments

&

Other

Net

Assets

2.9%

Franklin

Allocation

VIP

Fund

FA-5

Annual

Report

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

–

Class

1

and

the

Franklin

U.S.

Treasury

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

December

31,

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

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

A

a

U.S.

Treasury

Notes

14.1%

Diversified

Financial

Services,

United

States

U.S.

Treasury

Bonds

4.2%

Diversified

Financial

Services,

United

States

Microsoft

Corp.

2.5%

Software,

United

States

Schwab

U.S.

TIPS

ETF

2.0%

Capital

Markets,

United

States

FNMA,

30

Year

1.8%

Thrifts

&

Mortgage

Finance,

United

States

Alphabet,

Inc.

1.7%

Interactive

Media

&

Services,

United

States

Apple,

Inc.

1.4%

Technology

Hardware,

Storage

&

Peripherals,

United

States

FHLMC

Pool,

30

Year

1.1%

Diversified

Financial

Services,

United

States

Templeton

Global

Bond

VIP

Fund

1.0%

Capital

Markets,

United

States

Amazon.com,

Inc.

0.8%

Internet

&

Direct

Marketing

Retail,

United

States

Class

2

Fund

Expenses

Franklin

Allocation

VIP

Fund

FA-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,042.00

$4.17

$1,021.13

$4.12

0.81%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Allocation

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$5.49

$6.86

$6.37

$7.44

$7.13

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.06

0.10

0.11

c

0.23

c

0.21

c

Net

realized

and

unrealized

gains

(losses)

...........

0.58

0.45

1.11

(0.89)

0.63

Total

from

investment

operations

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

0.64

0.55

1.22

(0.66)

0.84

Less

distributions

from:

Net

investment

income

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

(0.11)

(0.12)

(0.27)

(0.24)

(0.22)

Net

realized

gains

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

—

(1.80)

(0.46)

(0.17)

(0.31)

Total

distributions

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

(0.11)

(1.92)

(0.73)

(0.41)

(0.53)

Net

asset

value,

end

of

year

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

$6.02

$5.49

$6.86

$6.37

$7.44

Total

return

d

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

11.81%

12.19%

20.04%

(9.34)%

12.17%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.60%

0.60%

0.44%

0.12%

0.12%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.56%

e

0.55%

e

0.39%

0.10%

0.10%

Net

investment

income

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

1.04%

1.79%

1.55%

3.13%

2.75%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$841

$811

$842

$984

$1,047

Portfolio

turnover

rate

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

54.07%

99.02%

170.79%

2.23%

1.28%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

54.07%

91.62%

f

158.11%

f

2.23%

1.28%

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

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.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

See

Note

1(d)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$5.43

$6.81

$6.32

$7.39

$7.08

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.05

0.09

0.09

c

0.21

c

0.18

c

Net

realized

and

unrealized

gains

(losses)

...........

0.58

0.43

1.11

(0.89)

0.64

Total

from

investment

operations

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

0.63

0.52

1.20

(0.68)

0.82

Less

distributions

from:

Net

investment

income

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

(0.10)

(0.10)

(0.25)

(0.22)

(0.20)

Net

realized

gains

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

—

(1.80)

(0.46)

(0.17)

(0.31)

Total

distributions

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

(0.10)

(1.90)

(0.71)

(0.39)

(0.51)

Net

asset

value,

end

of

year

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

$5.96

$5.43

$6.81

$6.32

$7.39

Total

return

d

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

11.68%

11.74%

19.86%

(9.65)%

11.98%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.85%

0.85%

0.69%

0.37%

0.37%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.81%

e

0.80%

e

0.64%

0.35%

0.35%

Net

investment

income

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

0.80%

1.54%

1.30%

2.88%

2.50%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$302,084

$398,620

$403,040

$390,300

$480,402

Portfolio

turnover

rate

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

54.07%

99.02%

170.79%

2.23%

1.28%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

54.07%

91.62%

f

158.11%

f

2.23%

1.28%

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

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.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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.

Annual

Report

FA-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$5.62

$6.97

$6.46

$7.53

$7.21

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.04

0.08

0.08

c

0.20

c

0.18

c

Net

realized

and

unrealized

gains

(losses)

...........

0.60

0.46

1.13

(0.89)

0.64

Total

from

investment

operations

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

0.64

0.54

1.21

(0.69)

0.82

Less

distributions

from:

Net

investment

income

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

(0.09)

(0.09)

(0.24)

(0.21)

(0.19)

Net

realized

gains

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

—

(1.80)

(0.46)

(0.17)

(0.31)

Total

distributions

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

(0.09)

(1.89)

(0.70)

(0.38)

(0.50)

Net

asset

value,

end

of

year

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

$6.17

$5.62

$6.97

$6.46

$7.53

Total

return

d

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

11.54%

11.75%

19.56%

(9.58)%

11.78%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.95%

0.95%

0.79%

0.47%

0.47%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.91%

e

0.90%

e

0.74%

0.45%

0.45%

Net

investment

income

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

0.70%

1.44%

1.20%

2.78%

2.40%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$418,751

$409,388

$406,693

$393,385

$528,862

Portfolio

turnover

rate

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

54.07%

99.02%

170.79%

2.23%

1.28%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

54.07%

91.62%

f

158.11%

f

2.23%

1.28%

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

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.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

See

Note

1(d)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Allocation

VIP

Fund

Annual

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

59.0%

Aerospace

&

Defense

1.3%

BAE

Systems

plc

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

United

Kingdom

86,858

$

647,191

BWX

Technologies,

Inc.

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

United

States

5,501

263,388

Dassault

Aviation

SA

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

France

3,820

412,834

General

Dynamics

Corp.

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

United

States

5,154

1,074,454

Huntington

Ingalls

Industries,

Inc.

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

United

States

268

50,046

Lockheed

Martin

Corp.

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

United

States

2,711

963,517

MTU

Aero

Engines

AG

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

Germany

5,700

1,156,436

Northrop

Grumman

Corp.

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

United

States

4,752

1,839,357

Raytheon

Technologies

Corp.

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

United

States

25,005

2,151,930

a

Rolls-Royce

Holdings

plc

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

United

Kingdom

253,703

423,121

Textron,

Inc.

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

United

States

1,365

105,378

9,087,652

Air

Freight

&

Logistics

0.7%

CH

Robinson

Worldwide,

Inc.

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

United

States

950

102,248

Deutsche

Post

AG

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

Germany

20,932

1,345,299

DSV

A/S

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

Denmark

5,000

1,164,179

Expeditors

International

of

Washington,

Inc.

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

United

States

1,230

165,177

b

Nippon

Express

Holdings

Co.

Ltd.

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

Japan

3,200

188,746

United

Parcel

Service,

Inc.,

B

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

United

States

10,333

2,214,775

5,180,424

Airlines

0.0%

†

a

International

Consolidated

Airlines

Group

SA

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

United

Kingdom

203,228

395,208

Auto

Components

0.2%

a

Aptiv

plc

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

United

States

2,400

395,880

Bridgestone

Corp.

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

Japan

1,300

55,779

a

Continental

AG

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

Germany

5,158

541,499

Gentex

Corp.

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

United

States

1,820

63,427

Valeo

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

France

21,493

647,639

1,704,224

Automobiles

0.5%

Bayerische

Motoren

Werke

AG

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

Germany

10,583

1,057,910

Honda

Motor

Co.

Ltd.

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

Japan

27,500

781,920

Isuzu

Motors

Ltd.

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

Japan

27,800

345,802

a

Rivian

Automotive,

Inc.,

A

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

United

States

3,600

373,284

a

Tesla,

Inc.

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

United

States

643

679,510

Toyota

Motor

Corp.

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

Japan

13,500

249,363

Yamaha

Motor

Co.

Ltd.

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

Japan

3,400

81,615

3,569,404

Banks

1.8%

Banco

Bilbao

Vizcaya

Argentaria

SA

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

Spain

102,073

604,915

Bank

Leumi

Le-Israel

BM

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

Israel

17,582

188,676

Barclays

plc

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

United

Kingdom

139,432

354,881

BNP

Paribas

SA

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

France

2,814

194,409

Citigroup,

Inc.

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

United

States

1,517

91,612

Commonwealth

Bank

of

Australia

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

Australia

8,227

603,988

DBS

Group

Holdings

Ltd.

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

Singapore

35,000

846,972

FinecoBank

Banca

Fineco

SpA

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

Italy

63,000

1,102,418

ING

Groep

NV

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

Netherlands

89,718

1,246,364

JPMorgan

Chase

&

Co.

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

United

States

8,142

1,289,286

Kasikornbank

PCL

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

Thailand

106,792

454,805

KB

Financial

Group,

Inc.

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

South

Korea

19,325

893,596

Lloyds

Banking

Group

plc

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

United

Kingdom

1,151,623

747,247

Mitsubishi

UFJ

Financial

Group,

Inc.

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

Japan

38,800

211,032

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Banks

(continued)

People's

United

Financial,

Inc.

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

United

States

1,577

$

28,102

Raiffeisen

Bank

International

AG

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

Austria

6,215

182,393

Shinhan

Financial

Group

Co.

Ltd.

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

South

Korea

21,424

661,926

Societe

Generale

SA

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

France

24,947

856,719

Standard

Chartered

plc

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

United

Kingdom

162,064

984,676

Sumitomo

Mitsui

Financial

Group,

Inc.

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

Japan

23,100

788,323

Sumitomo

Mitsui

Financial

Group,

Inc.,

ADR

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

Japan

99,400

674,926

13,007,266

Beverages

0.9%

a

Boston

Beer

Co.,

Inc.

(The),

A

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

United

States

40

20,204

Brown-Forman

Corp.,

B

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

United

States

6,591

480,220

Coca-Cola

Co.

(The)

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

United

States

8,102

479,720

a

Coca-Cola

HBC

AG,

DI

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

Russia

1,772

61,306

Constellation

Brands,

Inc.,

A

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

United

States

2,304

578,235

a

Monster

Beverage

Corp.

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

United

States

13,464

1,293,083

PepsiCo,

Inc.

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

United

States

18,414

3,198,696

Pernod

Ricard

SA

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

France

2,088

501,929

6,613,393

Biotechnology

1.6%

AbbVie,

Inc.

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

United

States

13,839

1,873,801

Amgen,

Inc.

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

United

States

4,824

1,085,255

a

Biogen,

Inc.

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

United

States

1,039

249,277

CSL

Ltd.

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

Australia

7,571

1,599,178

a

Genmab

A/S

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

Denmark

3,000

1,196,470

Gilead

Sciences,

Inc.

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

United

States

37,057

2,690,709

a

Iovance

Biotherapeutics

,

Inc.

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

United

States

1,500

28,635

a

Mirati

Therapeutics,

Inc.

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

United

States

1,000

146,690

a

Moderna

,

Inc.

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

United

States

1,854

470,879

a

Neurocrine

Biosciences,

Inc.

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

United

States

1,509

128,521

a

PTC

Therapeutics,

Inc.

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

United

States

1,400

55,762

a

Regeneron

Pharmaceuticals,

Inc.

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

United

States

2,469

1,559,223

a

United

Therapeutics

Corp.

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

United

States

116

25,065

a

Vertex

Pharmaceuticals,

Inc.

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

United

States

1,678

368,489

11,477,954

Building

Products

0.8%

A

O

Smith

Corp.

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

United

States

1,840

157,964

AGC,

Inc.

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

Japan

9,600

458,343

Allegion

plc

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

United

States

3,195

423,146

a

Builders

FirstSource

,

Inc.

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

United

States

3,240

277,700

Carlisle

Cos.,

Inc.

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

United

States

2,100

521,052

Cie

de

Saint-Gobain

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

France

10,211

717,742

Geberit

AG

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

Switzerland

1,512

1,231,064

Johnson

Controls

International

plc

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

United

States

12,700

1,032,637

Lennox

International,

Inc.

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

United

States

189

61,304

Owens

Corning

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

United

States

3,368

304,804

Trane

Technologies

plc

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

United

States

4,356

880,043

a

Trex

Co.,

Inc.

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

United

States

514

69,405

6,135,204

Capital

Markets

2.6%

3i

Group

plc

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

United

Kingdom

46,669

914,121

Bank

of

New

York

Mellon

Corp.

(The)

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

United

States

1,764

102,453

BlackRock,

Inc.

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

United

States

965

883,515

Blackstone,

Inc.

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

United

States

4,592

594,159

Carlyle

Group,

Inc.

(The)

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

United

States

5,528

303,487

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Capital

Markets

(continued)

Cboe

Global

Markets,

Inc.

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

United

States

910

$

118,664

Charles

Schwab

Corp.

(The)

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

United

States

12,531

1,053,857

Deutsche

Boerse

AG

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

Germany

5,900

984,370

Evercore

,

Inc.,

A

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

United

States

1,506

204,590

FactSet

Research

Systems,

Inc.

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

United

States

466

226,481

Goldman

Sachs

Group,

Inc.

(The)

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

United

States

5,356

2,048,938

Intercontinental

Exchange,

Inc.

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

United

States

5,655

773,434

Intermediate

Capital

Group

plc

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

United

Kingdom

43,000

1,279,531

Invesco

Ltd.

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

United

States

2,045

47,076

Janus

Henderson

Group

plc

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

United

States

5,689

238,597

Jefferies

Financial

Group,

Inc.

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

United

States

8,259

320,449

Lazard

Ltd.,

A

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

United

States

4,117

179,625

MarketAxess

Holdings,

Inc.

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

United

States

400

164,508

Moody's

Corp.

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

United

States

1,171

457,369

MSCI,

Inc.

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

United

States

732

448,489

Nasdaq,

Inc.

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

United

States

3,100

651,031

Partners

Group

Holding

AG

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

Switzerland

707

1,165,779

S&P

Global,

Inc.

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

United

States

5,915

2,791,466

SEI

Investments

Co.

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

United

States

2,306

140,528

T

Rowe

Price

Group,

Inc.

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

United

States

7,622

1,498,790

Tradeweb

Markets,

Inc.,

A

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

United

States

5,000

500,700

UBS

Group

AG

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

Switzerland

50,349

902,689

18,994,696

Chemicals

2.3%

Air

Products

and

Chemicals,

Inc.

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

United

States

8,052

2,449,902

Albemarle

Corp.

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

United

States

4,930

1,152,486

BASF

SE

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

Germany

1,730

121,325

Celanese

Corp.

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

United

States

1,294

217,470

c

Covestro

AG,

144A,

Reg

S

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

Germany

18,383

1,130,543

a

Danimer

Scientific,

Inc.

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

United

States

700

5,964

Dow,

Inc.

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

United

States

2,257

128,017

Ecolab,

Inc.

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

United

States

6,121

1,435,925

Huntsman

Corp.

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

United

States

915

31,915

Koninklijke

DSM

NV

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

Netherlands

5,700

1,282,662

Linde

plc

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

United

Kingdom

8,285

2,870,173

LyondellBasell

Industries

NV,

A

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

United

States

4,886

450,636

Mitsubishi

Chemical

Holdings

Corp.

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

Japan

19,000

140,844

Mitsui

Chemicals,

Inc.

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

Japan

9,000

241,775

Mosaic

Co.

(The)

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

United

States

4,321

169,772

NewMarket

Corp.

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

United

States

49

16,793

Nitto

Denko

Corp.

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

Japan

7,000

540,439

Olin

Corp.

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

United

States

5,045

290,188

Sherwin-Williams

Co.

(The)

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

United

States

1,100

387,376

Sika

AG

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

Switzerland

3,000

1,245,417

Sumitomo

Chemical

Co.

Ltd.

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

Japan

32,200

151,757

Symrise

AG

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

Germany

8,400

1,241,333

Tosoh

Corp.

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

Japan

12,900

191,533

Umicore

SA

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

Belgium

22,000

896,768

Westlake

Chemical

Corp.

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

United

States

1,151

111,797

16,902,810

Commercial

Services

&

Supplies

0.3%

Cintas

Corp.

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

United

States

2,970

1,316,215

a

Copart

,

Inc.

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

United

States

1,383

209,690

Republic

Services,

Inc.

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

United

States

6,969

971,827

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Commercial

Services

&

Supplies

(continued)

Rollins,

Inc.

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

United

States

1,588

$

54,326

2,552,058

Communications

Equipment

0.2%

a

Arista

Networks,

Inc.

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

United

States

985

141,594

Cisco

Systems,

Inc.

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

United

States

9,444

598,466

a

F5,

Inc.

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

United

States

401

98,129

Motorola

Solutions,

Inc.

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

United

States

1,082

293,979

1,132,168

Construction

&

Engineering

0.1%

Quanta

Services,

Inc.

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

United

States

366

41,966

Sinopec

Engineering

Group

Co.

Ltd.,

H

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

China

480,600

237,236

Taisei

Corp.

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

Japan

17,200

522,735

801,937

Construction

Materials

0.1%

Eagle

Materials,

Inc.

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

United

States

106

17,645

James

Hardie

Industries

plc,

CDI

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

United

States

2,473

99,413

Martin

Marietta

Materials,

Inc.

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

United

States

1,463

644,481

761,539

Consumer

Finance

0.2%

Ally

Financial,

Inc.

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

United

States

2,525

120,215

Capital

One

Financial

Corp.

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

United

States

5,092

738,799

SLM

Corp.

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

United

States

9,736

191,507

Synchrony

Financial

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

United

States

3,772

174,983

1,225,504

Containers

&

Packaging

0.0%

†

Amcor

plc

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

United

States

4,295

51,583

Avery

Dennison

Corp.

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

United

States

367

79,481

International

Paper

Co.

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

United

States

1,552

72,913

Packaging

Corp.

of

America

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

United

States

606

82,507

Silgan

Holdings,

Inc.

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

United

States

227

9,725

296,209

Distributors

0.1%

Genuine

Parts

Co.

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

United

States

1,145

160,529

LKQ

Corp.

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

United

States

1,798

107,934

Pool

Corp.

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

United

States

288

163,008

431,471

Diversified

Consumer

Services

0.1%

a

Grand

Canyon

Education,

Inc.

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

United

States

185

15,856

H&R

Block,

Inc.

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

United

States

16,932

398,918

414,774

Diversified

Financial

Services

0.4%

a

Berkshire

Hathaway,

Inc.,

B

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

United

States

2,821

843,479

EXOR

NV

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

Netherlands

4,626

413,782

Investor

AB,

B

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

Sweden

52,473

1,315,236

Sofina

SA

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

Belgium

742

364,188

2,936,685

Diversified

Telecommunication

Services

0.6%

AT&T,

Inc.

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

United

States

18,102

445,309

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Diversified

Telecommunication

Services

(continued)

c

Cellnex

Telecom

SA,

144A,

Reg

S

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

Spain

19,000

$

1,099,755

Deutsche

Telekom

AG

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

Germany

25,478

470,398

Nippon

Telegraph

&

Telephone

Corp.

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

Japan

40,100

1,095,998

b

Telefonica

SA

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

Spain

172,569

747,704

Verizon

Communications,

Inc.

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

United

States

8,522

442,803

4,301,967

Electric

Utilities

0.4%

Alliant

Energy

Corp.

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

United

States

1,488

91,467

American

Electric

Power

Co.,

Inc.

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

United

States

2,262

201,250

Electricite

de

France

SA

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

France

21,004

246,839

Evergy

,

Inc.

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

United

States

1,282

87,958

Exelon

Corp.

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

United

States

2,839

163,981

Hawaiian

Electric

Industries,

Inc.

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

United

States

681

28,261

NextEra

Energy,

Inc.

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

United

States

8,692

811,485

NRG

Energy,

Inc.

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

United

States

8,348

359,632

OGE

Energy

Corp.

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

United

States

547

20,994

Red

Electrica

Corp.

SA

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

Spain

21,139

456,757

Southern

Co.

(The)

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

United

States

5,825

399,479

2,868,103

Electrical

Equipment

0.7%

Acuity

Brands,

Inc.

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

United

States

89

18,843

AMETEK,

Inc.

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

United

States

2,618

384,951

a

Array

Technologies,

Inc.

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

United

States

20,100

315,369

Eaton

Corp.

plc

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

United

States

1,382

238,837

Emerson

Electric

Co.

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

United

States

23,310

2,167,131

a

Generac

Holdings,

Inc.

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

United

States

271

95,370

Hubbell,

Inc.

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

United

States

191

39,780

Mitsubishi

Electric

Corp.

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

Japan

47,700

605,090

nVent

Electric

plc

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

United

States

14,485

550,430

Rockwell

Automation,

Inc.

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

United

States

1,110

387,223

4,803,024

Electronic

Equipment,

Instruments

&

Components

0.6%

Amphenol

Corp.,

A

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

United

States

11,866

1,037,800

a

Arrow

Electronics,

Inc.

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

United

States

2,397

321,845

Cognex

Corp.

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

United

States

1,387

107,853

Jabil,

Inc.

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

United

States

4,856

341,620

Keyence

Corp.

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

Japan

400

251,350

a

Keysight

Technologies,

Inc.

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

United

States

3,576

738,480

Shimadzu

Corp.

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

Japan

1,400

59,097

TE

Connectivity

Ltd.

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

United

States

7,749

1,250,224

Vontier

Corp.

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

United

States

4,156

127,714

4,235,983

Energy

Equipment

&

Services

0.1%

SBM

Offshore

NV

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

Netherlands

55,024

819,590

a

Tecnicas

Reunidas

SA

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

Spain

15,114

119,047

938,637

Entertainment

0.5%

Activision

Blizzard,

Inc.

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

United

States

3,101

206,310

a

CTS

Eventim

AG

&

Co.

KGaA

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

Germany

18,000

1,314,634

Electronic

Arts,

Inc.

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

United

States

1,933

254,963

a

Netflix,

Inc.

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

United

States

151

90,968

Nintendo

Co.

Ltd.

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

Japan

800

374,058

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-15

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Entertainment

(continued)

a

ROBLOX

Corp.,

A

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

United

States

800

$

82,528

a

Skillz

,

Inc.

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

United

States

439

3,266

a

Walt

Disney

Co.

(The)

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

United

States

7,112

1,101,578

World

Wrestling

Entertainment,

Inc.,

A

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

United

States

125

6,167

3,434,472

Equity

Real

Estate

Investment

Trusts

(REITs)

0.9%

Cousins

Properties,

Inc.

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

United

States

2,559

103,077

Crown

Castle

International

Corp.

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

United

States

4,685

977,947

CubeSmart

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

United

States

557

31,699

Extra

Space

Storage,

Inc.

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

United

States

1,051

238,293

Goodman

Group

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

Australia

34,925

672,364

Life

Storage,

Inc.

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

United

States

217

33,240

National

Retail

Properties,

Inc.

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

United

States

1,206

57,972

a

Orion

Office

REIT,

Inc.

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

United

States

251

4,686

Public

Storage

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

United

States

6,161

2,307,664

Realty

Income

Corp.

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

United

States

2,497

178,760

Segro

plc

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

United

Kingdom

57,469

1,117,537

Simon

Property

Group,

Inc.

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

United

States

667

106,567

SL

Green

Realty

Corp.

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

United

States

199

14,268

Spirit

Realty

Capital,

Inc.

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

United

States

745

35,902

STORE

Capital

Corp.

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

United

States

1,476

50,774

VICI

Properties,

Inc.

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

United

States

2,004

60,341

Weyerhaeuser

Co.

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

United

States

10,303

424,278

WP

Carey,

Inc.

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

United

States

1,101

90,337

6,505,706

Food

&

Staples

Retailing

1.0%

Albertsons

Cos.,

Inc.,

A

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

United

States

4,936

149,018

Casey's

General

Stores,

Inc.

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

United

States

231

45,588

Costco

Wholesale

Corp.

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

United

States

991

562,591

Jeronimo

Martins

SGPS

SA

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

Portugal

7,550

172,636

Koninklijke

Ahold

Delhaize

NV

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

Netherlands

36,062

1,236,538

Kroger

Co.

(The)

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

United

States

29,595

1,339,470

Lawson,

Inc.

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

Japan

2,300

109,067

Sundrug

Co.

Ltd.

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

Japan

23,543

615,120

Walgreens

Boots

Alliance,

Inc.

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

United

States

4,666

243,379

Walmart,

Inc.

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

United

States

21,154

3,060,772

7,534,179

Food

Products

0.7%

Archer-Daniels-Midland

Co.

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

United

States

10,535

712,061

Bunge

Ltd.

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

United

States

362

33,796

Campbell

Soup

Co.

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

United

States

883

38,375

Conagra

Brands,

Inc.

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

United

States

1,299

44,361

Flowers

Foods,

Inc.

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

United

States

1,325

36,398

General

Mills,

Inc.

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

United

States

4,522

304,692

Hershey

Co.

(The)

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

United

States

3,281

634,775

Hormel

Foods

Corp.

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

United

States

1,964

95,863

Ingredion,

Inc.

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

United

States

433

41,845

J

M

Smucker

Co.

(The)

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

United

States

701

95,210

Kellogg

Co.

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

United

States

1,554

100,109

Lamb

Weston

Holdings,

Inc.

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

United

States

2,032

128,788

McCormick

&

Co.,

Inc.

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

United

States

7,900

763,219

Nestle

SA

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

Switzerland

6,292

877,461

Tyson

Foods,

Inc.,

A

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

United

States

11,686

1,018,552

4,925,505

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Gas

Utilities

0.2%

National

Fuel

Gas

Co.

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

United

States

3,214

$

205,503

Osaka

Gas

Co.

Ltd.

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

Japan

18,400

304,137

Tokyo

Gas

Co.

Ltd.

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

Japan

19,200

344,438

UGI

Corp.

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

United

States

7,763

356,399

1,210,477

Health

Care

Equipment

&

Supplies

2.3%

Abbott

Laboratories

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

United

States

13,760

1,936,582

Alcon,

Inc.

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

Switzerland

15,187

1,338,033

Becton

Dickinson

and

Co.

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

United

States

4,500

1,131,660

Cochlear

Ltd.

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

Australia

6,000

940,473

Cooper

Cos.,

Inc.

(The)

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

United

States

71

29,745

DiaSorin

SpA

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

Italy

664

126,224

a

Edwards

Lifesciences

Corp.

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

United

States

5,822

754,240

Fisher

&

Paykel

Healthcare

Corp.

Ltd.

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

New

Zealand

8,456

189,251

GN

Store

Nord

A/S

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

Denmark

12,000

752,327

a

Haemonetics

Corp.

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

United

States

4,024

213,433

a

Hologic

,

Inc.

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

United

States

1,719

131,607

Hoya

Corp.

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

Japan

5,600

830,489

a

IDEXX

Laboratories,

Inc.

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

United

States

1,110

730,891

a

Intuitive

Surgical,

Inc.

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

United

States

4,666

1,676,494

Medtronic

plc

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

United

States

10,100

1,044,845

Olympus

Corp.

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

Japan

6,900

158,791

a

Quidel

Corp.

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

United

States

1,381

186,421

ResMed

,

Inc.

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

United

States

922

240,163

Smith

&

Nephew

plc

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

United

Kingdom

3,326

57,999

Sonova

Holding

AG

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

Switzerland

1,433

559,368

Straumann

Holding

AG

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

Switzerland

158

333,721

Stryker

Corp.

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

United

States

8,192

2,190,705

Teleflex,

Inc.

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

United

States

2,284

750,248

16,303,710

Health

Care

Providers

&

Services

0.8%

Cardinal

Health,

Inc.

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

United

States

820

42,222

Chemed

Corp.

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

United

States

102

53,962

CVS

Health

Corp.

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

United

States

5,843

602,764

Fresenius

Medical

Care

AG

&

Co.

KGaA

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

Germany

11,289

731,267

Fresenius

SE

&

Co.

KGaA

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

Germany

1,958

78,636

a

Guardant

Health,

Inc.

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

United

States

700

70,014

a

Laboratory

Corp.

of

America

Holdings

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

United

States

3,467

1,089,366

Premier,

Inc.,

A

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

United

States

555

22,849

Quest

Diagnostics,

Inc.

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

United

States

4,666

807,265

Sonic

Healthcare

Ltd.

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

Australia

1,916

64,899

UnitedHealth

Group,

Inc.

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

United

States

3,957

1,986,968

5,550,212

Health

Care

Technology

0.2%

Cerner

Corp.

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

United

States

11,884

1,103,667

a

Certara

,

Inc.

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

United

States

1,000

28,420

M3,

Inc.

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

Japan

1,000

50,391

a

Veeva

Systems,

Inc.,

A

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

United

States

1,200

306,576

1,489,054

Hotels,

Restaurants

&

Leisure

0.7%

a

Airbnb,

Inc.,

A

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

United

States

1,000

166,490

Aristocrat

Leisure

Ltd.

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

Australia

7,225

228,897

a

Booking

Holdings,

Inc.

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

United

States

287

688,579

Choice

Hotels

International,

Inc.

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

United

States

673

104,981

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-17

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Hotels,

Restaurants

&

Leisure

(continued)

Domino's

Pizza,

Inc.

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

United

States

1,219

$

687,918

c

La

Francaise

des

Jeux

SAEM,

144A,

Reg

S

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

France

4,752

210,432

a

Las

Vegas

Sands

Corp.

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

United

States

8,338

313,842

McDonald's

Corp.

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

United

States

6,801

1,823,144

Yum!

Brands,

Inc.

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

United

States

7,315

1,015,761

5,240,044

Household

Durables

0.4%

Barratt

Developments

plc

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

United

Kingdom

28,388

288,031

DR

Horton,

Inc.

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

United

States

1,589

172,327

Garmin

Ltd.

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

United

States

1,002

136,442

Gree

Electric

Appliances,

Inc.

of

Zhuhai,

A

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

China

52,100

303,965

Iida

Group

Holdings

Co.

Ltd.

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

Japan

7,200

167,352

Lennar

Corp.,

A

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

United

States

739

85,842

a

NVR,

Inc.

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

United

States

20

118,177

Panasonic

Corp.

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

Japan

5,000

54,931

Persimmon

plc

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

United

Kingdom

1,744

67,541

PulteGroup,

Inc.

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

United

States

1,475

84,311

Sekisui

House

Ltd.

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

Japan

19,600

421,452

Sony

Group

Corp.

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

Japan

4,348

548,724

Taylor

Wimpey

plc

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

United

Kingdom

45,651

108,750

Whirlpool

Corp.

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

United

States

177

41,535

2,599,380

Household

Products

0.4%

Church

&

Dwight

Co.,

Inc.

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

United

States

1,653

169,433

Colgate-Palmolive

Co.

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

United

States

15,426

1,316,455

Kimberly-Clark

Corp.

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

United

States

1,014

144,921

Procter

&

Gamble

Co.

(The)

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

United

States

9,023

1,475,982

3,106,791

Industrial

Conglomerates

0.9%

3M

Co.

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

United

States

2,488

441,943

CK

Hutchison

Holdings

Ltd.

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

United

Kingdom

153,000

985,218

Hitachi

Ltd.

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

Japan

29,046

1,572,562

Honeywell

International,

Inc.

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

United

States

5,600

1,167,656

Roper

Technologies,

Inc.

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

United

States

4,400

2,164,184

6,331,563

Insurance

0.6%

AIA

Group

Ltd.

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

Hong

Kong

69,046

696,969

American

Financial

Group,

Inc.

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

United

States

2,184

299,907

Assicurazioni

Generali

SpA

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

Italy

22,076

466,202

Assured

Guaranty

Ltd.

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

United

States

2,165

108,683

Chubb

Ltd.

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

United

States

538

104,001

Dai-ichi

Life

Holdings,

Inc.

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

Japan

2,700

54,426

Erie

Indemnity

Co.,

A

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

United

States

1,700

327,522

Fidelity

National

Financial,

Inc.

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

United

States

9,015

470,403

First

American

Financial

Corp.

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

United

States

3,508

274,431

NN

Group

NV

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

Netherlands

4,860

262,622

Old

Republic

International

Corp.

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

United

States

10,315

253,542

Progressive

Corp.

(The)

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

United

States

2,639

270,893

Prudential

plc,

(GBP

Traded)

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

United

Kingdom

32,962

569,544

Prudential

plc,

(HKD

Traded)

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

United

Kingdom

7,450

127,126

4,286,271

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Interactive

Media

&

Services

2.3%

a

Alphabet,

Inc.,

A

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

United

States

2,830

$

8,198,623

a

Alphabet,

Inc.,

C

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

United

States

1,379

3,990,261

c

Auto

Trader

Group

plc,

144A,

Reg

S

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

United

Kingdom

7,104

71,088

a

Baidu,

Inc.,

ADR

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

China

2,085

310,227

a

IAC/InterActiveCorp

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

United

States

1,007

131,625

a

Match

Group,

Inc.

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

United

States

2,531

334,725

a

Meta

Platforms,

Inc.,

A

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

United

States

10,084

3,391,753

a

Vimeo,

Inc.

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

United

States

1,721

30,909

16,459,211

Internet

&

Direct

Marketing

Retail

1.2%

a

Alibaba

Group

Holding

Ltd.

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

China

47,993

705,385

a

Amazon.com,

Inc.

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

United

States

1,652

5,508,330

a

boohoo

Group

plc

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

United

Kingdom

385,000

645,040

eBay,

Inc.

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

United

States

2,657

176,690

a,c

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

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

United

Kingdom

10,948

594,345

a

MercadoLibre

,

Inc.

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

Argentina

870

1,173,108

Qurate

Retail,

Inc.,

A

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

United

States

1,529

11,620

ZOZO,

Inc.

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

Japan

6,500

202,548

9,017,066

IT

Services

3.1%

Accenture

plc,

A

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

United

States

13,933

5,775,925

a,c

Adyen

NV,

144A,

Reg

S

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

Netherlands

683

1,791,459

a

Akamai

Technologies,

Inc.

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

United

States

671

78,534

a

Amadeus

IT

Group

SA

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

Spain

24,497

1,656,261

Amdocs

Ltd.

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

United

States

4,206

314,777

Automatic

Data

Processing,

Inc.

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

United

States

2,208

544,449

Cognizant

Technology

Solutions

Corp.,

A

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

United

States

4,482

397,643

a

DXC

Technology

Co.

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

United

States

23,000

740,370

a

EPAM

Systems,

Inc.

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

United

States

151

100,936

Fujitsu

Ltd.

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

Japan

3,300

566,683

a

Gartner,

Inc.

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

United

States

1,424

476,072

International

Business

Machines

Corp.

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

United

States

3,454

461,662

Jack

Henry

&

Associates,

Inc.

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

United

States

512

85,499

Keywords

Studios

plc

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

Ireland

33,000

1,313,040

a

Marqeta

,

Inc.,

A

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

United

States

3,700

63,529

Mastercard

,

Inc.,

A

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

United

States

6,110

2,195,445

a

Okta

,

Inc.

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

United

States

1,300

291,421

Paychex,

Inc.

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

United

States

2,314

315,861

a

Paymentus

Holdings,

Inc.,

A

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

United

States

1,600

55,968

a

PayPal

Holdings,

Inc.

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

United

States

3,200

603,456

SCSK

Corp.

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

Japan

3,000

59,670

a

Shopify,

Inc.,

A

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

Canada

760

1,046,816

a

Snowflake,

Inc.,

A

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

United

States

1,600

542,000

a

Twilio

,

Inc.,

A

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

United

States

1,762

464,005

Visa,

Inc.,

A

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

United

States

11,054

2,395,512

Western

Union

Co.

(The)

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

United

States

654

11,667

22,348,660

Leisure

Products

0.0%

†

Brunswick

Corp.

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

United

States

214

21,556

Polaris,

Inc.

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

United

States

165

18,135

Shimano,

Inc.

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

Japan

200

53,232

92,923

Life

Sciences

Tools

&

Services

2.0%

a

10X

Genomics,

Inc.,

A

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

United

States

1,300

193,648

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-19

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Life

Sciences

Tools

&

Services

(continued)

Agilent

Technologies,

Inc.

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

United

States

7,352

$

1,173,747

a

Bio-Rad

Laboratories,

Inc.,

A

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

United

States

79

59,690

Danaher

Corp.

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

United

States

7,056

2,321,495

Eurofins

Scientific

SE

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

Luxembourg

1,113

137,782

a

Evotec

SE

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

Germany

16,000

771,771

a

Illumina,

Inc.

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

United

States

2,446

930,556

a

Mettler

-Toledo

International,

Inc.

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

United

States

2,086

3,540,380

Sartorius

Stedim

Biotech

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

France

666

365,482

Thermo

Fisher

Scientific,

Inc.

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

United

States

2,644

1,764,183

a

Waters

Corp.

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

United

States

2,363

880,454

West

Pharmaceutical

Services,

Inc.

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

United

States

3,512

1,647,163

a,c

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

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

China

38,500

455,862

14,242,213

Machinery

1.2%

Allison

Transmission

Holdings,

Inc.

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

United

States

641

23,300

Caterpillar,

Inc.

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

United

States

2,246

464,338

CNH

Industrial

NV

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

United

Kingdom

10,374

200,414

Crane

Co.

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

United

States

1,001

101,832

Cummins,

Inc.

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

United

States

1,022

222,939

Deere

&

Co.

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

United

States

2,186

749,558

Donaldson

Co.,

Inc.

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

United

States

4,900

290,374

Dover

Corp.

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

United

States

5,000

908,000

Fortive

Corp.

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

United

States

4,417

336,973

Graco

,

Inc.

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

United

States

1,102

88,843

Illinois

Tool

Works,

Inc.

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

United

States

5,920

1,461,056

Ingersoll

Rand,

Inc.

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

United

States

5,426

335,707

Komatsu

Ltd.

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

Japan

16,326

381,568

Lincoln

Electric

Holdings,

Inc.

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

United

States

247

34,449

MISUMI

Group,

Inc.

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

Japan

13,500

554,270

NGK

Insulators

Ltd.

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

Japan

3,500

59,201

Otis

Worldwide

Corp.

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

United

States

1,887

164,301

PACCAR,

Inc.

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

United

States

1,739

153,484

Pentair

plc

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

United

States

7,800

569,634

Snap-on,

Inc.

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

United

States

2,057

443,037

Stanley

Black

&

Decker,

Inc.

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

United

States

3,152

594,530

Techtronic

Industries

Co.

Ltd.

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

Hong

Kong

17,000

338,941

Toro

Co.

(The)

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

United

States

737

73,634

Toyota

Industries

Corp.

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

Japan

2,550

203,858

Xylem,

Inc.

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

United

States

2,400

287,808

9,042,049

Marine

0.2%

AP

Moller

-

Maersk

A/S,

A

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

Denmark

138

457,446

AP

Moller

-

Maersk

A/S,

B

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

Denmark

134

477,893

Nippon

Yusen

KK

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

Japan

1,600

121,930

SITC

International

Holdings

Co.

Ltd.

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

China

64,000

231,501

1,288,770

Media

0.7%

a,c

Ascential

plc,

144A,

Reg

S

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

United

Kingdom

220,000

1,208,906

Cable

One,

Inc.

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

United

States

361

636,606

Comcast

Corp.,

A

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

United

States

11,591

583,375

CyberAgent

,

Inc.

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

Japan

76,200

1,269,469

Fox

Corp.,

A

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

United

States

877

32,361

a

Informa

plc

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

United

Kingdom

57,803

404,383

Interpublic

Group

of

Cos.,

Inc.

(The)

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

United

States

8,286

310,311

Omnicom

Group,

Inc.

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

United

States

1,491

109,246

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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

(continued)

Vivendi

SE

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

France

12,675

$

171,318

4,725,975

Metals

&

Mining

0.7%

Anglo

American

plc

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

South

Africa

3,451

141,832

ArcelorMittal

SA

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

Luxembourg

20,098

644,208

BHP

Group

plc

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

Australia

2,169

64,486

BlueScope

Steel

Ltd.

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

Australia

11,478

174,998

a

Cleveland-Cliffs,

Inc.

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

United

States

734

15,979

Evraz

plc

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

Russia

24,522

200,325

Fortescue

Metals

Group

Ltd.

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

Australia

12,324

173,009

Newmont

Corp.

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

United

States

3,370

209,007

Nucor

Corp.

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

United

States

11,995

1,369,229

Reliance

Steel

&

Aluminum

Co.

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

United

States

341

55,317

Southern

Copper

Corp.

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

Peru

315

19,439

Steel

Dynamics,

Inc.

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

United

States

7,805

484,456

Sumitomo

Metal

Mining

Co.

Ltd.

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

Japan

20,890

790,716

United

States

Steel

Corp.

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

United

States

9,454

225,100

Wheaton

Precious

Metals

Corp.

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

Brazil

18,917

812,032

5,380,133

Multiline

Retail

0.5%

Dollar

General

Corp.

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

United

States

1,620

382,045

Kohl's

Corp.

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

United

States

4,978

245,863

Next

plc

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

United

Kingdom

3,903

431,333

Seria

Co.

Ltd.

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

Japan

13,848

400,867

Target

Corp.

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

United

States

9,847

2,278,990

3,739,098

Multi-Utilities

0.4%

Ameren

Corp.

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

United

States

1,346

119,807

Consolidated

Edison,

Inc.

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

United

States

2,159

184,206

DTE

Energy

Co.

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

United

States

6,138

733,736

E.ON

SE

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

Germany

88,589

1,230,188

MDU

Resources

Group,

Inc.

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

United

States

3,549

109,451

NiSource,

Inc.

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

United

States

6,329

174,744

WEC

Energy

Group,

Inc.

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

United

States

1,324

128,521

2,680,653

Oil,

Gas

&

Consumable

Fuels

1.3%

APA

Corp.

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

United

States

12,301

330,774

BP

plc

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

United

Kingdom

441,931

1,978,518

Cenovus

Energy,

Inc.

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

Canada

33,620

412,373

Chevron

Corp.

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

United

States

9,242

1,084,549

ConocoPhillips

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

United

States

4,631

334,266

Continental

Resources,

Inc.

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

United

States

2,171

97,174

Coterra

Energy,

Inc.

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

United

States

7,989

151,791

Devon

Energy

Corp.

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

United

States

2,368

104,310

EOG

Resources,

Inc.

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

United

States

15,223

1,352,259

Equinor

ASA

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

Norway

15,260

403,797

Exxon

Mobil

Corp.

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

United

States

9,515

582,223

Galp

Energia

SGPS

SA,

B

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

Portugal

19,557

189,614

HollyFrontier

Corp.

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

United

States

4,855

159,147

Lundin

Energy

AB

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

Sweden

10,057

359,462

Royal

Dutch

Shell

plc,

B

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

Netherlands

59,280

1,300,528

Texas

Pacific

Land

Corp.

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

United

States

8

9,991

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-21

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

TotalEnergies

SE

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

France

12,797

$

650,855

9,501,631

Paper

&

Forest

Products

0.0%

†

Louisiana-Pacific

Corp.

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

United

States

1,792

140,403

a

Sylvamo

Corp.

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

United

States

142

3,961

144,364

Personal

Products

0.4%

Estee

Lauder

Cos.,

Inc.

(The),

A

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

United

States

2,056

761,131

a

Herbalife

Nutrition

Ltd.

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

United

States

3,572

146,202

L'Oreal

SA

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

France

3,208

1,528,406

a

Olaplex

Holdings,

Inc.

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

United

States

1,600

46,608

Unilever

plc

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

United

Kingdom

11,735

629,030

3,111,377

Pharmaceuticals

2.6%

Astellas

Pharma,

Inc.

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

Japan

9,300

151,270

AstraZeneca

plc

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

United

Kingdom

7,568

882,993

AstraZeneca

plc,

ADR

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

United

Kingdom

8,314

484,290

Bayer

AG

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

Germany

19,717

1,052,141

Bristol-Myers

Squibb

Co.

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

United

States

7,665

477,913

a

Catalent

,

Inc.

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

United

States

10,789

1,381,316

Eli

Lilly

&

Co.

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

United

States

6,692

1,848,464

Hikma

Pharmaceuticals

plc

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

Jordan

34,000

1,020,226

Ipsen

SA

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

France

1,778

162,576

Johnson

&

Johnson

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

United

States

15,490

2,649,874

Merck

&

Co.,

Inc.

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

United

States

16,108

1,234,517

Novo

Nordisk

A/S,

B

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

Denmark

11,095

1,245,226

Organon

&

Co.

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

United

States

9,397

286,139

Orion

OYJ,

B

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

Finland

5,344

221,808

Otsuka

Holdings

Co.

Ltd.

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

Japan

6,300

229,060

Pfizer,

Inc.

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

United

States

39,962

2,359,756

Roche

Holding

AG

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

Switzerland

4,585

1,899,950

Roche

Holding

AG,

BR

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

Switzerland

140

62,589

Sanofi

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

France

2,887

289,464

Sumitomo

Dainippon

Pharma

Co.

Ltd.

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

Japan

4,700

54,193

Takeda

Pharmaceutical

Co.

Ltd.,

ADR

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

Japan

38,404

523,447

Zoetis,

Inc.

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

United

States

1,888

460,729

18,977,941

Professional

Services

1.1%

Adecco

Group

AG

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

Switzerland

22,131

1,126,440

Booz

Allen

Hamilton

Holding

Corp.

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

United

States

732

62,066

a

CACI

International,

Inc.,

A

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

United

States

373

100,415

a

Clarivate

plc

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

United

States

54,000

1,270,080

a

CoStar

Group,

Inc.

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

United

States

6,500

513,695

Equifax,

Inc.

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

United

States

1,890

553,373

Experian

plc

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

United

Kingdom

29,268

1,440,450

a

FTI

Consulting,

Inc.

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

United

States

144

22,092

IHS

Markit

Ltd.

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

United

States

3,909

519,584

ManpowerGroup

,

Inc.

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

United

States

150

14,599

Persol

Holdings

Co.

Ltd.

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

Japan

4,400

127,845

Randstad

NV

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

Netherlands

5,440

370,808

RELX

plc

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

United

Kingdom

8,317

271,304

Robert

Half

International,

Inc.

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

United

States

4,588

511,654

Verisk

Analytics,

Inc.

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

United

States

2,261

517,159

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Wolters

Kluwer

NV

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

Netherlands

4,363

$

513,124

7,934,688

Real

Estate

Management

&

Development

0.5%

a

CBRE

Group,

Inc.,

A

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

United

States

11,227

1,218,242

China

Overseas

Land

&

Investment

Ltd.

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

China

153,500

363,662

CK

Asset

Holdings

Ltd.

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

Hong

Kong

117,830

743,373

a

Jones

Lang

LaSalle,

Inc.

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

United

States

1,754

472,422

LEG

Immobilien

SE

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

Germany

3,594

500,690

Swire

Pacific

Ltd.,

A

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

Hong

Kong

47,000

267,373

3,565,762

Road

&

Rail

0.9%

AMERCO

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

United

States

324

235,299

Canadian

Pacific

Railway

Ltd.

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

Canada

8,660

623,000

JB

Hunt

Transport

Services,

Inc.

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

United

States

4,233

865,225

Knight-Swift

Transportation

Holdings,

Inc.

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

United

States

5,572

339,558

Landstar

System,

Inc.

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

United

States

837

149,840

Norfolk

Southern

Corp.

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

United

States

2,500

744,275

Old

Dominion

Freight

Line,

Inc.

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

United

States

1,185

424,680

Ryder

System,

Inc.

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

United

States

1,832

151,012

Schneider

National,

Inc.,

B

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

United

States

248

6,674

a

Uber

Technologies,

Inc.

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

United

States

4,038

169,313

Union

Pacific

Corp.

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

United

States

10,244

2,580,771

6,289,647

Semiconductors

&

Semiconductor

Equipment

3.2%

a

Alphawave

IP

Group

plc

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

United

Kingdom

10,266

27,741

Analog

Devices,

Inc.

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

United

States

9,300

1,634,661

Applied

Materials,

Inc.

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

United

States

5,120

805,683

ASML

Holding

NV

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

Netherlands

2,249

1,800,072

ASML

Holding

NV,

NYRS

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

Netherlands

1,622

1,291,339

Broadcom,

Inc.

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

United

States

184

122,435

Disco

Corp.

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

Japan

200

61,093

Intel

Corp.

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

United

States

27,067

1,393,951

KLA

Corp.

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

United

States

996

428,390

Lam

Research

Corp.

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

United

States

754

542,239

Monolithic

Power

Systems,

Inc.

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

United

States

2,193

1,081,873

NVIDIA

Corp.

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

United

States

9,585

2,819,044

NXP

Semiconductors

NV

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

China

5,777

1,315,885

QUALCOMM,

Inc.

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

United

States

10,261

1,876,429

Skyworks

Solutions,

Inc.

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

United

States

1,217

188,805

STMicroelectronics

NV

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

Singapore

1,087

53,411

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

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

Taiwan

49,586

1,094,992

Teradyne,

Inc.

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

United

States

1,284

209,973

Texas

Instruments,

Inc.

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

United

States

27,878

5,254,167

Tokyo

Electron

Ltd.

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

Japan

1,500

862,834

Xilinx,

Inc.

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

United

States

1,612

341,792

23,206,809

Software

5.6%

a

Adobe,

Inc.

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

United

States

3,745

2,123,640

a

AppLovin

Corp.,

A

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

United

States

1,100

103,686

a

Aspen

Technology,

Inc.

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

United

States

398

60,576

a

Atlassian

Corp.

plc,

A

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

United

States

900

343,161

a

Autodesk,

Inc.

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

United

States

3,242

911,618

a

Avalara,

Inc.

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

United

States

3,380

436,392

AVEVA

Group

plc

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

United

Kingdom

25,000

1,152,618

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-23

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

Bill.com

Holdings,

Inc.

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

United

States

4,400

$

1,096,260

a

Cadence

Design

Systems,

Inc.

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

United

States

4,825

899,139

a

Check

Point

Software

Technologies

Ltd.

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

Israel

1,500

174,840

a

Crowdstrike

Holdings,

Inc.,

A

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

United

States

300

61,425

a

CyberArk

Software

Ltd.

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

United

States

7,800

1,351,584

a

Fair

Isaac

Corp.

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

United

States

387

167,830

a

Fortinet,

Inc.

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

United

States

593

213,124

a

Gitlab

,

Inc.,

A

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

United

States

500

43,500

a

HashiCorp

,

Inc.,

A

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

United

States

900

81,936

Intuit,

Inc.

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

United

States

7,273

4,678,139

a

Manhattan

Associates,

Inc.

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

United

States

710

110,398

Microsoft

Corp.

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

United

States

53,374

17,950,744

Oracle

Corp.

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

United

States

9,868

860,588

Oracle

Corp.

Japan

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

Japan

1,900

144,262

a

Paycom

Software,

Inc.

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

United

States

700

290,633

a

Procore

Technologies,

Inc.

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

United

States

300

23,991

a

PTC,

Inc.

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

United

States

4,921

596,179

a

salesforce.com,

Inc.

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

United

States

2,353

597,968

a

ServiceNow

,

Inc.

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

United

States

3,455

2,242,675

SimCorp

A/S

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

Denmark

9,700

1,056,347

a

Synopsys,

Inc.

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

United

States

2,200

810,700

a

Teradata

Corp.

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

United

States

2,226

94,538

Trend

Micro,

Inc.

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

Japan

1,000

55,482

a

Tyler

Technologies,

Inc.

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

United

States

796

428,208

a

Workday,

Inc.,

A

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

United

States

3,220

879,640

a

Zoom

Video

Communications,

Inc.,

A

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

United

States

607

111,633

40,153,454

Specialty

Retail

1.0%

a

AutoNation,

Inc.

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

United

States

1,659

193,854

a

AutoZone,

Inc.

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

United

States

206

431,856

Best

Buy

Co.,

Inc.

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

United

States

2,934

298,094

Dick's

Sporting

Goods,

Inc.

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

United

States

2,358

271,146

Foot

Locker,

Inc.

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

United

States

3,064

133,682

Home

Depot,

Inc.

(The)

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

United

States

3,984

1,653,400

Kingfisher

plc

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

United

Kingdom

102,019

468,880

Lithia

Motors,

Inc.,

A

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

United

States

588

174,607

Lowe's

Cos.,

Inc.

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

United

States

6,233

1,611,106

a

O'Reilly

Automotive,

Inc.

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

United

States

659

465,406

Penske

Automotive

Group,

Inc.

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

United

States

1,159

124,268

Ross

Stores,

Inc.

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

United

States

7,200

822,816

Tractor

Supply

Co.

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

United

States

870

207,582

a

Victoria's

Secret

&

Co.

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

United

States

127

7,054

Williams-Sonoma,

Inc.

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

United

States

1,598

270,270

Yamada

Holdings

Co.

Ltd.

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

Japan

34,400

117,532

7,251,553

Technology

Hardware,

Storage

&

Peripherals

1.9%

Apple,

Inc.

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

United

States

58,604

10,406,312

Brother

Industries

Ltd.

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

Japan

8,300

159,881

Canon,

Inc.

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

Japan

11,300

275,481

a

Dell

Technologies,

Inc.,

C

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

United

States

396

22,243

Elecom

Co.

Ltd.

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

Japan

13,800

181,518

Hewlett

Packard

Enterprise

Co.

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

United

States

3,641

57,419

HP,

Inc.

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

United

States

32,532

1,225,480

NetApp,

Inc.

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

United

States

1,584

145,712

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Samsung

Electronics

Co.

Ltd.

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

South

Korea

18,639

$

1,224,013

13,698,059

Textiles,

Apparel

&

Luxury

Goods

0.5%

Burberry

Group

plc

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

United

Kingdom

2,660

65,601

Carter's,

Inc.

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

United

States

289

29,253

Hermes

International

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

France

155

270,629

NIKE,

Inc.,

B

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

United

States

17,025

2,837,557

Pandora

A/S

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

Denmark

1,683

209,177

3,412,217

Thrifts

&

Mortgage

Finance

0.2%

Housing

Development

Finance

Corp.

Ltd.

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

India

25,529

881,498

MGIC

Investment

Corp.

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

United

States

11,345

163,595

New

York

Community

Bancorp,

Inc.

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

United

States

9,302

113,577

1,158,670

Tobacco

0.4%

Altria

Group,

Inc.

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

United

States

9,973

472,620

Imperial

Brands

plc

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

United

Kingdom

45,456

995,350

Philip

Morris

International,

Inc.

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

United

States

13,400

1,273,000

2,740,970

Trading

Companies

&

Distributors

0.7%

Fastenal

Co.

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

United

States

17,526

1,122,715

Ferguson

plc

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

United

States

9,282

1,647,392

ITOCHU

Corp.

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

Japan

1,900

58,093

Marubeni

Corp.

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

Japan

72,700

707,885

Mitsubishi

Corp.

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

Japan

30,600

971,054

MSC

Industrial

Direct

Co.,

Inc.,

A

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

United

States

298

25,050

Watsco

,

Inc.

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

United

States

228

71,337

WW

Grainger,

Inc.

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

United

States

1,625

842,140

5,445,666

Water

Utilities

0.1%

American

Water

Works

Co.,

Inc.

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

United

States

2,719

513,510

Wireless

Telecommunication

Services

0.1%

KDDI

Corp.

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

Japan

21,600

631,281

a

T-Mobile

US,

Inc.

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

United

States

888

102,990

734,271

Total

Common

Stocks

(Cost

$291,202,882)

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

426,142,998

Management

Investment

Companies

3.0%

Capital

Markets

3.0%

Schwab

U.S.

TIPS

ETF

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

United

States

234,247

14,731,794

a,d

Templeton

Global

Bond

VIP

Fund,

Class

1

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

United

States

511,021

7,062,310

21,794,104

Total

Management

Investment

Companies

(Cost

$22,621,279)

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

21,794,104

Preferred

Stocks

0.1%

Automobiles

0.1%

e

Bayerische

Motoren

Werke

AG,

2.64%

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

Germany

2,751

227,951

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-25

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Preferred

Stocks

(continued)

Health

Care

Equipment

&

Supplies

0.0%

†

e

Sartorius

AG,

0.12%

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

Germany

225

$

152,056

Total

Preferred

Stocks

(Cost

$383,232)

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

380,007

Principal

Amount

*

Corporate

Bonds

10.4%

Aerospace

&

Defense

0.2%

Boeing

Co.

(The)

,

Senior

Bond,

3.5%,

3/01/39

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

United

States

300,000

305,438

Senior

Note,

2.196%,

2/04/26

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

United

States

350,000

350,202

Northrop

Grumman

Corp.,

Senior

Bond,

5.25%,

5/01/50

........

United

States

100,000

140,431

Raytheon

Technologies

Corp.,

Senior

Bond,

4.5%,

6/01/42

......

United

States

300,000

371,699

1,167,770

Air

Freight

&

Logistics

0.1%

FedEx

Corp.

,

Senior

Bond,

5.1%,

1/15/44

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

United

States

400,000

508,820

Senior

Bond,

4.75%,

11/15/45

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

United

States

100,000

122,146

United

Parcel

Service,

Inc.,

Senior

Bond,

3.75%,

11/15/47

.......

United

States

100,000

119,198

750,164

Airlines

0.1%

c

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Senior

Secured

Note,

144A,

4.5%,

10/20/25

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

United

States

525,000

552,107

Banks

1.5%

c

Banco

de

Chile,

Senior

Bond,

144A,

2.99%,

12/09/31

..........

Chile

200,000

197,477

Bancolombia

SA,

Senior

Note,

3%,

1/29/25

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

Colombia

650,000

653,288

Bank

of

America

Corp.,

L,

Sub.

Bond,

4.183%,

11/25/27

........

United

States

960,000

1,051,081

c

BNP

Paribas

SA,

Senior

Bond,

144A,

3.052%

to

1/13/30,

FRN

thereafter,

1/13/31

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

France

200,000

205,949

Citigroup,

Inc.

,

Senior

Bond,

2.572%

to

6/03/30,

FRN

thereafter,

6/03/31

.....

United

States

700,000

706,817

Senior

Note,

3.352%

to

4/24/24,

FRN

thereafter,

4/24/25

......

United

States

1,100,000

1,149,168

Credit

Suisse

Group

Funding

Guernsey

Ltd.,

Senior

Note,

3.8%,

9/15/22

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

Switzerland

1,200,000

1,226,117

HSBC

Holdings

plc

,

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

200,000

195,616

Senior

Note,

1.645%

to

8/18/25,

FRN

thereafter,

4/18/26

......

United

Kingdom

525,000

521,058

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

300,000

293,894

JPMorgan

Chase

&

Co.

,

Senior

Bond,

3.54%

to

5/01/27,

FRN

thereafter,

5/01/28

......

United

States

1,200,000

1,304,197

Sub.

Bond,

2.956%

to

5/13/30,

FRN

thereafter,

5/13/31

.......

United

States

300,000

310,941

f

PNC

Financial

Services

Group,

Inc.

(The),

T,

Junior

Sub.

Bond,

3.4%

to

9/15/26,

FRN

thereafter,

Perpetual

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

United

States

400,000

394,696

c

Standard

Chartered

plc,

Senior

Note

,

144A,

4.05%,

4/12/26

.....

United

Kingdom

470,000

506,748

S

VB

Financial

Group,

Senior

Note

,

3.125%,

6/05/30

...........

United

States

100,000

105,068

Truist

Bank,

Sub.

Note,

2.25%,

3/11/30

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

United

States

400,000

399,385

Truist

Financial

Corp.,

Sub.

Note,

3.875%,

3/19/29

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

United

States

860,000

948,136

c

UniCredit

SpA

,

Senior

Note,

144A,

1.982%

to

6/03/26,

FRN

thereafter,

6/03/27

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

Italy

500,000

487,367

US

Bancorp,

Sub.

Note,

3%,

7/30/29

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

United

States

300,000

317,143

Wells

Fargo

&

Co.,

Senior

Bond,

2.879%

to

10/30/29,

FRN

thereafter,

10/30/30

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

United

States

200,000

208,126

11,182,272

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Beverages

0.2%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.,

Senior

Bond,

4.9%,

2/01/46

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

Belgium

100,000

$

126,685

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond,

3.5%,

6/01/30

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

Belgium

420,000

460,845

Senior

Bond,

5.8%,

1/23/59

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

Belgium

250,000

362,484

Constellation

Brands,

Inc.,

Senior

Bond,

2.25%,

8/01/31

........

United

States

450,000

440,311

1,390,325

Biotechnology

0.3%

AbbVie,

Inc.

,

Senior

Bond,

4.85%,

6/15/44

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

United

States

400,000

502,405

Senior

Bond,

4.75%,

3/15/45

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

United

States

300,000

375,055

Senior

Bond,

4.25%,

11/21/49

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

United

States

370,000

445,968

Amgen,

Inc.,

Senior

Note

,

2.45%,

2/21/30

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

United

States

980,000

998,500

2,321,928

Building

Products

0.1%

Carrier

Global

Corp.,

Senior

Bond,

3.577%,

4/05/50

...........

United

States

930,000

991,517

Capital

Markets

0.3%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note

,

3.5%,

1/23/25

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

United

States

425,000

448,356

Sub.

Note,

4.25%,

10/21/25

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

United

States

400,000

436,628

Morgan

Stanley

,

Senior

Bond,

3.591%

to

7/22/27,

FRN

thereafter,

7/22/28

.....

United

States

1,060,000

1,143,641

Senior

Bond,

3.622%

to

4/01/30,

FRN

thereafter,

4/01/31

.....

United

States

300,000

327,243

2,355,868

Chemicals

0.1%

CF

Industries,

Inc.,

Senior

Bond,

5.15%,

3/15/34

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

United

States

400,000

484,442

Sherwin-Williams

Co.

(The),

Senior

Bond,

2.3%,

5/15/30

........

United

States

400,000

399,550

c

Yara

International

ASA,

Senior

Note

,

144A,

3.148%,

6/04/30

.....

Brazil

100,000

103,281

987,273

Consumer

Finance

0.1%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust,

Senior

Bond,

3.4%,

10/29/33

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

Ireland

200,000

203,872

Capital

O

ne

Financial

Corp.,

Senior

Note

,

3.75%,

3/09/27

.......

United

States

435,000

471,217

675,089

Containers

&

Packaging

0.0%

†

WRKCo

,

Inc.,

Senior

Bond,

3%,

6/15/33

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

United

States

235,000

242,015

Diversified

Financial

Services

0.3%

c

CK

Hutchison

International

19

Ltd.,

Senior

Note,

144A,

3.25%,

4/11/24

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

United

Kingdom

635,000

661,524

c

EDP

Finance

BV,

Senior

Note,

144A,

1.71%,

1/24/28

..........

Portugal

700,000

681,524

c

NTT

Finance

Corp.,

Senior

Bond,

144A,

2.065%,

4/03/31

.......

Japan

500,000

500,097

1,843,145

Diversified

Telecommunication

Services

0.4%

AT&T,

Inc.,

Senior

Bond,

3.5%,

6/01/41

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

United

States

525,000

540,709

Bell

Telephone

Co.

of

Canada

or

Bell

Canada

(The),

Senior

Bond,

4.3%,

7/29/49

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

Canada

275,000

334,833

Orange

SA,

Senior

Bond,

9%,

3/01/31

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

France

300,000

460,191

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Telecommunication

Services

(continued)

Verizon

Communications,

Inc.

,

Senior

Bond,

1.75%,

1/20/31

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

United

States

200,000

$

189,531

Senior

Bond,

2.55%,

3/21/31

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

United

States

200,000

201,989

c

Senior

Bond,

144A,

2.355%,

3/15/32

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

United

States

710,000

700,386

Senior

Bond,

2.85%,

9/03/41

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

United

States

400,000

395,394

2,823,033

Electric

Utilities

0.6%

Commonwealth

Edison

Co.,

Senior

Bond,

4%,

3/01/48

.........

United

States

200,000

234,187

Duke

Energy

Corp.,

Senior

Bond,

3.75%,

9/01/46

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

United

States

200,000

213,930

Duke

Energy

Florida

LLC,

Senior

Bond,

6.4%,

6/15/38

.........

United

States

200,000

288,918

c

Enel

Finance

International

NV,

Senior

Bond,

144A,

2.25%,

7/12/31

Italy

400,000

387,325

Exelon

Corp.,

Senior

Bond,

4.05%,

4/15/30

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

United

States

850,000

945,402

Georgia

Power

Co.,

Senior

Bond,

4.3%,

3/15/42

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

United

States

700,000

798,714

Southern

Co.

(The),

A,

Senior

Bond,

3.7%,

4/30/30

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

United

States

700,000

762,176

c

State

Grid

Overseas

Investment

BVI

Ltd.,

Senior

Note

,

144A,

3.5%,

5/04/27

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

China

600,000

648,415

c

Vistra

Operations

Co.

LLC,

Senior

Secured

Note,

144A,

3.55%,

7/15/24

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

United

States

235,000

242,143

4,521,210

Electronic

Equipment,

Instruments

&

Components

0.1%

Flex

Ltd.,

Senior

Note

,

4.875%,

5/12/30

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

United

States

600,000

684,937

Energy

Equipment

&

Services

0.1%

Baker

Hughes

Holdings

LLC

/

Baker

Hughes

Co-Obligor,

Inc.,

Senior

Bond,

4.08%,

12/15/47

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

United

States

485,000

552,327

c

Schlumberger

Holdings

Corp.,

Senior

Note,

144A,

3.75%,

5/01/24

.

United

States

410,000

430,361

982,688

Entertainment

0.1%

NBCUniversal

Media

LLC,

Senior

Bond,

5.95%,

4/01/41

........

United

States

200,000

287,052

Walt

Disney

Co.

(The),

Senior

Bond,

2.65%,

1/13/31

...........

United

States

200,000

208,284

495,336

Equity

Real

Estate

Investment

Trusts

(REITs)

0.2%

Alexandria

Real

Estate

Equities,

Inc.,

Senior

Bond,

4.9%,

12/15/30

United

States

300,000

360,763

Essex

Portfolio

LP,

Senior

Bond,

2.65%,

3/15/32

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

United

States

360,000

361,643

MPT

Operating

Partnership

LP

/

MPT

Finance

Corp.,

Senior

Bond,

3.5%,

3/15/31

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

United

States

100,000

101,279

Simon

Property

Group

LP,

Senior

Note,

3.375%,

12/01/27

.......

United

States

595,000

640,280

1,463,965

Food

&

Staples

Retailing

0.1%

c

Cencosud

SA,

Senior

Note

,

144A,

5.15%,

2/12/25

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

Chile

300,000

324,311

Kroger

Co.

(The),

Senior

Bond,

5.4%,

1/15/49

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

United

States

400,000

559,965

884,276

Food

Products

0.1%

c

Bimbo

Bakeries

USA,

Inc.,

Senior

Bond,

144A,

4%,

5/17/51

.....

Mexico

400,000

433,907

c

JBS

Finance

Luxembourg

SARL,

Senior

Bond,

144A,

3.625%,

1/15/32

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

United

States

400,000

402,196

836,103

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

Health

Care

Equipment

&

Supplies

0.1%

STERIS

Irish

FinCo

.

UnLtd

.

Co.

,

Senior

Bond,

3.75%,

3/15/51

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

United

States

250,000

$

274,225

Senior

Note,

2.7%,

3/15/31

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

United

States

200,000

201,929

476,154

Health

Care

Providers

&

Services

0.6%

Anthem,

Inc.,

Senior

Bond,

5.1%,

1/15/44

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

United

States

400,000

529,246

Centene

Corp.,

Senior

Note

,

3%,

10/15/30

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

United

States

450,000

458,208

Cigna

Corp.

,

Senior

Bond,

2.375%,

3/15/31

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

United

States

400,000

402,471

Senior

Note,

3.05%,

10/15/27

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

United

States

550,000

584,546

CVS

Health

Corp.

,

Senior

Bond,

5.3%,

12/05/43

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

United

States

500,000

661,489

Senior

Bond,

5.125%,

7/20/45

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

United

States

200,000

260,585

HCA,

Inc.

,

Senior

Secured

Bond,

4.5%,

2/15/27

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

United

States

408,000

449,697

Senior

Secured

Note

,

4.125%,

6/15/29

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

United

States

300,000

330,430

Quest

Diagnostics,

Inc.,

Senior

Bond,

2.8%,

6/30/31

...........

United

States

600,000

620,266

4,296,938

Hotels,

Restaurants

&

Leisure

0.1%

Las

Vegas

Sands

Corp.,

Senior

Bond,

3.9%,

8/08/29

...........

United

States

650,000

655,183

Household

Durables

0.1%

MDC

Holdings,

Inc.,

Senior

Bond,

2.5%,

1/15/31

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

United

States

456,000

441,712

Mohaw

k

Industries,

Inc.,

Senior

Note

,

3.625%,

5/15/30

.........

United

States

290,000

311,321

NVR,

Inc.,

Senior

Bond,

3%,

5/15/30

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

United

States

200,000

208,044

961,077

Household

Products

0.1%

c

Kimberly-Clark

de

Mexico

SAB

de

CV,

Senior

Bond,

144A,

2.431%,

7/01/31

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

Mexico

500,000

494,822

Independent

Power

and

Renewable

Electricity

Producers

0.1%

c

Colbun

SA

,

Senior

Note

,

144A,

3.95%,

10/11/27

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

Chile

200,000

211,605

Senior

Note

,

144A,

3.15%,

3/06/30

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

Chile

200,000

200,325

411,930

Insurance

0.7%

Aflac,

Inc.,

Senior

Bond,

4.75%,

1/15/49

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

United

States

700,000

929,610

Allstate

Corp.

(The),

Senior

Bond,

4.2%,

12/15/46

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

United

States

500,000

601,656

Aon

Corp.,

Senior

Note

,

2.8%,

5/15/30

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

United

States

500,000

515,874

Arch

Capital

Group

Ltd.,

Senior

Bond,

3.635%,

6/30/50

.........

United

States

800,000

858,227

Manulife

Financial

Corp.,

Sub.

Bond,

4.061%

to

2/24/27,

FRN

thereafter,

2/24/32

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

Canada

200,000

215,333

Marsh

&

McLennan

Cos.,

Inc.,

Senior

Bond,

4.9%,

3/15/49

......

United

States

250,000

336,876

MetLife,

Inc.,

Junior

Sub.

Bond,

6.4%,

12/15/36

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

United

States

250,000

308,053

c

Metropolitan

Life

Global

Funding

I,

Secured

Note,

144A,

3.6%,

1/11/24

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

United

States

940,000

988,812

Prudential

plc,

Senior

Note

,

3.125%,

4/14/30

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

United

Kingdom

425,000

454,105

5,208,546

Interactive

Media

&

Services

0.1%

c

Tencent

Holdings

Ltd.

,

Senior

Note

,

144A,

3.595%,

1/19/28

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

China

500,000

531,143

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-29

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Interactive

Media

&

Services

(continued)

c

Tencent

Holdings

Ltd.,

(continued)

Senior

Note

,

144A,

2.39%,

6/03/30

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

China

500,000

$

490,406

1,021,549

Internet

&

Direct

Marketing

Retail

0.3%

Alibaba

Group

Holding

Ltd.

,

Senior

Bond,

2.125%,

2/09/31

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

China

200,000

193,290

Senior

Bond,

4%,

12/06/37

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

China

300,000

325,750

Senior

Bond,

4.2%,

12/06/47

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

China

800,000

881,814

Amazon.com,

Inc.,

Senior

Bond,

4.05%,

8/22/47

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

United

States

500,000

607,681

2,008,535

IT

Services

0.2%

Fidelity

National

Information

Services,

Inc.,

Senior

Bond,

2.25%,

3/01/31

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

United

States

650,000

636,333

Fiserv,

Inc.

,

Senior

Bond,

2.65%,

6/01/30

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

United

States

200,000

203,171

Senior

Note

,

3.5%,

7/01/29

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

United

States

470,000

505,953

1,345,457

Life

Sciences

Tools

&

Services

0.1%

Thermo

Fisher

Scientific,

Inc.,

Senior

Note,

0.797%,

10/18/23

....

United

States

450,000

448,608

Machinery

0.0%

†

Caterpillar,

Inc.,

Senior

Note

,

2.6%,

4/09/30

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

United

States

300,000

312,940

Media

0.3%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond,

2.8%,

4/01/31

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

United

States

350,000

346,752

Senior

Secured

Bond,

3.5%,

3/01/42

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

United

States

100,000

97,168

Comcast

Corp.

,

Senior

Bond,

4.25%,

1/15/33

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

United

States

300,000

351,550

Senior

Bond,

4.049%,

11/01/52

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

United

States

500,000

585,558

Fox

Corp.

,

Senior

Bond,

5.476%,

1/25/39

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

United

States

100,000

129,197

Senior

Note,

4.709%,

1/25/29

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

United

States

400,000

456,971

1,967,196

Multiline

Retail

0.1%

Dollar

Tree,

Inc.,

Senior

Note,

4%,

5/15/25

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

United

States

350,000

376,273

Kohl's

Corp.,

Senior

Bond,

3.375%,

5/01/31

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

United

States

400,000

407,790

784,063

Multi-Utilities

0.3%

Berkshire

Hathaway

Energy

Co.,

Senior

Bond,

6.125%,

4/01/36

..

United

States

200,000

272,632

Dominion

Energy,

Inc.,

Senior

Note,

4.25%,

6/01/28

...........

United

States

1,050,000

1,171,194

Public

Service

Enterprise

Group,

Inc.,

Senior

Note,

2.875%,

6/15/24

United

States

1,000,000

1,035,984

2,479,810

Oil,

Gas

&

Consumable

Fuels

0.9%

c

Aker

BP

ASA,

Senior

Note

,

144A,

3.75%,

1/15/30

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

Norway

500,000

530,005

BP

Capital

Mar

kets

America,

Inc.,

Senior

Note

,

3.937%,

9/21/28

..

United

States

100,000

110,755

Canadian

Natural

Resources

Ltd.,

Senior

Bond,

3.9%,

2/01/25

...

Canada

200,000

212,595

Cheniere

Corpus

Christi

Holdings

LLC,

Senior

Secured

Note,

5.125%,

6/30/27

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

United

States

200,000

225,817

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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)

c

Continental

Resources,

Inc.,

Senior

Bond,

144A,

5.75%,

1/15/31

..

United

States

300,000

$

353,790

Energy

Transfer

LP,

Senior

Bond,

6.05%,

6/01/41

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

United

States

500,000

613,232

Enterprise

Products

Operating

LLC

,

Senior

Bond,

3.125%,

7/31/29

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

United

States

400,000

425,188

Senior

Bond,

6.125%,

10/15/39

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

United

States

700,000

948,213

Kinder

Morgan,

Inc.

,

Senior

Bond,

5.55%,

6/01/45

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

United

States

300,000

380,152

Senior

Note

,

4.3%,

3/01/28

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

United

States

400,000

444,838

MPLX

LP

,

Senior

Bond,

5.5%,

2/15/49

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

United

States

325,000

416,008

Senior

Note,

4.875%,

6/01/25

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

United

States

100,000

109,512

Senior

Note,

2.65%,

8/15/30

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

United

States

400,000

398,639

Phillips

66,

Senior

Bond,

3.3%,

3/15/52

.....................

United

States

200,000

200,154

c

Sinopec

Group

Overseas

Development

2018

Ltd.,

Senior

Bond,

144A,

3.35%,

5/13/50

.................................

China

200,000

201,387

TransCanada

PipeLines

Ltd.,

Senior

Bond,

4.25%,

5/15/28

......

Canada

500,000

558,031

Transcontinental

Gas

Pipe

Line

Co.

LLC,

Senior

Note,

7.85%,

2/01/26

...........................................

United

States

400,000

488,692

6,617,008

Paper

&

Forest

Products

0.1%

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

225,000

229,048

Senior

Bond,

3.125%,

1/15/32

..........................

Brazil

200,000

193,848

422,896

Pharmaceuticals

0.3%

AstraZeneca

plc

,

Senior

Bond,

4%,

9/18/42

.............................

United

Kingdom

300,000

359,143

Senior

Bond,

4.375%,

11/16/45

.........................

United

Kingdom

450,000

577,682

Royalty

Pharma

plc

,

Senior

Note,

1.75%,

9/02/27

...........................

United

States

100,000

98,316

Senior

Note,

2.2%,

9/02/30

............................

United

States

200,000

193,821

Takeda

Pharmaceutical

Co.

Ltd.

,

Senior

Bond,

3.175%,

7/09/50

..........................

Japan

400,000

404,348

Senior

Note,

5%,

11/26/28

.............................

Japan

300,000

352,739

1,986,049

Road

&

Rail

0.2%

Burlington

Northern

Santa

Fe

LLC,

Senior

Bond,

4.9%,

4/01/44

...

United

States

200,000

261,865

CSX

Corp.

,

Senior

Bond,

3.8%,

11/01/46

...........................

United

States

200,000

225,908

Senior

Bond,

4.75%,

11/15/48

..........................

United

States

525,000

678,410

1,166,183

Software

0.1%

Microsoft

Corp.,

Senior

Note,

2.65%,

11/03/22

................

United

States

420,000

426,665

ServiceNow

,

Inc.,

Senior

Bond,

1.4%,

9/01/30

................

United

States

150,000

139,793

566,458

Specialty

Retail

0.1%

AutoNation,

Inc.,

Senior

Bond,

4.75%,

6/01/30

...............

United

States

100,000

114,352

AutoZone,

Inc.,

Senior

Bond,

1.65%,

1/15/31

.................

United

States

265,000

249,708

364,060

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-31

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Technology

Hardware,

Storage

&

Peripherals

0.1%

Teledyne

FLIR

LLC,

Senior

Note,

2.5%,

8/01/30

..............

United

States

575,000

$

576,926

Thrifts

&

Mortgage

Finance

0.1%

c

BPCE

SA,

Sub.

Bond,

144A,

5.15%,

7/21/24

.................

France

600,000

650,179

Radian

Group,

Inc.,

Senior

Note,

4.875%,

3/15/27

.............

United

States

350,000

375,922

1,026,101

Tobacco

0.1%

c

Imperial

Brands

Finance

plc

,

Senior

Note,

144A,

3.5%,

7/26/26

.......................

United

Kingdom

300,000

315,678

Senior

Note

,

144A,

4.25%,

7/21/25

......................

United

Kingdom

285,000

306,237

621,915

Wireless

Telecommunication

Services

0.2%

America

Movil

SAB

de

CV,

Senior

Bond,

3.625%,

4/22/29

.......

Mexico

300,000

325,090

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

200,000

195,795

Senior

Secured

Note,

3.75%,

4/15/27

....................

United

States

325,000

352,106

Vodafone

Group

plc,

Senior

Bond,

6.15%,

2/27/37

.............

United

Kingdom

300,000

407,373

1,280,364

Total

Corporate

Bonds

(Cost

$72,027,855)

......................................

74,651,789

Foreign

Government

and

Agency

Securities

0.9%

c

African

Export-Import

Bank

(The)

,

Senior

Note

,

144A,

3.994

%

,

9/21/29

...........................................

Supranational

g

500,000

517,258

c

Banque

Ouest

Africaine

de

Developpement

,

Senior

Note

,

144A,

5

%

,

7/27/27

...........................................

Supranational

g

300,000

332,184

Colombia

Government

Bond

,

Senior

Bond

,

5

%

,

6/15/45

........

Colombia

500,000

453,125

c

Comision

Federal

de

Electricidad

,

Senior

Bond

,

144A,

3.348

%

,

2/09/31

...........................................

Mexico

300,000

294,681

c

Electricite

de

France

SA

,

Senior

Note

,

144A,

4.5

%

,

9/21/28

......

France

655,000

741,038

c

Export-Import

Bank

of

India

,

Senior

Bond

,

144A,

3.25

%

,

1/15/30

..

India

200,000

203,940

c

Indonesia

Government

Bond

,

Senior

Bond

,

144A,

4.35

%

,

1/08/27

.

Indonesia

500,000

557,624

c

Kazakhstan

Government

Bond

,

Senior

Bond

,

144A,

5.125

%

,

7/21/25

Kazakhstan

350,000

394,705

Mexico

Government

Bond

,

Senior

Bond

,

3.6

%

,

1/30/25

.........

Mexico

200,000

212,430

Panama

Notas

del

Tesoro

,

Senior

Note

,

3.75

%

,

4/17/26

........

Panama

450,000

478,620

c

Pertamina

Persero

PT

,

Senior

Bond

,

144A,

4.7

%

,

7/30/49

.......

Indonesia

200,000

218,852

Peru

Government

Bond

,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

200,000

199,502

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

200,000

273,361

Philippines

Government

Bond

,

Senior

Bond

,

3.95

%

,

1/20/40

.....

Philippines

310,000

346,970

c

Romania

Government

Bond

,

Senior

Bond

,

144A,

5.125

%

,

6/15/48

.

Romania

200,000

236,646

c

Russia

Government

Bond

,

Senior

Bond

,

144A,

5.1

%

,

3/28/35

....

Russia

400,000

472,500

Uruguay

Government

Bond

,

Senior

Bond,

4.5%,

8/14/24

............................

Uruguay

400,000

424,504

Senior

Bond,

4.375%,

1/23/31

..........................

Uruguay

150,000

173,064

Total

Foreign

Government

and

Agency

Securities

(Cost

$6,511,245)

...............

6,531,004

U.S.

Government

and

Agency

Securities

18.3%

U.S.

Treasury

Bonds

,

6%,

2/15/26

........................................

United

States

705,000

842,227

4.5%,

2/15/36

......................................

United

States

905,000

1,244,092

1.125%,

8/15/40

.....................................

United

States

332,000

289,981

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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

U.S.

Government

and

Agency

Securities

(continued)

U.S.

Treasury

Bonds,

(continued)

1.375%,

11/15/40

....................................

United

States

1,971,000

$

1,796,844

2.75%,

8/15/42

.....................................

United

States

50,000

56,988

2.875%,

5/15/43

.....................................

United

States

3,370,000

3,917,362

3.125%,

8/15/44

.....................................

United

States

725,000

880,677

2.5%,

5/15/46

......................................

United

States

5,102,000

5,640,699

2.25%,

8/15/46

.....................................

United

States

5,575,000

5,896,869

3.375%,

11/15/48

....................................

United

States

3,300,000

4,319,004

3%,

2/15/49

........................................

United

States

1,713,000

2,106,722

2.25%,

8/15/49

.....................................

United

States

150,000

160,600

1.25%,

5/15/50

.....................................

United

States

920,000

781,605

1.375%,

8/15/50

.....................................

United

States

260,000

227,855

2.375%,

5/15/51

.....................................

United

States

1,794,000

1,982,090

2%,

8/15/51

........................................

United

States

400,000

407,875

U.S.

Treasury

Notes

,

1.75%,

5/15/22

.....................................

United

States

6,080,000

6,115,737

1.875%,

5/31/22

.....................................

United

States

1,465,000

1,475,388

1.5%,

3/31/23

......................................

United

States

465,000

470,740

2.75%,

11/15/23

.....................................

United

States

1,320,000

1,370,016

2.125%,

11/30/23

....................................

United

States

1,120,000

1,150,187

2.125%,

3/31/24

.....................................

United

States

18,837,000

19,389,601

2%,

4/30/24

........................................

United

States

1,345,000

1,381,620

2.5%,

5/15/24

......................................

United

States

5,710,000

5,932,378

2%,

5/31/24

........................................

United

States

1,705,000

1,752,021

2%,

6/30/24

........................................

United

States

2,255,000

2,318,246

1.75%,

7/31/24

.....................................

United

States

13,225,000

13,522,562

2.375%,

8/15/24

.....................................

United

States

1,640,000

1,703,038

1.25%,

8/31/24

.....................................

United

States

700,000

706,508

1.5%,

10/31/24

.....................................

United

States

2,920,000

2,966,081

1.5%,

11/30/24

......................................

United

States

510,000

518,068

0.25%,

6/30/25

.....................................

United

States

600,000

583,008

0.25%,

9/30/25

.....................................

United

States

310,000

300,240

0.375%,

11/30/25

....................................

United

States

5,143,000

4,988,107

0.375%,

1/31/26

.....................................

United

States

7,580,000

7,335,130

0.875%,

6/30/26

.....................................

United

States

975,000

959,651

1.875%,

7/31/26

.....................................

United

States

389,000

400,077

1.25%,

12/31/26

.....................................

United

States

200,000

199,812

2.375%,

5/15/27

.....................................

United

States

3,140,000

3,314,663

0.5%,

6/30/27

......................................

United

States

8,585,000

8,216,784

2.25%,

11/15/27

.....................................

United

States

5,375,000

5,644,380

1.25%,

4/30/28

.....................................

United

States

1,700,000

1,684,926

3.125%,

11/15/28

....................................

United

States

320,000

355,763

1.625%,

8/15/29

.....................................

United

States

4,565,000

4,632,227

0.625%,

8/15/30

.....................................

United

States

1,550,000

1,445,859

1.25%,

8/15/31

.....................................

United

States

420,000

410,747

1.375%,

11/15/31

....................................

United

States

400,000

395,062

Total

U.S.

Government

and

Agency

Securities

(Cost

$134,731,522)

................

132,190,117

Asset-Backed

Securities

0.4%

Airlines

0.1%

American

Airlines

Pass-Through

Trust

,

2016-3

,

A

,

3.25

%

,

10/15/28

United

States

424,415

404,856

United

Airlines

Pass-Through

Trust

,

2016-1,

A,

3.45%,

7/07/28

.............................

United

States

78,894

80,113

2019-2,

A,

2.9%,

5/01/28

..............................

United

States

186,017

184,912

2020-1,

B,

4.875%,

7/15/27

............................

United

States

269,400

280,864

950,745

a

a

a

a

a

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-33

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Asset-Backed

Securities

(continued)

Banks

0.1%

Capital

One

Multi-Asset

Execution

Trust

,

2017-A6

,

A6

,

2.29

%

,

7/15/25

...........................................

United

States

600,000

$

607,906

Consumer

Finance

0.1%

American

Express

Credit

Account

Master

Trust

,

2019-1

,

A

,

2.87

%

,

10/15/24

..........................................

United

States

600,000

603,950

Discover

Card

Execution

Note

Trust

,

2019-A1

,

A1

,

3.04

%

,

7/15/24

United

States

500,000

500,423

1,104,373

a

a

a

a

a

a

Diversified

Financial

Services

0.1%

c

New

Economy

Assets

Phase

1

Sponsor

LLC

,

2021-1

,

A1

,

144A,

1.91

%

,

10/20/61

.....................................

United

States

490,000

481,216

Total

Asset-Backed

Securities

(Cost

$3,160,718)

................................

3,144,240

Commercial

Mortgage-Backed

Securities

0.1%

c,h

BX

Commercial

Mortgage

Trust

,

2021-VOLT

,

B

,

144A,

FRN

,

1.06

%

,

(

1-month

USD

LIBOR

+

0.95

%

),

9/15/36

..................

United

States

250,000

248,857

c,h

BX

Mortgage

Trust

,

2021-PAC

,

A

,

144A,

FRN

,

0.799

%

,

(

1-month

USD

LIBOR

+

0.689

%

),

10/15/36

........................

United

States

230,000

229,474

478,331

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$479,424)

...................

478,331

Mortgage-Backed

Securities

4.1%

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

1.2%

FHLMC

Gold

Pools,

30

Year,

4.5%,

1/01/49

..................

United

States

465,342

510,346

FHLMC

Pool,

15

Year,

3%,

8/01/34

........................

United

States

58,356

61,271

FHLMC

Pool,

30

Year,

3%,

3/01/50

........................

United

States

2,440,212

2,553,526

FHLMC

Pool,

30

Year,

3.5%,

2/01/47

.......................

United

States

2,147,698

2,296,354

FHLMC

Pool,

30

Year,

3.5%,

4/01/50

.......................

United

States

1,650,078

1,779,458

FHLMC

Pool,

30

Year,

4%,

5/01/47

-

9/01/49

.................

United

States

1,039,701

1,128,925

FHLMC

Pool,

30

Year,

4.5%,

10/01/48

......................

United

States

488,067

536,490

8,866,370

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

2.4%

FNMA,

15

Year,

1.5%,

1/01/37

...........................

United

States

548,000

549,954

FNMA,

15

Year,

2%,

7/01/36

-

12/01/36

.....................

United

States

2,891,736

2,964,075

FNMA,

15

Year,

2.5%,

7/01/36

...........................

United

States

996,093

1,035,484

FNMA,

30

Year,

2%,

5/01/51

-

10/01/51

.....................

United

States

3,327,238

3,320,994

FNMA,

30

Year,

2.5%,

7/01/51

-

12/01/51

...................

United

States

4,548,958

4,647,288

FNMA,

30

Year,

3%,

8/01/50

-

9/01/51

......................

United

States

1,884,716

1,962,537

FNMA,

30

Year,

3.5%,

11/01/46

...........................

United

States

356,318

382,275

FNMA,

30

Year,

4%,

8/01/49

-

1/01/50

......................

United

States

1,369,485

1,487,399

FNMA,

30

Year,

4.5%,

2/01/50

...........................

United

States

1,042,640

1,135,316

17,485,322

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

0.5%

GNMA

II,

Single-family,

30

Year,

2%,

6/20/51

-

8/20/51

.........

United

States

760,767

768,699

GNMA

II,

Single-family,

30

Year,

2.5%,

6/20/51

-

7/20/51

........

United

States

1,623,335

1,664,968

GNMA

II,

Single-family,

30

Year,

3%,

8/20/51

.................

United

States

982,451

1,019,680

3,453,347

Total

Mortgage-Backed

Securities

(Cost

$30,133,327)

............................

29,805,039

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

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

Municipal

Bonds

0.8%

Arizona

0.1%

Maricopa

County

Union

High

School

District

No.

210-Phoenix

,

GO

,

2020

C

,

5

%

,

7/01/31

.................................

United

States

200,000

$

255,590

California

0.4%

California

Health

Facilities

Financing

Authority

,

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.934%,

6/01/32

..............................

United

States

65,000

67,942

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.984%,

6/01/33

..............................

United

States

55,000

57,449

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

3.034%,

6/01/34

..............................

United

States

40,000

41,701

California

State

University

,

Revenue

,

2021

B

,

Refunding

,

2.719

%

,

11/01/52

..........................................

United

States

200,000

202,110

Clovis

Unified

School

District

,

GO

,

2021

B

,

Refunding

,

3.067

%

,

8/01/39

...........................................

United

States

1,045,000

1,070,448

Foothill-Eastern

Transportation

Corridor

Agency

,

Revenue

,

2019

A

,

Refunding

,

4.094

%

,

1/15/49

............................

United

States

35,000

37,698

Gilroy

Unified

School

District

,

GO

,

2019

,

Refunding

,

3.364

%

,

8/01/47

United

States

140,000

146,643

San

Bernardino

Community

College

District

,

GO,

2021,

Refunding,

2.686%,

8/01/41

...................

United

States

485,000

487,880

GO,

2021,

Refunding,

2.856%,

8/01/49

...................

United

States

285,000

285,899

State

of

California

,

GO

,

2.5

%

,

10/01/29

.....................

United

States

500,000

523,450

2,921,220

Florida

0.1%

County

of

Broward

,

Airport

System

,

Revenue

,

2019

C

,

Refunding

,

3.477

%

,

10/01/43

....................................

United

States

70,000

71,881

County

of

Sarasota

,

Revenue

,

2020

,

5

%

,

10/01/34

............

United

States

500,000

645,815

717,696

Illinois

0.0%

†

State

of

Illinois

,

GO

,

2003

,

5.1

%

,

6/01/33

...................

United

States

125,000

144,579

Massachusetts

0.0%

†

Massachusetts

State

College

Building

Authority

,

Revenue

,

2019

C

,

Refunding

,

3.373

%

,

5/01/43

............................

United

States

230,000

241,666

New

York

0.0%

†

Metropolitan

Transportation

Authority

,

Revenue

,

2020

E

,

Refunding

,

4

%

,

11/15/45

.......................................

United

States

95,000

108,627

Ohio

0.0%

†

Greenville

City

School

District

,

GO

,

2019

,

Refunding

,

3.541

%

,

1/01/51

...........................................

United

States

160,000

168,276

Pennsylvania

0.1%

Commonwealth

Financing

Authority

,

Revenue

,

2021

A

,

2.991

%

,

6/01/42

...........................................

United

States

625,000

640,920

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education

,

Revenue

,

2017

C

,

Refunding

,

3.005

%

,

9/15/41

.....

United

States

250,000

266,834

907,754

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-35

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

Texas

0.1%

City

of

Austin

,

Electric

Utility

,

Revenue

,

2008

,

Refunding

,

AGMC

Insured

,

6.262

%

,

11/15/32

.............................

United

States

335,000

$

429,215

Total

Municipal

Bonds

(Cost

$5,702,314)

.......................................

5,894,623

Total

Long

Term

Investments

(Cost

$566,953,798)

...............................

701,012,252

a

Short

Term

Investments

2.5%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.5%

d,i

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

18,002,980

18,002,980

Total

Money

Market

Funds

(Cost

$18,002,980)

..................................

18,002,980

Total

Short

Term

Investments

(Cost

$18,002,980

)

................................

18,002,980

a

Total

Investments

(Cost

$584,956,778)

99.6%

...................................

$719,015,232

Other

Assets,

less

Liabilities

0.4%

.............................................

2,660,414

Net

Assets

100.0%

...........................................................

$721,675,646

*

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

10

regarding

fair

value

measurements.

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$24,230,872,

representing

3.4%

of

net

assets.

d

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

e

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

f

Perpetual

security

with

no

stated

maturity

date.

g

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

h

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

i

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-36

At

December

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

At

December

31,

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

92

$

21,889,100

3/18/22

$

256,752

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

138

18,004,688

3/22/22

(145,503)

U.S.

Treasury

10

Year

Notes

....................

Long

24

3,131,250

3/22/22

5,525

U.S.

Treasury

5

Year

Notes

.....................

Long

3

362,930

3/31/22

1,595

U.S.

Treasury

Long

Bonds

.....................

Short

23

3,690,062

3/22/22

(51,064)

U.S.

Treasury

Ultra

Bonds

......................

Long

1

197,125

3/22/22

4,311

Total

Futures

Contracts

......................................................................

$71,616

*

As

of

year

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

Mexico

Government

Bond

......

1.00%

Quarterly

GSCO

6/20/26

575,000

$

4,909

$

1,493

$

3,416

BBB

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

12/20/26

325,000

(34,753)

(27,571)

(7,182)

BB+

Total

OTC

Swap

Contracts

..............................................

$(29,844)

$(26,078)

$(3,766)

Total

Credit

Default

Swap

Contracts

....................................

$(29,844)

$

(26,078)

$(3,766)

(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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-37

Franklin

Allocation

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$558,740,465

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

26,216,313

Value

-

Unaffiliated

issuers

..................................................................

$693,949,942

Value

-

Non-controlled

affiliates

(

Note

3e)

.......................................................

25,065,290

Cash

....................................................................................

3,504

Foreign

currency,

at

value

(cost

$105,615)

........................................................

105,707

Receivables:

Capital

shares

sold

........................................................................

367,501

Dividends

and

interest

.....................................................................

1,847,239

Deposits

with

brokers

for:

Futures

contracts

........................................................................

1,363,096

Variation

margin

on

futures

contracts

...........................................................

207,996

OTC

swap

contracts

(upfront

payments

$

1,623

)

....................................................

1,493

Unrealized

appreciation

on

OTC

swap

contracts

....................................................

3,416

Total

assets

..........................................................................

722,915,184

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

582,753

Management

fees

.........................................................................

271,708

Distribution

fees

..........................................................................

186,702

Reports

to

shareholders

fees

................................................................

111,491

OTC

swap

contracts

(upfront

receipts

$2

8,786

)

....................................................

27,571

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

7,182

Deferred

tax

...............................................................................

29,420

Accrued

expenses

and

other

liabilities

...........................................................

22,711

Total

liabilities

.........................................................................

1,239,538

Net

assets,

at

value

.................................................................

$721,675,646

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$527,881,633

Total

distributable

earnings

(losses)

.............................................................

193,794,013

Net

assets,

at

value

.................................................................

$721,675,646

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-38

Franklin

Allocation

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$840,795

Shares

outstanding

........................................................................

139,631

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$6.02

Class

2:

Net

assets,

at

value

.......................................................................

$302,083,659

Shares

outstanding

........................................................................

50,692,398

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$5.96

Class

4:

Net

assets,

at

value

.......................................................................

$418,751,192

Shares

outstanding

........................................................................

67,889,699

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$6.17

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FA-39

Franklin

Allocation

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$287,798)

Unaffiliated

issuers

........................................................................

$8,126,232

Non-controlled

affiliates

(Note

3e)

.............................................................

1,856

Interest:

Unaffiliated

issuers:

Paydown

gain

(loss)

.....................................................................

(1,142,508)

Paid

in

cash

a

...........................................................................

5,345,845

Total

investment

income

...................................................................

12,331,425

Expenses:

Management

fees

(Note

3

a

)

...................................................................

4,223,572

Interest

expense

...........................................................................

2

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

878,655

    Class

4

................................................................................

1,454,772

Custodian

fees

(Note

4

)

......................................................................

18,513

Reports

to

shareholders

fees

..................................................................

137,337

Professional

fees

...........................................................................

127,733

Trustees'

fees

and

expenses

..................................................................

7,902

Other

....................................................................................

82,634

Total

expenses

.........................................................................

6,931,120

Expense

reductions

(Note

4

)

...............................................................

(10)

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(320,830)

Net

expenses

.........................................................................

6,610,280

Net

investment

income

................................................................

5,721,145

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$3,731)

Unaffiliated

issuers

......................................................................

57,704,795

Non-controlled

affiliates

(Note

3e)

...........................................................

(115,461)

Foreign

currency

transactions

................................................................

29,329

Futures

contracts

.........................................................................

9,094,031

TBA

sale

commitments

.....................................................................

93

Swap

contracts

...........................................................................

1,917

Net

realized

gain

(loss)

..................................................................

66,714,704

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

12,200,543

Non-controlled

affiliates

(Note

3e)

...........................................................

(243,381)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(33,309)

Futures

contracts

.........................................................................

(194,592)

Swap

contracts

...........................................................................

(3,766)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

19,084

Net

change

in

unrealized

appreciation

(depreciation)

............................................

11,744,579

Net

realized

and

unrealized

gain

(loss)

............................................................

78,459,283

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$84,180,428

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FA-40

Franklin

Allocation

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$5,721,145

$11,362,253

Net

realized

gain

(loss)

.................................................

66,714,704

(9,609,886)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

11,744,579

82,252,924

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

84,180,428

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

.............................................................

(44,550)

104,749

Class

2

.............................................................

(128,346,341)

61,121,480

Class

4

.............................................................

(29,324,411)

64,739,571

Total

capital

share

transactions

............................................

(157,715,302)

125,965,800

Net

increase

(decrease)

in

net

assets

...................................

(87,142

,912)

(1,756,469)

Net

assets:

Beginning

of

year

.......................................................

808,818,558

810,575,027

End

of

year

...........................................................

$721,675,646

$808,818,558

Franklin

Templeton

Variable

Insurance

Products

Trust

FA-41

Annual

Report

Notes

to

Financial

Statements

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

December

31,

2021,

43.8%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

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

FA-42

Annual

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

December

31,

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

FA-43

Annual

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

December

31,

2021,

the

Fund

had

OTC

derivatives

in

a

net

liability

position

for

such

contracts

of

$34,753.

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

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

FA-44

Annual

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

December

31,

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

FA-45

Annual

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

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

11,749

$68,109

7,931

$46,123

Shares

issued

in

reinvestment

of

distributions

..........

2,704

15,547

47,596

227,036

Shares

redeemed

...............................

(22,563)

(128,206)

(30,469)

(168,410)

Net

increase

(decrease)

..........................

(8,110)

$(44,550)

25,058

$104,749

Class

2

Shares:

Shares

sold

...................................

2,481,710

$14,077,892

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

...............................

(26,406,666)

(149,444,932)

(11,902,724)

(66,163,778)

Net

increase

(decrease)

..........................

(22,693,254)

$(128,346,341)

14,189,963

$61,121,480

Class

4

Shares:

Shares

sold

...................................

1,953,061

$11,577,200

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

...............................

(8,025,411)

(47,473,403)

(9,182,946)

(53,560,354)

Net

increase

(decrease)

..........................

(4,958,487)

$(29,324,411)

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

FA-46

Annual

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

year

ended

December

31,

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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FA-47

Annual

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

interest

expense,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

During

the

year

ended December

31,

2021

the

Fund

utilized

$5,509,663

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

117,992,191

$

(124,000,595)

$

—

$

—

$

18,002,980

18,002,980

$

1,856

Templeton

Global

Bond

VIP

Fund,

Class

1

............

7,821,152

—

(400,000)

(115,461)

(243,381)

7,062,310

511,021

—

Total

Affiliated

Securities

...

$31,832,536

$117,992,191

$(124,400,595)

$(115,461)

$(243,381)

$25,065,290

$1,856

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$13,608,038

$13,451,147

Long

term

capital

gain

......................................................

—

198,276,413

$13,608,038

$211,727,560

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FA-48

Annual

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,

paydown

losses,

bond

discounts

and

premiums

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$397,123,670

and

$547,713,870,

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

December

31,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

Cost

of

investments

..........................................................................

$591,670,987

Unrealized

appreciation

........................................................................

$144,745,095

Unrealized

depreciation

........................................................................

(17,359,078)

Net

unrealized

appreciation

(depreciation)

..........................................................

$127,386,017

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$20,161,282

Undistributed

long

term

capital

gains

..............................................................

46,279,733

Total

distributable

earnings

.....................................................................

$66,441,015

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

$

11,431

a

Variation

margin

on

futures

contracts

$

196,567

a

Credit

contracts

............

OTC

swap

contracts

(upfront

payments)

1,493

OTC

swap

contracts

(upfront

receipts)

27,571

Unrealized

appreciation

on

OTC

swap

contracts

3,416

Unrealized

depreciation

on

OTC

swap

contracts

7,182

Equity

contracts

...........

Variation

margin

on

futures

contracts

256,752

a

Variation

margin

on

futures

contracts

—

Total

....................

$273,092

$231,320

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FA-49

Annual

Report

Franklin

Allocation

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts

and

swap

contracts

represented

$58,280,568

and

$450,000,

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

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

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Allocation

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Interest

rate

contracts

..........

Futures

contracts

$964,733

Futures

contracts

$(200,235)

Credit

contracts

...............

Swap

contracts

1,917

Swap

contracts

(3,766)

Equity

Contracts

..............

Futures

contracts

8,129,298

Futures

contracts

5,643

Total

.......................

$9,095,948

$(198,358)

8.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FA-50

Annual

Report

Franklin

Allocation

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

December

31,

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

...................

$

6,448,070

$

2,639,582

$

—

$

9,087,652

Air

Freight

&

Logistics

...................

2,482,200

2,509,478

188,746

5,180,424

Airlines

..............................

—

395,208

—

395,208

Auto

Components

......................

459,307

1,244,917

—

1,704,224

Automobiles

..........................

1,052,794

2,516,610

—

3,569,404

Banks

...............................

2,083,926

10,923,340

—

13,007,266

Beverages

...........................

6,050,158

563,235

—

6,613,393

Biotechnology

.........................

8,682,306

2,795,648

—

11,477,954

Building

Products

......................

3,728,055

2,407,149

—

6,135,204

Capital

Markets

........................

13,748,206

5,246,490

—

18,994,696

Chemicals

...........................

9,718,414

7,184,396

—

16,902,810

Commercial

Services

&

Supplies

...........

2,552,058

—

—

2,552,058

Communications

Equipment

..............

1,132,168

—

—

1,132,168

Construction

&

Engineering

...............

41,966

759,971

—

801,937

Construction

Materials

..................

662,126

99,413

—

761,539

Consumer

Finance

.....................

1,225,504

—

—

1,225,504

Containers

&

Packaging

.................

296,209

—

—

296,209

Distributors

...........................

431,471

—

—

431,471

Diversified

Consumer

Services

............

414,774

—

—

414,774

Diversified

Financial

Services

.............

843,479

2,093,206

—

2,936,685

Diversified

Telecommunication

Services

.....

888,112

2,666,151

747,704

4,301,967

Electric

Utilities

........................

2,164,507

703,596

—

2,868,103

Electrical

Equipment

....................

4,197,934

605,090

—

4,803,024

Electronic

Equipment,

Instruments

&

Components

........................

3,925,536

310,447

—

4,235,983

Energy

Equipment

&

Services

.............

—

938,637

—

938,637

Entertainment

.........................

1,745,780

1,688,692

—

3,434,472

Equity

Real

Estate

Investment

Trusts

(REITs)

.

4,715,805

1,789,901

—

6,505,706

Food

&

Staples

Retailing

.................

5,573,454

1,960,725

—

7,534,179

Food

Products

........................

4,048,044

877,461

—

4,925,505

Gas

Utilities

..........................

561,902

648,575

—

1,210,477

Health

Care

Equipment

&

Supplies

.........

11,017,034

5,286,676

—

16,303,710

Health

Care

Providers

&

Services

..........

4,675,410

874,802

—

5,550,212

Health

Care

Technology

.................

1,438,663

50,391

—

1,489,054

Hotels,

Restaurants

&

Leisure

.............

4,800,715

439,329

—

5,240,044

Household

Durables

....................

638,634

1,960,746

—

2,599,380

Household

Products

....................

3,106,791

—

—

3,106,791

Industrial

Conglomerates

................

3,773,783

2,557,780

—

6,331,563

Insurance

............................

2,109,382

2,176,889

—

4,286,271

Interactive

Media

&

Services

..............

16,388,123

71,088

—

16,459,211

Internet

&

Direct

Marketing

Retail

..........

6,869,748

2,147,318

—

9,017,066

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FA-51

Annual

Report

Franklin

Allocation

VIP

Fund

(continued)

Level

1

Level

2

Level

3

Total

Franklin

Allocation

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

IT

Services

...........................

$

18,274,587

$

4,074,073

$

—

$

22,348,660

Leisure

Products

.......................

39,691

53,232

—

92,923

Life

Sciences

Tools

&

Services

............

12,511,316

1,730,897

—

14,242,213

Machinery

............................

7,303,797

1,738,252

—

9,042,049

Marine

..............................

—

1,288,770

—

1,288,770

Media

...............................

1,671,899

3,054,076

—

4,725,975

Metals

&

Mining

.......................

3,190,559

2,189,574

—

5,380,133

Multiline

Retail

........................

2,906,898

832,200

—

3,739,098

Multi-Utilities

..........................

1,450,465

1,230,188

—

2,680,653

Oil,

Gas

&

Consumable

Fuels

.............

4,618,857

4,882,774

—

9,501,631

Paper

&

Forest

Products

.................

144,364

—

—

144,364

Personal

Products

.....................

953,941

2,157,436

—

3,111,377

Pharmaceuticals

.......................

11,706,445

7,271,496

—

18,977,941

Professional

Services

...................

4,084,717

3,849,971

—

7,934,688

Real

Estate

Management

&

Development

....

1,690,664

1,875,098

—

3,565,762

Road

&

Rail

..........................

6,289,647

—

—

6,289,647

Semiconductors

&

Semiconductor

Equipment

.

19,334,407

3,872,402

—

23,206,809

Software

.............................

37,744,745

2,408,709

—

40,153,454

Specialty

Retail

........................

6,665,141

586,412

—

7,251,553

Technology

Hardware,

Storage

&

Peripherals

.

11,857,166

1,840,893

—

13,698,059

Textiles,

Apparel

&

Luxury

Goods

..........

2,866,810

545,407

—

3,412,217

Thrifts

&

Mortgage

Finance

...............

277,172

881,498

—

1,158,670

Tobacco

.............................

1,745,620

995,350

—

2,740,970

Trading

Companies

&

Distributors

..........

2,061,242

3,384,424

—

5,445,666

Water

Utilities

.........................

513,510

—

—

513,510

Wireless

Telecommunication

Services

.......

102,990

631,281

—

734,271

Management

Investment

Companies

.........

21,794,104

—

—

21,794,104

Preferred

Stocks

........................

—

380,007

—

380,007

Corporate

Bonds

........................

—

74,651,789

—

74,651,789

Foreign

Government

and

Agency

Securities

....

—

6,531,004

—

6,531,004

U.S.

Government

and

Agency

Securities

.......

—

132,190,117

—

132,190,117

Asset-Backed

Securities

..................

—

3,144,240

—

3,144,240

Commercial

Mortgage-Backed

Securities

......

—

478,331

—

478,331

Mortgage-Backed

Securities

................

—

29,805,039

—

29,805,039

Municipal

Bonds

.........................

—

5,894,623

—

5,894,623

Short

Term

Investments

...................

18,002,980

—

—

18,002,980

Total

Investments

in

Securities

...........

$344,496,282

$373,582,500

a

$936,450

$719,015,232

Other

Financial

Instruments:

Futures

contracts

........................

$

268,183

$

—

$

—

$

268,183

Swap

contracts

.........................

—

3,416

—

3,416

Total

Other

Financial

Instruments

.........

$268,183

$3,416

$—

$271,599

Liabilities:

Other

Financial

Instruments:

Futures

contracts

........................

$

196,567

$

—

$

—

$

196,567

Swap

contracts

..........................

—

7,182

—

7,182

Total

Other

Financial

Instruments

.........

$196,567

$7,182

$—

$203,749

a

Includes

foreign

securities

valued

at

$120,887,357,

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

FA-52

Annual

Report

Franklin

Allocation

VIP

Fund

(continued)

A

reconciliation

of

assets

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

financial

instruments

at

the

beginning

and/or

end

of

the

year.

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Counterparty

GSCO

Goldman

Sachs

Group,

Inc.

JPHQ

JPMorgan

Chase

Bank

NA

Cu

r

rency

GBP

British

Pound

HKD

Hong

Kong

Dollar

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

AGMC

Assured

Guaranty

Municipal

Corp.

CDI

CREST

Depository

Interest

ETF

Exchange-Traded

Fund

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

LIBOR

London

Inter-Bank

Offered

Rate

NYRS

New

York

Registry

Shares

REIT

Real

Estate

Investment

Trust

TIPS

Treasury

Inflation-Protected

Securities

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FA-53

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Allocation

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Allocation

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FA-54

Annual

Report

Franklin

Allocation

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$3,592,958

Interest

Earned

from

Federal

Obligations

Note

(1)

$2,052,793

FD-1

Annual

Report

Franklin

DynaTech

VIP

Fund

This

annual

report

for

Franklin

DynaTech

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+16.14%

5-Year

+23.64%

10-Year

+16.66%

FD-2

Annual

Report

Franklin

DynaTech

VIP

Fund

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–12/31/21)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Fund’s

new

primary

benchmark,

the

Russell

1000

®

Growth

Index,

the

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

and

the

Fund’s

old

primary

benchmark,

the

Russell

3000

®

Growth

Index.

The

Russell

1000

®

Growth

Index

is

replacing

the

Russell

3000

®

Growth

Index

as

the

Fund’s

primary

benchmark

because

the

investment

manager

believes

the

Russell

1000

®

Growth

Index

provides

a

better

comparison

to

the

Fund’s

investments.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FD-3

Annual

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

DynaTech

VIP

Fund

Formerly,

Flex

Cap

Growth

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

capital

appreciation.

Under

normal

market

conditions,

the

Fund

invests

primarily

in

equity

securities

of

companies

that

the

investment

manager

believes

are

leaders

in

innovation,

take

advantage

of

new

technologies,

have

superior

management

and

benefit

from

new

industry

conditions

in

the

dynamically

changing

global

economy.

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.

To

the

extent

the

Fund

focuses

on

particular

countries,

regions,

industries,

sectors

or

types

of

investment

from

time

to

time,

it

may

be

subject

to

greater

risk

of

adverse

developments

in

such

areas

of

focus

than

a

fund

that

invests

in

a

wider

variety

of

countries,

regions,

industries,

sectors

or

investments.

Smaller

or

midsized

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger

companies.

Historically,

these

securities

have

experienced

more

price

volatility

than

larger-company

stocks,

especially

over

the

short

term.

Foreign

securities

involve

special

risks,

including

currency

fluctuations

and

economic

and

political

uncertainties.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Performance

Overview

You

can

find

the

Fund’s

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

new

primary

benchmark,

the

Russell

1000

®

Growth

Index

posted

a

+27.60%

total

return.

The

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

500

®

Index

(S&P

500

®

)

posted

a

+28.71%

total

return

for

the

same

period.

1

The

Fund’s

old

primary

benchmark,

the

Russell

3000

®

Growth

Index,

posted

a

+25.85%

total

return

for

the

same

period.

The

Russell

1000

®

Growth

Index

is

replacing

the

Russell

3000

®

Growth

Index

as

the

Fund’s

primary

benchmark

because

the

investment

manager

believes

the

Russell

1000

®

Growth

Index

provides

a

better

comparison

to

the

Fund’s

investments.

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Software

24.6%

IT

Services

12.6%

Semiconductors

&

Semiconductor

Equipment

12.3%

Life

Sciences

Tools

&

Services

8.2%

Internet

&

Direct

Marketing

Retail

7.3%

Interactive

Media

&

Services

7.1%

Health

Care

Equipment

&

Supplies

5.8%

Entertainment

3.0%

Automobiles

2.8%

Capital

Markets

2.5%

Electronic

Equipment,

Instruments

&

Components

1.7%

Health

Care

Technology

1.6%

Biotechnology

1.6%

Pharmaceuticals

1.4%

Other

6.7%

Short-Term

Investments

&

Other

Net

Assets

0.8%

Franklin

DynaTech

VIP

Fund

FD-4

Annual

Report

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

Investment

Strategy

We

use

fundamental,

bottom-up

research

to

seek

companies

meeting

our

criteria

of

growth

potential,

quality

and

valuation.

The

research

may

include

consideration

of

cash

flow,

income

statements,

balance

sheet,

and

notes

to

them

and

its

analysis

typically

includes

forecasts

of

multiple

possible

future

outcomes.

In

seeking

sustainable

growth

characteristics,

we

look

for

companies

we

believe

can

produce

sustainable

earnings

and

cash

flow

growth,

evaluating

the

long-term

market

opportunity

and

competitive

structure

of

an

industry

to

target

leaders

and

emerging

leaders.

We

define

quality

companies

as

those

with

strong

and

improving

competitive

positions

in

attractive

markets.

We

also

believe

important

attributes

of

quality

are

experienced

and

talented

management

teams

as

well

as

financial

strength

reflected

in

the

capital

structure,

gross

and

operating

margins,

free

cash

flow

generation

and

returns

on

capital

employed.

Our

valuation

analysis

includes

a

range

of

potential

outcomes

based

on

an

assessment

of

multiple

scenarios.

In

assessing

value,

we

consider

whether

security

prices

fully

reflect

the

balance

of

the

sustainable

growth

opportunities

relative

to

business

and

financial

risks.

Manager’s

Discussion

During

the

one-year

reporting

period

ended

December

31,

2021,

the

Fund

underperformed

the

index,

partially

due

to

stock

selection

in

the

information

technology

(IT)

sector.

The

IT

sector

comprised

almost

half

of

the

overall

portfolio,

and

related

detractors

were

concentrated

in

the

software

industry

where

Microsoft

and

ServiceNow

underperformed.

The

portfolio

typically

carries

lighter-than-

index

weightings

in

technology

giants,

including

Microsoft,

which

boosted

the

Fund’s

absolute

returns

but

detracted

on

a

relative

basis.

The

company

performed

well

throughout

the

year

with

consecutive

quarters

of

growth

driven

by

strength

of

its

Microsoft

Cloud

business.

Cloud

computing

specialist

ServiceNow

was

also

an

absolute

contributor

but

underperformed

the

benchmark

for

the

period.

An

overweighting

and

stock

selection

in

the

IT

services

industry

dragged

on

relative

performance

along

with

digital

payments

company

Block

(formerly

Square).

In

contrast,

financial

software

company

Intuit

ended

the

reporting

period

on

a

high

note

as

robust

business

activity

helped

by

demand

recovery

for

loan

and

tax

products

and

outperformance

of

its

Credit

Karma

business

lifted

the

stock,

which

reached

an

all-time

high

in

November.

The

Fund’s

semiconductor-related

holdings

also

advanced

over

the

period

and

outperformed

the

index,

aided

in

part

by

chipmakers

NVIDIA

and

ASML

Holding

(not

part

of

the

index),

which

have

been

benefiting

from

an

ongoing

favorable

demand

environment.

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Amazon.com,

Inc.

5.8%

Internet

&

Direct

Marketing

Retail,

United

States

Microsoft

Corp.

4.1%

Software,

United

States

NVIDIA

Corp.

4.1%

Semiconductors

&

Semiconductor

Equipment,

United

States

Alphabet,

Inc.

4.0%

Interactive

Media

&

Services,

United

States

ServiceNow

,

Inc.

2.6%

Software,

United

States

Shopify,

Inc.

2.4%

IT

Services,

Canada

Intuit,

Inc.

2.3%

Software,

United

States

Tesla,

Inc.

2.2%

Automobiles,

United

States

Thermo

Fisher

Scientific,

Inc.

2.1%

Life

Sciences

Tools

&

Services,

United

States

ASML

Holding

NV

2.0%

Semiconductors

&

Semiconductor

Equipment,

Netherlands

Franklin

DynaTech

VIP

Fund

FD-5

Annual

Report

Stock

selection

in

the

consumer

discretionary

sector

resulted

in

both

negative

absolute

and

relative

returns.

A

key

detractor

was

Latin

American

online

marketplace

MercadoLibre

(not

part

of

the

index),

which

has

seen

its

stock

trending

downward

since

the

start

of

2021,

despite

strong

business

momentum

in

the

e-commerce

space.

We

continue

to

hold

the

stock

as

MercadoLibre

has

effectively

become

a

one-stop

shop

for

all

things

e-commerce

across

Latin

America.

In

our

view,

the

company

has

a

solid

customer

base

but

still

has

a

large

growth

runway.

Within

the

communications

services

sector,

interactive

media

and

services

companies

were

an

area

of

weakness

as

our

off-benchmark

stake

in

Tencent

Holdings

shed

considerable

equity

value.

Tencent

is

a

Chinese

multinational

technology

conglomerate

that

provides

various

internet-related

services

and

products.

In

general,

investors

sold

off

Tencent

and

other

stocks

due

to

China’s

intensifying

crackdown

on

property,

private

education,

technology

and

other

sectors

of

the

economy.

An

underweighting

in

Alphabet

(Google’s

parent

company)

also

detracted

from

relative

returns

as

its

share

value

jumped

significantly.

Thank

you

for

your

participation

in

Franklin

DynaTech

VIP

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

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

2

Fund

Expenses

Franklin

DynaTech

VIP

Fund

FD-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,018.00

$4.97

$1,020.28

$4.97

0.98%

FD-7

Annual

Report

Please

keep

this

supplement

with

your

prospectus

for

future

reference.

FFC

P2

P4

03/21

SUPPLEMENT

DATED

MARCH

15,

2021

TO

THE

PROSPECTUSES

DATED

MAY

1,

2020

FOR

FRANKLIN

FLEX

CAP

GROWTH

VIP

FUND

(a

series

of

Franklin

Templeton

Variable

Insurance

Products

Trust)

The

prospectus

is

amended

as

follows:

I.

The

Board

of

Trustees

recently

approved

various

changes

to

the

Franklin

Flex

Cap

Growth

VIP

Fund

(the

“Fund”)

to

be

effective

on

or

about

May

1,

2021.

Among

other

things,

the

proposals

approved

by

the

Board

include

changing

the

name

of

the

Fund

to

the

“Franklin

DynaTech

VIP

Fund,”

changing

the

Fund’s

investment

philosophy

to

focus

on

equity

securities

of

companies

that

the

investment

manager

believes

are

leaders

in

innovation,

take

advantage

of

new

technologies,

have

superior

management,

and

benefit

from

new

industry

conditions

in

the

dynamically

changing

global

economy;

and

reducing

the

Fund’s

investment

management

fee

so

that

the

Fund

will

pay

the

investment

manager

fees

according

to

the

following

fee

schedule:

0.63%

of

the

value

of

its

net

assets

up

to

and

including

$100

million;

0.50%

of

the

value

of

its

net

assets

over

$100

million

up

to

and

including

$250

million;

0.45%

of

the

value

of

its

net

assets

over

$250

million

up

to

and

including

$7.5

billion;

0.44%

of

the

value

of

its

net

assets

over

$7.5

billion

up

to

and

including

$10

billion;

0.43%

of

the

value

of

its

net

assets

over

$10

billion

up

to

and

including

$12.5

billion;

0.42%

of

the

value

of

its

net

assets

over

$12.5

billion

up

to

and

including

$15

billion;

0.40%

of

the

value

of

its

net

assets

over

$15

billion.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

DynaTech

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FD-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.92

$8.06

$6.46

$7.46

$5.89

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.08)

(0.03)

(0.01)

(0.02)

(0.01)

Net

realized

and

unrealized

gains

(losses)

...........

1.79

3.47

1.99

0.42

1.60

Total

from

investment

operations

....................

1.71

3.44

1.98

0.40

1.59

Less

distributions

from:

Net

realized

gains

.............................

(0.78)

(0.58)

(0.38)

(1.40)

(0.02)

Net

asset

value,

end

of

year

.......................

$11.85

$10.92

$8.06

$6.46

$7.46

Total

return

c

...................................

16.14%

44.88%

31.16%

3.14%

26.94%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.03%

1.31%

1.33%

1.30%

1.35%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.96%

0.96%

d

0.96%

d

0.96%

d

0.96%

Net

investment

(loss)

............................

(0.71)%

(0.36)%

(0.19)%

(0.20)%

(0.20)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$139,784

$125,731

$97,964

$69,233

$81,084

Portfolio

turnover

rate

............................

74.97%

15.70%

26.29%

15.17%

52.12%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

DynaTech

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FD-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.40

$7.71

$6.20

$7.21

$5.70

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.09)

(0.04)

(0.02)

(0.02)

(0.02)

Net

realized

and

unrealized

gains

(losses)

...........

1.70

3.31

1.91

0.41

1.55

Total

from

investment

operations

....................

1.61

3.27

1.89

0.39

1.53

Less

distributions

from:

Net

realized

gains

.............................

(0.78)

(0.58)

(0.38)

(1.40)

(0.02)

Net

asset

value,

end

of

year

.......................

$11.23

$10.40

$7.71

$6.20

$7.21

Total

return

c

...................................

16.09%

44.71%

31.03%

3.10%

26.78%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.13%

1.41%

1.43%

1.40%

1.45%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.06%

1.06%

d

1.06%

d

1.06%

d

1.06%

Net

investment

(loss)

............................

(0.81)%

(0.47)%

(0.29)%

(0.30)%

(0.30)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$36,515

$38,425

$31,761

$29,681

$30,112

Portfolio

turnover

rate

............................

74.97%

15.70%

26.29%

15.17%

52.12%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

DynaTech

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FD-10

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

99.2%

Aerospace

&

Defense

0.4%

a

Axon

Enterprise,

Inc.

...................................

United

States

4,948

$

776,836

Automobiles

2.8%

a

Rivian

Automotive,

Inc.,

A

...............................

United

States

10,381

1,076,406

a

Tesla,

Inc.

...........................................

United

States

3,700

3,910,086

4,986,492

Banks

0.6%

a

NU

Holdings

Ltd.,

A

....................................

Brazil

7,300

68,474

a

SVB

Financial

Group

...................................

United

States

1,545

1,047,881

1,116,355

Biotechnology

1.6%

a

Argenx

SE

..........................................

Netherlands

1,549

550,401

a

Avid

Bioservices

,

Inc.

..................................

United

States

2,584

75,401

a

BioNTech

SE,

ADR

....................................

Germany

1,860

479,508

a

Intellia

Therapeutics,

Inc.

................................

United

States

3,415

403,790

a

Moderna

,

Inc.

........................................

United

States

2,477

629,109

a

Natera

,

Inc.

..........................................

United

States

6,811

636,079

2,774,288

Capital

Markets

2.5%

Moody's

Corp.

........................................

United

States

2,473

965,904

MSCI,

Inc.

...........................................

United

States

3,086

1,890,762

Tradeweb

Markets,

Inc.,

A

...............................

United

States

15,434

1,545,561

4,402,227

Chemicals

0.2%

Linde

plc

............................................

United

Kingdom

811

281,201

Consumer

Finance

0.1%

b

Kaspi.KZ

JSC,

GDR,

Reg

S

.............................

Kazakhstan

645

74,820

Electric

Utilities

1.0%

NextEra

Energy,

Inc.

...................................

United

States

18,515

1,728,560

Electronic

Equipment,

Instruments

&

Components

1.7%

Amphenol

Corp.,

A

....................................

United

States

8,047

703,791

Keyence

Corp.

.......................................

Japan

1,238

777,929

a

Keysight

Technologies,

Inc.

..............................

United

States

1,557

321,536

a

Trimble,

Inc.

.........................................

United

States

612

53,360

a

Zebra

Technologies

Corp.,

A

.............................

United

States

1,854

1,103,501

2,960,117

Entertainment

3.0%

a

Netflix,

Inc.

..........................................

United

States

776

467,493

a

ROBLOX

Corp.,

A

.....................................

United

States

13,584

1,401,326

a

Sea

Ltd.,

ADR

........................................

Taiwan

15,414

3,448,266

5,317,085

Equity

Real

Estate

Investment

Trusts

(REITs)

0.8%

Crown

Castle

International

Corp.

..........................

United

States

1,248

260,507

SBA

Communications

Corp.

.............................

United

States

3,089

1,201,683

1,462,190

Health

Care

Equipment

&

Supplies

5.8%

Abbott

Laboratories

....................................

United

States

7,107

1,000,239

a

CryoPort

,

Inc.

........................................

United

States

1,788

105,796

a

Dexcom

,

Inc.

.........................................

United

States

1,237

664,207

a

Edwards

Lifesciences

Corp.

.............................

United

States

8,033

1,040,675

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

DynaTech

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FD-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Equipment

&

Supplies

(continued)

a

IDEXX

Laboratories,

Inc.

................................

United

States

4,009

$

2,639,766

a

Inari

Medical,

Inc.

.....................................

United

States

650

59,325

a

Inmode

Ltd.

.........................................

United

States

6,208

438,161

a

Insulet

Corp.

.........................................

United

States

1,553

413,207

a

Intuitive

Surgical,

Inc.

..................................

United

States

5,707

2,050,525

STERIS

plc

..........................................

United

States

4,326

1,052,992

Stryker

Corp.

........................................

United

States

3,093

827,130

10,292,023

Health

Care

Providers

&

Services

0.7%

UnitedHealth

Group,

Inc.

................................

United

States

2,317

1,163,458

Health

Care

Technology

1.6%

a

Definitive

Healthcare

Corp.

..............................

United

States

1,925

52,610

a

Doximity

,

Inc.,

A

......................................

United

States

1,608

80,609

a

Inspire

Medical

Systems,

Inc.

............................

United

States

4,635

1,066,328

a

Veeva

Systems,

Inc.,

A

.................................

United

States

6,172

1,576,823

2,776,370

Hotels,

Restaurants

&

Leisure

0.8%

a

Airbnb,

Inc.,

A

........................................

United

States

4,331

721,068

a

Booking

Holdings,

Inc.

.................................

United

States

309

741,362

1,462,430

Industrial

Conglomerates

0.4%

Roper

Technologies,

Inc.

................................

United

States

1,547

760,907

Interactive

Media

&

Services

7.1%

a

Alphabet,

Inc.,

A

......................................

United

States

1,848

5,353,730

a

Alphabet,

Inc.,

C

......................................

United

States

617

1,785,345

a

Match

Group,

Inc.

.....................................

United

States

3,081

407,462

a

Meta

Platforms,

Inc.,

A

.................................

United

States

8,634

2,904,046

a

Snap,

Inc.,

A

.........................................

United

States

6,193

291,257

Tencent

Holdings

Ltd.

..................................

China

6,186

361,011

a,b

Trustpilot

Group

plc,

144A,

Reg

S

.........................

United

Kingdom

19,318

85,467

a

ZoomInfo

Technologies,

Inc.,

A

...........................

United

States

21,610

1,387,362

12,575,680

Internet

&

Direct

Marketing

Retail

7.3%

a

Amazon.com,

Inc.

.....................................

United

States

3,080

10,269,767

a

DoorDash

,

Inc.,

A

.....................................

United

States

1,870

278,443

a

Etsy,

Inc.

............................................

United

States

630

137,932

a

Fiverr

International

Ltd.

.................................

United

States

1,200

136,440

a

MercadoLibre

,

Inc.

....................................

Argentina

1,543

2,080,582

12,903,164

IT

Services

12.6%

a,b

Adyen

NV,

144A,

Reg

S

................................

Netherlands

1,233

3,234,069

a

Afterpay

Ltd.

.........................................

Australia

3,131

188,763

a

Block,

Inc.,

A

.........................................

United

States

8,643

1,395,931

a

Cloudflare

,

Inc.,

A

.....................................

United

States

7,722

1,015,443

a

Endava

plc,

ADR

......................................

United

Kingdom

2,177

365,562

a

EPAM

Systems,

Inc.

...................................

United

States

2,160

1,443,852

a

Globant

SA

..........................................

United

States

1,551

487,154

Mastercard

,

Inc.,

A

....................................

United

States

6,169

2,216,645

a

MongoDB,

Inc.

.......................................

United

States

3,394

1,796,614

a

Okta

,

Inc.

...........................................

United

States

1,225

274,608

a

Paymentus

Holdings,

Inc.,

A

.............................

United

States

2,716

95,006

a

PayPal

Holdings,

Inc.

..................................

United

States

8,025

1,513,355

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

DynaTech

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FD-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

IT

Services

(continued)

a

Shopify,

Inc.,

A

.......................................

Canada

3,083

$

4,246,445

a

Snowflake,

Inc.,

A

.....................................

United

States

2,782

942,403

a

Thoughtworks

Holding,

Inc.

..............................

United

States

3,179

85,229

a

Twilio

,

Inc.,

A

.........................................

United

States

6,172

1,625,334

Visa,

Inc.,

A

..........................................

United

States

6,175

1,338,184

22,264,597

Life

Sciences

Tools

&

Services

8.2%

a

10X

Genomics,

Inc.,

A

..................................

United

States

3,101

461,925

Agilent

Technologies,

Inc.

...............................

United

States

601

95,950

a

Avantor

,

Inc.

.........................................

United

States

3,065

129,159

a

Bio-Rad

Laboratories,

Inc.,

A

.............................

United

States

1,236

933,885

Bio-

Techne

Corp.

.....................................

United

States

1,238

640,467

a

Charles

River

Laboratories

International,

Inc.

.................

United

States

625

235,487

Danaher

Corp.

.......................................

United

States

10,789

3,549,689

a

Evotec

SE

...........................................

Germany

3,463

167,040

a

Evotec

SE,

ADR

......................................

Germany

8,994

213,608

a

Illumina,

Inc.

.........................................

United

States

1,233

469,083

Lonza

Group

AG

......................................

Switzerland

1,237

1,028,726

a

Maravai

LifeSciences

Holdings,

Inc.,

A

.....................

United

States

6,241

261,498

a

Medpace

Holdings,

Inc.

.................................

United

States

1,236

269,003

a

Oxford

Nanopore

Technologies

plc

........................

United

Kingdom

1,603

15,132

a

Repligen

Corp.

.......................................

United

States

6,172

1,634,592

Thermo

Fisher

Scientific,

Inc.

............................

United

States

5,549

3,702,515

a,b

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

..................

China

49,572

586,961

14,394,720

Media

0.3%

a

Liberty

Broadband

Corp.,

A

..............................

United

States

3,098

498,468

Personal

Products

0.1%

a

Olaplex

Holdings,

Inc.

..................................

United

States

2,744

79,933

Pharmaceuticals

1.4%

a

Catalent

,

Inc.

........................................

United

States

10,362

1,326,647

Zoetis,

Inc.

..........................................

United

States

4,942

1,205,996

2,532,643

Professional

Services

0.3%

a

CoStar

Group,

Inc.

....................................

United

States

6,202

490,144

Semiconductors

&

Semiconductor

Equipment

12.3%

a

Advanced

Micro

Devices,

Inc.

............................

United

States

3,719

535,164

Analog

Devices,

Inc.

...................................

United

States

8,425

1,480,862

ASML

Holding

NV,

NYRS

...............................

Netherlands

4,469

3,557,950

a

Enphase

Energy,

Inc.

..................................

United

States

2,481

453,874

Entegris

,

Inc.

.........................................

United

States

6,184

856,979

a,c

GLOBALFOUNDRIES,

Inc.

..............................

United

States

5,412

351,618

Intel

Corp.

...........................................

United

States

4,659

239,938

KLA

Corp.

...........................................

United

States

2,472

1,063,232

Lam

Research

Corp.

...................................

United

States

3,085

2,218,578

Monolithic

Power

Systems,

Inc.

...........................

United

States

3,087

1,522,910

NVIDIA

Corp.

........................................

United

States

24,649

7,249,517

a

SiTime

Corp.

.........................................

United

States

3,093

904,826

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.,

ADR

...........

Taiwan

1,816

218,483

Teradyne,

Inc.

........................................

United

States

6,181

1,010,779

21,664,710

Software

24.6%

a

Adobe,

Inc.

..........................................

United

States

3,393

1,924,035

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

DynaTech

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FD-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

Amplitude,

Inc.,

A

.....................................

United

States

1,716

$

90,845

a

ANSYS,

Inc.

.........................................

United

States

3,088

1,238,659

a

AppLovin

Corp.,

A

.....................................

United

States

620

58,441

a

Aspen

Technology,

Inc.

.................................

United

States

1,254

190,859

a

Atlassian

Corp.

plc,

A

..................................

United

States

6,475

2,468,853

a

Autodesk,

Inc.

........................................

United

States

1,243

349,519

a

Avalara,

Inc.

.........................................

United

States

7,415

957,351

Bentley

Systems,

Inc.,

B

................................

United

States

1,896

91,634

a

Bill.com

Holdings,

Inc.

..................................

United

States

4,940

1,230,801

a

Braze,

Inc.,

A

........................................

United

States

700

54,012

a

Cadence

Design

Systems,

Inc.

...........................

United

States

9,873

1,839,833

a

Crowdstrike

Holdings,

Inc.,

A

.............................

United

States

3,095

633,701

a

CS

Disco,

Inc.

........................................

United

States

1,327

47,440

a

Datadog

,

Inc.,

A

......................................

United

States

8,026

1,429,511

a

Descartes

Systems

Group,

Inc.

(The)

......................

Canada

658

54,403

a

DocuSign,

Inc.

.......................................

United

States

4,949

753,782

a

DoubleVerify

Holdings,

Inc.

..............................

United

States

1,164

38,738

a

Fortinet,

Inc.

.........................................

United

States

1,549

556,711

a

Gitlab

,

Inc.,

A

........................................

United

States

3,103

269,961

a

HashiCorp

,

Inc.,

A

.....................................

United

States

1,458

132,736

a

HubSpot

,

Inc.

........................................

United

States

5,241

3,454,605

Intuit,

Inc.

...........................................

United

States

6,319

4,064,507

Microsoft

Corp.

.......................................

United

States

21,568

7,253,750

a,c

Monday.com

Ltd.

......................................

United

States

2,321

716,539

a

Palo

Alto

Networks,

Inc.

................................

United

States

931

518,344

a

Paylocity

Holding

Corp.

.................................

United

States

723

170,744

a

Procore

Technologies,

Inc.

..............................

United

States

6,818

545,235

a

salesforce.com,

Inc.

...................................

United

States

8,021

2,038,377

a

Samsara,

Inc.,

A

......................................

United

States

7,989

224,571

a,c

SentinelOne

,

Inc.,

A

...................................

United

States

6,150

310,513

a

ServiceNow

,

Inc.

......................................

United

States

7,089

4,601,541

a

Sprinklr

,

Inc.,

A

.......................................

United

States

6,385

101,330

a

Synopsys,

Inc.

.......................................

United

States

6,477

2,386,774

a

Tyler

Technologies,

Inc.

.................................

United

States

1,855

997,897

a

Workday,

Inc.,

A

......................................

United

States

4,632

1,265,370

a

Zscaler

,

Inc.

.........................................

United

States

761

244,532

43,306,454

Technology

Hardware,

Storage

&

Peripherals

1.0%

Apple,

Inc.

..........................................

United

States

9,874

1,753,326

Trading

Companies

&

Distributors

0.0%

†

Fastenal

Co.

.........................................

United

States

545

34,913

Total

Common

Stocks

(Cost

$107,225,598)

.....................................

174,834,111

Preferred

Stocks

0.0%

†

Health

Care

Equipment

&

Supplies

0.0%

†

d

Sartorius

AG,

0.12%

...................................

Germany

129

87,179

Total

Preferred

Stocks

(Cost

$82,888)

..........................................

87,179

Total

Long

Term

Investments

(Cost

$107,308,486)

...............................

174,921,290

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

DynaTech

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FD-14

Short

Term

Investments

1.6%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.8%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

1,413,440

$

1,413,440

Total

Money

Market

Funds

(Cost

$1,413,440)

...................................

1,413,440

a

a

a

a

a

g

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.8%

Money

Market

Funds

0.8%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

1,337,150

1,337,150

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$1,337,150)

............................................................

1,337,150

Total

Short

Term

Investments

(Cost

$2,750,590

)

.................................

2,750,590

a

Total

Investments

(Cost

$110,059,076)

100.8%

..................................

$177,671,880

Other

Assets,

less

Liabilities

(0.8)%

...........................................

(1,372,843)

Net

Assets

100.0%

...........................................................

$176,299,037

See

Abbreviations

on

page

FD-

26

.

†

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$3,981,317,

representing

2.3%

of

net

assets.

c

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

2021.

See

Note

1(c).

d

Variable

rate

security.

The

rate

shown

represents

the

yield

at

period

end.

e

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

g

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FD-15

Franklin

DynaTech

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$107,308,486

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

2,750,590

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$1,303,373)

.................................

$174,921,290

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

2,750,590

Foreign

currency,

at

value

(cost

$866)

...........................................................

864

Receivables:

Capital

shares

sold

........................................................................

315,419

Dividends

...............................................................................

16,720

Total

assets

..........................................................................

178,004,883

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

86,183

Management

fees

.........................................................................

166,886

Distribution

fees

..........................................................................

40,793

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

1,337,150

Accrued

expenses

and

other

liabilities

...........................................................

74,834

Total

liabilities

.........................................................................

1,705,846

Net

assets,

at

value

.................................................................

$176,299,037

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$51,259,215

Total

distributable

earnings

(losses)

.............................................................

125,039,822

Net

assets,

at

value

.................................................................

$176,299,037

Franklin

DynaTech

VIP

Fund

Class

2:

Net

assets,

at

value

.......................................................................

$139,784,346

Shares

outstanding

........................................................................

11,798,503

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.85

Class

4:

Net

assets,

at

value

.......................................................................

$36,514,691

Shares

outstanding

........................................................................

3,251,414

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.23

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FD-16

Franklin

DynaTech

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$4,229)

Unaffiliated

issuers

........................................................................

$423,235

Non-controlled

affiliates

(Note

3e)

.............................................................

211

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

12,017

Non-controlled

affiliates

(Note

3

e

)

.............................................................

73

Total

investment

income

...................................................................

435,536

Expenses:

Management

fees

(Note

3

a

)

...................................................................

1,204,619

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

338,832

    Class

4

................................................................................

134,290

Custodian

fees

(Note

4

)

......................................................................

874

Reports

to

shareholders

fees

..................................................................

49,258

Professional

fees

...........................................................................

88,775

Trustees'

fees

and

expenses

..................................................................

2,619

Other

....................................................................................

10,732

Total

expenses

.........................................................................

1,829,999

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(121,300)

Net

expenses

.........................................................................

1,708,699

Net

investment

income

(loss)

............................................................

(1,273,163)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

57,508,811

Foreign

currency

transactions

................................................................

(9,222)

Net

realized

gain

(loss)

..................................................................

57,499,589

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(31,583,944)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(4)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(31,583,948)

Net

realized

and

unrealized

gain

(loss)

............................................................

25,915,641

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$24,642,478

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.

Annual

Report

FD-17

Franklin

DynaTech

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(1,273,163)

$(528,553)

Net

realized

gain

(loss)

.................................................

57,499,589

10,941,529

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(31,583,948)

38,261,628

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

24,642,478

48,674,604

Distributions

to

shareholders:

Class

2

.............................................................

(8,441,223)

(6,270,140)

Class

4

.............................................................

(2,584,190)

(2,134,830)

Total

distributions

to

shareholders

..........................................

(11,025,413)

(8,404,970)

Capital

share

transactions:

(Note

2

)

Class

2

.............................................................

3,566,947

(2,125,752)

Class

4

.............................................................

(5,041,405)

(3,712,359)

Total

capital

share

transactions

............................................

(1,474,458)

(5,838,111)

Net

increase

(decrease)

in

net

assets

...................................

12,142,607

34,431,523

Net

assets:

Beginning

of

year

.......................................................

164,156,430

129,724,907

End

of

year

...........................................................

$176,299,037

$164,156,430

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

Franklin

DynaTech

VIP

Fund

FD-18

Annual

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

DynaTech

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

The

Fund

offers

two

classes

of

shares:

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

Effective

May

1,

2021,

Franklin

Flex

Cap

Growth

VIP

Fund

was

renamed

Franklin

DynaTech

VIP

Fund. 

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

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

FD-19

Annual

Report

Franklin

DynaTech

VIP

Fund

(continued)

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

Participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

cash

collateral

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

The

collateral

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to

the

collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

December

31,

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

FD-20

Annual

Report

Franklin

DynaTech

VIP

Fund

(continued)

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote

.

2.

Shares

of

Beneficial

Interest

At

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

2

Shares:

Shares

sold

...................................

2,061,212

$24,333,567

4,213,499

$37,146,503

Shares

issued

in

reinvestment

of

distributions

..........

761,157

8,441,223

752,718

6,270,140

Shares

redeemed

...............................

(2,541,054)

(29,207,843)

(5,601,791)

(45,542,395)

Net

increase

(decrease)

..........................

281,315

$3,566,947

(635,574)

$(2,125,752)

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

FD-21

Annual

Report

Franklin

DynaTech

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

Effective

May

1,

2021,

the

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets of

the

Fund

as

follows:

Prior

to

May

1,

2021,

the

Fund

paid

fees

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.691%

of

the

Fund’s

average

daily

net

assets.

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

4

Shares:

Shares

sold

...................................

404,187

$4,478,776

656,101

$5,754,240

Shares

issued

in

reinvestment

of

distributions

..........

245,645

2,584,190

268,870

2,134,830

Shares

redeemed

...............................

(1,094,541)

(12,104,371)

(1,349,107)

(11,601,429)

Net

increase

(decrease)

..........................

(444,709)

$(5,041,405)

(424,136)

$(3,712,359)

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.630%

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

Annualized

Fee

Rate

Net

Assets

1.000%

Up

to

and

including

$100

million

0.900%

Over

$100

million,

up

to

and

including

$250

million

0.850%

Over

$250

million,

up

to

and

including

$10

billion

0.800%

Over

$10

billion,

up

to

and

including

$12.5

billion

0.775%

Over

$12.5

billion,

up

to

and

including

$15

billion

0.750%

In

excess

of

$15

billion

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

FD-22

Annual

Report

Franklin

DynaTech

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

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

Class

2

and

Class

4,

respectively.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

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

year

ended

December

31,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

DynaTech

VIP

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$

3,334,677

$

41,485,202

$

(43,406,439)

$

—

$

—

$

1,413,440

1,413,440

$

211

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$466,550

$22,435,641

$(21,565,041)

$—

$—

$1,337,150

1,337,150

$73

Total

Affiliated

Securities

...

$3,801,227

$63,920,843

$(64,971,480)

$—

$—

$2,750,590

$284

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

FD-23

Annual

Report

Franklin

DynaTech

VIP

Fund

(continued)

f.

Waiver

and

Expense

Reimbursements

Advisers

have

contractually

agreed

in

advance

to

waive

or

limit

its

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

each

class

of

the

Fund

does

not

exceed

0.71%

based

on

the

average

net

assets

of

each

class

until

April

30,

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

year

ended

December

31,

2021,

there

were

no

credits

earned.

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

long

term

capital

gains

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

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$128,175,501

and

$140,094,615,

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$1,337,150

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.

2021

2020

Distributions

paid

from:

Long

term

capital

gain

......................................................

$11,025,413

$8,404,970

Cost

of

investments

..........................................................................

$110,384,199

Unrealized

appreciation

........................................................................

$70,780,889

Unrealized

depreciation

........................................................................

(3,493,208)

Net

unrealized

appreciation

(depreciation)

..........................................................

$67,287,681

Distributable

earnings:

Undistributed

long

term

capital

gains

..............................................................

$57,752,145

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

FD-24

Annual

Report

Franklin

DynaTech

VIP

Fund

(continued)

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19,

has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general,

and

may

continue

for

an

unpredictable

duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Fund, its

ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its

ability

to

achieve its

investment

objectives.

8.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

December

31,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

To

Financial

Statements

FD-25

Annual

Report

Franklin

DynaTech

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

Franklin

DynaTech

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

776,836

$

—

$

—

$

776,836

Automobiles

..........................

4,986,492

—

—

4,986,492

Banks

...............................

1,116,355

—

—

1,116,355

Biotechnology

.........................

2,223,887

550,401

—

2,774,288

Capital

Markets

........................

4,402,227

—

—

4,402,227

Chemicals

...........................

—

281,201

—

281,201

Consumer

Finance

.....................

74,820

—

—

74,820

Electric

Utilities

........................

1,728,560

—

—

1,728,560

Electronic

Equipment,

Instruments

&

Components

........................

2,182,188

777,929

—

2,960,117

Entertainment

.........................

5,317,085

—

—

5,317,085

Equity

Real

Estate

Investment

Trusts

(REITs)

.

1,462,190

—

—

1,462,190

Health

Care

Equipment

&

Supplies

.........

10,292,023

—

—

10,292,023

Health

Care

Providers

&

Services

..........

1,163,458

—

—

1,163,458

Health

Care

Technology

.................

2,776,370

—

—

2,776,370

Hotels,

Restaurants

&

Leisure

.............

1,462,430

—

—

1,462,430

Industrial

Conglomerates

................

760,907

—

—

760,907

Interactive

Media

&

Services

..............

12,129,202

446,478

—

12,575,680

Internet

&

Direct

Marketing

Retail

..........

12,903,164

—

—

12,903,164

IT

Services

...........................

18,841,765

3,422,832

—

22,264,597

Life

Sciences

Tools

&

Services

............

12,611,993

1,782,727

—

14,394,720

Media

...............................

498,468

—

—

498,468

Personal

Products

.....................

79,933

—

—

79,933

Pharmaceuticals

.......................

2,532,643

—

—

2,532,643

Professional

Services

...................

490,144

—

—

490,144

Semiconductors

&

Semiconductor

Equipment

.

21,664,710

—

—

21,664,710

Software

.............................

43,306,454

—

—

43,306,454

Technology

Hardware,

Storage

&

Peripherals

.

1,753,326

—

—

1,753,326

Trading

Companies

&

Distributors

..........

34,913

—

—

34,913

Preferred

Stocks

........................

—

87,179

—

87,179

Short

Term

Investments

...................

2,750,590

—

—

2,750,590

Total

Investments

in

Securities

...........

$170,323,133

$7,348,747

a

$—

$177,671,880

a

Includes

foreign

securities

valued

at

$7,348,747,

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

FD-26

Annual

Report

Franklin

DynaTech

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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

GDR

Global

Depositary

Receipt

NYRS

New

York

Registry

Shares

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FD-27

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

DynaTech

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

DynaTech

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

transfer

agent.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FD-28

Annual

Report

Franklin

DynaTech

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$11,025,413

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$335,843

FGR-1

Annual

Report

Franklin

Global

Real

Estate

VIP

Fund

This

annual

report

for

Franklin

Global

Real

Estate

VIP

Fund

covers

the

fiscal

year

ended

December

31,

202

1

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+26.79%

5-Year

+8.62%

10-Year

+8.65%

FGR-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/2

1

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

FTSE

®

EPRA

®

/NAREIT

®

Developed

Index.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FGR-3

Annual

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

FTSE

®

EPRA

®

/

NAREIT

®

Developed

Index

posted

a

+27.21%

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

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Equity

Real

Estate

Investment

Trusts

(REITs)

81.2%

Real

Estate

Management

&

Development

16.9%

Other

0.6%

Short-Term

Investments

&

Other

Net

Assets

1.3%

Franklin

Global

Real

Estate

VIP

Fund

FGR-4

Annual

Report

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

large

Chinese

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

12

months

under

review,

the

Fund’s

performance

relative

to

the

FTSE

®

EPRA

®

/NAREIT

®

Developed

Index

was

supported

foremost

at

the

sector

level

by

stock

selection

and

an

underweight

in

healthcare

property

and

an

underweight

to

retail

property.

The

positive

effects

from

both

these

sectors

came

from

a

lack

of

exposure

to

stocks

that

underperformed

a

real

estate

market

that

advanced

strongly

during

the

period.

Some

of

the

largest

individual

contributors

to

the

Fund’s

overall

gains

were

in

the

industrial

property

sector

as

our

investments

in

Rexford

Industrial

Realty

and

Prologis

appreciated

substantially.

Both

companies

have

been

benefiting

from

increasing

demand

for

industrial

properties,

such

as

warehouses,

as

e-commerce

expands.

Camden

Property

Trust

and

UDR

delivered

positive

results

in

the

residential

sector.

Camden

Property

Trust

is

a

sunbelt-focused

U.S.

multifamily

REIT

that

continues

to

be

a

core

holding

for

our

real

estate

funds.

The

company

has

been

experiencing

record

pricing

power

across

its

portfolio

from

strong

migration

to

its

markets.

UDR

is

an

owner

and

operator

of

apartment

communities

primarily

in

U.S.

coastal

cities.

The

company

has

outperformed

following

a

much

faster-than-expected

recovery

in

apartment

fundamentals

after

the

pandemic-induced

softness

of

the

prior

year.

In

contrast,

the

Fund’s

position

in

German-listed

Vonovia

detracted

from

relative

returns

in

the

sector.

While

the

acquisition

of

Deutsche

Wohnen

(also

a

Fund

holding

prior

to

acquisition)

was

earnings

accretive

and

should

help

temper

concerns

in

relation

to

rent

regulation

in

Germany,

the

associated

rights

offering

loomed

for

much

of

the

period

and

was

an

overhang

on

performance.

In

the

shopping

centers

sector,

a

top

contributor

included

Regency

Centers,

an

owner

of

mostly

grocery-anchored

shopping

centers

located

in

affluent

and

densely

populated

areas

across

the

U.S.

The

reopening

of

the

economy

and

the

implementation

of

vaccine

rollout

plans

created

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.

Conversely,

an

underweighting

in

the

regional

malls

sector

proved

less

helpful

with

our

underweighted

position

in

Simon

Property

Group

detracting

from

relative

performance.

Simon

is

one

of

the

largest

owners

of

retail

real

estate

in

the

world,

primarily

regional

Top

10

Countries

12/31/21

a

%

of

Total

Net

Assets

a

a

United

States

59.3%

Japan

8.5%

United

Kingdom

6.1%

Germany

4.3%

Australia

3.9%

Hong

Kong

3.5%

Singapore

3.1%

Sweden

2.9%

Canada

2.8%

Belgium

1.6%

Franklin

Global

Real

Estate

VIP

Fund

FGR-5

Annual

Report

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

underweighting

to

Simon

as

we

see

the

outlook

for

their

assets

as

challenged

amid

increasing

e-commerce

adoption.

An

overweighting

in

the

office

space

sector

detracted

from

relative

performance

during

the

period.

Performance

in

the

sector

was

hurt

by

Gecina

and

Kenedix

Office

Investment.

Gecina

is

an

owner

and

developer

of

primarily

commercial

properties

in

the

Paris

region,

while

Kenedix

Office

is

a

Japanese

REIT

focused

on

the

ownership

of

office

buildings

mostly

in

Tokyo.

Elsewhere,

relative

performance

in

the

diversified

sector

was

hampered

by

Japanese

developer

Mitsui

Fudosan.

In

terms

of

country

level

performance,

the

Fund

benefited

most

from

stock

selection

in

the

U.S.

and

Australia.

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

12

months

ended

December

31,

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

significant

investment

in

securities

with

non-U.S.

currency

exposure.

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

December

31,

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

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Prologis,

Inc.

7.4%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Equinix

,

Inc.

4.1%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Public

Storage

3.5%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

AvalonBay

Communities,

Inc.

3.5%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Vonovia

SE

3.4%

Real

Estate

Management

&

Development,

Germany

Realty

Income

Corp.

2.8%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Camden

Property

Trust

2.8%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

UDR,

Inc.

2.8%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Alexandria

Real

Estate

Equities,

Inc.

2.7%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Healthpeak

Properties,

Inc.

2.5%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

Class

2

Fund

Expenses

Franklin

Global

Real

Estate

VIP

Fund

FGR-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,100.80

$6.62

$1,018.90

$6.37

1.25%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Global

Real

Estate

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGR-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.66

$17.99

$15.41

$16.96

$15.83

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.19

0.39

0.29

0.33

0.17

Net

realized

and

unrealized

gains

(losses)

...........

3.76

(1.59)

3.15

(1.41)

1.52

Total

from

investment

operations

....................

3.95

(1.20)

3.44

(1.08)

1.69

Less

distributions

from:

Net

investment

income

..........................

(0.18)

(0.54)

(0.50)

(0.47)

(0.56)

Net

realized

gains

.............................

(0.37)

(1.59)

(0.36)

—

—

Total

distributions

...............................

(0.55)

(2.13)

(0.86)

(0.47)

(0.56)

Net

asset

value,

end

of

year

.......................

$18.06

$14.66

$17.99

$15.41

$16.96

Total

return

c

...................................

27.20%

(5.17)%

22.62%

(6.52)%

10.76%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.16%

1.24%

1.14%

1.15%

1.14%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.00%

d

1.00%

d

1.04%

d

1.15%

d

1.14%

e

Net

investment

income

...........................

1.14%

2.73%

1.66%

1.92%

1.04%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,001

$966

$1,057

$878

$819

Portfolio

turnover

rate

............................

26.48%

23.01%

28.34%

17.78%

22.18%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Global

Real

Estate

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.21

$17.50

$15.00

$16.52

$15.42

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.14

0.35

0.24

0.27

0.13

Net

realized

and

unrealized

gains

(losses)

...........

3.63

(1.56)

3.08

(1.36)

1.47

Total

from

investment

operations

....................

3.77

(1.21)

3.32

(1.09)

1.60

Less

distributions

from:

Net

investment

income

..........................

(0.14)

(0.49)

(0.46)

(0.43)

(0.50)

Net

realized

gains

.............................

(0.37)

(1.59)

(0.36)

—

—

Total

distributions

...............................

(0.51)

(2.08)

(0.82)

(0.43)

(0.50)

Net

asset

value,

end

of

year

.......................

$17.47

$14.21

$17.50

$15.00

$16.52

Total

return

c

...................................

26.79%

(5.39)%

22.37%

(6.77)%

10.47%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.41%

1.48%

1.39%

1.40%

1.39%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.25%

d

1.25%

d

1.29%

d

1.40%

d

1.39%

e

Net

investment

income

...........................

0.88%

2.47%

1.41%

1.67%

0.79%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$154,411

$134,051

$159,153

$146,408

$183,532

Portfolio

turnover

rate

............................

26.48%

23.01%

28.34%

17.78%

22.18%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Global

Real

Estate

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGR-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

98.7%

Diversified

Telecommunication

Services

0.6%

a

Cellnex

Telecom

SA,

144A,

Reg

S

.........................

Spain

15,387

$

890,628

Equity

Real

Estate

Investment

Trusts

(REITs)

81.2%

Aedifica

SA

..........................................

Belgium

9,862

1,286,356

Alexandria

Real

Estate

Equities,

Inc.

.......................

United

States

18,944

4,223,754

Allied

Properties

Real

Estate

Investment

Trust

................

Canada

34,691

1,205,749

American

Assets

Trust,

Inc.

..............................

United

States

17,954

673,814

American

Homes

4

Rent,

A

..............................

United

States

82,141

3,582,169

Americold

Realty

Trust

.................................

United

States

20,842

683,409

AvalonBay

Communities,

Inc.

............................

United

States

21,440

5,415,530

Boston

Properties,

Inc.

.................................

United

States

8,406

968,203

Camden

Property

Trust

.................................

United

States

24,601

4,395,707

Canadian

Apartment

Properties

REIT

......................

Canada

48,081

2,279,903

Capital

&

Counties

Properties

plc

.........................

United

Kingdom

446,614

1,019,414

CapitaLand

Integrated

Commercial

Trust

....................

Singapore

972,854

1,470,700

City

Office

REIT,

Inc.

...................................

United

States

40,823

805,030

Cousins

Properties,

Inc.

................................

United

States

54,916

2,212,017

Derwent

London

plc

...................................

United

Kingdom

32,141

1,494,023

Dexus

..............................................

Australia

173,935

1,404,579

Equinix

,

Inc.

.........................................

United

States

7,586

6,416,542

Equity

LifeStyle

Properties,

Inc.

...........................

United

States

34,631

3,035,753

First

Industrial

Realty

Trust,

Inc.

..........................

United

States

26,851

1,777,536

Gecina

SA

..........................................

France

12,310

1,721,186

GLP

J-

Reit

..........................................

Japan

888

1,533,991

Goodman

Group

......................................

Australia

165,634

3,188,728

GPT

Group

(The)

.....................................

Australia

357,930

1,409,545

H&R

Real

Estate

Investment

Trust

........................

Canada

69,700

895,710

Healthcare

Trust

of

America,

Inc.,

A

........................

United

States

38,885

1,298,370

Healthpeak

Properties,

Inc.

..............................

United

States

109,782

3,962,032

b

Host

Hotels

&

Resorts,

Inc.

..............................

United

States

79,717

1,386,279

Hulic

Reit

,

Inc.

.......................................

Japan

702

1,055,596

Ichigo

Office

REIT

Investment

Corp.

.......................

Japan

885

637,587

Inmobiliaria

Colonial

Socimi

SA

...........................

Spain

98,537

921,254

Japan

Hotel

REIT

Investment

Corp.

........................

Japan

1,375

671,375

Kenedix

Office

Investment

Corp.

..........................

Japan

209

1,290,799

Kilroy

Realty

Corp.

....................................

United

States

21,694

1,441,783

Life

Storage,

Inc.

......................................

United

States

9,953

1,524,601

Link

REIT

...........................................

Hong

Kong

183,977

1,620,932

Mapletree

Logistics

Trust

...............................

Singapore

1,170,292

1,649,159

MGM

Growth

Properties

LLC,

A

...........................

United

States

42,472

1,734,981

NETSTREIT

Corp.

....................................

United

States

56,577

1,295,613

NTT

UD

REIT

Investment

Corp.

..........................

Japan

788

1,063,283

Orix

JREIT,

Inc.

.......................................

Japan

701

1,095,170

Prologis,

Inc.

.........................................

United

States

68,005

11,449,322

Public

Storage

.......................................

United

States

14,701

5,506,407

Realty

Income

Corp.

...................................

United

States

61,474

4,400,924

Regency

Centers

Corp.

.................................

United

States

47,421

3,573,172

Rexford

Industrial

Realty,

Inc.

............................

United

States

45,148

3,661,954

RPT

Realty

..........................................

United

States

50,107

670,432

b

Ryman

Hospitality

Properties,

Inc.

.........................

United

States

16,013

1,472,556

SBA

Communications

Corp.

.............................

United

States

3,323

1,292,713

Segro

plc

...........................................

United

Kingdom

201,455

3,917,477

Simon

Property

Group,

Inc.

..............................

United

States

16,239

2,594,505

Spirit

Realty

Capital,

Inc.

................................

United

States

46,844

2,257,412

b

Summit

Hotel

Properties,

Inc.

............................

United

States

43,938

428,835

UDR,

Inc.

...........................................

United

States

71,641

4,297,744

UNITE

Group

plc

(The)

.................................

United

Kingdom

75,972

1,141,711

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Global

Real

Estate

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-10

See

A

bbreviations

on

page

FGR-

23

.

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

43,934

$

3,768,219

126,181,545

Real

Estate

Management

&

Development

16.9%

Aroundtown

SA

.......................................

Germany

233,090

1,404,974

b

Capitaland

Investment

Ltd.

..............................

Singapore

685,765

1,732,491

Castellum

AB

........................................

Sweden

47,626

1,279,230

a

CTP

NV,

144A,

Reg

S

..................................

Netherlands

40,772

867,348

Fabege

AB

..........................................

Sweden

56,222

939,906

b

Fastighets

AB

Balder,

B

.................................

Sweden

31,088

2,234,694

Grainger

plc

.........................................

United

Kingdom

440,053

1,890,967

Hang

Lung

Properties

Ltd.

...............................

Hong

Kong

453,422

932,846

Mitsubishi

Estate

Co.

Ltd.

...............................

Japan

140,340

1,945,682

Mitsui

Fudosan

Co.

Ltd.

................................

Japan

142,957

2,831,795

New

World

Development

Co.

Ltd.

.........................

Hong

Kong

185,738

735,492

Nomura

Real

Estate

Holdings,

Inc.

........................

Japan

43,837

1,009,476

Shurgard

Self

Storage

SA

...............................

Belgium

18,852

1,233,147

Sun

Hung

Kai

Properties

Ltd.

............................

Hong

Kong

171,634

2,082,943

Vonovia

SE

..........................................

Germany

95,143

5,238,443

26,359,434

Total

Common

Stocks

(Cost

$93,627,061)

......................................

153,431,607

Short

Term

Investments

0.4%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.4%

c

Joint

Repurchase

Agreement,

0.031%,

1/03/22

(Maturity

Value

$692,239)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$293,205)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$35,456)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$363,578)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

5%,

1/20/48

-

10/20/51;

U.S.

Treasury

Note,

2.5%,

1/31/24;

and

U.S.

Cash

Management

Bill,

Discount

Note,

1/25/22

(valued

at

$706,290)

.........................................

692,237

692,237

Total

Repurchase

Agreements

(Cost

$692,237)

..................................

692,237

Total

Short

Term

Investments

(Cost

$692,237

)

..................................

692,237

a

Total

Investments

(Cost

$94,319,298)

99.1%

....................................

$154,123,844

Other

Assets,

less

Liabilities

0.9%

.............................................

1,289,038

Net

Assets

100.0%

...........................................................

$155,412,882

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Global

Real

Estate

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGR-11

*

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$1,757,976,

representing

1.1%

of

net

assets.

b

Non-income

producing.

c

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-12

Franklin

Global

Real

Estate

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$93,627,061

Cost

-

Unaffiliated

repurchase

agreements

......................................................

692,237

Value

-

Unaffiliated

issuers

..................................................................

$153,431,607

Value

-

Unaffiliated

repurchase

agreements

......................................................

692,237

Foreign

currency,

at

value

(cost

$41,473)

.........................................................

41,465

Receivables:

Investment

securities

sold

...................................................................

1,250,576

Capital

shares

sold

........................................................................

110

Dividends

and

interest

.....................................................................

462,274

European

Union

tax

reclaims

(Note

1e)

.........................................................

1,263,255

Total

assets

..........................................................................

157,141,524

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

1,239,637

Capital

shares

redeemed

...................................................................

198,024

Management

fees

.........................................................................

113,932

Distribution

fees

..........................................................................

31,819

Accrued

expenses

and

other

liabilities

...........................................................

145,230

Total

liabilities

.........................................................................

1,728,642

Net

assets,

at

value

.................................................................

$155,412,882

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$88,626,259

Total

distributable

earnings

(losses)

.............................................................

66,786,623

Net

assets,

at

value

.................................................................

$155,412,882

Franklin

Global

Real

Estate

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$1,001,426

Shares

outstanding

........................................................................

55,460

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$18.06

Class

2:

Net

assets,

at

value

.......................................................................

$154,411,456

Shares

outstanding

........................................................................

8,837,102

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.47

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGR-13

Franklin

Global

Real

Estate

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$90,662)

Unaffiliated

issuers

........................................................................

$3,054,804

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

3,799

Non-controlled

affiliates

(No

te

3e)

.............................................................

34

Other

income

(Note

1e)

......................................................................

48,943

Total

investment

income

...................................................................

3,107,580

Expenses:

Management

fees

(Note

3a)

...................................................................

1,528,636

Interest

expense

...........................................................................

2

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

361,688

Custodian

fees

(Note

4)

......................................................................

6,431

Reports

to

shareholders

fees

..................................................................

35,834

Professional

fees

...........................................................................

96,985

Trustees'

fees

and

expenses

..................................................................

2,395

Other

....................................................................................

22,911

Total

expenses

.........................................................................

2,054,882

Expense

reductions

(Note

4)

...............................................................

(1)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(236,901)

Net

expenses

.........................................................................

1,817,980

Net

investment

income

................................................................

1,289,600

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

11,008,579

Foreign

currency

transactions

................................................................

(52,372)

Net

realized

gain

(loss)

..................................................................

10,956,207

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

22,282,109

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(82,896)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

22,199,213

Net

realized

and

unrealized

gain

(loss)

............................................................

33,155,420

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$34,445,020

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGR-14

Franklin

Global

Real

Estate

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$1,289,600

$3,273,214

Net

realized

gain

(loss)

.................................................

10,956,207

5,502,334

Net

change

in

unrealized

appreciation

(depreciation)

...........................

22,199,213

(18,826,188)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

34,445,020

(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

.............................................................

(147,334)

91,462

Class

2

.............................................................

(9,286,881)

3,019,898

Total

capital

share

transactions

............................................

(9,434,215)

3,111,360

Net

increase

(decrease)

in

net

assets

...................................

20,395,631

(25,192,462)

Net

assets:

Beginning

of

year

.......................................................

135,017,251

160,209,713

End

of

year

...........................................................

$155,412,882

$135,017,251

Franklin

Templeton

Variable

Insurance

Products

Trust

FGR-15

Annual

Report

Notes

to

Financial

Statements

Franklin

Global

Real

Estate

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

 Franklin

Templeton

Variable

Insurance

Products

Trust

(Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Global

Real

Estate

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

At

December

31,

2021,

82.4%

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.

At

December

31,

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

FGR-16

Annual

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

year

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

December

31,

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

FGR-17

Annual

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.

At

December

31,

2021,

the Fund

had

no

securities

on

loan.

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGR-18

Annual

Report

Franklin

Global

Real

Estate

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.

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

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

98

$1,479

2,518

$33,827

Shares

issued

in

reinvestment

of

distributions

..........

1,752

29,467

9,436

122,579

Shares

redeemed

...............................

(12,274)

(178,280)

(4,809)

(64,944)

Net

increase

(decrease)

..........................

(10,424)

$(147,334)

7,145

$91,462

Class

2

Shares:

Shares

sold

...................................

228,144

$3,630,429

236,639

$3,343,255

Shares

issued

in

reinvestment

of

distributions

..........

281,332

4,585,707

1,438,937

18,130,603

Shares

redeemed

...............................

(1,108,976)

(17,503,017)

(1,332,313)

(18,453,960)

Net

increase

(decrease)

..........................

(599,500)

$(9,286,881)

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

FGR-19

Annual

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

year

ended

December

31,

2021,

the

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)

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

FGR-20

Annual

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

year

ended

December

31,

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

interest

expense,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$10,186,000

$(10,349,000)

$—

$—

$—

—

$34

Total

Affiliated

Securities

...

$163,000

$10,186,000

$(10,349,000)

$—

$—

$—

$34

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$1,293,162

$4,362,274

Long

term

capital

gain

......................................................

3,322,012

13,890,908

$4,615,174

$18,253,182

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGR-21

Annual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

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,

passive

foreign

investment

company

shares,

corporate

actions

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$37,768,513

and

$47,964,979,

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.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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,

Cost

of

investments

..........................................................................

$100,589,692

Unrealized

appreciation

........................................................................

$62,268,840

Unrealized

depreciation

........................................................................

(8,734,688)

Net

unrealized

appreciation

(depreciation)

..........................................................

$53,534,152

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$4,025,113

Undistributed

long

term

capital

gains

..............................................................

$7,991,335

Total

distributable

earnings

.....................................................................

$12,016,448

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGR-22

Annual

Report

Franklin

Global

Real

Estate

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

year

ended

December

31,

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

December

31,

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

Franklin

Global

Real

Estate

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Diversified

Telecommunication

Services

.....

$

—

$

890,628

$

—

$

890,628

Equity

Real

Estate

Investment

Trusts

(REITs)

.

96,588,680

29,592,865

—

126,181,545

Real

Estate

Management

&

Development

....

3,033,341

23,326,093

—

26,359,434

Short

Term

Investments

...................

—

692,237

—

692,237

Total

Investments

in

Securities

...........

$99,622,021

$54,501,823

a

$—

$154,123,844

a

Includes

foreign

securities

valued

at

$53,809,586,

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.

Credit

Facility

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGR-23

Annual

Report

Franklin

Global

Real

Estate

VIP

Fund

(continued)

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure,

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Selected

Portfolio

REIT

Real

Estate

Investment

Trust

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FGR-24

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Global

Real

Estate

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Global

Real

Estate

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FGR-25

Annual

Report

Franklin

Global

Real

Estate

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

 `

The

Fund

hereby

reports

the

following

amount,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amount,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$3,322,012

FGI-1

Annual

Report

Franklin

Growth

and

Income

VIP

Fund

This

annual

report

for

Franklin

Growth

and

Income

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+25.24%

5-Year

+12.92%

10-Year

+12.42%

FGI-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–12/31/21)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Russell

1000

®

Value

Index

and

Standard

&

Poor’s

®

500

Index

(S&P

500

®

).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FGI-3

Annual

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.

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

primary

benchmark,

the

Russell

1000

®

Value

Index,

posted

a

+25.16%

total

return.

1

Also

for

comparison,

the

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

total

return.

1

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Banks

9.9%

Capital

Markets

9.8%

Oil,

Gas

&

Consumable

Fuels

6.4%

Electric

Utilities

6.0%

Health

Care

Equipment

&

Supplies

4.5%

Pharmaceuticals

4.3%

Specialty

Retail

4.2%

Health

Care

Providers

&

Services

4.0%

Beverages

3.8%

Semiconductors

&

Semiconductor

Equipment

3.7%

Chemicals

3.6%

Life

Sciences

Tools

&

Services

3.3%

Multiline

Retail

3.3%

Aerospace

&

Defense

3.1%

Other*

29.5%

Short-Term

Investments

&

Other

Net

Assets

0.6%

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).

Franklin

Growth

and

Income

VIP

Fund

FGI-4

Annual

Report

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

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

annual

period

under

review,

the

Fund’s

largest

sector

weighting,

the

financials

sector,

contributed

most

to

the

Fund’s

absolute

performance,

with

strong

results

in

the

capital

markets

and

banks

industries.

Investor

optimism

about

the

global

economic

recovery

was

a

boost

for

economically

sensitive

sectors

including

financials,

where

our

holdings

in

global

financial

services

firms

Morgan

Stanley

and

JPMorgan

Chase

outperformed.

Strong

economic

fundamentals

and

the

increasing

likelihood

that

inflationary

pressures

could

lift

interest

rates

boosted

bank

shares,

including

Bank

of

America,

which

was

another

financials

sector

contributor.

Within

the

capital

markets

industry,

the

Fund

also

saw

strong

performances

from

several

private

equity

companies,

including

Ares

Management.

In

the

information

technology

(IT)

sector,

the

Fund’s

semiconductor-related

holdings

advanced

over

the

period,

aided

in

part

by

chipmaker

Broadcom,

which

benefited

broadly

from

increased

demand

for

chips

across

numerous

end

markets.

Conversely,

we

added

Fidelity

National

Information

Services

to

the

IT

services

industry,

which

struggled

over

the

period.

The

company

is

a

provider

of

processing

services

to

financial

institutions,

with

market

positions

in

core

processing,

card-issuing

services,

check

risk

management,

mortgage

processing

and

lender

processing

services

in

the

U.S.

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

JPMorgan

Chase

&

Co.

3.9%

Banks,

United

States

Bank

of

America

Corp.

3.8%

Banks,

United

States

Morgan

Stanley

3.5%

Capital

Markets,

United

States

Johnson

&

Johnson

3.4%

Pharmaceuticals,

United

States

Procter

&

Gamble

Co.

(The)

2.8%

Household

Products,

United

States

United

Parcel

Service,

Inc.

2.7%

Air

Freight

&

Logistics,

United

States

Raytheon

Technologies

Corp.

2.7%

Aerospace

&

Defense,

United

States

Medtronic

plc

2.6%

Health

Care

Equipment

&

Supplies,

United

States

Target

Corp.

2.6%

Multiline

Retail,

United

States

Broadcom,

Inc.

2.5%

Semiconductors

&

Semiconductor

Equipment,

United

States

Franklin

Growth

and

Income

VIP

Fund

FGI-5

Annual

Report

Rounding

out

the

top

five

Fund

contributors

over

the

annual

period

is

Target

in

the

consumer

discretionary

sector.

The

big-box

retailer

continued

to

become

a

stronger

omnichannel

player,

offering

customers

added

convenience

through

an

enhanced

digital

presence

and

flexible

delivery

fulfillment

while

its

merchandise

maintains

broad

appeal.

In

contrast,

medical

technology

company

Medtronic

was

a

significant

detractor

in

the

health

care

sector.

The

company

saw

pressure

on

volumes

of

surgical

procedures

due

to

ongoing

COVID-19

disruptions.

A

more

competitive

environment

weighed

on

the

shares

of

Verizon

Communications

(exited

by

year-end)

in

the

communication

services

sector.

Elsewhere,

smaller

detractors

from

Fund

performance

included

Xcel

Energy

in

the

utilities

sector

and

U.K.-based

Unilever

in

the

consumer

staples

sector,

a

position

exited

by

year-end.

Overall,

each

sector

represented

in

the

Fund’s

portfolio

contributed

positively

to

Fund

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

December

31,

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

2

Fund

Expenses

Franklin

Growth

and

Income

VIP

Fund

FGI-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,101.50

$4.45

$1,020.97

$4.28

0.84%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Growth

and

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGI-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$13.33

$17.20

$14.80

$16.32

$15.97

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.25

0.31

0.41

0.31

0.35

Net

realized

and

unrealized

gains

(losses)

...........

3.03

(0.13)

3.28

(0.97)

2.04

Total

from

investment

operations

....................

3.28

0.18

3.69

(0.66)

2.39

Less

distributions

from:

Net

investment

income

..........................

(0.39)

(0.63)

(0.41)

(0.43)

(1.03)

Net

realized

gains

.............................

(0.99)

(3.42)

(0.88)

(0.43)

(1.01)

Total

distributions

...............................

(1.38)

(4.05)

(1.29)

(0.86)

(2.04)

Net

asset

value,

end

of

year

.......................

$15.23

$13.33

$17.20

$14.80

$16.32

Total

return

c

...................................

25.59%

5.81%

26.05%

(4.37)%

16.15%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.85%

0.83%

0.72%

0.73%

0.72%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.59%

0.59%

0.59%

0.59%

0.59%

Net

investment

income

...........................

1.71%

2.31%

2.07%

1.96%

2.21%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$5,772

$3,206

$3,539

$31,479

$35,865

Portfolio

turnover

rate

............................

30.74%

33.46%

25.20%

24.29%

33.91%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Growth

and

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.97

$16.84

$14.51

$16.02

$15.69

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.20

0.27

0.25

0.27

0.31

Net

realized

and

unrealized

gains

(losses)

...........

2.94

(0.14)

3.33

(0.96)

2.00

Total

from

investment

operations

....................

3.14

0.13

3.58

(0.69)

2.31

Less

distributions

from:

Net

investment

income

..........................

(0.36)

(0.58)

(0.37)

(0.39)

(0.97)

Net

realized

gains

.............................

(0.99)

(3.42)

(0.88)

(0.43)

(1.01)

Total

distributions

...............................

(1.35)

(4.00)

(1.25)

(0.82)

(1.98)

Net

asset

value,

end

of

year

.......................

$14.76

$12.97

$16.84

$14.51

$16.02

Total

return

c

...................................

25.24%

5.52%

25.66%

(4.58)%

15.85%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.08%

1.08%

0.97%

0.98%

0.97%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.84%

0.84%

0.84%

0.84%

0.84%

Net

investment

income

...........................

1.44

%

2.07%

1.82%

1.71%

1.96%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$39,934

$64,455

$69,635

$61,855

$74,105

Portfolio

turnover

rate

............................

30.74%

33.46%

25.20%

24.29%

33.91%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Growth

and

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGI-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

82.2%

Aerospace

&

Defense

3.1%

Lockheed

Martin

Corp.

.................................

United

States

585

$

207,915

Raytheon

Technologies

Corp.

............................

United

States

14,235

1,225,064

1,432,979

Air

Freight

&

Logistics

2.7%

United

Parcel

Service,

Inc.,

B

............................

United

States

5,830

1,249,602

Banks

9.2%

Bank

of

America

Corp.

.................................

United

States

31,510

1,401,880

Citigroup,

Inc.

........................................

United

States

7,505

453,227

JPMorgan

Chase

&

Co.

.................................

United

States

11,240

1,779,853

Truist

Financial

Corp.

..................................

United

States

9,550

559,152

4,194,112

Beverages

3.8%

Coca-Cola

Co.

(The)

...................................

United

States

13,585

804,368

PepsiCo,

Inc.

........................................

United

States

5,370

932,823

1,737,191

Capital

Markets

8.3%

a

Apollo

Global

Management,

Inc.

..........................

United

States

10,070

729,370

Ares

Management

Corp.

................................

United

States

9,130

741,995

BlackRock,

Inc.

.......................................

United

States

750

686,670

Morgan

Stanley

.......................................

United

States

16,505

1,620,131

3,778,166

Chemicals

3.6%

BASF

SE

...........................................

Germany

4,370

306,468

Huntsman

Corp.

......................................

United

States

17,280

602,726

Linde

plc

............................................

United

Kingdom

840

291,001

Sherwin-Williams

Co.

(The)

..............................

United

States

1,310

461,330

1,661,525

Commercial

Services

&

Supplies

1.7%

Republic

Services,

Inc.

.................................

United

States

5,490

765,581

Communications

Equipment

1.0%

Cisco

Systems,

Inc.

...................................

United

States

7,385

467,988

Diversified

Telecommunication

Services

0.4%

TELUS

Corp.

........................................

Canada

7,730

182,109

Electric

Utilities

6.0%

Duke

Energy

Corp.

....................................

United

States

10,825

1,135,543

Entergy

Corp.

........................................

United

States

3,485

392,585

NextEra

Energy,

Inc.

...................................

United

States

11,790

1,100,714

Xcel

Energy,

Inc.

......................................

United

States

1,650

111,705

2,740,547

Electrical

Equipment

2.2%

Eaton

Corp.

plc

.......................................

United

States

4,210

727,572

Emerson

Electric

Co.

..................................

United

States

2,830

263,105

990,677

Equity

Real

Estate

Investment

Trusts

(REITs)

2.3%

Healthpeak

Properties,

Inc.

..............................

United

States

10,240

369,562

Prologis,

Inc.

.........................................

United

States

2,925

492,453

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Growth

and

Income

VIP

Fund

(continued)

Annual

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)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

Public

Storage

.......................................

United

States

490

$

183,534

1,045,549

Food

&

Staples

Retailing

1.2%

Walmart,

Inc.

........................................

United

States

3,680

532,459

Food

Products

0.6%

Mondelez

International,

Inc.,

A

............................

United

States

4,330

287,122

Health

Care

Equipment

&

Supplies

2.6%

Medtronic

plc

........................................

United

States

11,610

1,201,055

Health

Care

Providers

&

Services

3.2%

HCA

Healthcare,

Inc.

...................................

United

States

2,781

714,495

UnitedHealth

Group,

Inc.

................................

United

States

1,460

733,124

1,447,619

Hotels,

Restaurants

&

Leisure

1.7%

McDonald's

Corp.

.....................................

United

States

2,805

751,936

Household

Products

2.8%

Procter

&

Gamble

Co.

(The)

.............................

United

States

7,865

1,286,557

Insurance

0.6%

Arthur

J

Gallagher

&

Co.

................................

United

States

1,605

272,320

IT

Services

1.1%

Fidelity

National

Information

Services,

Inc.

...................

United

States

1,805

197,016

Visa,

Inc.,

A

..........................................

United

States

1,470

318,563

515,579

Life

Sciences

Tools

&

Services

1.1%

Thermo

Fisher

Scientific,

Inc.

............................

United

States

766

511,106

Machinery

1.6%

Fortive

Corp.

.........................................

United

States

2,783

212,315

Illinois

Tool

Works,

Inc.

.................................

United

States

1,210

298,628

Stanley

Black

&

Decker,

Inc.

.............................

United

States

1,038

195,788

706,731

Media

1.5%

Comcast

Corp.,

A

.....................................

United

States

13,740

691,534

Multiline

Retail

2.6%

Target

Corp.

.........................................

United

States

5,100

1,180,344

Oil,

Gas

&

Consumable

Fuels

5.8%

Canadian

Natural

Resources

Ltd.

.........................

Canada

4,007

169,296

Chevron

Corp.

.......................................

United

States

9,230

1,083,140

EOG

Resources,

Inc.

..................................

United

States

3,310

294,027

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

12,290

533,386

Suncor

Energy,

Inc.

....................................

Canada

23,560

589,707

2,669,556

Pharmaceuticals

4.3%

Johnson

&

Johnson

...................................

United

States

9,250

1,582,398

Pfizer,

Inc.

...........................................

United

States

6,750

398,587

1,980,985

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Growth

and

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGI-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Road

&

Rail

0.9%

Norfolk

Southern

Corp.

.................................

United

States

1,416

$

421,557

Semiconductors

&

Semiconductor

Equipment

1.9%

Broadcom,

Inc.

.......................................

United

States

510

339,359

Texas

Instruments,

Inc.

.................................

United

States

2,765

521,120

860,479

Software

1.6%

Microsoft

Corp.

.......................................

United

States

485

163,115

Oracle

Corp.

.........................................

United

States

6,500

566,865

729,980

Specialty

Retail

2.8%

Lowe's

Cos.,

Inc.

......................................

United

States

2,990

772,855

TJX

Cos.,

Inc.

(The)

...................................

United

States

6,890

523,089

1,295,944

Total

Common

Stocks

(Cost

$21,219,515)

......................................

37,588,889

b

Equity-Linked

Securities

9.6%

Banks

0.7%

c

BNP

Paribas

Issuance

BV

into

Bank

of

America

Corp.,

144A,

6%,

11/08/22

..........................................

United

States

7,200

329,495

Electrical

Equipment

0.6%

c

Royal

Bank

of

Canada

into

Eaton

Corp.

plc,

144A,

5.75%,

8/26/22

United

States

1,600

274,619

Health

Care

Providers

&

Services

0.8%

c

Royal

Bank

of

Canada

into

HC

A

Healthcare,

Inc.,

Senior

Note

,

144A,

6%,

7/15/22

........................................

United

States

1,640

378,248

Internet

&

Direct

Marketing

Retail

0.9%

c

Credit

Suisse

AG

into

Amazon.com,

Inc.,

144A,

5%,

4/22/22

.....

United

States

120

402,546

IT

Services

0.3%

c

Royal

Bank

of

Canada

into

Fidelity

National

Information

Services,

Inc.,

144A,

5%,

5/27/22

...............................

United

States

1,340

150,146

Life

Sciences

Tools

&

Services

0.7%

c

Credit

Suisse

AG

into

Thermo

Fisher

Scientific,

Inc.,

144A,

4.5%,

8/05/22

...........................................

United

States

540

311,639

Machinery

0.7%

c

Credit

Suisse

AG

into

Stanley

Black

&

Decker,

Inc.,

144A,

6.5%,

3/31/22

...........................................

United

States

1,670

317,887

Multiline

Retail

0.7%

c

Barclays

Bank

plc

into

Dollar

Tree,

Inc.,

144A,

5.5%,

1/14/22

.....

United

States

2,310

303,418

Oil,

Gas

&

Consumable

Fuels

0.6%

c

Goldman

Sachs

International

Bank

into

Canadian

Natural

Resources

Ltd.,

144A,

9.5%,

12/30/22

.............................

Canada

6,200

258,081

Road

&

Rail

0.8%

c

Credit

Suisse

AG

into

Norfolk

Southern

Corp.,

144A,

6%,

11/18/22

United

States

1,200

357,168

Software

1.4%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

salesforce.com,

Inc.,

144A,

5%,

8/19/22

...................................

United

States

1,280

322,180

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Growth

and

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

b

Equity-Linked

Securities

(continued)

Software

(continued)

c

Royal

Bank

of

Canada

into

Microsoft

Corp.,

144A,

6%,

12/16/22

..

United

States

900

$

301,691

623,871

Specialty

Retail

1.4%

c

BNP

Paribas

Issuance

BV

into

TJX

Cos.,

Inc.

(The),

144A,

5.75%,

9/30/22

...........................................

United

States

4,900

357,173

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Tractor

Supply

Co.,

144A,

6.5%,

1/10/22

.................................

United

States

1,900

310,584

667,757

Total

Equity-Linked

Securities

(Cost

$4,203,847)

................................

4,374,875

Convertible

Preferred

Stocks

7.6%

Capital

Markets

1.5%

KKR

&

Co.,

Inc.,

6%,

C

.................................

United

States

7,270

677,200

Health

Care

Equipment

&

Supplies

1.9%

a

Becton

Dickinson

and

Co.,

6%,

B

.........................

United

States

7,290

384,548

Boston

Scientific

Corp.,

5.5%,

A

..........................

United

States

4,335

497,051

881,599

Life

Sciences

Tools

&

Services

1.5%

Danaher

Corp.,

4.75%,

A

................................

United

States

230

504,620

a

Danaher

Corp.,

5%,

B

..................................

United

States

111

192,937

697,557

Semiconductors

&

Semiconductor

Equipment

1.8%

Broadcom,

Inc.,

8%,

A

..................................

United

States

390

809,402

Water

Utilities

0.9%

Essential

Utilities,

Inc.,

6%

..............................

United

States

6,080

396,355

Total

Convertible

Preferred

Stocks

(Cost

$2,633,175)

............................

3,462,113

Total

Long

Term

Investments

(Cost

$28,056,537)

................................

45,425,877

a

Short

Term

Investments

1.6%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.4%

d

Joint

Repurchase

Agreement,

0.031%,

1/03/22

(Maturity

Value

$175,615)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$74,383)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$8,995)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$92,237)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

5%,

1/20/48

-

10/20/51;

U.S.

Treasury

Note,

2.5%,

1/31/24;

and

U.S.

Cash

Management

Bill,

Discount

Note,

1/25/22

(valued

at

$179,180)

.........................................

175,615

175,615

Total

Repurchase

Agreements

(Cost

$175,615)

..................................

175,615

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Growth

and

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGI-13

Short

Term

Investments

(continued)

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.2%

Country

Shares

Money

Market

Funds

1.0%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

430,000

$

430,000

Principal

Amount

*

Repurchase

Agreements

0.2%

d

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

1/03/22

(Maturity

Value

$103,242)

Collateralized

by

U.S.

Treasury

Bond,

Index-Linked,

2%,

1/15/26;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Bonds,

6.5%

-

7.5%,

8/15/22

-

11/15/26;

U.S.

Treasury

Notes,

Index-Linked,

0.625%,

1/15/24

-

1/15/26;

and

U.S.

Treasury

Notes,

0.125%

-

2.75%,

7/31/22

-

11/15/26

(valued

at

$105,307)

.............

103,242

103,242

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$533,242)

.............................................................

533,242

Total

Short

Term

Investments

(Cost

$708,857

)

..................................

708,857

a

Total

Investments

(Cost

$28,765,394)

101.0%

...................................

$46,134,734

Other

Assets,

less

Liabilities

(1.0)%

...........................................

(429,598)

Net

Assets

100.0%

...........................................................

$45,705,136

See

Abbreviations

on

page

FGI-

25

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

December

31,

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$4,374,875,

representing

9.6%

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

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-14

Franklin

Growth

and

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$28,056,537

Cost

-

Non-controlled

affiliates

(

Note

3e)

........................................................

430,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

278,857

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$1,179,168)

..................................

$45,425,877

Value

-

Non-controlled

affiliates

(

Note

3e)

.......................................................

430,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

278,857

Cash

....................................................................................

12,589

Receivables:

Investment

securities

sold

...................................................................

202,369

Capital

shares

sold

........................................................................

7,607

Dividends

and

interest

.....................................................................

47,104

Other

assets

..............................................................................

1,464

Total

assets

..........................................................................

46,405,867

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

58,485

Management

fees

.........................................................................

12,826

Distribution

fees

..........................................................................

8,393

Reports

to

shareholders

fees

................................................................

74,487

Payable

upon

return

of

securities

loaned

(Note

1

e

)

..................................................

533,242

Accrued

expenses

and

other

liabilities

...........................................................

13,298

Total

liabilities

.........................................................................

700,731

Net

assets,

at

value

.................................................................

$45,705,136

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$7,626,679

Total

distributable

earnings

(losses)

.............................................................

38,078,457

Net

assets,

at

value

.................................................................

$45,705,136

Franklin

Growth

and

Income

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$5,771,567

Shares

outstanding

........................................................................

378,973

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$15.23

Class

2:

Net

assets,

at

value

.......................................................................

$39,933,569

Shares

outstanding

........................................................................

2,704,868

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.76

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FGI-15

Franklin

Growth

and

Income

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$19,616)

Unaffiliated

issuers

........................................................................

$1,520,214

Interest:

Unaffiliated

issuers

........................................................................

994

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

3,076

Non-controlled

affiliates

(Note

3e)

.............................................................

44

Total

investment

income

...................................................................

1,524,328

Expenses:

Management

fees

(Note

3

a

)

...................................................................

417,446

Interest

expense

...........................................................................

2

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

156,697

Custodian

fees

(Note

4

)

......................................................................

873

Reports

to

shareholders

fees

..................................................................

47,943

Professional

fees

...........................................................................

71,615

Trustees'

fees

and

expenses

..................................................................

1,774

Other

....................................................................................

18,000

Total

expenses

.........................................................................

714,350

Expense

reductions

(Note

4

)

...............................................................

(261)

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(163,144)

Net

expenses

.........................................................................

550,945

Net

investment

income

................................................................

973,383

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

19,987,094

Foreign

currency

transactions

................................................................

534

Net

realized

gain

(loss)

..................................................................

19,987,628

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(5,408,330)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(437)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(5,408,767)

Net

realized

and

unrealized

gain

(loss)

............................................................

14,578,861

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$15,552,244

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FGI-16

Franklin

Growth

and

Income

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$973,383

$1,330,696

Net

realized

gain

(loss)

.................................................

19,987,628

5,087,661

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(5,408,767)

(3,257,210)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

15,552,244

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

.............................................................

1,996,872

235,202

Class

2

.............................................................

(32,864,638)

7,666,739

Total

capital

share

transactions

............................................

(30,867,766)

7,901,941

Net

increase

(decrease)

in

net

assets

...................................

(21,955,393)

(5,513,421)

Net

assets:

Beginning

of

year

.......................................................

67,660,529

73,173,950

End

of

year

...........................................................

$45,705,136

$67,660,529

Franklin

Templeton

Variable

Insurance

Products

Trust

FGI-17

Annual

Report

Notes

to

Financial

Statements

Franklin

Growth

and

Income

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Growth

and

Income

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

At

December

31,

2021,

44.5%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

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

December

31,

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

FGI-18

Annual

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

year

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

December

31,

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

FGI-19

Annual

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.

Additionally,

the

Fund

received

$680,857

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

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.

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

December

31,

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGI-20

Annual

Report

Franklin

Growth

and

Income

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.

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

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

145,803

$2,117,954

15,478

$202,485

Shares

issued

in

reinvestment

of

distributions

..........

24,659

341,784

65,434

726,968

Shares

redeemed

...............................

(31,887)

(462,866)

(46,293)

(694,251)

Net

increase

(decrease)

..........................

138,575

$1,996,872

34,619

$235,202

Class

2

Shares:

Shares

sold

...................................

80,772

$1,113,188

249,299

$3,313,867

Shares

issued

in

reinvestment

of

distributions

..........

467,912

6,298,087

1,464,837

15,849,541

Shares

redeemed

...............................

(2,813,816)

(40,275,913)

(879,658)

(11,496,669)

Net

increase

(decrease)

..........................

(2,265,132)

$(32,864,638)

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)

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

FGI-21

Annual

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

year

ended

December

31,

2021,

the

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

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

year

ended

December

31,

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

FGI-22

Annual

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

interest

expense,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$13,037,000

$(12,721,000)

$—

$—

$430,000

430,000

$44

Total

Affiliated

Securities

...

$114,000

$13,037,000

$(12,721,000)

$—

$—

$430,000

$44

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$1,771,761

$2,770,624

Long

term

capital

gain

......................................................

4,868,110

13,805,885

$6,639,871

$16,576,509

Cost

of

investments

..........................................................................

$28,878,448

Unrealized

appreciation

........................................................................

$17,590,414

Unrealized

depreciation

........................................................................

(334,128)

Net

unrealized

appreciation

(depreciation)

..........................................................

$17,256,286

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGI-23

Annual

Report

Franklin

Growth

and

Income

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

equity-linked

securities

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$19,814,823

and

$56,349,925

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$533,242

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$1,953,711

Undistributed

long

term

capital

gains

..............................................................

18,868,142

Total

distributable

earnings

.....................................................................

$20,821,853

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FGI-24

Annual

Report

Franklin

Growth

and

Income

VIP

Fund

(continued)

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

December

31,

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

...................

$

1,432,979

$

—

$

—

$

1,432,979

Air

Freight

&

Logistics

...................

1,249,602

—

—

1,249,602

Banks

...............................

4,194,112

—

—

4,194,112

Beverages

...........................

1,737,191

—

—

1,737,191

Capital

Markets

........................

3,778,166

—

—

3,778,166

Chemicals

...........................

1,355,057

306,468

—

1,661,525

Commercial

Services

&

Supplies

...........

765,581

—

—

765,581

Communications

Equipment

..............

467,988

—

—

467,988

Diversified

Telecommunication

Services

.....

182,109

—

—

182,109

Electric

Utilities

........................

2,740,547

—

—

2,740,547

Electrical

Equipment

....................

990,677

—

—

990,677

Equity

Real

Estate

Investment

Trusts

(REITs)

.

1,045,549

—

—

1,045,549

Food

&

Staples

Retailing

.................

532,459

—

—

532,459

Food

Products

........................

287,122

—

—

287,122

Health

Care

Equipment

&

Supplies

.........

1,201,055

—

—

1,201,055

Health

Care

Providers

&

Services

..........

1,447,619

—

—

1,447,619

Hotels,

Restaurants

&

Leisure

.............

751,936

—

—

751,936

Household

Products

....................

1,286,557

—

—

1,286,557

Insurance

............................

272,320

—

—

272,320

IT

Services

...........................

515,579

—

—

515,579

Life

Sciences

Tools

&

Services

............

511,106

—

—

511,106

Machinery

............................

706,731

—

—

706,731

Media

...............................

691,534

—

—

691,534

Multiline

Retail

........................

1,180,344

—

—

1,180,344

Oil,

Gas

&

Consumable

Fuels

.............

2,669,556

—

—

2,669,556

Pharmaceuticals

.......................

1,980,985

—

—

1,980,985

Road

&

Rail

..........................

421,557

—

—

421,557

Semiconductors

&

Semiconductor

Equipment

.

860,479

—

—

860,479

Software

.............................

729,980

—

—

729,980

Specialty

Retail

........................

1,295,944

—

—

1,295,944

Equity-Linked

Securities

...................

—

4,374,875

—

4,374,875

Convertible

Preferred

Stocks

...............

3,462,113

—

—

3,462,113

Short

Term

Investments

...................

430,000

278,857

—

708,857

Total

Investments

in

Securities

...........

$41,174,534

$4,960,200

a

$—

$46,134,734

a

Includes

foreign

securities

valued

at

$306,468,

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

FGI-25

Annual

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FGI-26

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Growth

and

Income

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Growth

and

Income

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FGI-27

Annual

Report

Franklin

Growth

and

Income

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$4,868,110

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$1,288,915

FI-1

Annual

Report

Franklin

Income

VIP

Fund

This

annual

report

for

Franklin

Income

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+16.75%

5-Year

+7.45%

10-Year

+7.38%

FI-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–12/31/21)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

)

and

the

Fund’s

Blended

Benchmark.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

***Source:

FactSet.

The

Fund’s

Blended

Benchmark

was

calculated

internally

and

was

composed

of

50%

MSCI

USA

High

Dividend

Yield

Index

+

25%

Bloomberg

U.S.

High

Yield

Very

Liquid

Index

+

25%

Bloomberg

U.S.

Aggregate

Bond

Index.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FI-3

Annual

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

U.S.

High

Yield

Very

Liquid

Index

+

25%

Bloomberg

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.

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

one-year

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

+28.71%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Blended

Benchmark,

posted

a

+11.45%

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

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Pharmaceuticals

9.7%

Health

Care

Providers

&

Services

8.7%

Oil,

Gas

&

Consumable

Fuels

8.2%

Electric

Utilities

8.1%

Banks

7.3%

Semiconductors

&

Semiconductor

Equipment

5.2%

Diversified

Financial

Services

4.2%

Multi-Utilities

4.0%

Media

3.4%

Diversified

Telecommunication

Services

3.2%

Capital

Markets

2.9%

Biotechnology

2.6%

Automobiles

2.6%

Beverages

2.5%

Other*

25.4%

Short-Term

Investments

&

Other

Net

Assets

2.0%

Franklin

Income

VIP

Fund

FI-4

Annual

Report

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

As

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

investor

appetite

for

risk

increased

and

the

search

for

yield

intensified.

Consequently,

lower-rated

bonds

posted

greater

returns

than

higher-rated

bonds.

Shorter-term

bonds

generally

outperformed

longer-term

bonds,

which

tend

to

be

more

sensitive

to

inflation.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

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;

the

company’s

sensitivity

to

changes

in

interest

rates

and

business

conditions;

and

the

company’s

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.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value,

and

we

perform

independent

analysis

of

the

debt

securities

being

considered

for

the

Fund’s

portfolio,

rather

than

relying

principally

on

the

rating

assigned

by

rating

organizations.

Manager’s

Discussion

During

the

12-month

period,

the

Fund

demonstrated

strong

performance

across

equity

and

fixed

income.

Increased

Fund

exposure

to

the

equity

market

helped

drive

strong

returns,

while

lower

exposure

to

interest-rate

sensitive

fixed

income

securities

led

to

strong

performance

from

the

Fund

relative

to

its

blended

benchmark.

Dividend

stocks,

particularly

value-oriented

sectors,

outperformed

considerably

during

the

first

half

of

the

period

under

review.

The

outperformance

was

more

than

offset

by

the

end

of

the

period

with

growth-oriented

companies

outperforming

for

the

total

period

under

review.

The

equity

component

of

the

Fund’s

blended

benchmark

increased

with

the

MSCI

USA

High

Dividend

Yield

Index

posting

positive

returns

for

the

12-month

period.

The

Fund’s

equity

positions

outperformed

the

Fund’s

blended

benchmark.

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,

which

weighed

on

the

more

duration

sensitive

portions

of

the

Fund’s

benchmark.

Fixed

income

returns

for

the

Fund

outperformed

the

Fund’s

blended

benchmark.

The

Bloomberg

U.S.

Aggregate

Bond

Index

posted

negative

returns,

while

the

Bloomberg

U.S.

High

Yield

Very

Liquid

Index

posted

positive

returns

at

period-end.

Equity

Equity

holdings

increased

over

the

period.

As

an

asset

class,

equities

outperformed

fixed

income

during

the

period.

We

continued

to

selectively

add

to

positions

across

the

equity

markets

during

the

period

that

included

common

stocks,

Top

Five

Equity

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Pfizer,

Inc.

2.3%

Pharmaceuticals

,

United

States

Southern

Co.

(The)

2.2%

Electric

Utilities

,

United

States

Dominion

Energy,

Inc.

2.0%

Multi-Utilities

,

United

States

Merck

&

Co.,

Inc.

2.0%

Pharmaceuticals

,

United

States

AbbVie,

Inc.

1.9%

Biotechnology

,

United

States

Franklin

Income

VIP

Fund

FI-5

Annual

Report

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

during

the

period,

(large

contributors

relative

to

the

Fund’s

benchmark

as

well)

with

the

consumer

discretionary,

health

care

and

information

technology

sectors

providing

notable

positive

absolute

contributions

as

well.

All

the

Fund’s

common

equity

positions

in

the

financials

sector

were

positive

contributors

during

the

period

amid

rising

interest

rates.

These

positions

included

holdings

of

Bank

of

America,

JPMorgan

Chase,

Morgan

Stanley

and

MetLife.

Other

notable

contributors

included

Barclays,

Truist

Financial

and

U.S.

Bancorp.

Energy

peers

Chevron

and

Exxon

Mobil

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

semiconductor

peers

Broadcom

and

Texas

Instruments

within

the

information

technology

sector

as

well

as

Pfizer,

AbbVie

and

CVS

Health

in

the

health

care

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

came

from

a

preferred

equity

investment

in

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.

Additionally,

the

Fund

saw

small

underperformance

from

communication

services

company

Verizon

Communications.

Fixed

income

Fixed

income

holdings

posted

positive

returns

during

the

period

with

outperformance

relative

to

the

Fund’s

blended

fixed

income

benchmark.

As

an

asset

class,

fixed

income

underperformed

the

equity

asset

class,

which

benefited

the

Fund

given

our

overweight

allocation

to

equities

relative

to

the

Fund’s

blended

benchmark.

The

Fund’s

duration

positioning

at

the

front

end

of

the

yield

curve

in

the

face

of

rising

interest

rates

during

the

period

was

a

key

source

driving

the

outperformance

relative

to

the

Fund’s

benchmark.

Additionally,

corporate

credit

spreads

continued

to

narrow

during

the

period

under

review,

which

benefited

the

Fund’s

high-yield

exposures

in

particular.

With

the

exception

of

minor

negative

performance

from

the

consumer

staples

sector,

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.

Within

energy,

the

largest

contributor

to

performance

was

high-yield

oilfield

service

company

Weatherford

International.

Strong

commodity

price

performance,

increased

demand

outlook,

as

well

as

strong

business

performance

led

to

the

gains.

Other

notable

energy

contributors

included

Calumet

Specialty

Products

Partners

and

HighPoint

Energy

(not

held

at

period-end).

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

CHS/

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.

The

other

notable

detractor

was

Sinclair

Broadcasting/Diamond

Sports

as

the

company

deals

with

renewing

carriage

contracts

in

their

regional

sports

broadcasting

business.

There

were

no

other

notable

detractors

in

the

period

under

review.

Top

Five

Fixed

Income

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

CHS/Community

Health

Systems,

Inc.

4.1%

Health

Care

Providers

&

Services

,

United

States

U.S.

Treasury

Notes

3.6%

Diversified

Financial

Services

,

United

States

Tenet

Healthcare

Corp.

1.8%

Health

Care

Providers

&

Services

,

United

States

DISH

DBS

Corp.

1.2%

Media

,

United

States

Credit

Suisse

AG

1.2%

Capital

Markets

,

Switzerland

Franklin

Income

VIP

Fund

FI-6

Annual

Report

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.

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

December

31,

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

2

Fund

Expenses

Franklin

Income

VIP

Fund

FI-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

A

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,053.40

$3.76

$1,021.54

$3.70

0.73%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Income

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$15.65

$16.52

$15.26

$16.72

$15.87

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.53

0.59

0.75

0.71

0.69

Net

realized

and

unrealized

gains

(losses)

...........

2.09

(0.54)

1.68

(1.35)

0.87

Total

from

investment

operations

....................

2.62

0.05

2.43

(0.64)

1.56

Less

distributions

from:

Net

investment

income

..........................

(0.80)

(0.91)

(0.91)

(0.82)

(0.71)

Net

realized

gains

.............................

—

(0.01)

(0.26)

—

—

Total

distributions

...............................

(0.80)

(0.92)

(1.17)

(0.82)

(0.71)

Net

asset

value,

end

of

year

.......................

$17.47

$15.65

$16.52

$15.26

$16.72

Total

return

c

...................................

17.00%

0.97%

16.42%

(4.09)%

9.94%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.47%

0.47%

0.46%

0.47%

0.47%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.47%

e

0.46%

0.45%

0.45%

0.45%

Net

investment

income

...........................

3.20%

3.96%

4.38%

4.33%

4.22%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$243,732

$306,641

$309,330

$612,657

$735,149

Portfolio

turnover

rate

............................

39.27%

45.93%

25.16%

43.22%

20.96%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

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)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$15.04

$15.91

$14.74

$16.17

$15.38

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.47

0.53

0.64

0.65

0.63

Net

realized

and

unrealized

gains

(losses)

...........

2.02

(0.53)

1.66

(1.30)

0.83

Total

from

investment

operations

....................

2.49

—

2.30

(0.65)

1.46

Less

distributions

from:

Net

investment

income

..........................

(0.77)

(0.86)

(0.87)

(0.78)

(0.67)

Net

realized

gains

.............................

—

(0.01)

(0.26)

—

—

Total

distributions

...............................

(0.77)

(0.87)

(1.13)

(0.78)

(0.67)

Net

asset

value,

end

of

year

.......................

$16.76

$15.04

$15.91

$14.74

$16.17

Total

return

c

...................................

16.75%

0.69%

16.06%

(4.30)%

9.67%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.72%

0.72%

0.71%

0.72%

0.72%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.72%

e

0.71%

0.70%

0.70%

0.70%

Net

investment

income

...........................

2.95%

3.73%

4.13%

4.08%

3.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$3,026,228

$3,852,709

$4,318,156

$4,086,652

$5,041,498

Portfolio

turnover

rate

............................

39.27%

45.93%

25.16%

43.22%

20.96%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

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)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$15.45

$16.32

$15.08

$16.53

$15.71

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.46

0.53

0.64

0.64

0.62

Net

realized

and

unrealized

gains

(losses)

...........

2.07

(0.54)

1.71

(1.33)

0.85

Total

from

investment

operations

....................

2.53

(0.01)

2.35

(0.69)

1.47

Less

distributions

from:

Net

investment

income

..........................

(0.75)

(0.85)

(0.85)

(0.76)

(0.65)

Net

realized

gains

.............................

—

(0.01)

(0.26)

—

—

Total

distributions

...............................

(0.75)

(0.86)

(1.11)

(0.76)

(0.65)

Net

asset

value,

end

of

year

.......................

$17.23

$15.45

$16.32

$15.08

$16.53

Total

return

c

...................................

16.59%

0.58%

16.05%

(4.42)%

9.55%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.82%

0.82%

0.81%

0.82%

0.82%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.82%

e

0.81%

0.80%

0.80%

0.80%

Net

investment

income

...........................

2.82%

3.62%

4.03%

3.98%

3.87%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$333,522

$302,474

$323,582

$294,700

$335,217

Portfolio

turnover

rate

............................

39.27%

45.93%

25.16%

43.22%

20.96%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

46.4%

Aerospace

&

Defense

1.5%

Lockheed

Martin

Corp.

.................................

United

States

100,000

$

35,541,000

Raytheon

Technologies

Corp.

............................

United

States

225,000

19,363,500

54,904,500

Air

Freight

&

Logistics

0.9%

United

Parcel

Service,

Inc.,

B

............................

United

States

157,700

33,801,418

Banks

3.8%

Bank

of

America

Corp.

.................................

United

States

500,000

22,245,000

Barclays

plc

.........................................

United

Kingdom

5,500,000

13,998,565

Citigroup,

Inc.

........................................

United

States

250,000

15,097,500

JPMorgan

Chase

&

Co.

.................................

United

States

250,000

39,587,500

Truist

Financial

Corp.

..................................

United

States

495,000

28,982,250

US

Bancorp

.........................................

United

States

325,000

18,255,250

138,166,065

Beverages

2.5%

Coca-Cola

Co.

(The)

...................................

United

States

775,000

45,887,750

PepsiCo,

Inc.

........................................

United

States

260,000

45,164,600

91,052,350

Biotechnology

2.3%

AbbVie,

Inc.

.........................................

United

States

500,000

67,700,000

Amgen,

Inc.

.........................................

United

States

70,000

15,747,900

83,447,900

Capital

Markets

0.7%

Morgan

Stanley

.......................................

United

States

266,500

26,159,640

Chemicals

0.7%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

35,000

10,649,100

BASF

SE

...........................................

Germany

225,000

15,779,226

26,428,326

Diversified

Telecommunication

Services

2.4%

BCE,

Inc.

...........................................

Canada

466,000

24,252,637

Verizon

Communications,

Inc.

............................

United

States

1,225,000

63,651,000

87,903,637

Electric

Utilities

6.2%

American

Electric

Power

Co.,

Inc.

.........................

United

States

350,000

31,139,500

Duke

Energy

Corp.

....................................

United

States

520,000

54,548,000

Edison

International

...................................

United

States

770,000

52,552,500

Exelon

Corp.

.........................................

United

States

300,000

17,328,000

Southern

Co.

(The)

....................................

United

States

900,000

61,722,000

Xcel

Energy,

Inc.

......................................

United

States

67,500

4,569,750

221,859,750

Energy

Equipment

&

Services

0.4%

a

Weatherford

International

plc

.............................

United

States

500,000

13,860,000

Health

Care

Equipment

&

Supplies

0.3%

Medtronic

plc

........................................

United

States

100,000

10,345,000

Health

Care

Providers

&

Services

0.2%

a

CHS/Community

Health

Systems,

Inc.

......................

United

States

500,000

6,655,000

Household

Products

1.3%

Procter

&

Gamble

Co.

(The)

.............................

United

States

275,000

44,984,500

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

Annual

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

Common

Stocks

(continued)

Industrial

Conglomerates

0.9%

Honeywell

International,

Inc.

.............................

United

States

150,000

$

31,276,500

Insurance

0.5%

MetLife,

Inc.

.........................................

United

States

300,000

18,747,000

IT

Services

0.8%

International

Business

Machines

Corp.

.....................

United

States

199,679

26,689,095

a

Kyndryl

Holdings,

Inc.

..................................

United

States

39,935

722,824

27,411,919

Machinery

0.6%

Cummins,

Inc.

........................................

United

States

100,000

21,814,000

Media

0.3%

Comcast

Corp.,

A

.....................................

United

States

200,000

10,066,000

Metals

&

Mining

0.3%

b

Rio

Tinto

plc,

ADR

.....................................

Australia

150,000

10,041,000

Multi-Utilities

2.9%

Dominion

Energy,

Inc.

..................................

United

States

706,638

55,513,481

DTE

Energy

Co.

......................................

United

States

100,000

11,954,000

Sempra

Energy

.......................................

United

States

273,060

36,120,377

103,587,858

Oil,

Gas

&

Consumable

Fuels

5.3%

BP

plc,

ADR

.........................................

United

Kingdom

550,000

14,646,500

Chevron

Corp.

.......................................

United

States

500,000

58,675,000

Civitas

Resources,

Inc.

.................................

United

States

85,000

4,162,450

Exxon

Mobil

Corp.

.....................................

United

States

1,100,000

67,309,000

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

450,000

19,530,000

b

TotalEnergies

SE,

ADR

.................................

France

550,000

27,203,000

191,525,950

Personal

Products

0.5%

Unilever

plc

..........................................

United

Kingdom

300,000

16,080,863

Pharmaceuticals

7.3%

AstraZeneca

plc,

ADR

..................................

United

Kingdom

300,000

17,475,000

Bristol-Myers

Squibb

Co.

................................

United

States

750,000

46,762,500

Johnson

&

Johnson

...................................

United

States

250,000

42,767,500

Merck

&

Co.,

Inc.

.....................................

United

States

950,000

72,808,000

Pfizer,

Inc.

...........................................

United

States

1,398,200

82,563,710

262,376,710

Road

&

Rail

0.7%

Union

Pacific

Corp.

....................................

United

States

106,500

26,830,545

Semiconductors

&

Semiconductor

Equipment

1.6%

Analog

Devices,

Inc.

...................................

United

States

100,000

17,577,000

Intel

Corp.

...........................................

United

States

806,856

41,553,083

59,130,083

Specialty

Retail

0.4%

Home

Depot,

Inc.

(The)

.................................

United

States

32,000

13,280,320

Tobacco

1.1%

Philip

Morris

International,

Inc.

...........................

United

States

427,900

40,650,500

Total

Common

Stocks

(Cost

$1,180,298,970)

....................................

1,672,387,334

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

c

Equity-Linked

Securities

16.5%

Automobiles

2.1%

d

Citigroup

Global

Markets

Holdings,

Inc.

into

Ford

Motor

Co.,

144A,

12.5%,

1/12/23

.....................................

United

States

877,000

$

17,940,589

d

National

Bank

of

Canada

into

General

Motors

Co.,

144A,

10%,

1/26/22

...........................................

United

States

1,123,500

58,570,525

76,511,114

Banks

2.2%

d

Citigroup

Global

Markets

Holdings,

Inc.

into

JPMorgan

Chase

&

Co.,

144A,

8%,

8/15/22

...................................

United

States

232,000

36,052,633

d

Credit

Suisse

AG

into

Bank

of

America

Corp.,

144A,

7.5%,

7/19/22

United

States

1,015,000

43,252,997

79,305,630

Capital

Markets

0.5%

d

UBS

AG

into

Morgan

Stanley,

144A,

8.5%,

2/11/22

............

United

States

200,000

17,047,128

Chemicals

0.9%

d

National

Bank

of

Canada

into

Air

Products

and

Chemicals,

Inc.,

144A,

8.5%,

4/13/22

.................................

United

States

106,000

31,644,040

Energy

Equipment

&

Services

0.8%

d

Royal

Bank

of

Canada

into

Schlumberger

NV,

144A,

10%,

3/01/22

United

States

900,000

26,896,737

Health

Care

Providers

&

Services

1.7%

d

J.P.

Morgan

Structured

Products

BV

into

CVS

Health

Corp.,

144A,

Reg

S,

8.5%,

1/25/22

.................................

United

States

451,000

36,823,367

d

Royal

Bank

of

Canada

into

CVS

Health

Corp.,

144A,

8%,

12/16/22

United

States

250,000

24,213,362

61,036,729

Insurance

0.8%

d

BNP

Paribas

Issuance

BV

into

MetLife,

Inc.,

144A,

8.5%,

8/23/22

.

United

States

450,000

28,246,243

Internet

&

Direct

Marketing

Retail

1.1%

d

Merrill

Lynch

International

&

Co.

CV

into

Amazon.com,

Inc.,

144A,

8.5%,

1/11/23

.......................................

United

States

11,700

39,393,647

Media

0.7%

d

Morgan

Stanley

Finance

II

Ltd.

into

Comcast

Corp.,

144A,

6%,

7/19/22

...........................................

United

States

485,000

25,079,277

Metals

&

Mining

1.1%

d

Citigroup

Global

Markets

Holdings,

Inc.

into

Barrick

Gold

Corp.,

144A,

9%,

10/13/22

..................................

Canada

1,000,000

19,340,689

d

National

Bank

of

Canada

into

Rio

Tinto

plc,

144A,

12.5%,

7/28/22

.

Australia

260,000

18,425,300

37,765,989

Oil,

Gas

&

Consumable

Fuels

1.2%

d

UBS

AG

into

Chevron

Corp.,

144A,

10%,

8/16/22

.............

United

States

400,000

43,744,049

Road

&

Rail

0.2%

d

Goldman

Sachs

International

Bank

into

Union

Pacific

Corp.,

144A,

8%,

2/09/22

........................................

United

States

33,000

7,954,819

Semiconductors

&

Semiconductor

Equipment

2.6%

d

Citigroup

Global

Markets

Holdings,

Inc.

into

Texas

Instruments,

Inc.,

144A,

8.5%,

1/27/22

.................................

United

States

234,000

43,200,432

d

Credit

Suisse

AG

into

Intel

Corp.,

144A,

9%,

7/19/22

...........

United

States

384,590

20,537,789

d

Goldman

Sachs

International

Bank

into

Texas

Instruments,

Inc.,

144A,

8.5%,

12/14/22

.................................

United

States

130,000

24,964,528

d

Mizuho

Markets

Cayman

LP

into

Microchip

Technology,

Inc.,

144A,

9%,

10/11/22

.......................................

United

States

40,000

6,472,838

95,175,587

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-14

a

a

Country

Shares

a

Value

a

a

a

a

a

a

c

Equity-Linked

Securities

(continued)

Software

0.6%

d

Societe

Generale

SA

into

Workday,

Inc.,

144A,

8%,

9/02/22

......

United

States

90,600

$

23,021,165

Total

Equity-Linked

Securities

(Cost

$562,097,503)

..............................

592,822,154

Convertible

Preferred

Stocks

4.3%

Capital

Markets

0.2%

b

KKR

&

Co.,

Inc.,

6%,

C

.................................

United

States

85,000

7,917,750

Electric

Utilities

1.9%

American

Electric

Power

Co.,

Inc.,

6.125%

..................

United

States

300,000

15,036,000

NextEra

Energy,

Inc.,

5.279%

............................

United

States

400,000

23,016,000

NextEra

Energy,

Inc.,

6.219%

............................

United

States

230,200

13,330,882

Southern

Co.

(The),

6.75%,

2019

.........................

United

States

350,000

18,812,500

70,195,382

Multi-Utilities

1.1%

Dominion

Energy,

Inc.,

7.25%,

A

..........................

United

States

175,000

17,612,000

DTE

Energy

Co.,

6.25%

................................

United

States

400,000

20,536,000

38,148,000

Semiconductors

&

Semiconductor

Equipment

1.0%

Broadcom,

Inc.,

8%,

A

..................................

United

States

17,000

35,281,630

Thrifts

&

Mortgage

Finance

0.1%

a

FNMA,

5.375%

.......................................

United

States

475

4,868,750

a

Total

Convertible

Preferred

Stocks

(Cost

$155,006,650)

..........................

156,411,512

Principal

Amount

*

Convertible

Bonds

0.2%

Hotels,

Restaurants

&

Leisure

0.1%

d

DraftKings

,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

3/15/28

.........

United

States

2,500,000

1,895,000

Media

0.1%

DISH

Network

Corp.

,

Senior

Note

,

2.375

%

,

3/15/24

............

United

States

4,555,000

4,378,494

Total

Convertible

Bonds

(Cost

$6,167,849)

.....................................

6,273,494

Corporate

Bonds

25.2%

Aerospace

&

Defense

0.2%

Raytheon

Technologies

Corp.

,

Senior

Note

,

3.95

%

,

8/16/25

......

United

States

7,500,000

8,138,903

Automobiles

0.5%

Ford

Motor

Co.

,

Senior

Note

,

4.346

%

,

12/08/26

...............

United

States

7,000,000

7,644,455

General

Motors

Co.

,

Senior

Bond

,

5.15

%

,

4/01/38

.............

United

States

7,500,000

9,055,871

16,700,326

Banks

1.3%

Bank

of

America

Corp.

,

e

AA,

Junior

Sub.

Bond,

6.1%

to

3/17/25,

FRN

thereafter,

Perpetual

United

States

8,000,000

8,675,560

e

X,

Junior

Sub.

Bond,

6.25%

to

9/05/24,

FRN

thereafter,

Perpetual

United

States

6,000,000

6,461,250

Senior

Bond,

3.419%

to

12/20/27,

FRN

thereafter,

12/20/28

...

United

States

5,000,000

5,341,728

Citigroup,

Inc.

,

Sub.

Bond

,

4.125

%

,

7/25/28

..................

United

States

12,500,000

13,730,196

e

JPMorgan

Chase

&

Co.

,

f

I,

Junior

Sub.

Bond,

FRN,

3.599%,

(3-month

USD

LIBOR

+

3.47%),

Perpetual

...................................

United

States

10,559,000

10,611,869

R,

Junior

Sub.

Bond,

6%

to

8/01/23,

FRN

thereafter,

Perpetual

.

United

States

3,200,000

3,340,400

48,161,003

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-15

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Biotechnology

0.3%

AbbVie,

Inc.

,

Senior

Note

,

3.8

%

,

3/15/25

....................

United

States

10,500,000

$

11,184,698

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

9,449,042

Chemicals

0.6%

d

Consolidated

Energy

Finance

SA

,

Senior

Note

,

144A,

6.5

%

,

5/15/26

Switzerland

10,000,000

10,197,900

d

SCIH

Salt

Holdings,

Inc.

,

Senior

Note,

144A,

6.625%,

5/01/29

.....................

United

States

10,000,000

9,364,050

Senior

Secured

Note,

144A,

4.875%,

5/01/28

..............

United

States

3,000,000

2,884,695

22,446,645

Communications

Equipment

0.4%

d

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

6

%

,

6/15/25

.

United

States

12,500,000

12,513,937

Consumer

Finance

0.8%

Capital

One

Financial

Corp.

,

Sub.

Note

,

4.2

%

,

10/29/25

........

United

States

8,000,000

8,722,115

Ford

Motor

Credit

Co.

LLC

,

Senior

Note

,

5.125

%

,

6/16/25

.......

United

States

20,000,000

21,776,000

30,498,115

Containers

&

Packaging

0.6%

d

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note,

144A,

7.25%,

4/15/25

......................

United

States

11,500,000

11,541,975

Senior

Secured

Note,

144A,

5.5%,

4/15/24

................

United

States

10,000,000

10,104,700

21,646,675

Diversified

Financial

Services

0.6%

d

MPH

Acquisition

Holdings

LLC

,

Senior

Note,

144A,

5.75%,

11/01/28

.....................

United

States

18,000,000

17,145,270

Senior

Secured

Note,

144A,

5.5%,

9/01/28

................

United

States

5,000,000

5,076,325

22,221,595

Diversified

Telecommunication

Services

0.8%

d

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

10/15/29

...

France

11,500,000

11,347,108

AT&T,

Inc.

,

Senior

Bond

,

4.125

%

,

2/17/26

...................

United

States

12,000,000

13,101,370

d

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5.5

%

,

5/01/26

.................................

United

States

5,002,000

5,159,050

29,607,528

Energy

Equipment

&

Services

0.5%

d

Weatherford

International

Ltd.

,

Senior

Note,

144A,

11%,

12/01/24

.......................

United

States

3,013,000

3,106,524

Senior

Note,

144A,

8.625%,

4/30/30

.....................

United

States

14,500,000

15,077,172

18,183,696

Entertainment

0.7%

Netflix,

Inc.

,

Senior

Bond

,

4.875

%

,

4/15/28

..................

United

States

22,000,000

25,117,950

Health

Care

Equipment

&

Supplies

0.3%

d

Mozart

Debt

Merger

Sub,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

10/01/29

United

States

10,000,000

10,157,200

Health

Care

Providers

&

Services

6.8%

d

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

....................

United

States

70,000,000

71,419,600

Secured

Note,

144A,

6.125%,

4/01/30

....................

United

States

33,500,000

33,192,973

Senior

Note,

144A,

6.875%,

4/01/28

.....................

United

States

10,000,000

9,814,150

Senior

Secured

Note,

144A,

6.625%,

2/15/25

..............

United

States

10,000,000

10,361,350

Senior

Secured

Note,

144A,

8%,

3/15/26

..................

United

States

12,500,000

13,154,250

Senior

Secured

Note,

144A,

8%,

12/15/27

.................

United

States

10,000,000

10,813,900

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

Annual

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

Corporate

Bonds

(continued)

Health

Care

Providers

&

Services

(continued)

CVS

Health

Corp.

,

Senior

Bond,

4.3%,

3/25/28

............................

United

States

8,000,000

$

8,984,808

Senior

Note,

4.1%,

3/25/25

............................

United

States

1,225,000

1,321,295

HCA,

Inc.

,

Senior

Bond,

5.875%,

5/01/23

..........................

United

States

7,500,000

7,950,113

Senior

Secured

Note,

5%,

3/15/24

.......................

United

States

10,400,000

11,189,060

Tenet

Healthcare

Corp.

,

d

Secured

Note,

144A,

6.25%,

2/01/27

.....................

United

States

29,000,000

30,054,296

Senior

Note,

6.75%,

6/15/23

...........................

United

States

24,000,000

25,679,040

d

Senior

Note,

144A,

6.125%,

10/01/28

....................

United

States

9,000,000

9,524,295

243,459,130

Hotels,

Restaurants

&

Leisure

1.5%

d

Caesars

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

7/01/25

...........................................

United

States

18,000,000

18,916,200

d

Golden

Nugget,

Inc.

,

Senior

Note

,

144A,

6.75

%

,

10/15/24

.......

United

States

16,000,000

16,020,800

d

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Bond,

144A,

5.5%,

3/01/25

.......................

United

States

13,200,000

13,613,820

Senior

Note

,

144A,

5.25%,

5/15/27

......................

United

States

6,000,000

6,140,670

54,691,490

Independent

Power

and

Renewable

Electricity

Producers

0.3%

d,e

Vistra

Corp.

,

Junior

Sub.

Bond

,

144A,

7%

to

12/15/26,

FRN

thereafter

,

Perpetual

.................................

United

States

9,500,000

9,638,652

Media

2.3%

d

CSC

Holdings

LLC

,

Senior

Bond

,

144A,

5.5

%

,

4/15/27

.........

United

States

10,000,000

10,349,400

d

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

15,000,000

7,517,250

d

Directv

Financing

LLC

/

Directv

Financing

Co-Obligor,

Inc.

,

Senior

Secured

Note

,

144A,

5.875

%

,

8/15/27

....................

United

States

5,000,000

5,126,000

DISH

DBS

Corp.

,

Senior

Note,

5.875%,

7/15/22

..........................

United

States

14,000,000

14,245,350

Senior

Note,

5%,

3/15/23

.............................

United

States

11,000,000

11,287,540

Senior

Note,

5.875%,

11/15/24

.........................

United

States

10,000,000

10,285,600

d

Senior

Secured

Note,

144A,

5.25%,

12/01/26

..............

United

States

6,500,000

6,614,790

d

Univision

Communications,

Inc.

,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

..............

United

States

7,140,000

7,220,289

Senior

Secured

Note,

144A,

6.625%,

6/01/27

..............

United

States

8,500,000

9,167,378

81,813,597

Metals

&

Mining

0.1%

d

Cleveland-Cliffs,

Inc.

,

Senior

Secured

Note

,

144A,

6.75

%

,

3/15/26

.

United

States

5,000,000

5,299,600

Oil,

Gas

&

Consumable

Fuels

1.4%

Calumet

Specialty

Products

Partners

LP

/

Calumet

Finance

Corp.

,

Senior

Note,

7.75%,

4/15/23

...........................

United

States

6,000,000

5,983,740

d

Senior

Note,

144A,

11%,

4/15/25

........................

United

States

15,000,000

16,196,850

d

Senior

Secured

Note,

144A,

9.25%,

7/15/24

...............

United

States

5,185,000

5,633,166

Civitas

Resources,

Inc.

,

Senior

Note

,

7.5

%

,

4/30/26

...........

United

States

6,877,144

6,947,875

Occidental

Petroleum

Corp.

,

Senior

Note,

8%,

7/15/25

.............................

United

States

5,000,000

5,842,500

Senior

Note

,

6.625%,

9/01/30

..........................

United

States

6,000,000

7,435,080

d

PBF

Holding

Co.

LLC

/

PBF

Finance

Corp.

,

Senior

Secured

Note

,

144A,

9.25

%

,

5/15/25

.................................

United

States

3,623,000

3,450,382

51,489,593

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-17

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Pharmaceuticals

2.4%

d

Bausch

Health

Cos.,

Inc.

,

Senior

Bond,

144A,

6.125%,

4/15/25

.....................

United

States

7,666,000

$

7,818,055

Senior

Note,

144A,

9%,

12/15/25

.......................

United

States

5,000,000

5,272,400

Senior

Note,

144A,

5%,

2/15/29

........................

United

States

5,000,000

4,420,325

Senior

Note,

144A,

6.25%,

2/15/29

......................

United

States

3,921,000

3,732,322

Senior

Secured

Note,

144A,

5.5%,

11/01/25

...............

United

States

11,000,000

11,192,665

Senior

Secured

Note,

144A,

4.875%,

6/01/28

..............

United

States

4,500,000

4,598,145

d

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

4.25

%

,

12/15/25

...

Germany

11,000,000

11,908,184

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.4

%

,

7/26/29

..........

United

States

8,000,000

8,768,222

d

Endo

Dac

/

Endo

Finance

LLC

/

Endo

Finco

,

Inc.

,

Senior

Note,

144A,

6%,

6/30/28

........................

United

States

7,094,000

5,295,884

Senior

Secured

Note,

144A,

5.875%,

10/15/24

.............

United

States

4,500,000

4,434,570

d

Par

Pharmaceutical,

Inc.

,

Senior

Secured

Note

,

144A,

7.5

%

,

4/01/27

United

States

8,429,000

8,626,491

Utah

Acquisition

Sub,

Inc.

,

Senior

Note

,

3.95

%

,

6/15/26

.........

United

States

10,000,000

10,792,902

86,860,165

Road

&

Rail

0.1%

d

Ashtead

Capital,

Inc.

,

Senior

Note

,

144A,

4.25

%

,

11/01/29

......

United

Kingdom

4,500,000

4,802,456

Tobacco

0.6%

BAT

Capital

Corp.

,

Senior

Note

,

3.557

%

,

8/15/27

.............

United

Kingdom

20,000,000

20,991,682

Trading

Companies

&

Distributors

0.7%

United

Rentals

North

America,

Inc.

,

Senior

Bond

,

4.875

%

,

1/15/28

United

States

11,300,000

11,894,380

d

WESCO

Distribution,

Inc.

,

Senior

Note

,

144A,

7.125

%

,

6/15/25

...

United

States

14,000,000

14,857,850

26,752,230

Wireless

Telecommunication

Services

1.1%

Sprint

Communications,

Inc.

,

Senior

Note

,

6

%

,

11/15/22

........

United

States

6,300,000

6,565,230

Sprint

Corp.

,

Senior

Note,

7.875%,

9/15/23

..........................

United

States

12,500,000

13,784,062

Senior

Note,

7.125%,

6/15/24

..........................

United

States

8,200,000

9,216,144

Senior

Note,

7.625%,

3/01/26

..........................

United

States

7,500,000

9,013,988

38,579,424

Total

Corporate

Bonds

(Cost

$858,730,050)

.....................................

910,405,332

Units

a

g

Index-Linked

Notes

1.2%

Capital

Markets

1.2%

d,h

Credit

Suisse

AG,

Senior

Note,

144A,

15.194%,

9/06/22

........

Switzerland

10,332

42,109,874

Total

Index-Linked

Notes

(Cost

$34,999,753)

....................................

42,109,874

Principal

Amount

*

U.S.

Government

and

Agency

Securities

3.6%

U.S.

Treasury

Notes

,

2.75%,

5/31/23

.....................................

United

States

50,000,000

51,548,828

0.375%,

9/15/24

.....................................

United

States

40,000,000

39,439,063

0.5%,

3/31/25

......................................

United

States

15,000,000

14,753,320

0.75%,

5/31/26

.....................................

United

States

25,000,000

24,488,281

Total

U.S.

Government

and

Agency

Securities

(Cost

$129,388,346)

................

130,229,492

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-18

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

0.3%

Airlines

0.3%

United

Airlines

Pass-Through

Trust

,

2020-1

,

A

,

5.875

%

,

10/15/27

.

United

States

9,033,000

$

9,911,591

Total

Asset-Backed

Securities

(Cost

$9,033,000)

................................

9,911,591

Mortgage-Backed

Securities

0.0%

†

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.0%

†

FNMA,

30

Year,

4%,

8/01/49

.............................

United

States

2,032,417

2,200,162

Total

Mortgage-Backed

Securities

(Cost

$2,153,092)

.............................

2,200,162

Shares

Escrows

and

Litigation

Trusts

0.3%

d

Chesapeake

Energy

Corp.,

Escrow

Account,

144A

............

United

States

9,500,000

10,175,735

Total

Escrows

and

Litigation

Trusts

(Cost

$9,500,000)

...........................

10,175,735

Total

Long

Term

Investments

(Cost

$2,947,375,213)

.............................

3,532,926,680

a

Short

Term

Investments

2.3%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.6%

i,j

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

56,779,626

56,779,626

Total

Money

Market

Funds

(Cost

$56,779,626)

..................................

56,779,626

k

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.7%

a

a

a

a

a

Money

Market

Funds

0.6%

i,j

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

20,527,000

20,527,000

Principal

Amount

*

Repurchase

Agreements

0.1%

l

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

1/03/22

(Maturity

Value

$5,132,440)

Collateralized

by

U.S.

Treasury

Bond,

Index-Linked,

2%,

1/15/26;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Bonds,

6.5%

-

7.5%,

8/15/22

-

11/15/26;

U.S.

Treasury

Notes,

Index-Linked,

0.625%,

1/15/24

-

1/15/26;

and

U.S.

Treasury

Notes,

0.125%

-

2.75%,

7/31/22

-

11/15/26

(valued

at

$5,235,068)

............

5,132,419

5,132,419

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$25,659,419)

...........................................................

25,659,419

Total

Short

Term

Investments

(Cost

$82,439,045

)

................................

82,439,045

a

Total

Investments

(Cost

$3,029,814,258)

100.3%

................................

$3,615,365,725

Other

Assets,

less

Liabilities

(0.3)%

...........................................

(11,884,010)

Net

Assets

100.0%

...........................................................

$3,603,481,715

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-19

See

A

bbreviations

on

page

FI-

33

.

*

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

December

31,

2021.

See

Note

1(g).

c

See

Note

1(f)

regarding

equity-linked

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$1,186,878,077,

representing

32.9%

of

net

assets.

e

Perpetual

security

with

no

stated

maturity

date.

f

The

coupon

rate

shown

represents

the

rate

at

period

end.

g

See

Note

1(e)

regarding

index-linked

notes.

h

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.

i

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

j

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

k

See

Note

1(g)

regarding

securities

on

loan.

l

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-20

Franklin

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,947,375,213

Cost

-

Non-controlled

affiliates

(Not

e

3e)

........................................................

77,306,626

Cost

-

Unaffiliated

repurchase

agreements

......................................................

5,132,419

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$33,705,900)

.................................

$3,532,926,680

Value

-

Non-controlled

affiliates

(Not

e

3e)

.......................................................

77,306,626

Value

-

Unaffiliated

repurchase

agreements

......................................................

5,132,419

Cash

....................................................................................

594,018

Receivables:

Investment

securities

sold

...................................................................

198,995

Capital

shares

sold

........................................................................

1,600,169

Dividends

and

interest

.....................................................................

16,498,536

European

Union

tax

reclaims

(Not

e

1h)

.........................................................

1,712,110

Total

assets

..........................................................................

3,635,969,553

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

4,086,377

Management

fees

.........................................................................

1,375,931

Distribution

fees

..........................................................................

732,079

Payable

upon

return

of

securities

loaned

(Not

e

1g)

..................................................

25,659,419

Accrued

expenses

and

other

liabilities

...........................................................

634,032

Total

liabilities

.........................................................................

32,487,838

Net

assets,

at

value

.................................................................

$3,603,481,715

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,811,067,683

Total

distributable

earnings

(losses)

.............................................................

792,414,032

Net

assets,

at

value

.................................................................

$3,603,481,715

Franklin

Income

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$243,731,549

Shares

outstanding

........................................................................

13,950,914

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.47

Class

2:

Net

assets,

at

value

.......................................................................

$3,026,227,697

Shares

outstanding

........................................................................

180,561,692

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$16.76

Class

4:

Net

assets,

at

value

.......................................................................

$333,522,469

Shares

outstanding

........................................................................

19,355,311

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.23

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FI-21

Franklin

Income

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$670,898)

Unaffiliated

issuers

........................................................................

$80,850,385

Non-controlled

affiliates

(Not

e

3e)

.............................................................

6,332

Interest:

Unaffiliated

issuers

........................................................................

67,579,930

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

82,349

Non-controlled

affiliates

(Not

e

3e)

.............................................................

764

Other

income

(Not

e

1h)

......................................................................

22,370

Total

investment

income

...................................................................

148,542,130

Expenses:

Management

fees

(Not

e

3a)

...................................................................

18,488,521

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

8,628,493

    Class

4

................................................................................

1,119,958

Custodian

fees

(Not

e

4)

......................................................................

32,419

Reports

to

shareholders

fees

..................................................................

390,686

Professional

fees

...........................................................................

107,667

Trustees'

fees

and

expenses

..................................................................

37,655

Other

....................................................................................

126,052

Total

expenses

.........................................................................

28,931,451

Expense

reductions

(Not

e

4)

...............................................................

(109)

Expenses

waived/paid

by

affiliates

(Not

e

3e)

...................................................

(64,314)

Net

expenses

.........................................................................

28,867,028

Net

investment

income

................................................................

119,675,102

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

509,595,098

Written

options

...........................................................................

4,083,478

Foreign

currency

transactions

................................................................

(10,359)

Net

realized

gain

(loss)

..................................................................

513,668,217

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

10,370,597

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(155,750)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

10,214,847

Net

realized

and

unrealized

gain

(loss)

............................................................

523,883,064

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$643,558,166

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FI-22

Franklin

Income

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$119,675,102

$160,490,300

Net

realized

gain

(loss)

.................................................

513,668,217

(366,440,390)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

10,214,847

189,780,651

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

643,558,166

(16,169,439)

Distributions

to

shareholders:

Class

1

.............................................................

(16,108,181)

(16,535,949)

Class

2

.............................................................

(184,021,190)

(219,850,517)

Class

4

.............................................................

(14,055,725)

(16,548,919)

Total

distributions

to

shareholders

..........................................

(214,185,096)

(252,935,385)

Capital

share

transactions:

(Note

2)

Class

1

.............................................................

(92,365,384)

11,863,357

Class

2

.............................................................

(1,191,742,494)

(227,620,547)

Class

4

.............................................................

(3,607,701)

(4,380,893)

Total

capital

share

transactions

............................................

(1,287,715,579)

(220,138,083)

Net

increase

(decrease)

in

net

assets

...................................

(858,342,509)

(489,242,907)

Net

assets:

Beginning

of

year

.......................................................

4,461,824,224

4,951,067,131

End

of

year

...........................................................

$3,603,481,715

$4,461,824,224

Franklin

Templeton

Variable

Insurance

Products

Trust

FI-23

Annual

Report

Notes

to

Financial

Statements

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-24

Annual

Report

Franklin

Income

VIP

Fund

(continued)

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

December

31,

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

FI-25

Annual

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

December

31,

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

Statement

of

Operations

and

may

be

based

on

the

performance

of

an

underlying

equity

security,

an

equity

index,

or

an

option

position.

The

risks

of

investing

in

equity-linked

securities

include

unfavorable

price

movements

in

the

underlying

security

and

the

credit

risk

of

the

issuing

financial

institution.

There

may

be

no

guarantee

of

a

return

of

principal

with

equity-linked

securities

and

the

appreciation

potential

may

be

limited.

Equity-linked

securities

may

be

more

volatile

and

less

liquid

than

other

investments

held

by

the

Fund.

g.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

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,

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-26

Annual

Report

Franklin

Income

VIP

Fund

(continued)

Inc.,

an

affiliate

of

the Fund,

and/or

a

joint

repurchase

agreement.

Additionally,

at

December

31,

2021,

the

Fund

held $8,984,019

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

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.

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-27

Annual

Report

Franklin

Income

VIP

Fund

(continued)

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.

2.

Shares

of

Beneficial

Interest

At

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

2,421,558

$40,162,495

2,306,541

$33,745,188

Shares

issued

in

reinvestment

of

distributions

..........

964,562

16,108,181

1,187,928

16,535,949

Shares

redeemed

...............................

(9,030,990)

(148,636,060)

(2,618,645)

(38,417,780)

Net

increase

(decrease)

..........................

(5,644,870)

$(92,365,384)

875,824

$11,863,357

Class

2

Shares:

Shares

sold

...................................

8,261,102

$133,024,654

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

...............................

(95,307,859)

(1,508,788,338)

(49,970,834)

(707,735,003)

Net

increase

(decrease)

..........................

(75,574,114)

$(1,191,742,494)

(15,212,330)

$(227,620,547)

Class

4

Shares:

Shares

sold

...................................

2,779,479

$45,895,938

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

...............................

(3,856,387)

(63,559,364)

(3,520,562)

(51,037,911)

Net

increase

(decrease)

..........................

(225,562)

$(3,607,701)

(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

FI-28

Annual

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

year

ended

December

31,

2021,

the

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)

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

FI-29

Annual

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

year

ended

December

31,

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

year

ended

December

31,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

During

the

year

ended December

31,

2021

the

Fund

utilized

$404,664,856

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

1,810,221,028

$

(1,882,597,698)

$

—

$

—

$

56,779,626

56,779,626

$

6,332

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$8,117,000

$339,838,000

$(327,428,000)

$—

$—

$20,527,000

20,527,000

$764

Total

Affiliated

Securities

...

$137,273,296

$2,150,059,028

$(2,210,025,698)

$—

$—

$77,306,626

$7,096

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$214,185,096

$249,422,628

Long

term

capital

gain

......................................................

—

3,512,757

$214,185,096

$252,935,385

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-30

Annual

Report

Franklin

Income

VIP

Fund

(continued)

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

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,

equity-linked

securities

and

convertible

securities.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$1,542,532,073

and

$2,801,183,491,

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$25,659,419

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Credit

Risk

At

December

31,

2021,

the

Fund

had

20.5%

of

its

portfolio

invested

in

high

yield,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

and

unrated

securities.

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.

Cost

of

investments

..........................................................................

$3,037,250,556

Unrealized

appreciation

........................................................................

$647,653,442

Unrealized

depreciation

........................................................................

(69,538,273)

Net

unrealized

appreciation

(depreciation)

..........................................................

$578,115,169

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$212,550,703

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-31

Annual

Report

Franklin

Income

VIP

Fund

(continued)

9.

Other

Derivative

Information

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

options

represented

340,769

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Income

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

..............

Written

options

$4,083,478

Written

options

$–

Total

.......................

$4,083,478

$–

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FI-32

Annual

Report

Franklin

Income

VIP

Fund

(continued)

A

summary

of

inputs

used

as

of

December

31,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Income

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks:

Aerospace

&

Defense

...................

$

54,904,500

$

—

$

—

$

54,904,500

Air

Freight

&

Logistics

...................

33,801,418

—

—

33,801,418

Banks

...............................

124,167,500

13,998,565

—

138,166,065

Beverages

...........................

91,052,350

—

—

91,052,350

Biotechnology

.........................

83,447,900

—

—

83,447,900

Capital

Markets

........................

26,159,640

—

—

26,159,640

Chemicals

...........................

10,649,100

15,779,226

—

26,428,326

Diversified

Telecommunication

Services

.....

87,903,637

—

—

87,903,637

Electric

Utilities

........................

221,859,750

—

—

221,859,750

Energy

Equipment

&

Services

.............

13,860,000

—

—

13,860,000

Health

Care

Equipment

&

Supplies

.........

10,345,000

—

—

10,345,000

Health

Care

Providers

&

Services

..........

6,655,000

—

—

6,655,000

Household

Products

....................

44,984,500

—

—

44,984,500

Industrial

Conglomerates

................

31,276,500

—

—

31,276,500

Insurance

............................

18,747,000

—

—

18,747,000

IT

Services

...........................

27,411,919

—

—

27,411,919

Machinery

............................

21,814,000

—

—

21,814,000

Media

...............................

10,066,000

—

—

10,066,000

Metals

&

Mining

.......................

10,041,000

—

—

10,041,000

Multi-Utilities

..........................

103,587,858

—

—

103,587,858

Oil,

Gas

&

Consumable

Fuels

.............

191,525,950

—

—

191,525,950

Personal

Products

.....................

—

16,080,863

—

16,080,863

Pharmaceuticals

.......................

262,376,710

—

—

262,376,710

Road

&

Rail

..........................

26,830,545

—

—

26,830,545

Semiconductors

&

Semiconductor

Equipment

.

59,130,083

—

—

59,130,083

Specialty

Retail

........................

13,280,320

—

—

13,280,320

Tobacco

.............................

40,650,500

—

—

40,650,500

Equity-Linked

Securities

...................

—

592,822,154

—

592,822,154

Convertible

Preferred

Stocks:

Capital

Markets

........................

7,917,750

—

—

7,917,750

Electric

Utilities

........................

70,195,382

—

—

70,195,382

Multi-Utilities

..........................

38,148,000

—

—

38,148,000

Semiconductors

&

Semiconductor

Equipment

.

35,281,630

—

—

35,281,630

Thrifts

&

Mortgage

Finance

...............

—

4,868,750

—

4,868,750

Convertible

Bonds

.......................

—

6,273,494

—

6,273,494

Corporate

Bonds

........................

—

910,405,332

—

910,405,332

Index-Linked

Notes

......................

—

42,109,874

—

42,109,874

U.S.

Government

and

Agency

Securities

.......

—

130,229,492

—

130,229,492

Asset-Backed

Securities

..................

—

9,911,591

—

9,911,591

Mortgage-Backed

Securities

................

—

2,200,162

—

2,200,162

Escrows

and

Litigation

Trusts

...............

—

10,175,735

—

10,175,735

Short

Term

Investments

...................

77,306,626

5,132,419

—

82,439,045

Total

Investments

in

Securities

...........

$1,855,378,068

$1,759,987,657

a

$—

$3,615,365,725

a

Includes

foreign

securities

valued

at

$45,858,654,

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

FI-33

Annual

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

other

than

those

already

disclosed

in

the

financial

statements.

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FI-34

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Income

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Income

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FI-35

Annual

Report

Franklin

Income

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$61,626,894

Interest

Earned

from

Federal

Obligations

Note

(1)

$2,043,934

FLG-1

Annual

Report

Franklin

Large

Cap

Growth

VIP

Fund

This

annual

report

for

Franklin

Large

Cap

Growth

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

202

1

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+15.28%

5-Year

+23.15%

10-Year

+16.92%

FLG-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/2

1

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FLG-3

Annual

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.

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

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

total

return.

2

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

S&P

500,

posted

a

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

2

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

*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.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Software

21.7%

IT

Services

10.4%

Internet

&

Direct

Marketing

Retail

8.0%

Semiconductors

&

Semiconductor

Equipment

6.9%

Technology

Hardware,

Storage

&

Peripherals

5.3%

Life

Sciences

Tools

&

Services

5.2%

Health

Care

Equipment

&

Supplies

5.1%

Interactive

Media

&

Services

4.7%

Capital

Markets

4.7%

Automobiles

3.2%

Equity

Real

Estate

Investment

Trusts

(REITs)

2.6%

Health

Care

Providers

&

Services

2.5%

Professional

Services

2.2%

Hotels,

Restaurants

&

Leisure

1.8%

Other*

15.2%

Short-Term

Investments

&

Other

Net

Assets

0.5%

Franklin

Large

Cap

Growth

VIP

Fund

FLG-4

Annual

Report

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

Investment

Strategy

We

are

research

driven,

fundamental

investors,

pursuing

a

growth

strategy.

As

bottom-up

investors

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

Over

the

one-year

period,

the

information

technology

(IT)

sector

delivered

absolute

gains

but

was

the

biggest

detractor

relative

to

the

benchmark

due

to

an

overweighting

and

stock

selection

in

the

IT

services

industry.

Within

the

industry,

Mastercard,

Twilio

(not

part

of

the

index)

and

Visa

weighed

on

relative

returns.

Payment

processors

Mastercard

and

Visa

have

been

seeing

post-pandemic

improvement

in

transaction

rates,

but

the

pace

of

cross-border

travel

recovery

continues

to

pose

a

challenge

to

revenue

growth.

Cloud

communications

platform

company

Twilio

saw

a

modest

pullback

in

its

equity

value

on

competitive

fears.

In

our

view,

the

core

business

of

processing

text

messages,

calls,

videos

and

other

content

for

mobile

apps

continues

to

be

a

strong

growth

market.

More

than

240,000

customers

currently

use

its

services,

and

we

believe

user

numbers

can

continue

to

rise

as

more

app

developers

integrate

additional

communication

tools.

Although

IT

was

an

overall

detractor,

the

sector

benefited

from

holdings

in

NVIDIA,

Bill.com

Holdings

(not

part

of

the

index)

and

Intuit.

Increased

spending

on

artificial

intelligence

by

social

media

platforms

and

robust

gaming

demand

have

been

tailwinds

for

graphic

chips

specialist

NVIDIA.

Payment

solutions

provider

Bill.com

has

been

a

beneficiary

of

the

growing

digital

transformation

needs

of

small-

and

mid-

capitalization

companies.

The

company

also

announced

the

acquisition

of

a

spend

management

software

company

that

will

help

position

Bill.com

as

an

all-inclusive

financial

operating

system

for

small

and

medium-sized

businesses,

which

we

view

as

a

positive

long-term

opportunity.

Robust

demand

recovery

for

loan

and

tax

products

and

outperformance

of

its

credit

business

lifted

the

shares

of

financial

software

company

Intuit,

which

reached

an

all-time

high

in

November

2021.

Stock

selection

in

the

industrials

sector

detracted

from

relative

results,

led

lower

by

CoStar

Group

(not

part

of

the

index).

During

the

period,

CoStar

acquired

a

residential

real

estate

analytics

company,

which

put

pressure

on

the

shares

of

the

commercial

real

estate

information

leader.

With

this

acquisition,

CoStar

will

have

access

to

one

of

the

most

valuable

residential

real

estate

data

sets,

which

could

be

a

long-term

growth

opportunity

for

the

company,

in

our

view.

A

position

in

electric

transit

bus

and

energy

storage

company

Proterra

also

weighed

on

industrials

sector

results.

Gross

margins

for

the

company

were

hurt

by

supply

chain

shortages

and

logistic

constraints,

which

impacted

production

schedules.

Top

10

Holdings

12/31/21

Company

Industry,

Country

%

of

Total

Net

Assets

a

aa

Amazon.com,

Inc.

8.0%

Internet

&

Direct

Marketing

Retail,

United

States

Microsoft

Corp.

5.4%

Software,

United

States

Apple,

Inc.

5.3%

Technology

Hardware,

Storage

&

Peripherals,

United

States

NVIDIA

Corp.

3.9%

Semiconductors

&

Semiconductor

Equipment,

United

States

Mastercard

,

Inc.

3.8%

IT

Services,

United

States

ServiceNow

,

Inc.

3.6%

Software,

United

States

Alphabet,

Inc.

3.4%

Interactive

Media

&

Services,

United

States

SBA

Communications

Corp.

2.6%

Equity

Real

Estate

Investment

Trusts

(REITs),

United

States

West

Pharmaceutical

Services,

Inc.

2.5%

Life

Sciences

Tools

&

Services,

United

States

MSCI,

Inc.

2.2%

Capital

Markets,

United

States

Franklin

Large

Cap

Growth

VIP

Fund

FLG-5

Annual

Report

In

the

consumer

discretionary

sector,

Amazon.com

underperformed

the

benchmark

and

was

a

leading

relative

detractor

for

the

period.

In

contrast,

Rivian

Automotive

(not

part

of

the

index)

was

a

top

contributor

in

the

sector.

The

electric

vehicle

(EV)

manufacturer,

went

public

in

November

2021

and

received

a

contract

to

build

100,000

electric

delivery

vans

for

Amazon.com,

which

has

a

sizeable

minority

stake

in

the

company.

We

continue

to

believe

the

long-term

outlook

for

EV

adoption

in

the

U.S.

and

globally

is

robust.

Elsewhere,

West

Pharmaceutical

Services

was

among

the

Fund’s

top-five

relative

contributors.

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

stock.

Thank

you

for

your

participation

in

Franklin

Large

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

December

31,

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

2

Fund

Expenses

Franklin

Large

Cap

Growth

VIP

Fund

FLG-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,047.40

$5.68

$1,019.65

$5.61

1.10%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Large

Cap

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FLG-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$29.78

$22.73

$19.19

$20.93

$17.85

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.10)

(0.09)

(0.06)

(0.04)

(0.03)

Net

realized

and

unrealized

gains

(losses)

...........

4.39

9.54

6.51

0.03

4.91

Total

from

investment

operations

....................

4.29

9.45

6.45

(0.01)

4.88

Less

distributions

from:

Net

investment

income

..........................

—

—

—

—

(0.20)

Net

realized

gains

.............................

(3.77)

(2.40)

(2.91)

(1.73)

(1.60)

Total

distributions

...............................

(3.77)

(2.40)

(2.91)

(1.73)

(1.80)

Net

asset

value,

end

of

year

.......................

$30.30

$29.78

$22.73

$19.19

$20.93

Total

return

c

...................................

15.56%

44.98%

34.98%

(1.24)%

28.38%

Ratios

to

average

net

assets

Expenses

d

....................................

0.84%

e

0.84%

e

0.84%

e

0.85%

0.87%

Net

investment

(loss)

............................

(0.32)%

(0.36)%

(0.25)%

(0.17)%

(0.14)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$5,387

$4,606

$1,350

$1,040

$1,092

Portfolio

turnover

rate

............................

14.98%

14.90%

17.01%

21.93%

24.96%

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$28.65

$22.00

$18.70

$20.48

$17.48

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.16)

(0.14)

(0.11)

(0.09)

(0.08)

Net

realized

and

unrealized

gains

(losses)

...........

4.21

9.19

6.32

0.04

4.81

Total

from

investment

operations

....................

4.05

9.05

6.21

(0.05)

4.73

Less

distributions

from:

Net

investment

income

..........................

—

—

—

—

(0.13)

Net

realized

gains

.............................

(3.77)

(2.40)

(2.91)

(1.73)

(1.60)

Total

distributions

...............................

(3.77)

(2.40)

(2.91)

(1.73)

(1.73)

Net

asset

value,

end

of

year

.......................

$28.93

$28.65

$22.00

$18.70

$20.48

Total

return

c

...................................

15.28%

44.63%

34.58%

(1.47)%

28.11%

Ratios

to

average

net

assets

Expenses

d

....................................

1.09%

e

1.09%

e

1.09%

e

1.10%

1.12%

Net

investment

(loss)

............................

(0.57)%

(0.58)%

(0.50)%

(0.42)%

(0.39)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$128,584

$131,001

$114,170

$100,435

$118,875

Portfolio

turnover

rate

............................

14.98

%

14.90%

17.01%

21.93%

24.96%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Large

Cap

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FLG-9

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

99.5%

Auto

Components

0.8%

a

Aptiv

plc

............................................

United

States

6,658

$

1,098,237

Automobiles

3.2%

a,b

Lucid

Group,

Inc.

.....................................

United

States

11,802

449,066

a,b

Rivian

Automotive,

Inc.,

A

...............................

United

States

24,702

2,561,350

a

Tesla,

Inc.

...........................................

United

States

1,166

1,232,206

4,242,622

Banks

0.1%

a,b

NU

Holdings

Ltd.,

A

....................................

Brazil

9,900

92,862

Beverages

1.1%

Constellation

Brands,

Inc.,

A

.............................

United

States

2,753

690,921

a

Monster

Beverage

Corp.

................................

United

States

8,433

809,905

1,500,826

Biotechnology

0.8%

a,b

Ginkgo

Bioworks

Holdings,

Inc.

...........................

United

States

28,200

234,342

a

Heron

Therapeutics,

Inc.

................................

United

States

45,652

416,803

a,b

Novavax

,

Inc.

........................................

United

States

3,111

445,091

1,096,236

Capital

Markets

4.7%

Intercontinental

Exchange,

Inc.

...........................

United

States

5,953

814,192

MSCI,

Inc.

...........................................

United

States

4,881

2,990,540

S&P

Global,

Inc.

......................................

United

States

4,989

2,354,458

a

TPG

Pace

Beneficial

II

Corp.,

A

...........................

United

States

15,800

154,840

6,314,030

Chemicals

1.5%

Ecolab,

Inc.

..........................................

United

States

2,998

703,301

Linde

plc

............................................

United

Kingdom

3,572

1,237,448

1,940,749

Commercial

Services

&

Supplies

0.4%

Republic

Services,

Inc.

.................................

United

States

4,079

568,817

Consumer

Finance

0.5%

a,b

SoFi

Technologies,

Inc.

.................................

United

States

42,321

669,095

Electric

Utilities

0.5%

NextEra

Energy,

Inc.

...................................

United

States

7,386

689,557

Entertainment

1.6%

a

ROBLOX

Corp.,

A

.....................................

United

States

10,453

1,078,331

a

Sea

Ltd.,

ADR

........................................

Taiwan

1,489

333,104

a

Walt

Disney

Co.

(The)

..................................

United

States

5,049

782,040

2,193,475

Equity

Real

Estate

Investment

Trusts

(REITs)

2.6%

SBA

Communications

Corp.

.............................

United

States

8,880

3,454,498

Food

Products

0.6%

a

Freshpet

,

Inc.

........................................

United

States

3,595

342,496

Lamb

Weston

Holdings,

Inc.

.............................

United

States

8,187

518,892

861,388

Health

Care

Equipment

&

Supplies

5.1%

a

Edwards

Lifesciences

Corp.

.............................

United

States

13,113

1,698,789

a,b

Figs,

Inc.,

A

..........................................

United

States

28,790

793,452

a

IDEXX

Laboratories,

Inc.

................................

United

States

2,705

1,781,134

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Annual

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)

Health

Care

Equipment

&

Supplies

(continued)

a

Intuitive

Surgical,

Inc.

..................................

United

States

5,607

$

2,014,595

a

Nevro

Corp.

.........................................

United

States

5,836

473,125

6,761,095

Health

Care

Providers

&

Services

2.5%

a

Guardant

Health,

Inc.

..................................

United

States

4,189

418,984

UnitedHealth

Group,

Inc.

................................

United

States

5,700

2,862,198

3,281,182

Health

Care

Technology

1.5%

a

Veeva

Systems,

Inc.,

A

.................................

United

States

8,037

2,053,293

Hotels,

Restaurants

&

Leisure

1.8%

a

Chipotle

Mexican

Grill,

Inc.

..............................

United

States

1,023

1,788,460

a,b

Dutch

Bros,

Inc.,

A

....................................

United

States

10,162

517,347

a,b

Sweetgreen

,

Inc.,

A

....................................

United

States

1,400

44,800

2,350,607

Industrial

Conglomerates

1.7%

Honeywell

International,

Inc.

.............................

United

States

4,780

996,678

Roper

Technologies,

Inc.

................................

United

States

2,612

1,284,738

2,281,416

Interactive

Media

&

Services

4.7%

a

Alphabet,

Inc.,

A

......................................

United

States

1,580

4,577,323

a

Meta

Platforms,

Inc.,

A

.................................

United

States

4,444

1,494,739

a

Snap,

Inc.,

A

.........................................

United

States

5,615

264,074

6,336,136

Internet

&

Direct

Marketing

Retail

8.0%

a

Amazon.com,

Inc.

.....................................

United

States

3,218

10,729,906

IT

Services

10.4%

a

Cloudflare

,

Inc.,

A

.....................................

United

States

4,150

545,725

a

Marqeta

,

Inc.,

A

.......................................

United

States

22,256

382,136

Mastercard

,

Inc.,

A

....................................

United

States

14,122

5,074,317

a

Okta

,

Inc.

...........................................

United

States

2,403

538,681

a

PayPal

Holdings,

Inc.

..................................

United

States

8,518

1,606,324

a

Shopify,

Inc.,

A

.......................................

Canada

1,167

1,607,414

a

Snowflake,

Inc.,

A

.....................................

United

States

1,996

676,145

a

Twilio

,

Inc.,

A

.........................................

United

States

6,162

1,622,701

Visa,

Inc.,

A

..........................................

United

States

8,454

1,832,066

13,885,509

Life

Sciences

Tools

&

Services

5.2%

Danaher

Corp.

.......................................

United

States

6,644

2,185,942

a

Illumina,

Inc.

.........................................

United

States

1,900

722,836

West

Pharmaceutical

Services,

Inc.

........................

United

States

7,096

3,328,095

a,c

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

..................

China

62,288

737,526

6,974,399

Machinery

0.3%

a,b

Proterra

,

Inc.

.........................................

United

States

47,147

416,308

Pharmaceuticals

1.2%

AstraZeneca

plc,

ADR

..................................

United

Kingdom

13,285

773,851

a

Catalent

,

Inc.

........................................

United

States

6,138

785,848

1,559,699

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FLG-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Professional

Services

2.2%

a

CoStar

Group,

Inc.

....................................

United

States

25,058

$

1,980,334

TransUnion

..........................................

United

States

7,816

926,821

2,907,155

Road

&

Rail

1.1%

Union

Pacific

Corp.

....................................

United

States

5,916

1,490,418

Semiconductors

&

Semiconductor

Equipment

6.9%

Analog

Devices,

Inc.

...................................

United

States

6,231

1,095,223

ASML

Holding

NV,

NYRS

...............................

Netherlands

888

706,972

a,b

GLOBALFOUNDRIES,

Inc.

..............................

United

States

4,200

272,874

Monolithic

Power

Systems,

Inc.

...........................

United

States

3,810

1,879,587

NVIDIA

Corp.

........................................

United

States

17,968

5,284,569

9,239,225

Software

21.7%

a

Adobe,

Inc.

..........................................

United

States

4,767

2,703,175

a,b

AppLovin

Corp.,

A

.....................................

United

States

6,060

571,216

a

Atlassian

Corp.

plc,

A

..................................

United

States

1,778

677,934

a

Avalara,

Inc.

.........................................

United

States

920

118,781

a,b

AvidXchange

Holdings,

Inc.

..............................

United

States

33,356

502,341

a

Bill.com

Holdings,

Inc.

..................................

United

States

9,718

2,421,240

a

Black

Knight,

Inc.

.....................................

United

States

8,616

714,180

a

Confluent,

Inc.,

A

......................................

United

States

4,838

368,849

a

Crowdstrike

Holdings,

Inc.,

A

.............................

United

States

2,442

499,999

a

DocuSign,

Inc.

.......................................

United

States

4,396

669,555

a

Gitlab

,

Inc.,

A

........................................

United

States

700

60,900

a

HashiCorp

,

Inc.,

A

.....................................

United

States

1,200

109,248

Intuit,

Inc.

...........................................

United

States

4,373

2,812,801

Microsoft

Corp.

.......................................

United

States

21,408

7,199,939

a

Paycom

Software,

Inc.

.................................

United

States

1,169

485,357

a

PTC,

Inc.

...........................................

United

States

7,782

942,789

a

salesforce.com,

Inc.

...................................

United

States

4,823

1,225,669

a

ServiceNow

,

Inc.

......................................

United

States

7,329

4,757,327

a

Synopsys,

Inc.

.......................................

United

States

4,044

1,490,214

a

Workday,

Inc.,

A

......................................

United

States

2,683

732,942

29,064,456

Specialty

Retail

0.3%

a

Burlington

Stores,

Inc.

..................................

United

States

1,325

386,251

Technology

Hardware,

Storage

&

Peripherals

5.3%

Apple,

Inc.

..........................................

United

States

40,119

7,123,931

Textiles,

Apparel

&

Luxury

Goods

1.2%

NIKE,

Inc.,

B

.........................................

United

States

8,953

1,492,196

a

On

Holding

AG,

A

.....................................

Switzerland

4,600

173,926

1,666,122

Total

Common

Stocks

(Cost

$45,797,831)

......................................

133,229,500

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-12

See

Abbreviations

on

page

FLG-

24

.

a

a

Country

Warrants

a

Value

a

a

a

a

a

a

Warrants

0.0%

†

Biotechnology

0.0%

†

a

Ginkgo

Bioworks

Holdings,

Inc.,

C,

8/01/26

..................

United

States

5,640

$

12,634

Total

Warrants

(Cost

$—)

.....................................................

12,634

Total

Long

Term

Investments

(Cost

$45,797,831)

................................

133,242,134

a

Short

Term

Investments

2.9%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

1.1%

d

Joint

Repurchase

Agreement,

0.031%,

1/03/22

(Maturity

Value

$1,398,011)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$592,142)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$71,606)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$734,263)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

5%,

1/20/48

-

10/20/51;

U.S.

Treasury

Note,

2.5%,

1/31/24;

and

U.S.

Cash

Management

Bill,

Discount

Note,

1/25/22

(valued

at

$1,426,388)

........................................

1,398,007

1,398,007

Total

Repurchase

Agreements

(Cost

$1,398,007)

................................

1,398,007

e

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.8%

Shares

Money

Market

Funds

1.4%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

1,948,000

1,948,000

Principal

Amount

*

Repurchase

Agreements

0.4%

d

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

1/03/22

(Maturity

Value

$487,775)

Collateralized

by

U.S.

Treasury

Bond,

Index-Linked,

2%,

1/15/26;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Bonds,

6.5%

-

7.5%,

8/15/22

-

11/15/26;

U.S.

Treasury

Notes,

Index-Linked,

0.625%,

1/15/24

-

1/15/26;

and

U.S.

Treasury

Notes,

0.125%

-

2.75%,

7/31/22

-

11/15/26

(valued

at

$497,529)

.............

487,773

487,773

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$2,435,773)

............................................................

2,435,773

Total

Short

Term

Investments

(Cost

$3,833,780

)

.................................

3,833,780

a

Total

Investments

(Cost

$49,631,611)

102.4%

...................................

$137,075,914

Other

Assets,

less

Liabilities

(2.4)%

...........................................

(3,104,554)

Net

Assets

100.0%

...........................................................

$133,971,360

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FLG-13

*

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

December

31,

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

December

31,

2021,

the

value

of

this

security

was

$737,526,

representing

0.6%

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

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-14

Franklin

Large

Cap

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$45,797,831

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

1,948,000

Cost

-

Unaffiliated

repurchase

agreements

......................................................

1,885,780

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$5,6

67

,

879

)

..................................

$133,242,134

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

1,948,000

Value

-

Unaffiliated

repurchase

agreements

......................................................

1,885,780

Receivables:

Capital

shares

sold

........................................................................

16

Dividends

and

interest

.....................................................................

9,886

Total

assets

..........................................................................

137,085,816

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

426,613

Capital

shares

redeemed

...................................................................

89,359

Management

fees

.........................................................................

85,317

Distribution

fees

..........................................................................

27,349

Payable

upon

return

of

securities

loaned

(Note

1

d

)

..................................................

2,435,773

Accrued

expenses

and

other

liabilities

...........................................................

50,045

Total

liabilities

.........................................................................

3,114,456

Net

assets,

at

value

.................................................................

$133,971,360

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$24,305,161

Total

distributable

earnings

(losses)

.............................................................

109,666,199

Net

assets,

at

value

.................................................................

$133,971,360

Franklin

Large

Cap

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$5,387,419

Shares

outstanding

........................................................................

177,782

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$30.30

Class

2:

Net

assets,

at

value

.......................................................................

$128,583,941

Shares

outstanding

........................................................................

4,445,304

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$28.93

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FLG-15

Franklin

Large

Cap

Growth

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$278)

Unaffiliated

issuers

........................................................................

$474,928

Interest:

Unaffiliated

issuers

........................................................................

172

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

226,177

Non-controlled

affiliates

(

Note

3e)

.............................................................

159

Total

investment

income

...................................................................

701,436

Expenses:

Management

fees

(Note

3

a

)

...................................................................

1,013,872

Interest

expense

...........................................................................

142

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

325,364

Custodian

fees

(Note

4

)

......................................................................

878

Reports

to

shareholders

fees

..................................................................

31,703

Professional

fees

...........................................................................

76,292

Trustees'

fees

and

expenses

..................................................................

2,315

Other

....................................................................................

11,726

Total

expenses

.........................................................................

1,462,292

Expense

reductions

(Note

4

)

...............................................................

(6)

Expenses

waived/paid

by

affiliates

(

Note

3e)

...................................................

(1,763)

Net

expenses

.........................................................................

1,460,523

Net

investment

income

(loss)

............................................................

(759,087)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

23,018,916

Foreign

currency

transactions

................................................................

(305)

Net

realized

gain

(loss)

..................................................................

23,018,611

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(3,017,147)

Net

realized

and

unrealized

gain

(loss)

............................................................

20,001,464

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$19,242,377

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FLG-16

Franklin

Large

Cap

Growth

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(759,087)

$(689,116)

Net

realized

gain

(loss)

.................................................

23,018,611

17,097,318

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(3,017,147)

28,111,649

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

19,242,377

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

.............................................................

643,138

2,179,293

Class

2

.............................................................

(4,891,047)

(14,944,016)

Total

capital

share

transactions

............................................

(4,247,909)

(12,764,723)

Net

increase

(decrease)

in

net

assets

...................................

(1,635,936)

20,086,821

Net

assets:

Beginning

of

year

.......................................................

135,607,296

115,520,475

End

of

year

...........................................................

$133,971,360

$135,607,296

Franklin

Templeton

Variable

Insurance

Products

Trust

FLG-17

Annual

Report

Notes

to

Financial

Statements

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

December

31,

2021,

66.3%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

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

December

31,

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

FLG-18

Annual

Report

Franklin

Large

Cap

Growth

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

year

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

December

31,

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

$3,441,995

in

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FLG-19

Annual

Report

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

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

December

31,

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

FLG-20

Annual

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

December

31,

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.750%

of

the

Fund’s

average

daily

net

assets.

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

4,879

$142,500

91,945

$2,104,488

Shares

issued

in

reinvestment

of

distributions

..........

21,262

589,813

14,182

319,951

Shares

redeemed

...............................

(3,046)

(89,175)

(10,851)

(245,146)

Net

increase

(decrease)

..........................

23,095

$643,138

95,276

$2,179,293

Class

2

Shares:

Shares

sold

...................................

268,877

$7,625,062

358,053

$8,575,790

Shares

issued

in

reinvestment

of

distributions

..........

604,849

16,040,591

522,004

11,348,356

Shares

redeemed

...............................

(1,000,883)

(28,556,700)

(1,496,315)

(34,868,162)

Net

increase

(decrease)

..........................

(127,157)

$(4,891,047)

(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)

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

FLG-21

Annual

Report

Franklin

Large

Cap

Growth

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.

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

year

ended

December

31,

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

year

ended

December

31,

2021,

these

purchase

and

sale

transactions

aggregated

$0

and

$54,947,

respectively.

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$28,007,000

$(26,073,000)

$—

$—

$1,948,000

1,948,000

$159

Total

Affiliated

Securities

...

$14,000

$28,007,000

$(26,073,000)

$—

$—

$1,948,000

$159

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FLG-22

Annual

Report

Franklin

Large

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

long

term

capital

gains

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

year

ended

December

31,

2021,

aggregated

$20,044,435

and

$41,201,887

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$2,435,773

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.

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$593,248

$—

Long

term

capital

gain

......................................................

16,037,156

11,668,307

$16,630,404

$11,668,307

Cost

of

investments

..........................................................................

$49,635,470

Unrealized

appreciation

........................................................................

$90,004,139

Unrealized

depreciation

........................................................................

(2,563,695)

Net

unrealized

appreciation

(depreciation)

..........................................................

$87,440,444

Distributable

earnings:

Undistributed

long

term

capital

gains

..............................................................

$22,225,753

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FLG-23

Annual

Report

Franklin

Large

Cap

Growth

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

December

31,

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

......................

$

1,098,237

$

—

$

—

$

1,098,237

Automobiles

..........................

4,242,622

—

—

4,242,622

Banks

...............................

92,862

—

—

92,862

Beverages

...........................

1,500,826

—

—

1,500,826

Biotechnology

.........................

1,096,236

—

—

1,096,236

Capital

Markets

........................

6,314,030

—

—

6,314,030

Chemicals

...........................

1,940,749

—

—

1,940,749

Commercial

Services

&

Supplies

...........

568,817

—

—

568,817

Consumer

Finance

.....................

669,095

—

—

669,095

Electric

Utilities

........................

689,557

—

—

689,557

Entertainment

.........................

2,193,475

—

—

2,193,475

Equity

Real

Estate

Investment

Trusts

(REITs)

.

3,454,498

—

—

3,454,498

Food

Products

........................

861,388

—

—

861,388

Health

Care

Equipment

&

Supplies

.........

6,761,095

—

—

6,761,095

Health

Care

Providers

&

Services

..........

3,281,182

—

—

3,281,182

Health

Care

Technology

.................

2,053,293

—

—

2,053,293

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FLG-24

Annual

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Level

1

Level

2

Level

3

Total

Franklin

Large

Cap

Growth

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Hotels,

Restaurants

&

Leisure

.............

$

2,350,607

$

—

$

—

$

2,350,607

Industrial

Conglomerates

................

2,281,416

—

—

2,281,416

Interactive

Media

&

Services

..............

6,336,136

—

—

6,336,136

Internet

&

Direct

Marketing

Retail

..........

10,729,906

—

—

10,729,906

IT

Services

...........................

13,885,509

—

—

13,885,509

Life

Sciences

Tools

&

Services

............

6,236,873

737,526

—

6,974,399

Machinery

............................

416,308

—

—

416,308

Pharmaceuticals

.......................

1,559,699

—

—

1,559,699

Professional

Services

...................

2,907,155

—

—

2,907,155

Road

&

Rail

..........................

1,490,418

—

—

1,490,418

Semiconductors

&

Semiconductor

Equipment

.

9,239,225

—

—

9,239,225

Software

.............................

29,064,456

—

—

29,064,456

Specialty

Retail

........................

386,251

—

—

386,251

Technology

Hardware,

Storage

&

Peripherals

.

7,123,931

—

—

7,123,931

Textiles,

Apparel

&

Luxury

Goods

..........

1,666,122

—

—

1,666,122

Warrants

..............................

12,634

—

—

12,634

Short

Term

Investments

...................

1,948,000

1,885,780

—

3,833,780

Total

Investments

in

Securities

...........

$134,452,608

$2,623,306

a

$—

$137,075,914

a

Includes

foreign

securities

valued

at

$737,526,

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

ADR

American

Depositary

Receipt

NYRS

New

York

Registry

Shares

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FLG-25

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Large

Cap

Growth

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Large

Cap

Growth

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FLG-26

Annual

Report

Franklin

Large

Cap

Growth

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$16,037,156

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$394,137

MGD-1

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

This

annual

report

for

Franklin

Mutual

Global

Discovery

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

+19.13%

5-Year

+6.42%

10-Year

+8.47%

MGD-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

MSCI

World

Value

Index-NR

(USD).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

MGD-3

Annual

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

equity

securities

of

U.S.

and

foreign

companies

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,

and

may

even

decline

further

in

value.

Investing

in

foreign

securities

typically

involve

more

risks

than

investing

in

U.S.

securities,

and

includes

risks

associated

with

internal

and

external

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.

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

benchmark,

the

MSCI

World

Value

Index-NR

(USD),

posted

a

+21.94%

total

return

for

the

period

under

review.

1

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(USD),

posted

a

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

United

States

41.8%

France

11.2%

United

Kingdom

11.0%

Germany

8.7%

Netherlands

6.0%

Switzerland

5.2%

Japan

3.3%

Israel

2.2%

Canada

1.8%

South

Korea

1.5%

China

1.3%

Other

1.0%

Short-Term

Investments

&

Other

Net

Assets

5.0%

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-4

Annual

Report

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR

(USD),

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR

(USD),

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

large

Chinese

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR

(USD),

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

Top

10

Industries

12/31/21

%

of

Total

Net

Assets

a

Insurance

9.0%

Oil,

Gas

&

Consumable

Fuels

7.8%

Banks

7.8%

Pharmaceuticals

7.5%

IT

Services

6.7%

Health

Care

Providers

&

Services

5.8%

Technology

Hardware,

Storage

&

Peripherals

4.2%

Chemicals

3.4%

Tobacco

3.3%

Aerospace

&

Defense

3.2%

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-5

Annual

Report

substantial

discount

to

face

value.

After

the

financially

distressed

company

is

reorganized,

often

in

bankruptcy

court,

the

old

debt

is

typically

replaced

with

new

securities

issued

by

the

financially

stronger

company.

The

other

piece

of

our

investment

strategy

is

participating

in

arbitrage

situations,

another

highly

specialized

field.

When

companies

announce

proposed

mergers

or

takeovers,

commonly

referred

to

as

deals,

the

target

company

may

trade

at

a

discount

to

the

bid

it

ultimately

accepts.

One

form

of

arbitrage

involves

purchasing

the

target

company’s

stock

when

it

is

trading

below

the

value

we

believe

it

would

receive

in

a

deal.

In

keeping

with

our

commitment

to

a

relatively

conservative

investment

approach,

we

typically

focus

our

arbitrage

efforts

on

announced

deals,

and

eschew

rumored

deals

or

other

situations

we

consider

relatively

risky.

In

addition,

it

is

our

practice

to

hedge

the

Fund’s

currency

exposure

when

we

deem

it

advantageous

for

our

shareholders.

Manager’s

Discussion

In

2021,

the

Fund

underperformed

its

benchmark,

as

stock

selection

in

the

information

technology

(IT)

and

materials

sectors

and

a

lack

of

exposure

to

real

estate

detracted

from

relative

returns.

Security

selection

in

health

care,

an

underweight

in

utilities

and

an

overweight

in

energy

contributed

to

relative

performance.

During

the

12-month

period,

investments

that

detracted

from

Fund

performance

included

Credit

Suisse

Group,

Check

Point

Software

Technologies

and

Charter

Communications.

Switzerland-based

Credit

Suisse

Group

detracted

from

relative

returns

after

dealing

with

several

scandals

earlier

in

the

year

including

exposure

to

the

collapse

of

Greensill

(not

a

Fund

holding),

a

supply

chain

finance

provider,

and

the

failure

of

prime

broker

client

Archegos

Capital

Management

(not

a

Fund

holding).

As

a

result,

the

stock

is

trading

at

a

significant

discount

to

peers,

despite

the

company’s

premier

wealth

management

platform

with

strong

positions

in

Europe,

Asia,

and

Latin

America.

The

company’s

new

management

team

is

focused

on

turning

around

the

business

and

further

building

its

wealth

management

operations

in

Asia

and

the

Middle

East.

IT

security

company

Check

Point

Software

Technologies

detracted

from

relative

results

during

the

year.

After

a

profit

warning

early

in

the

year,

recent

results

have

been

more

upbeat,

and

the

company

has

been

positive

about

momentum

in

areas

like

cloud

security

and

end-user

access

security

that

can

help

its

long-term

growth

outlook.

Charter

Communications

detracted

from

performance

due

to

weaker-than-expected

growth

in

broadband

subscribers.

While

overall

loss

of

customers

in

the

broadband

market

continued

to

be

very

low

this

year,

there

is

concern

that

the

overall

market

growth

is

slowing,

and

that

the

cable

industry’s

share

of

that

growth

will

come

under

pressure

as

telecommunications

companies

build

out

their

fiber

footprints

and

introduce

fixed

wireless

access

services.

We

believe

market

expectations

are

too

low

for

broadband

service

growth

and

that

in

a

market

with

only

two

suppliers,

Charter

can

continue

to

take

its

fair

share

of

growth.

Top

positive

contributors

to

performance

during

the

12-month

period

included

Eli

Lilly,

ING

Groep

and

Canadian

Natural

Resources.

Pharmaceutical

maker

Eli

Lilly

contributed

to

relative

performance

in

2021

amid

positive

pipeline

news

on

several

medicines

as

well

as

strong

financial

performance.

The

company

announced

that

it

would

file

its

Alzheimer’s

drug

with

the

U.S.

Food

and

Drug

Administration

much

earlier

than

expected

following

approval

of

a

rival

Alzheimer’s

treatment.

In

addition,

Lilly’s

diabetes

drug,

Trulicity,

continues

to

grow,

and

its

key

diabetes

pipeline

compound,

Tirzepatide,

showed

positive

results

in

multiple

Phase

3

clinical

trials,

further

strengthening

the

company’s

position

in

the

growing

diabetes

end

market.

We

exited

the

position

on

the

stock’s

strong

performance.

ING

Groep,

a

Dutch

financial

services

firm,

supported

relative

performance

following

upbeat

financial

results

during

the

year.

The

company

benefited

from

lower-than-

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

CVS

Health

Corp.

3.2%

Health

Care

Providers

&

Services,

United

States

GlaxoSmithKline

plc

2.9%

Pharmaceuticals,

United

Kingdom

Novartis

AG

2.7%

Pharmaceuticals,

Switzerland

ING

Groep

NV

2.6%

Banks,

Netherlands

BP

plc

2.6%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Anthem,

Inc.

2.6%

Health

Care

Providers

&

Services,

United

States

Deutsche

Telekom

AG

2.6%

Diversified

Telecommunication

Services,

Germany

Charter

Communications,

Inc.

2.6%

Media,

United

States

Wells

Fargo

&

Co.

2.5%

Banks,

United

States

Cognizant

Technology

Solutions

Corp.

2.5%

IT

Services,

United

States

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-6

Annual

Report

expected

credit

loss

provisions,

higher

fees,

and

reduced

costs.

Net

interest

income

was

down,

however.

ING

expects

to

see

ongoing

growth

in

fees

as

it

adds

new

services

and

reprices

existing

ones.

Furthermore,

the

bank

has

ample

excess

capital

that

we

expect

will

continue

to

be

returned

to

shareholders.

Canadian

Natural

Resources,

an

oil

and

gas

company,

bolstered

relative

performance

in

2021,

as

energy

stocks

generally

had

a

strong

year

due

to

higher

oil

and

natural

gas

prices.

Fundamentally,

the

company

generates

significant

amounts

of

excess

free

cash

flow

and

is

highly

disciplined

with

its

capital.

Canadian

Natural

Resources’

carbon

footprint also is

improving

faster

than generally

perceived.

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

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

December

31,

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

2

Fund

Expenses

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,029.40

$6.27

$1,019.02

$6.24

1.23%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Global

Discovery

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$17.50

$19.17

$17.47

$20.38

$20.22

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.25

0.57

c

0.43

0.36

0.47

Net

realized

and

unrealized

gains

(losses)

...........

3.14

(1.52)

3.64

(2.50)

1.29

Total

from

investment

operations

....................

3.39

(0.95)

4.07

(2.14)

1.76

Less

distributions

from:

Net

investment

income

..........................

(0.57)

(0.42)

(0.37)

(0.52)

(0.42)

Net

realized

gains

.............................

—

(0.30)

(2.00)

(0.25)

(1.18)

Total

distributions

...............................

(0.57)

(0.72)

(2.37)

(0.77)

(1.60)

Net

asset

value,

end

of

year

.......................

$20.32

$17.50

$19.17

$17.47

$20.38

Total

return

d

...................................

19.43%

(4.22)%

24.71%

(11.01)%

8.99%

Ratios

to

average

net

assets

Expenses

e,f

,g

...................................

0.98%

0.97%

0.94%

0.96%

1.01%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

1.29%

3.57%

c

2.22%

1.81%

2.29%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$4,166

$3,788

$3,878

$3,282

$3,189

Portfolio

turnover

rate

............................

41.58%

34.79%

21.82%

29.84%

17.49%

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.

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

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).

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.

Annual

Report

MGD-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$16.91

$18.54

$16.96

$19.80

$19.69

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.20

0.51

c

0.37

0.30

0.41

Net

realized

and

unrealized

gains

(losses)

...........

3.02

(1.47)

3.53

(2.42)

1.25

Total

from

investment

operations

....................

3.22

(0.96)

3.90

(2.12)

1.66

Less

distributions

from:

Net

investment

income

..........................

(0.52)

(0.37)

(0.32)

(0.47)

(0.37)

Net

realized

gains

.............................

—

(0.30)

(2.00)

(0.25)

(1.18)

Total

distributions

...............................

(0.52)

(0.67)

(2.32)

(0.72)

(1.55)

Net

asset

value,

end

of

year

.......................

$19.61

$16.91

$18.54

$16.96

$19.80

Total

return

d

...................................

19.13%

(4.46)%

24.37%

(11.22)%

8.71%

Ratios

to

average

net

assets

Expenses

e,f,g

...................................

1.22%

1.22%

1.19%

1.21%

1.26%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

1.05%

3.33%

c

1.97%

1.56%

2.04%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$477,214

$467,653

$539,759

$500,607

$631,179

Portfolio

turnover

rate

............................

41.58%

34.79%

21.82%

29.84%

17.49%

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.

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

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).

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$17.34

$18.98

$17.30

$20.17

$20.02

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.19

0.51

c

0.36

0.29

0.40

Net

realized

and

unrealized

gains

(losses)

...........

3.09

(1.50)

3.61

(2.47)

1.27

Total

from

investment

operations

....................

3.28

(0.99)

3.97

(2.18)

1.67

Less

distributions

from:

Net

investment

income

..........................

(0.50)

(0.35)

(0.29)

(0.44)

(0.34)

Net

realized

gains

.............................

—

(0.30)

(2.00)

(0.25)

(1.18)

Total

distributions

...............................

(0.50)

(0.65)

(2.29)

(0.69)

(1.52)

Net

asset

value,

end

of

year

.......................

$20.12

$17.34

$18.98

$17.30

$20.17

Total

return

d

...................................

18.98%

(4.54)%

24.28%

(11.31)%

8.61%

Ratios

to

average

net

assets

Expenses

e,f,g

...................................

1.32%

1.32%

1.29%

1.31%

1.36%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

0.95

%

3.22%

c

1.87%

1.46%

1.94%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$25,930

$26,688

$30,865

$30,094

$41,713

Portfolio

turnover

rate

............................

41.58%

34.79%

21.82%

29.84%

17.49%

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.

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

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).

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Mutual

Global

Discovery

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MGD-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

96.9%

Aerospace

&

Defense

3.2%

a

Airbus

SE

...........................................

France

63,936

$

8,173,752

BAE

Systems

plc

.....................................

United

Kingdom

1,096,354

8,169,086

16,342,838

Auto

Components

1.7%

Cie

Generale

des

Etablissements

Michelin

SCA

..............

France

53,424

8,743,095

a,b,c

International

Automotive

Components

Group

Brazil

LLC

........

Brazil

424,073

16,055

8,759,150

Automobiles

1.7%

a

General

Motors

Co.

....................................

United

States

147,678

8,658,361

Banks

7.8%

BNP

Paribas

SA

......................................

France

176,218

12,174,268

CaixaBank

SA

........................................

Spain

486,767

1,328,622

ING

Groep

NV

.......................................

Netherlands

960,888

13,348,674

Wells

Fargo

&

Co.

.....................................

United

States

266,100

12,767,478

39,619,042

Beverages

1.2%

Heineken

NV

........................................

Netherlands

55,066

6,192,215

Building

Products

2.0%

Johnson

Controls

International

plc

.........................

United

States

122,142

9,931,366

Capital

Markets

1.5%

Credit

Suisse

Group

AG,

A

..............................

Switzerland

783,268

7,585,528

Chemicals

3.4%

BASF

SE

...........................................

Germany

109,937

7,709,870

d

Covestro

AG,

144A,

Reg

S

..............................

Germany

157,174

9,666,105

17,375,975

Construction

Materials

1.6%

HeidelbergCement

AG

.................................

Germany

119,784

8,100,220

Diversified

Financial

Services

2.1%

Voya

Financial,

Inc.

....................................

United

States

161,150

10,685,856

Diversified

Telecommunication

Services

2.7%

Deutsche

Telekom

AG

..................................

Germany

713,705

13,177,062

a

Frontier

Communications

Parent,

Inc.

......................

United

States

22,843

673,640

13,850,702

Electrical

Equipment

1.5%

Mitsubishi

Electric

Corp.

................................

Japan

587,424

7,451,661

Entertainment

1.5%

a,e

Walt

Disney

Co.

(The)

..................................

United

States

48,157

7,459,038

Food

Products

2.9%

Danone

SA

..........................................

France

126,326

7,846,151

Kraft

Heinz

Co.

(The)

..................................

United

States

193,600

6,950,240

14,796,391

Health

Care

Equipment

&

Supplies

1.9%

Medtronic

plc

........................................

United

States

91,198

9,434,433

Health

Care

Providers

&

Services

5.8%

Anthem,

Inc.

.........................................

United

States

28,536

13,227,577

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Annual

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

(continued)

CVS

Health

Corp.

.....................................

United

States

155,791

$

16,071,400

29,298,977

Hotels,

Restaurants

&

Leisure

1.3%

a

Accor

SA

...........................................

France

201,152

6,514,871

Household

Products

1.7%

Reckitt

Benckiser

Group

plc

.............................

United

Kingdom

103,398

8,893,643

Industrial

Conglomerates

1.6%

General

Electric

Co.

...................................

United

States

85,533

8,080,302

Insurance

9.0%

a

Alleghany

Corp.

......................................

United

States

5,292

3,532,886

China

Pacific

Insurance

Group

Co.

Ltd.,

H

...................

China

2,384,177

6,478,433

Everest

Re

Group

Ltd.

.................................

United

States

32,478

8,896,374

e

Hartford

Financial

Services

Group,

Inc.

(The)

................

United

States

103,391

7,138,115

NN

Group

NV

........................................

Netherlands

198,819

10,743,690

Willis

Towers

Watson

plc

................................

United

States

36,591

8,689,997

45,479,495

IT

Services

6.7%

Capgemini

SE

........................................

France

33,932

8,309,505

Cognizant

Technology

Solutions

Corp.,

A

....................

United

States

141,960

12,594,691

a

Fiserv,

Inc.

..........................................

United

States

68,420

7,101,312

Global

Payments,

Inc.

..................................

United

States

42,986

5,810,847

33,816,355

Machinery

1.0%

Alstom

SA

...........................................

France

138,176

4,902,815

Media

2.6%

a

Charter

Communications,

Inc.,

A

..........................

United

States

19,906

12,978,115

Multi-Utilities

1.1%

RWE

AG

............................................

Germany

135,984

5,505,251

Oil,

Gas

&

Consumable

Fuels

7.8%

BP

plc

..............................................

United

Kingdom

2,966,046

13,278,937

Canadian

Natural

Resources

Ltd.

.........................

Canada

216,851

9,166,221

Kinder

Morgan,

Inc.

....................................

United

States

335,697

5,324,154

Williams

Cos.,

Inc.

(The)

................................

United

States

461,701

12,022,694

39,792,006

Pharmaceuticals

7.5%

GlaxoSmithKline

plc

...................................

United

Kingdom

685,835

14,920,385

Merck

&

Co.,

Inc.

.....................................

United

States

125,422

9,612,342

Novartis

AG,

ADR

.....................................

Switzerland

156,878

13,722,119

38,254,846

Semiconductors

&

Semiconductor

Equipment

3.4%

a

Renesas

Electronics

Corp.

..............................

Japan

751,901

9,333,460

Xilinx,

Inc.

...........................................

United

States

38,600

8,184,358

17,517,818

Software

2.2%

a

Avaya

Holdings

Corp.

..................................

United

States

4

79

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MGD-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

Check

Point

Software

Technologies

Ltd.

....................

Israel

94,082

$

10,966,198

10,966,277

Technology

Hardware,

Storage

&

Peripherals

4.2%

Catcher

Technology

Co.

Ltd.

.............................

Taiwan

685,000

3,865,728

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

120,441

7,909,294

a,e

Western

Digital

Corp.

..................................

United

States

143,339

9,347,136

21,122,158

Textiles,

Apparel

&

Luxury

Goods

1.0%

Cie

Financiere

Richemont

SA

............................

Switzerland

33,911

5,061,653

Tobacco

3.3%

Altria

Group,

Inc.

......................................

United

States

130,784

6,197,854

British

American

Tobacco

plc

.............................

United

Kingdom

290,877

10,791,988

16,989,842

Total

Common

Stocks

(Cost

$373,268,432)

.....................................

491,417,200

Warrants

Warrants

0.0%

†

Software

0.0%

†

a

Avaya

Holdings

Corp.,

12/15/22

..........................

United

States

3,613

10,116

Total

Warrants

(Cost

$—)

.....................................................

10,116

Principal

Amount

*

Corporate

Bonds

0.0%

†

Airlines

0.0%

†

d

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note,

144A,

5.5%,

4/20/26

................

United

States

199,080

207,328

Senior

Secured

Note,

144A,

5.75%,

4/20/29

...............

United

States

79,397

85,015

292,343

Total

Corporate

Bonds

(Cost

$278,477)

........................................

292,343

Shares

a

Companies

in

Liquidation

0.0%

a,b,f

Tribune

Media,

Litigation

Trust,

Contingent

Distribution

.........

United

States

57,457

—

a,b,f

Walter

Energy,

Inc.,

Litigation

Trust,

Contingent

Distribution

......

United

States

966,000

—

Total

Companies

in

Liquidation

(Cost

$–)

......................................

—

Total

Long

Term

Investments

(Cost

$373,546,909)

...............................

491,719,659

a

Short

Term

Investments

1.1%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

1.1%

g

FHLB,

1/03/22

.......................................

United

States

1,000,000

1,000,000

g

U.S.

Treasury

Bills

,

2/17/22

...........................................

United

States

1,500,000

1,499,953

4/28/22

...........................................

United

States

2,000,000

1,999,545

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-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)

g

U.S.

Treasury

Bills,

(continued)

5/26/22

...........................................

United

States

1,000,000

$

999,646

4,499,144

Total

U.S.

Government

and

Agency

Securities

(Cost

$5,499,242)

..................

5,499,144

Total

Short

Term

Investments

(Cost

$5,499,242

)

.................................

5,499,144

a

Total

Investments

(Cost

$379,046,151)

98.0%

...................................

$497,218,803

Securities

Sold

Short

(1.9)%

..................................................

(9,572,804)

Other

Assets,

less

Liabilities

3.9%

.............................................

19,663,464

Net

Assets

100.0%

...........................................................

$507,309,463

Shares

h

Securities

Sold

Short

(1.9)%

Common

Stocks

(1.9)%

Semiconductors

&

Semiconductor

Equipment

(1.9)%

Advanced

Micro

Devices,

Inc.

............................

United

States

66,524

(9,572,804)

Total

Common

Stocks

(Proceeds

$6,077,024)

...................................

(9,572,804)

Total

Securities

Sold

Short

(Proceeds

$6,077,024)

...............................

$(9,572,804)

*

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

13

regarding

fair

value

measurements.

c

See

Note

10

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$9,958,448,

representing

2.0%

of

net

assets.

e

A

portion

or

all

of

the

security

has

been

segregated

as

collateral

for

securities

sold

short.

At

December

31,

2021,

the

aggregate

value

of

these

securities

pledged

amounted

to

$12,735,404,

representing

2.5%

of

net

assets.

f

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.

g

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

h

See

Note

1(e)

regarding

securities

sold

short.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MGD-15

At

December

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c). 

At

December

31,

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

$

13,397,938

3/14/22

$

(71,437)

Foreign

Exchange

GBP/USD

...................

Short

89

7,526,619

3/14/22

(161,148)

Total

Futures

Contracts

......................................................................

$(232,585)

*

As

of

year

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

......

BOFA

Buy

532,027

726,952

1/18/22

$

1,962

$

(9,410)

British

Pound

......

BOFA

Sell

3,906,321

5,389,297

1/18/22

106,458

—

Japanese

Yen

......

BOFA

Sell

454,777,209

4,009,865

1/18/22

58,269

—

Japanese

Yen

......

UBSW

Buy

45,558,889

401,802

1/18/22

—

(5,937)

Japanese

Yen

......

UBSW

Sell

427,881,198

3,760,565

1/18/22

42,670

—

Swiss

Franc

.......

HSBK

Sell

6,840,280

7,408,176

1/20/22

—

(93,234)

Swiss

Franc

.......

UBSW

Buy

484,117

524,238

1/20/22

6,670

—

Swiss

Franc

.......

UBSW

Sell

483,333

528,957

1/20/22

319

(1,410)

Euro

.............

BOFA

Sell

21,446,228

25,127,565

1/24/22

724,829

(4,501)

Euro

.............

HSBK

Sell

19,946,893

23,367,879

1/24/22

672,553

(5,568)

Euro

.............

UBSW

Buy

19,637

22,141

1/24/22

207

—

Euro

.............

UBSW

Sell

3,599,713

4,135,991

1/24/22

47,773

(8,493)

New

Taiwan

Dollar

..

HSBK

Sell

64,113,018

2,327,912

3/30/22

998

—

New

Taiwan

Dollar

..

UBSW

Sell

41,719,482

1,515,463

3/30/22

1,299

—

South

Korean

Won

..

HSBK

Sell

2,883,665,592

2,440,722

5/16/22

22,134

—

South

Korean

Won

..

UBSW

Sell

269,296,183

228,099

5/16/22

2,235

—

South

Korean

Won

..

HSBK

Sell

3,276,006,847

2,765,730

6/17/22

19,470

—

South

Korean

Won

..

UBSW

Sell

178,093,425

150,417

6/17/22

1,122

—

Total

Forward

Exchange

Contracts

...................................................

$1,708,968

$(128,553)

Net

unrealized

appreciation

(depreciation)

............................................

$1,580,415

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

See

Note 

11

 regarding

other

derivative

information.

See

Abbreviations

on

page

MGD-

32

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MGD-16

Franklin

Mutual

Global

Discovery

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$379,046,151

Value

-

Unaffiliated

issuers

..................................................................

$497,218,803

Cash

....................................................................................

4,564,322

Restricted

cash

for

OTC

derivative

contracts

(Note

1d)

...............................................

974,000

Receivables:

Investment

securities

sold

...................................................................

511,705

Capital

shares

sold

........................................................................

251,355

Dividends

and

interest

.....................................................................

1,114,369

European

Union

tax

reclaims

(Note

1

h

)

.........................................................

2,590,216

Deposits

with

brokers

for:

Securities

sold

short

.....................................................................

9,845,778

Futures

contracts

........................................................................

416,830

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

1,708,968

Other

assets

..............................................................................

181,268

Total

assets

..........................................................................

519,377,614

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

66,938

Capital

shares

redeemed

...................................................................

368,822

Management

fees

.........................................................................

370,211

Distribution

fees

..........................................................................

107,074

Variation

margin

on

futures

contracts

...........................................................

82,025

Deposits

from

brokers

for:

OTC

derivative

contracts

..................................................................

974,000

Securities

sold

short,

at

value

(proceeds

$6,077,024)

................................................

9,572,804

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

128,553

Accrued

expenses

and

other

liabilities

...........................................................

397,724

Total

liabilities

.........................................................................

12,068,151

Net

assets,

at

value

.................................................................

$507,309,463

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$349,714,436

Total

distributable

earnings

(losses)

.............................................................

157,595,027

Net

assets,

at

value

.................................................................

$507,309,463

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MGD-17

Franklin

Mutual

Global

Discovery

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$4,165,771

Shares

outstanding

........................................................................

205,033

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$20.32

Class

2:

Net

assets,

at

value

.......................................................................

$477,213,511

Shares

outstanding

........................................................................

24,330,282

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.61

Class

4:

Net

assets,

at

value

.......................................................................

$25,930,181

Shares

outstanding

........................................................................

1,288,714

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$20.12

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

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

$696,467)

Unaffiliated

issuers

........................................................................

$11,105,889

Interest:

Unaffiliated

issuers

........................................................................

601,662

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

7,523

Non-controlled

affiliates

(Note

3

e

)

.............................................................

91

Other

income

(Note

1

h

)

......................................................................

19,118

Total

investment

income

...................................................................

11,734,283

Expenses:

Management

fees

(Note

3

a

)

...................................................................

4,515,023

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,212,195

    Class

4

................................................................................

94,783

Custodian

fees

(Note

4

)

......................................................................

15,590

Reports

to

shareholders

fees

..................................................................

135,204

Professional

fees

...........................................................................

102,077

Trustees'

fees

and

expenses

..................................................................

5,544

Dividends

on

securities

sold

short

..............................................................

94,202

Other

....................................................................................

161,781

Total

expenses

.........................................................................

6,336,399

Expense

reductions

(Note

4

)

...............................................................

(39)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(992)

Net

expenses

.........................................................................

6,335,368

Net

investment

income

................................................................

5,398,915

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

65,277,418

Foreign

currency

transactions

................................................................

(54,552)

Forward

exchange

contracts

.................................................................

2,050,589

Futures

contracts

.........................................................................

1,102,342

Securities

sold

short

.......................................................................

(2,774,363)

Net

realized

gain

(loss)

..................................................................

65,601,434

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

20,200,868

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(221,088)

Forward

exchange

contracts

.................................................................

2,423,750

Futures

contracts

.........................................................................

(1,963)

Securities

sold

short

.......................................................................

(3,389,157)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

19,012,410

Net

realized

and

unrealized

gain

(loss)

............................................................

84,613,844

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$90,012,759

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.

Annual

Report

MGD-19

Franklin

Mutual

Global

Discovery

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$5,398,915

$15,446,502

Net

realized

gain

(loss)

.................................................

65,601,434

(31,439,546)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

19,012,410

(11,712,372)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

90,012,759

(27,705,416)

Distributions

to

shareholders:

Class

1

.............................................................

(112,415)

(151,550)

Class

2

.............................................................

(12,672,652)

(18,507,580)

Class

4

.............................................................

(650,689)

(1,028,932)

Total

distributions

to

shareholders

..........................................

(13,435,756)

(19,688,062)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(216,018)

172,218

Class

2

.............................................................

(62,330,624)

(27,296,236)

Class

4

.............................................................

(4,849,570)

(1,856,627)

Total

capital

share

transactions

............................................

(67,396,212)

(28,980,645)

Net

increase

(decrease)

in

net

assets

...................................

9,180,791

(76,374,123)

Net

assets:

Beginning

of

year

.......................................................

498,128,672

574,502,795

End

of

year

...........................................................

$507,309,463

$498,128,672

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Franklin

Mutual

Global

Discovery

VIP

Fund

MGD-20

Annual

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

December

31,

2021,

43.8%

of

the

Fund's

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.  

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

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.

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-21

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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

December

31,

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

Derivatives

Association

(ISDA)

master

agreements

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-22

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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

December

31,

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 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.

At

December

31,

2021, the

Fund

received

$589,365

in

United

Kingdom

Treasury

Bonds

as

collateral

for

derivatives.

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

11

regarding

other

derivative

information.

d.

Restricted

Cash

At

December

31,

2021, the

Fund

held

restricted

cash

in

connection

with

investments

in

certain

derivative

securities.

Restricted

cash

is

held

in

a

segregated

account

with

the

counterparty

broker

and

is

reflected

in

the

Statement

of

Assets

and

Liabilities.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-23

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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.

At

December

31,

2021,

the

fund

had

no

securities

on

loan.

g.

Senior

Floating

Rate

Interests

The

Fund

invests

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the Fund

invests

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

2021,

the

Fund

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Securities

Sold

Short

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-24

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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

MGD-25

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

21,257

$414,362

35,855

$553,637

Shares

issued

in

reinvestment

of

distributions

..........

5,686

112,415

10,310

151,550

Shares

redeemed

...............................

(38,354)

(742,795)

(32,073)

(532,969)

Net

increase

(decrease)

..........................

(11,411)

$(216,018)

14,092

$172,218

Class

2

Shares:

Shares

sold

...................................

769,967

$14,519,351

2,017,207

$28,571,483

Shares

issued

in

reinvestment

of

distributions

..........

663,490

12,672,652

1,301,518

18,507,580

Shares

redeemed

...............................

(4,752,157)

(89,522,627)

(4,784,030)

(74,375,299)

Net

increase

(decrease)

..........................

(3,318,700)

$(62,330,624)

(1,465,305)

$(27,296,236)

Class

4

Shares:

Shares

sold

...................................

14,869

$289,930

178,276

$2,524,788

Shares

issued

in

reinvestment

of

distributions

..........

33,198

650,689

70,572

1,028,932

Shares

redeemed

...............................

(298,686)

(5,790,189)

(336,123)

(5,410,347)

Net

increase

(decrease)

..........................

(250,619)

$(4,849,570)

(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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-26

Annual

Report

Franklin

Mutual

Global

Discovery

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

year

ended

December

31,

2021,

the

gross

effective

management

fee

rate

was

0.875%

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

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

year

ended

December

31,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

Annualized

Fee

Rate

Net

Assets

0.875%

Up

to

and

including

$4

billion

0.845%

Over

$4

billion,

up

to

and

including

$7

billion

0.825%

Over

$7

billion,

up

to

and

including

$10

billion

0.805%

Over

$10

billion,

up

to

and

including

$13

billion

0.785%

Over

$13

billion,

up

to

and

including

$16

billion

0.765%

Over

$16

billion,

up

to

and

including

$19

billion

0.745%

Over

$19

billion,

up

to

and

including

$22

billion

0.725%

Over

$22

billion,

up

to

and

including

$25

billion

0.705%

Over

$25

billion,

up

to

and

including

$28

billion

0.685%

In

excess

of

$28

billion

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-27

Annual

Report

Franklin

Mutual

Global

Discovery

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

During

the

year

ended December

31,

2021,

the

Fund

utilized

$30,229,867

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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%

.

$—

$34,490,000

$(34,490,000)

$—

$—

$—

—

$91

Total

Affiliated

Securities

...

$—

$34,490,000

$(34,490,000)

$—

$—

$—

$91

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$13,435,756

$14,126,592

Long

term

capital

gain

......................................................

—

5,561,470

$13,435,756

$19,688,062

Cost

of

investments

..........................................................................

$377,109,051

Unrealized

appreciation

........................................................................

$128,849,412

Unrealized

depreciation

........................................................................

(16,964,634)

Net

unrealized

appreciation

(depreciation)

..........................................................

$111,884,778

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$11,305,393

Undistributed

long

term

capital

gains

..............................................................

$31,901,266

Total

distributable

earnings

.....................................................................

$43,206,659

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-28

Annual

Report

Franklin

Mutual

Global

Discovery

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

defaulted

securities,

foreign

currency

transactions,

wash

sales,

EU

reclaims

and

tax

straddles.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities

and

securities

sold

short)

for

the

year

ended

December

31,

2021,

aggregated

$205,049,102

and

$275,628,565,

respectively.

7.

Credit Risk

and

Defaulted

Securities

The

Fund

may

purchase

the

pre-default

or

defaulted

debt

of

distressed

companies.

Distressed

companies

are

financially

troubled

and

could

be

or

are

already

involved

in

financial

restructuring

or

bankruptcy.

Risks

associated

with

purchasing

these

securities

include

the

possibility

that

the

bankruptcy

or

other

restructuring

process

takes

longer

than

expected,

or

that

distributions

in

restructuring

are

less

than

anticipated,

either

or

both

of

which

may

result

in

unfavorable

consequences

to

the

Fund.

If

it

becomes

probable

that

the

income

on

debt

securities,

including

those

of

distressed

companies,

will

not

be

collected,

the

Fund

discontinues

accruing

income

and

recognizes

an

adjustment

for

uncollectible

interest.

At

December

31,

2021,

the

Fund

did

not

hold

any

distressed

company

securities

for

which

interest

recognition

has

been

discontinued.

8.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

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.

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

10.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-29

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

At

December

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

11.

Other

Derivative

Information

At

December

31,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

year

ended

December

31,

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

$

16,055

Total

Restricted

Securities

(Value

is

0.0%

†

of

Net

Assets)

.............

$281,629

$16,055

†

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

$

—

Variation

margin

on

futures

contracts

$

232,585

b

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,708,968

Unrealized

depreciation

on

OTC

forward

exchange

contracts

128,553

Total

....................

$1,708,968

$361,138

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

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

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Mutual

Global

Discovery

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Futures

contracts

$1,102,342

Futures

contracts

$(1,963)

Forward

exchange

contracts

2,050,589

Forward

exchange

contracts

2,423,750

Total

.......................

$3,152,931

$2,421,787

10.

Restricted

Securities

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-30

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts

represented

$22,452,050.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$75,949,751.

See

Note

1(c)

regarding

derivative

financial

instruments. 

12.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

13.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

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

December

31,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Global

Discovery

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

16,342,838

$

—

$

16,342,838

Auto

Components

......................

—

8,743,095

16,055

8,759,150

Automobiles

..........................

8,658,361

—

—

8,658,361

Banks

...............................

12,767,478

26,851,564

—

39,619,042

Beverages

...........................

—

6,192,215

—

6,192,215

Building

Products

......................

9,931,366

—

—

9,931,366

Capital

Markets

........................

—

7,585,528

—

7,585,528

11.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-31

Annual

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.

14.

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

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Chemicals

...........................

$

—

$

17,375,975

$

—

$

17,375,975

Construction

Materials

..................

—

8,100,220

—

8,100,220

Diversified

Financial

Services

.............

10,685,856

—

—

10,685,856

Diversified

Telecommunication

Services

.....

673,640

13,177,062

—

13,850,702

Electrical

Equipment

....................

—

7,451,661

—

7,451,661

Entertainment

.........................

7,459,038

—

—

7,459,038

Food

Products

........................

6,950,240

7,846,151

—

14,796,391

Health

Care

Equipment

&

Supplies

.........

9,434,433

—

—

9,434,433

Health

Care

Providers

&

Services

..........

29,298,977

—

—

29,298,977

Hotels,

Restaurants

&

Leisure

.............

—

6,514,871

—

6,514,871

Household

Products

....................

—

8,893,643

—

8,893,643

Industrial

Conglomerates

................

8,080,302

—

—

8,080,302

Insurance

............................

28,257,372

17,222,123

—

45,479,495

IT

Services

...........................

25,506,850

8,309,505

—

33,816,355

Machinery

............................

—

4,902,815

—

4,902,815

Media

...............................

12,978,115

—

—

12,978,115

Multi-Utilities

..........................

—

5,505,251

—

5,505,251

Oil,

Gas

&

Consumable

Fuels

.............

26,513,069

13,278,937

—

39,792,006

Pharmaceuticals

.......................

23,334,461

14,920,385

—

38,254,846

Semiconductors

&

Semiconductor

Equipment

.

8,184,358

9,333,460

—

17,517,818

Software

.............................

10,966,277

—

—

10,966,277

Technology

Hardware,

Storage

&

Peripherals

.

9,347,136

11,775,022

—

21,122,158

Textiles,

Apparel

&

Luxury

Goods

..........

—

5,061,653

—

5,061,653

Tobacco

.............................

6,197,854

10,791,988

—

16,989,842

Warrants

..............................

10,116

—

—

10,116

Corporate

Bonds

........................

—

292,343

—

292,343

Companies

in

Liquidation

..................

—

—

—

a

—

Short

Term

Investments

...................

4,499,144

1,000,000

—

5,499,144

Total

Investments

in

Securities

...........

$259,734,443

$237,468,305

b

$16,055

$497,218,803

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

1,708,968

$

—

$

1,708,968

Total

Other

Financial

Instruments

.........

$—

$1,708,968

$—

$1,708,968

Liabilities:

Other

Financial

Instruments:

Securities

Sold

Short

.....................

9,572,804

—

—

9,572,804

Forward

exchange

contracts

................

$

—

$

128,553

$

—

$

128,553

Futures

contracts

........................

232,585

—

—

232,585

Total

Other

Financial

Instruments

.........

$9,805,389

$128,553

$—

$9,933,942

a

Includes

securities

determined

to

have

no

value

at

December

31,

2021.

b

Includes

foreign

securities

valued

at

$236,175,962,

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.

13.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MGD-32

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

(continued)

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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. 

15.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure,

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Counterparty

BOFA

Bank

of

America

Corp.

HSBK

HSBC

Bank

plc

UBSW

UBS

AG

Cu

r

rency

CAD

Canadian

Dollar

CHF

Swiss

Franc

EUR

Euro

GBP

British

Pound

JPY

Japanese

Yen

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

FHLB

Federal

Home

Loan

Banks

14.

New

Accounting

Pronouncements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

MGD-33

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Mutual

Global

Discovery

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Mutual

Global

Discovery

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

MGD-34

Annual

Report

Franklin

Mutual

Global

Discovery

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

below

intend

s

to

elect

to

pass

through

to

their

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

s

ource

income

earned

by

the

Fund

during

the

fiscal

year

ended

December

31,

2021

:

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$3,961,723

Interest

Earned

from

Federal

Obligations

Note

(1)

$4,362

Amount

Reported

Foreign

Taxes

Paid

$552,984

Foreign

Source

Income

Earned

$6,212,873

MS-1

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

This

annual

report

for

Franklin

Mutual

Shares

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+19.17%

5-Year

+6.44%

10-Year

+9.00%

MS-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Russell

1000

®

Value

Index.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

MS-3

Annual

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.

*Rounds

to

less

than

0.1%

of

net

assets.

Performance

Overview

You

can

find

the

Fund’s

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

benchmark,

the

Russell

1000

®

Value

Index,

posted

a

+25.16%

total

return

for

the

period

under

review.

1

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(USD),

posted

a

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

United

States

81.6%

United

Kingdom

5.8%

Netherlands

2.6%

Switzerland

1.9%

South

Korea

1.8%

France

1.6%

Other

0.0%

*

Short-Term

Investments

&

Other

Net

Assets

4.7%

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-4

Annual

Report

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR

(USD),

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR

(USD),

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

large

Chinese

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR

(USD),

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

Top

10

Industries

12/31/21

%

of

Total

Net

Assets

a

Pharmaceuticals

9.1%

Insurance

7.6%

Banks

7.3%

Health

Care

Providers

&

Services

6.1%

IT

Services

5.9%

Oil,

Gas

&

Consumable

Fuels

5.1%

Media

4.8%

Software

4.5%

Technology

Hardware,

Storage

&

Peripherals

4.1%

Food

Products

3.9%

Franklin

Mutual

Shares

VIP

Fund

MS-5

Annual

Report

conservative

investment

approach,

we

typically

focus

our

arbitrage

efforts

on

announced

deals,

and

eschew

rumored

deals

or

other

situations

we

consider

relatively

risky.

In

addition,

it

is

our

practice

to

hedge

the

Fund’s

currency

exposure

when

we

deem

it

advantageous

for

our

shareholders.

Manager’s

Discussion

During

2021,

the

Fund

underperformed

its

benchmark,

driven

by

difficult

performance

in

the

information

technology

sector,

primarily

as

the

result

of

weak

stock

selection.

Stock

selection

and

an

underweight

in

real

estate

also

weighed

on

returns.

Overweighting

to

areas

of

the

health

care

sector,

which

lagged

during

the

year

due

to

COVID-related

headwinds,

also

detracted

from

relative

results.

Conversely,

security

selection

in

industrials,

which

were

bolstered

by

government

support

during

the

period,

and

an

underweight

in

utilities

contributed

to

performance

on

a

relative

basis,

as

did

stock

selection

in

consumer

staples.

During

the

12-month

period,

investments

that

detracted

from

Fund

performance

included

Charter

Communications,

Novartis

and

Samsung

Electronics.

Charter

Communications

detracted

from

performance

due

to

weaker-than-expected

growth

in

broadband

subscribers.

While

overall

loss

of

customers

in

the

broadband

market

continued

to

be

very

low

this

year,

there

is

concern

that

the

overall

market

growth

is

slowing

and

that

the

cable

industry’s

share

of

that

growth

will

come

under

pressure

as

telecommunications

companies

build

out

their

fiber

footprints

and

introduce

fixed

wireless

access

services.

We

believe

it

is

still

too

early

to

conclude

that

the

market

growth

for

broadband

service

has

stalled

and

that

even

in

a

market

with

only

two

suppliers,

Charter

can

continue

to

take

its

fair

share.

Swiss

pharmaceutical

company

Novartis

hindered

performance

in

2021

amid

concerns

around

the

potential

impact

of

drug

pricing

reforms

in

the

United

States.

However,

we

believe

that

given

the

company’s

geographic

and

product

diversification

and

its

focus

on

innovation,

it

should

be

able

to

manage

through

these

concerns

and

continue

to

provide

value

to

patients.

The

company’s

financial

results

have

been

robust

despite

uncertainty

surrounding

the

impact

of

the

global

pandemic,

and

Novartis

expects

its

overall

business

to

continue

to

normalize.

Samsung

Electronics,

a

South

Korea-based

maker

of

semiconductors,

smartphones,

and

consumer

electronics,

was

a

relative

detractor

in

2021

amid

concerns

about

the

memory

semiconductor

cycle.

However,

underlying

fundamentals

have

been

robust

and

continue

to

improve.

The

company

has

a

strong

semiconductor

business,

particularly

in

memory

chips

and

foundry.

We

believe

that

improved

capital

allocation

and

corporate

governance

should

augment

robust

cash

flows

and

create

value

for

shareholders.

Top

positive

contributors

to

performance

during

the

12-month

period

included

Capital

One

Financial,

Johnson

Controls

and

Eli

Lilly.

Capital

One

Financial

boosted

relative

performance

amid

a

strong

period

for

financial

stocks

in

general

in

2021.

We

believe

Capital

One

is

one

of

the

best

managed

and

positioned

consumer

banks

in

the

United

States,

with

a

good

brand

and

strong

franchises

in

credit

card

and

auto

lending.

Furthermore,

the

bank

has

invested

heavily

in

technology

as

evidenced

by

being

the

first

U.S.

bank

to

migrate

its

technology

to

the

cloud.

Johnson

Controls,

a

leader

in

commercial

heating,

ventilation,

and

air

conditioning

products,

boosted

relative

performance.

Recent

financial

results

have

been

positive

as

the

company

has

exited

lower

returning

businesses

and

cut

costs

aggressively

to

focus

on

margins

and

returns.

At

an

investor

day

earlier

in

the

year,

Johnson

Controls

articulated

three-year

financial

goals,

which

were

well

received

by

the

market.

Over

the

longer

term,

we

believe

Johnson

Controls

should

benefit

from

commercial

construction

growth

and

the

need

to

build

more

sustainably.

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

A

CVS

Health

Corp.

3.4%

Health

Care

Providers

&

Services,

United

States

Charter

Communications,

Inc.

3.0%

Media,

United

States

Anthem,

Inc.

2.7%

Health

Care

Providers

&

Services,

United

States

Merck

&

Co.,

Inc.

2.6%

Pharmaceuticals,

United

States

Kraft

Heinz

Co.

(The)

2.6%

Food

Products,

United

States

ING

Groep

NV

2.6%

Banks,

Netherlands

Fiserv,

Inc.

2.5%

IT

Services,

United

States

Williams

Cos.,

Inc.

(The)

2.5%

Oil,

Gas

&

Consumable

Fuels,

United

States

Sensata

Technologies

Holding

plc

2.4%

Electrical

Equipment,

United

States

Johnson

Controls

International

plc

2.4%

Building

Products,

United

States

Franklin

Mutual

Shares

VIP

Fund

MS-6

Annual

Report

Pharmaceutical

maker

Eli

Lilly

contributed

to

relative

performance

in

2021

amid

positive

pipeline

news

on

several

medicines

as

well

as

strong

financial

performance.

The

company

announced

that

it

would

file

its

Alzheimer’s

drug

with

the

U.S.

Food

and

Drug

Administration

much

earlier

than

expected

following

approval

of

a

rival

Alzheimer’s

treatment.

In

addition,

Lilly’s

diabetes

drug,

Trulicity,

continues

to

grow,

and

its

key

diabetes

pipeline

compound,

Tirzepatide,

showed

positive

results

in

multiple

Phase

3

clinical

trials,

further

strengthening

the

company’s

position

in

the

growing

diabetes

end

market.

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

December

31,

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

2

Fund

Expenses

Franklin

Mutual

Shares

VIP

Fund

MS-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,018.00

$4.99

$1,020.26

$5.00

0.98%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Shares

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$16.93

$19.19

$17.71

$20.71

$20.40

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.27

0.55

c

0.46

0.36

0.49

Net

realized

and

unrealized

gains

(losses)

...........

3.02

(1.68)

3.39

(2.04)

1.22

Total

from

investment

operations

....................

3.29

(1.13)

3.85

(1.68)

1.71

Less

distributions

from:

Net

investment

income

..........................

(0.60)

(0.50)

(0.42)

(0.55)

(0.53)

Net

realized

gains

.............................

—

(0.63)

(1.95)

(0.77)

(0.87)

Total

distributions

...............................

(0.60)

(1.13)

(2.37)

(1.32)

(1.40)

Net

asset

value,

end

of

year

.......................

$19.62

$16.93

$19.19

$17.71

$20.71

Total

return

d

...................................

19.52%

(4.85)%

22.92%

(8.86)%

8.64%

Ratios

to

average

net

assets

Expenses

e,f,g

...................................

0.73%

0.73%

0.71%

0.71%

0.72%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

1.44%

3.48%

c

2.35%

1.77%

2.34%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$116,861

$157,734

$158,431

$537,324

$653,700

Portfolio

turnover

rate

............................

47.31%

h

36.96%

38.50%

24.67%

18.32%

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.

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

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).

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

12

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.

Annual

Report

MS-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$16.59

$18.81

$17.40

$20.36

$20.08

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.22

0.51

c

0.40

0.31

0.43

Net

realized

and

unrealized

gains

(losses)

...........

2.95

(1.65)

3.32

(2.00)

1.20

Total

from

investment

operations

....................

3.17

(1.14)

3.72

(1.69)

1.63

Less

distributions

from:

Net

investment

income

..........................

(0.56)

(0.45)

(0.36)

(0.50)

(0.48)

Net

realized

gains

.............................

—

(0.63)

(1.95)

(0.77)

(0.87)

Total

distributions

...............................

(0.56)

(1.08)

(2.31)

(1.27)

(1.35)

Net

asset

value,

end

of

year

.......................

$19.20

$16.59

$18.81

$17.40

$20.36

Total

return

d

...................................

19.17%

(5.04)%

22.57%

(9.07)%

8.35%

Ratios

to

average

net

assets

Expenses

e,f,g

...................................

0.98%

0.98%

0.96%

0.96%

0.97%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

1.17%

3.25%

c

2.10%

1.52%

2.09%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$2,517,899

$2,620,645

$2,931,753

$2,516,834

$3,476,913

Portfolio

turnover

rate

............................

47.31%

h

36.96%

38.50%

24.67%

18.32%

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.

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

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).

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

12

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Mutual

Shares

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$16.75

$18.99

$17.55

$20.53

$20.23

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.20

0.49

c

0.38

0.29

0.41

Net

realized

and

unrealized

gains

(losses)

...........

2.98

(1.66)

3.36

(2.02)

1.21

Total

from

investment

operations

....................

3.18

(1.17)

3.74

(1.73)

1.62

Less

distributions

from:

Net

investment

income

..........................

(0.54)

(0.44)

(0.35)

(0.48)

(0.45)

Net

realized

gains

.............................

—

(0.63)

(1.95)

(0.77)

(0.87)

Total

distributions

...............................

(0.54)

(1.07)

(2.30)

(1.25)

(1.32)

Net

asset

value,

end

of

year

.......................

$19.39

$16.75

$18.99

$17.55

$20.53

Total

return

d

...................................

19.06%

(5.17)%

22.44%

(9.16)%

8.25%

Ratios

to

average

net

assets

Expenses

e,f,g

...................................

1.08%

1.08%

1.06%

1.06%

1.07%

Expenses

-

incurred

in

connection

with

securities

sold

short

0.02%

0.01%

0.02%

0.01%

—%

Net

investment

income

...........................

1.06%

3.13%

c

2.00%

1.42%

1.99%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$120,424

$116,704

$120,345

$105,047

$122,942

Portfolio

turnover

rate

............................

47.31%

h

36.96%

38.50%

24.67%

18.32%

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.

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

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).

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

12

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Mutual

Shares

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MS-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

95.4%

Aerospace

&

Defense

3.0%

a

Airbus

SE

...........................................

France

335,795

$

42,928,945

b

Huntington

Ingalls

Industries,

Inc.

.........................

United

States

211,244

39,447,705

82,376,650

Auto

Components

0.0%

†

a,c,d

International

Automotive

Components

Group

Brazil

LLC

........

Brazil

1,730,515

65,516

Automobiles

1.9%

a

General

Motors

Co.

....................................

United

States

883,160

51,779,671

Banks

7.3%

Bank

of

America

Corp.

.................................

United

States

790,481

35,168,500

ING

Groep

NV

.......................................

Netherlands

5,061,509

70,314,575

JPMorgan

Chase

&

Co.

.................................

United

States

239,334

37,898,539

Wells

Fargo

&

Co.

.....................................

United

States

1,226,624

58,853,419

202,235,033

Building

Products

2.4%

Johnson

Controls

International

plc

.........................

United

States

801,298

65,153,540

Chemicals

1.9%

Ashland

Global

Holdings,

Inc.

............................

United

States

475,783

51,222,798

Containers

&

Packaging

1.0%

International

Paper

Co.

.................................

United

States

599,819

28,179,497

Diversified

Financial

Services

1.6%

Voya

Financial,

Inc.

....................................

United

States

676,010

44,826,223

Diversified

Telecommunication

Services

0.5%

a

Frontier

Communications

Parent,

Inc.

......................

United

States

112,575

3,319,837

a,c,d

Windstream

Holdings,

Inc.

...............................

United

States

609,467

10,727,974

14,047,811

Electric

Utilities

1.9%

Evergy

,

Inc.

..........................................

United

States

377,915

25,928,748

Pinnacle

West

Capital

Corp.

.............................

United

States

392,519

27,707,916

53,636,664

Electrical

Equipment

2.4%

a

Sensata

Technologies

Holding

plc

.........................

United

States

1,087,033

67,059,066

Electronic

Equipment,

Instruments

&

Components

0.7%

a

Flex

Ltd.

............................................

United

States

1,043,938

19,135,384

Entertainment

1.5%

a,b

Walt

Disney

Co.

(The)

..................................

United

States

267,598

41,448,254

Equity

Real

Estate

Investment

Trusts

(REITs)

2.0%

Uniti

Group,

Inc.

......................................

United

States

153,914

2,156,335

Vornado

Realty

Trust

...................................

United

States

1,280,353

53,595,577

55,751,912

Food

Products

3.9%

Archer-Daniels-Midland

Co.

.............................

United

States

524,023

35,418,715

Kraft

Heinz

Co.

(The)

..................................

United

States

1,987,417

71,348,270

106,766,985

Health

Care

Equipment

&

Supplies

1.8%

Medtronic

plc

........................................

United

States

491,521

50,847,847

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Shares

VIP

Fund

(continued)

Annual

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)

Health

Care

Providers

&

Services

6.1%

Anthem,

Inc.

.........................................

United

States

161,012

$

74,635,502

CVS

Health

Corp.

.....................................

United

States

912,622

94,146,086

168,781,588

Household

Durables

1.9%

Lennar

Corp.,

A

.......................................

United

States

443,024

51,461,668

Industrial

Conglomerates

1.6%

General

Electric

Co.

...................................

United

States

459,792

43,436,550

Insurance

7.6%

a

Alleghany

Corp.

......................................

United

States

55,490

37,044,569

Everest

Re

Group

Ltd.

.................................

United

States

161,720

44,298,342

Hartford

Financial

Services

Group,

Inc.

(The)

................

United

States

624,201

43,094,837

MetLife,

Inc.

.........................................

United

States

635,241

39,696,210

Willis

Towers

Watson

plc

................................

United

States

190,554

45,254,670

209,388,628

IT

Services

5.9%

Alliance

Data

Systems

Corp.

.............................

United

States

426,281

28,377,526

Cognizant

Technology

Solutions

Corp.,

A

....................

United

States

721,881

64,045,282

a

Fiserv,

Inc.

..........................................

United

States

670,231

69,563,276

161,986,084

Media

4.8%

a

Charter

Communications,

Inc.,

A

..........................

United

States

125,872

82,064,768

Comcast

Corp.,

A

.....................................

United

States

912,509

45,926,578

a

Loyalty

Ventures,

Inc.

..................................

United

States

170,512

5,127,296

133,118,642

Oil,

Gas

&

Consumable

Fuels

4.6%

BP

plc

..............................................

United

Kingdom

12,573,658

56,292,050

Williams

Cos.,

Inc.

(The)

................................

United

States

2,665,560

69,411,182

125,703,232

Paper

&

Forest

Products

0.1%

a

Sylvamo

Corp.

.......................................

United

States

54,528

1,520,786

Pharmaceuticals

9.1%

a

Elanco

Animal

Health,

Inc.

...............................

United

States

1,154,196

32,756,082

Eli

Lilly

&

Co.

........................................

United

States

127,440

35,201,477

GlaxoSmithKline

plc

...................................

United

Kingdom

2,668,917

58,062,464

Merck

&

Co.,

Inc.

.....................................

United

States

938,912

71,958,216

Novartis

AG,

ADR

.....................................

Switzerland

613,305

53,645,788

251,624,027

Professional

Services

1.4%

KBR,

Inc.

...........................................

United

States

829,404

39,496,218

Semiconductors

&

Semiconductor

Equipment

2.0%

Xilinx,

Inc.

...........................................

United

States

261,900

55,530,657

Software

3.7%

a

Avaya

Holdings

Corp.

..................................

United

States

116

2,297

b

NortonLifeLock

,

Inc.

...................................

United

States

2,379,661

61,823,593

Oracle

Corp.

.........................................

United

States

455,163

39,694,765

101,520,655

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MS-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Specialty

Retail

2.0%

Best

Buy

Co.,

Inc.

.....................................

United

States

541,004

$

54,966,006

c,d

Wayne

Services

Legacy,

Inc.

.............................

United

States

2,039

—

54,966,006

Technology

Hardware,

Storage

&

Peripherals

4.1%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

761,394

50,000,322

a,b

Western

Digital

Corp.

..................................

United

States

946,509

61,721,852

111,722,174

Textiles,

Apparel

&

Luxury

Goods

1.9%

Tapestry,

Inc.

........................................

United

States

1,268,551

51,503,171

Tobacco

3.0%

Altria

Group,

Inc.

......................................

United

States

810,018

38,386,753

British

American

Tobacco

plc

.............................

United

Kingdom

1,200,451

44,538,594

82,925,347

Wireless

Telecommunication

Services

1.8%

a

T-Mobile

US,

Inc.

.....................................

United

States

428,084

49,649,182

Total

Common

Stocks

(Cost

$1,909,916,631)

....................................

2,628,867,466

Warrants

Warrants

0.1%

Diversified

Telecommunication

Services

0.1%

a,c,d

Windstream

Holdings,

Inc.,

9/21/55

........................

United

States

34,368

604,953

Software

0.0%

†

a

Avaya

Holdings

Corp.,

12/15/22

..........................

United

States

63,871

178,839

Total

Warrants

(Cost

$436,130)

................................................

783,792

Principal

Amount

*

Corporate

Bonds

1.3%

Airlines

0.0%

†

e

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note,

144A,

5.5%,

4/20/26

................

United

States

1,038,895

1,081,936

Senior

Secured

Note,

144A,

5.75%,

4/20/29

...............

United

States

414,141

443,444

1,525,380

Diversified

Telecommunication

Services

0.1%

Frontier

Communications

Holdings

LLC

,

Secured

Note

,

5.875

%

,

11/01/29

..........................................

United

States

2,949,278

2,953,422

Oil,

Gas

&

Consumable

Fuels

0.5%

e

Citgo

Holding,

Inc.

,

Senior

Secured

Note

,

144A,

9.25

%

,

8/01/24

..

United

States

13,383,000

13,464,837

Specialty

Retail

0.7%

e

Staples,

Inc.

,

Senior

Note

,

144A,

10.75

%

,

4/15/27

.............

United

States

20,434,000

19,280,296

Total

Corporate

Bonds

(Cost

$37,087,479)

......................................

37,223,935

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Shares

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-14

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

f,g

Senior

Floating

Rate

Interests

0.8%

Software

0.8%

Banff

Guarantor,

Inc.

,

Second

Lien,

Initial

Term

Loan

,

6

%

,

(

3-month

USD

LIBOR

+

5.5

%

),

2/27/26

...........................

United

States

6,640,700

$

6,716,769

Veritas

US,

Inc.

,

2021

Dollar

Term

Loan,

B

,

6

%

,

(

3-month

USD

LIBOR

+

5

%

),

9/01/25

................................

United

States

14,800,251

14,818,752

21,535,521

a

a

a

a

a

a

Total

Senior

Floating

Rate

Interests

(Cost

$21,343,156)

..........................

21,535,521

Asset-Backed

Securities

0.1%

Airlines

0.1%

American

Airlines

Pass-Through

Trust

,

2013-2

,

A

,

4.95

%

,

1/15/23

.

United

States

2,045,812

2,091,728

Total

Asset-Backed

Securities

(Cost

$2,015,125)

................................

2,091,728

Shares

Companies

in

Liquidation

0.0%

a,c,h

Bosgen

Liquidating

Trust

c/o

Verdolino

and

Lowey

P.C.,

Contingent

Distribution

........................................

Netherlands

347,093

—

a,c,h

Tribune

Media,

Litigation

Trust,

Contingent

Distribution

.........

United

States

397,730

—

a,c,h

Walter

Energy,

Inc.,

Litigation

Trust,

Contingent

Distribution

......

United

States

6,301,000

—

Total

Companies

in

Liquidation

(Cost

$–)

......................................

—

Total

Long

Term

Investments

(Cost

$1,970,798,521)

.............................

2,690,502,442

a

Short

Term

Investments

0.8%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

0.8%

i

FHLB,

1/03/22

.......................................

United

States

6,300,000

6,300,000

i

U.S.

Treasury

Bills

,

2/17/22

...........................................

United

States

6,500,000

6,499,797

4/28/22

...........................................

United

States

5,000,000

4,998,862

5/26/22

...........................................

United

States

2,000,000

1,999,293

6/23/22

...........................................

United

States

2,000,000

1,998,456

15,496,408

Total

U.S.

Government

and

Agency

Securities

(Cost

$21,796,681)

.................

21,796,408

Total

Short

Term

Investments

(Cost

$21,796,681

)

................................

21,796,408

a

Total

Investments

(Cost

$1,992,595,202)

98.5%

..................................

$2,712,298,850

Securities

Sold

Short

(2.4)%

..................................................

(64,950,560)

Other

Assets,

less

Liabilities

3.9%

.............................................

107,835,494

Net

Assets

100.0%

...........................................................

$2,755,183,784

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Shares

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MS-15

At

December

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(c)

. 

a

a

a

Country

Shares

a

Value

j

Securities

Sold

Short

(2.4)%

Common

Stocks

(2.4)%

Semiconductors

&

Semiconductor

Equipment

(2.4)%

Advanced

Micro

Devices,

Inc.

............................

United

States

451,359

(64,950,560)

Total

Common

Stocks

(Proceeds

$40,514,587)

..................................

(64,950,560)

Total

Securities

Sold

Short

(Proceeds

$40,514,587)

..............................

$(64,950,560)

*

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

has

been

segregated

as

collateral

for

securities

sold

short

and/or

open

forward

exchange

contracts.

At

December

31,

2021,

the

aggregate

value

of

these

securities

pledged

amounted

to

$86,068,588,

representing

3.1%

of

net

assets.

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

13

regarding

fair

value

measurements.

d

See

Note

9

regarding

restricted

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$34,270,513,

representing

1.2%

of

net

assets.

f

See

Note

1(g)

regarding

senior

floating

rate

interests.

g

The

coupon

rate

shown

represents

the

rate

at

period

end.

h

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.

i

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

j

See

Note

1(e)

regarding

securities

sold

short.

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Foreign

exchange

contracts

Foreign

Exchange

EUR/USD

...................

Short

39

$

5,558,719

3/14/22

$

(29,639)

Foreign

Exchange

GBP/USD

...................

Short

176

14,884,100

3/14/22

(318,475)

Total

Futures

Contracts

......................................................................

$(348,114)

*

As

of

year

end

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Mutual

Shares

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-16

At

December

31,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(c)

. 

See

Note 

10

 regarding

other

derivative

information.

See

Abbreviations

on

page

MS-

32

.

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

......

BOFA

Buy

154,288

211,630

1/18/22

$

—

$

(2,974)

British

Pound

......

BOFA

Sell

1,382,082

1,906,768

1/18/22

37,666

—

British

Pound

......

SSBT

Buy

130,000

177,678

1/18/22

—

(1,869)

British

Pound

......

SSBT

Sell

252,404

334,735

1/18/22

—

(6,612)

British

Pound

......

UBSW

Sell

288,150

384,614

1/18/22

—

(5,075)

Euro

.............

BOFA

Sell

16,022,882

18,799,427

1/24/22

564,320

—

Euro

.............

HSBK

Sell

16,533,859

19,394,550

1/24/22

577,917

—

Euro

.............

SSBT

Sell

1,769,936

2,060,477

1/24/22

46,172

—

Euro

.............

UBSW

Buy

793,017

894,142

1/24/22

8,364

—

Euro

.............

UBSW

Sell

1,638,434

1,917,841

1/24/22

53,194

—

South

Korean

Won

..

HSBK

Sell

8,067,819,315

6,837,017

5/16/22

70,376

—

South

Korean

Won

..

UBSW

Sell

10,600,916,932

8,979,186

5/16/22

87,985

—

South

Korean

Won

..

HSBK

Sell

23,213,960,218

19,598,109

6/17/22

137,962

—

South

Korean

Won

..

UBSW

Sell

13,807,944,877

11,662,116

6/17/22

86,984

—

Total

Forward

Exchange

Contracts

...................................................

$1,670,940

$(16,530)

Net

unrealized

appreciation

(depreciation)

............................................

$1,654,410

*

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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

MS-17

Franklin

Mutual

Shares

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$1,992,595,202

Value

-

Unaffiliated

issuers

..................................................................

$2,712,298,850

Cash

....................................................................................

26,887,987

Restricted

cash

for

OTC

derivative

contracts

(Note

1d)

...............................................

862,000

Receivables:

Investment

securities

sold

...................................................................

6,171,380

Capital

shares

sold

........................................................................

727,124

Dividends

and

interest

.....................................................................

6,018,174

European

Union

tax

reclaims

(Note

1

h

)

.........................................................

3,440,645

Deposits

with

brokers

for:

Securities

sold

short

.....................................................................

66,792,755

Futures

contracts

........................................................................

490,775

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

1,670,940

Other

assets

..............................................................................

483,867

Total

assets

..........................................................................

2,825,844,497

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

763,658

Capital

shares

redeemed

...................................................................

920,033

Management

fees

.........................................................................

1,553,424

Distribution

fees

..........................................................................

561,169

Variation

margin

on

futures

contracts

...........................................................

56,631

Deposits

from

brokers

for:

OTC

derivative

contracts

..................................................................

862,000

Securities

sold

short,

at

value

(proceeds

$40,514,587)

...............................................

64,950,560

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

16,530

Accrued

expenses

and

other

liabilities

...........................................................

976,708

Total

liabilities

.........................................................................

70,660,713

Net

assets,

at

value

.................................................................

$2,755,183,784

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$1,801,344,737

Total

distributable

earnings

(losses)

.............................................................

953,839,047

Net

assets,

at

value

.................................................................

$2,755,183,784

Franklin

Mutual

Shares

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$116,860,579

Shares

outstanding

........................................................................

5,957,496

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.62

Class

2:

Net

assets,

at

value

.......................................................................

$2,517,898,926

Shares

outstanding

........................................................................

131,168,566

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.20

Class

4:

Net

assets,

at

value

.......................................................................

$120,424,279

Shares

outstanding

........................................................................

6,209,615

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$19.39

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

MS-18

Franklin

Mutual

Shares

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,283,628)

Unaffiliated

issuers

........................................................................

$55,913,494

Interest:

Unaffiliated

issuers

........................................................................

6,445,750

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

19,320

Non-controlled

affiliates

(Note

3

e

)

.............................................................

232

Total

investment

income

...................................................................

62,378,796

Expenses:

Management

fees

(Note

3

a

)

...................................................................

19,550,081

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

6,588,858

    Class

4

................................................................................

423,798

Custodian

fees

(Note

4

)

......................................................................

36,060

Reports

to

shareholders

fees

..................................................................

583,183

Professional

fees

...........................................................................

65,979

Trustees'

fees

and

expenses

..................................................................

26,153

Dividends

on

securities

sold

short

..............................................................

561,285

Other

....................................................................................

422,991

Total

expenses

.........................................................................

28,258,388

Expense

reductions

(Note

4

)

...............................................................

(173)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(3,616)

Net

expenses

.........................................................................

28,254,599

Net

investment

income

................................................................

34,124,197

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

+

Unaffiliated

issuers

......................................................................

434,864,526

Foreign

currency

transactions

................................................................

(157,726)

Forward

exchange

contracts

.................................................................

3,760,289

Futures

contracts

.........................................................................

(126,973)

Securities

sold

short

.......................................................................

(16,515,876)

Net

realized

gain

(loss)

..................................................................

421,824,240

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

84,060,177

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(371,276)

Forward

exchange

contracts

.................................................................

4,704,572

Futures

contracts

.........................................................................

252,538

Securities

sold

short

.......................................................................

(23,844,853)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

64,801,158

Net

realized

and

unrealized

gain

(loss)

............................................................

486,625,398

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$520,749,595

+

Includes

gains

from

redemption

in-kind

(Note

11).

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.

Annual

Report

MS-19

Franklin

Mutual

Shares

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$34,124,197

$83,091,278

Net

realized

gain

(loss)

.................................................

421,824,240

(85,543,839)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

64,801,158

(174,178,576)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

520,749,595

(176,631,137)

Distributions

to

shareholders:

Class

1

.............................................................

(3,422,611)

(9,923,875)

Class

2

.............................................................

(73,136,481)

(153,724,682)

Class

4

.............................................................

(3,309,278)

(7,227,115)

Total

distributions

to

shareholders

..........................................

(79,868,370)

(170,875,672)

Capital

share

transactions:

(Note

2

)

Class

1

.............................................................

(64,966,663)

15,161,489

Class

2

.............................................................

(501,789,098)

9,448,782

Class

4

.............................................................

(14,024,839)

7,450,316

Total

capital

share

transactions

............................................

(580,780,600)

32,060,587

Net

increase

(decrease)

in

net

assets

...................................

(139,899,375)

(315,446,222)

Net

assets:

Beginning

of

year

.......................................................

2,895,083,159

3,210,529,381

End

of

year

...........................................................

$2,755,183,784

$2,895,083,159

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Franklin

Mutual

Shares

VIP

Fund

MS-20

Annual

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

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.

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

MS-21

Annual

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

December

31,

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

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-22

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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

December

31,

2021,

the

Fund

has

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 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.

At

December

31,

2021, the

Fund

received

$766,823

in

United

Kingdom

Treasury

Bonds

and

U.S.

Treasury

Bills,

Bonds

and

Notes

as

collateral

for

derivatives.

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.

d.

Restricted

Cash

At

December

31,

2021, the

Fund

held

restricted

cash

in

connection

with

investments

in

certain

derivative

securities.

Restricted

cash

is

held

in

a

segregated

account

with

the

counterparty

broker

and

is

reflected

in

the

Statement

of

Assets

and

Liabilities.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-23

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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.

At

December

31,

2021,

the

Fund

had

no

securities

on

loan.

g.

Senior

Floating

Rate

Interests

The

Fund

invests

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the Fund

invests

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Securities

Sold

Short

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-24

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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

MS-25

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

318,693

$6,213,133

991,549

$14,998,414

Shares

issued

in

reinvestment

of

distributions

..........

179,100

3,422,611

686,298

9,923,875

Shares

redeemed

in-kind

(Note

1

2

)

..................

(3,060,698)

(59,532,727)

—

—

Shares

redeemed

...............................

(794,758)

(15,069,680)

(619,658)

(9,760,800)

Net

increase

(decrease)

..........................

(3,357,663)

$(64,966,663)

1,058,189

$15,161,489

Class

2

Shares:

Shares

sold

...................................

9,578,231

$183,303,412

22,804,922

$339,671,560

Shares

issued

in

reinvestment

of

distributions

..........

3,908,951

73,136,481

10,848,601

153,724,682

Shares

redeemed

in-kind

(Note

1

2

)

..................

(13,941,656)

(265,295,778)

—

—

Shares

redeemed

...............................

(26,387,039)

(492,933,213)

(31,525,525)

(483,947,460)

Net

increase

(decrease)

..........................

(26,841,513)

$(501,789,098)

2,127,998

$9,448,782

Class

4

Shares:

Shares

sold

...................................

337,245

$6,316,446

1,256,949

$18,190,882

Shares

issued

in

reinvestment

of

distributions

..........

175,002

3,309,278

504,687

7,227,115

Shares

redeemed

...............................

(1,268,725)

(23,650,563)

(1,132,933)

(17,967,681)

Net

increase

(decrease)

..........................

(756,478)

$(14,024,839)

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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-26

Annual

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

year

ended

December

31,

2021,

the

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

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

year

ended

December

31,

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

MS-27

Annual

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

During

the

year

ended

December

31,

2021,

the

Fund

utilized

$89,275,115

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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%

.

$—

$91,233,000

$(91,233,000)

$—

$—

$—

—

$232

Total

Affiliated

Securities

...

$—

$91,233,000

$(91,233,000)

$—

$—

$—

$232

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$79,868,370

$91,085,601

Long

term

capital

gain

......................................................

—

79,790,071

$79,868,370

$170,875,672

Cost

of

investments

..........................................................................

$1,970,694,140

Unrealized

appreciation

........................................................................

$768,067,961

Unrealized

depreciation

........................................................................

(90,107,515)

Net

unrealized

appreciation

(depreciation)

..........................................................

$677,960,446

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$92,889,874

Undistributed

long

term

capital

gains

..............................................................

$179,615,830

Total

distributable

earnings

.....................................................................

$272,505,704

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-28

Annual

Report

Franklin

Mutual

Shares

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

foreign

currency

transactions,

defaulted

bonds,

wash

sales,

EU

reclaims,

and

gains

realized

on

in-kind

shareholder

redemptions.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities,

in-kind

transactions,

and

securities

sold

short)

for

the

year

ended

December

31,

2021,

aggregated

$1,318,446,482

and

$1,676,834,540,

respectively.

Sales

of

investments

excludes

in-kind

transactions

$290,114,734.

7.

Credit Risk

and

Defaulted

Securities

The

Fund

may

purchase

the

pre-default

or

defaulted

debt

of

distressed

companies.

Distressed

companies

are

financially

troubled

and

could

be

or

are

already

involved

in

financial

restructuring

or

bankruptcy.

Risks

associated

with

purchasing

these

securities

include

the

possibility

that

the

bankruptcy

or

other

restructuring

process

takes

longer

than

expected,

or

that

distributions

in

restructuring

are

less

than

anticipated,

either

or

both

of

which

may

result

in

unfavorable

consequences

to

the

Fund.

If

it

becomes

probable

that

the

income

on

debt

securities,

including

those

of

distressed

companies,

will

not

be

collected,

the

Fund

discontinues

accruing

income

and

recognizes

an

adjustment

for

uncollectible

interest.

At

December

31,

2021,

the

Fund

did

not

hold

any

distressed

company

securities

for

which

interest

recognition

has

been

discontinued.

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

December

31,

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

$

65,516

2,039

Wayne

Services

Legacy,

Inc.

...................

1/22/20

—

—

609,467

Windstream

Holdings,

Inc.

.....................

9/21/20

4,827,676

10,727,974

34,368

Windstream

Holdings,

Inc.,

9/21/55

..............

9/21/20

436,130

604,953

Total

Restricted

Securities

(Value

is

0.4%

of

Net

Assets)

..............

$6,413,047

$11,398,443

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-29

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

10.

Other

Derivative

Information

At

December

31,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts

represented

$25,904,428.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$156,900,501.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

$

—

Variation

margin

on

futures

contracts

$

348,114

b

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,670,940

Unrealized

depreciation

on

OTC

forward

exchange

contracts

16,530

Total

....................

$1,670,940

$364,644

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

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

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Mutual

Shares

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Futures

contracts

$(126,973)

Futures

contracts

$252,538

Forward

exchange

contracts

3,760,289

Forward

exchange

contracts

4,704,572

Total

.......................

$3,633,316

$4,957,110

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-30

Annual

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

year

ended

December

31,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

12.

Redemption

In-Kind

During

the

year

ended

December

31,

2021,

the

Fund

realized

$91,591,427

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.

13.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

December

31,

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

...................

$

39,447,705

$

42,928,945

$

—

$

82,376,650

Auto

Components

......................

—

—

65,516

65,516

Automobiles

..........................

51,779,671

—

—

51,779,671

Banks

...............................

131,920,458

70,314,575

—

202,235,033

Building

Products

......................

65,153,540

—

—

65,153,540

Chemicals

...........................

51,222,798

—

—

51,222,798

Containers

&

Packaging

.................

28,179,497

—

—

28,179,497

Diversified

Financial

Services

.............

44,826,223

—

—

44,826,223

Diversified

Telecommunication

Services

.....

3,319,837

—

10,727,974

14,047,811

Electric

Utilities

........................

53,636,664

—

—

53,636,664

Electrical

Equipment

....................

67,059,066

—

—

67,059,066

Electronic

Equipment,

Instruments

&

Components

........................

19,135,384

—

—

19,135,384

Entertainment

.........................

41,448,254

—

—

41,448,254

Equity

Real

Estate

Investment

Trusts

(REITs)

.

55,751,912

—

—

55,751,912

Food

Products

........................

106,766,985

—

—

106,766,985

Health

Care

Equipment

&

Supplies

.........

50,847,847

—

—

50,847,847

Health

Care

Providers

&

Services

..........

168,781,588

—

—

168,781,588

Household

Durables

....................

51,461,668

—

—

51,461,668

11.

Credit

Facility

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-31

Annual

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.

14.

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. The

ASUs

are

effective

for

certain

reference

Level

1

Level

2

Level

3

Total

Franklin

Mutual

Shares

VIP

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Industrial

Conglomerates

................

$

43,436,550

$

—

$

—

$

43,436,550

Insurance

............................

209,388,628

—

—

209,388,628

IT

Services

...........................

161,986,084

—

—

161,986,084

Media

...............................

133,118,642

—

—

133,118,642

Oil,

Gas

&

Consumable

Fuels

.............

69,411,182

56,292,050

—

125,703,232

Paper

&

Forest

Products

.................

1,520,786

—

—

1,520,786

Pharmaceuticals

.......................

193,561,563

58,062,464

—

251,624,027

Professional

Services

...................

39,496,218

—

—

39,496,218

Semiconductors

&

Semiconductor

Equipment

.

55,530,657

—

—

55,530,657

Software

.............................

101,520,655

—

—

101,520,655

Specialty

Retail

........................

54,966,006

—

—

a

54,966,006

Technology

Hardware,

Storage

&

Peripherals

.

61,721,852

50,000,322

—

111,722,174

Textiles,

Apparel

&

Luxury

Goods

..........

51,503,171

—

—

51,503,171

Tobacco

.............................

38,386,753

44,538,594

—

82,925,347

Wireless

Telecommunication

Services

.......

49,649,182

—

—

49,649,182

Warrants

:

Diversified

Telecommunication

Services

.....

—

—

604,953

604,953

Software

.............................

178,839

—

—

178,839

Corporate

Bonds

........................

—

37,223,935

—

37,223,935

Senior

Floating

Rate

Interests

...............

—

21,535,521

—

21,535,521

Asset-Backed

Securities

..................

—

2,091,728

—

2,091,728

Companies

in

Liquidation

..................

—

—

—

a

—

Short

Term

Investments

...................

15,496,408

6,300,000

—

21,796,408

Total

Investments

in

Securities

...........

$2,311,612,273

$389,288,134

b

$11,398,443

$2,712,298,850

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

1,670,940

$

—

$

1,670,940

Total

Other

Financial

Instruments

.........

$—

$1,670,940

$—

$1,670,940

Liabilities:

Other

Financial

Instruments:

Securities

Sold

Short

.....................

64,950,560

—

—

64,950,560

Forward

exchange

contracts

................

$

—

$

16,530

$

—

$

16,530

Futures

contracts

........................

348,114

—

—

348,114

Total

Other

Financial

Instruments

.........

$65,298,674

$16,530

$—

$65,315,204

a

Includes

securities

determined

to

have

no

value

at

December

31,

2021.

b

Includes

foreign

securities

valued

at

$322,136,950,,

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.

13.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

MS-32

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

(continued)

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. 

15.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure,

other

than

those

already

disclosed

in

the

financial

statements.

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

FRN

Floating

Rate

Note

LIBOR

London

Inter-Bank

Offered

Rate

14.

New

Accounting

Pronouncements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

MS-33

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Mutual

Shares

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Mutual

Shares

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

MS-34

Annual

Report

Franklin

Mutual

Shares

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$37,056,436

Interest

Earned

from

Federal

Obligations

Note

(1)

$23,866

FRD-1

Annual

Report

Franklin

Rising

Dividends

VIP

Fund

This

annual

report

for

Franklin

Rising

Dividends

VIP

Fund

covers

the

fiscal

year

ended

December

31,

202

1

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

+26.79%

5-Year

+16.81%

10-Year

+14.40%

FRD-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FRD-3

Annual

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.

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

)

posted

a

+28.71%

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

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Chemicals

10.4%

Health

Care

Equipment

&

Supplies

9.6%

Software

9.5%

IT

Services

6.9%

Industrial

Conglomerates

6.3%

Semiconductors

&

Semiconductor

Equipment

6.1%

Specialty

Retail

4.1%

Aerospace

&

Defense

3.4%

Machinery

3.4%

Building

Products

2.9%

Health

Care

Providers

&

Services

2.9%

Household

Products

2.8%

Pharmaceuticals

2.7%

Life

Sciences

Tools

&

Services

2.6%

Other*

25.0%

Short-Term

Investments

&

Other

Net

Assets

1.4%

Franklin

Rising

Dividends

VIP

Fund

FRD-4

Annual

Report

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

Investment

Strategy

We

are

research-driven,

fundamental

investors.

As

bottom-

up

investors

focusing

primarily

on

individual

securities,

we

look

for

companies

that

we

believe

meet

our

criteria

and

are

fundamentally

sound

and

attempt

to

acquire

them

at

attractive

prices.

These

criteria

include

consistent,

substantial

dividend

increases;

reinvested

earnings;

and

either

long-term

debt

that

is

no

more

than

50%

of

total

capitalization

or

senior

debt

that

has

been

rated

investment

grade

by

at

least

one

of

the

major

bond

rating

organizations.

In

following

these

criteria,

the

Fund

does

not

necessarily

focus

on

companies

whose

securities

pay

a

high

dividend

rate

but

rather

on

companies

that

consistently

increase

their

dividends.

Manager’s

Discussion

Over

the

12-month

period

through

December

31,

2021,

all

held

sectors

contributed

to

performance

on

an

absolute

basis,

led

by

information

technology

(IT),

industrials

and

health

care.

Consumer

staples

and

financials

were

the

most

modest

contributors.

Enterprise

software

company

Microsoft

contributed,

advancing

sharply

amid

repeated

strong

results

and

improving

guidance.

The

company

continued

to

benefit

from

work-from-home

trends

and

its

highly

profitable

cloud

business,

which

drove

strong

revenue

and

net

income

growth.

Bolstered,

too,

by

rising

subscription

revenues,

Microsoft

continued

to

beat

consensus

estimates

across

its

cloud,

productivity

and

personal

computing

segments.

We

believe

the

company

can

continue

to

take

market

share

as

businesses

seek

to

digitally

transform

through

cloud

and

data

technologies.

Furthermore,

we

believe

investors

may

not

yet

appreciate

Microsoft’s

cloud

opportunity

or

the

potential

of

its

gaming

business.

Global

IT

services

leader

Accenture

continued

to

benefit

from

trends

toward

digital

transformation

across

sectors,

posting

better-than-expected

earnings

on

strong

revenue

growth,

profit

margin

expansion

and

new

bookings,

especially

for

consulting

services.

Accenture

also

raised

guidance

amid

elevated,

sustained

demand

for

digital,

cloud

and

security

services

from

businesses

looking

to

improve

processes

and

efficiency

in

an

ongoing

shift

to

hybrid

working

models.

The

company

has

been

strategically

enhancing

its

cloud

and

digital

marketing

suite

through

buyouts

and

partnerships.

West

Pharmaceutical

Services,

a

drug

packaging

and

delivery

company,

benefited

from

the

need

for

supplies,

such

as

syringes,

seals

and

stoppers,

to

distribute

COVID-19

vaccines.

The

company’s

recent

earnings

reports

documented

strong

growth

in

sales,

and

even

stronger

profit

growth.

The

company’s

core

non-COVID-19

business

has

continued

to

perform

well,

especially

in

biologics.

The

company

also

boosted

its

guidance

for

the

full

year

on

the

back

of

the

robust

results.

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Microsoft

Corp.

9.5%

Software,

United

States

Accenture

plc

4.7%

IT

Services,

United

States

Roper

Technologies,

Inc.

4.0%

Industrial

Conglomerates,

United

States

Linde

plc

3.4%

Chemicals,

United

Kingdom

Stryker

Corp.

3.3%

Health

Care

Equipment

&

Supplies,

United

States

Analog

Devices,

Inc.

3.1%

Semiconductors

&

Semiconductor

Equipment,

United

States

Texas

Instruments,

Inc.

3.0%

Semiconductors

&

Semiconductor

Equipment,

United

States

West

Pharmaceutical

Services,

Inc.

2.6%

Life

Sciences

Tools

&

Services,

United

States

Air

Products

and

Chemicals,

Inc.

2.6%

Chemicals,

United

States

Lowe's

Cos.,

Inc.

2.5%

Specialty

Retail,

United

States

Franklin

Rising

Dividends

VIP

Fund

FRD-5

Annual

Report

On

the

downside,

insurer

Erie

Indemnity

weighed

on

returns.

The

property

and

casualty

insurer’s

recent

quarterly

earnings

reports

were

mixed.

Although

operating

revenue

and

investment

income

rose

from

2020

levels,

operating

expenses

were

also

higher

and

average

premium

rates

declined.

The

company

announced

a

hike

in

its

dividend,

to

be

distributed

in

January

2022.

We

expect

the

company

to

post

steady

growth

over

the

longer

term.

Shares

of

medical

technology

company

Medtronic

declined

during

the

period.

The

company

missed

revenue

estimates

in

its

most

recent

earnings

report,

citing

the

impact

of

a

COVID-19

resurgence

and

staffing

challenges

in

the

health

care

industry,

which

pressured

surgical

procedure

volumes.

Shares

were

pressured

late

in

2021

on

the

news

of

oversight

concerns

at

one

of

their

manufacturing

facilities.

Though

volumes

remain

vulnerable

to

the

pandemic’s

path

going

forward,

we

believe

the

company’s

strong

product

pipeline

and

proven

ability

to

innovate

should

lead

to

promising

results

in

the

coming

years.

Ross

Stores,

an

off-price

apparel

and

home

fashion

retailer,

also

weighed

on

performance

as

higher

costs

for

freight,

wages

and

other

pandemic-driven

issues

pressured

profits

despite

strong

same-store

sales

figures

and

guidance.

In

our

view,

the

company

has

managed

supply

constraints

well,

which,

together

with

a

higher

average

basket

than

many

peers,

has

helped

keep

earnings

solid

and

profit

margins

relatively

strong.

We

believe

Ross

is

well-positioned

to

benefit

from

a

continuing

economic

recovery.

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

December

31,

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

2

Fund

Expenses

Franklin

Rising

Dividends

VIP

Fund

FRD-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,124.80

$4.70

$1,020.78

$4.47

0.88%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Rising

Dividends

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FRD-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$30.17

$27.90

$25.75

$29.21

$25.51

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.30

0.32

0.37

0.39

0.40

Net

realized

and

unrealized

gains

(losses)

...........

7.68

3.76

6.77

(1.65)

4.76

Total

from

investment

operations

....................

7.98

4.08

7.14

(1.26)

5.16

Less

distributions

from:

Net

investment

income

..........................

(0.35)

(0.41)

(0.45)

(0.44)

(0.48)

Net

realized

gains

.............................

(1.06)

(1.40)

(4.54)

(1.76)

(0.98)

Total

distributions

...............................

(1.41)

(1.81)

(4.99)

(2.20)

(1.46)

Net

asset

value,

end

of

year

.......................

$36.74

$30.17

$27.90

$25.75

$29.21

Total

return

c

...................................

27.10%

16.23%

29.58%

(4.84)%

20.85%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.63%

0.65%

0.63%

0.62%

0.62%

Expenses

net

of

waiver

and

payments

by

affiliates

d,e

.....

0.63%

0.65%

0.63%

0.62%

0.62%

Net

investment

income

...........................

0.90%

1.20%

1.34%

1.38%

1.49%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$141,433

$156,585

$150,864

$157,838

$216,015

Portfolio

turnover

rate

............................

3.92%

12.83%

7.26%

f

3.09%

f

3.36%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Rising

Dividends

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$29.14

$26.99

$25.04

$28.46

$24.89

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.21

0.24

0.29

0.31

0.33

Net

realized

and

unrealized

gains

(losses)

...........

7.41

3.65

6.57

(1.61)

4.63

Total

from

investment

operations

....................

7.62

3.89

6.86

(1.30)

4.96

Less

distributions

from:

Net

investment

income

..........................

(0.28)

(0.33)

(0.37)

(0.36)

(0.41)

Net

realized

gains

.............................

(1.06)

(1.41)

(4.54)

(1.76)

(0.98)

Total

distributions

...............................

(1.34)

(1.74)

(4.91)

(2.12)

(1.39)

Net

asset

value,

end

of

year

.......................

$35.42

$29.14

$26.99

$25.04

$28.46

Total

return

c

...................................

26.79%

15.97%

29.23%

(5.07)%

20.56%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.88%

0.90%

0.88%

0.87%

0.87%

Expenses

net

of

waiver

and

payments

by

affiliates

d,e

.....

0.88%

0.90%

0.88%

0.87%

0.87%

Net

investment

income

...........................

0.66%

0.95%

1.09%

1.13%

1.24%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,513,905

$1,365,745

$1,387,688

$1,106,334

$1,640,883

Portfolio

turnover

rate

............................

3.92%

12.83%

7.26%

f

3.09%

f

3.36%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

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.

Annual

Report

FRD-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$29.22

$27.08

$25.11

$28.54

$24.98

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.18

0.22

0.26

0.29

0.30

Net

realized

and

unrealized

gains

(losses)

...........

7.42

3.65

6.60

(1.62)

4.65

Total

from

investment

operations

....................

7.60

3.87

6.86

(1.33)

4.95

Less

distributions

from:

Net

investment

income

..........................

(0.27)

(0.32)

(0.35)

(0.34)

(0.41)

Net

realized

gains

.............................

(1.06)

(1.41)

(4.54)

(1.76)

(0.98)

Total

distributions

...............................

(1.33)

(1.73)

(4.89)

(2.10)

(1.39)

Net

asset

value,

end

of

year

.......................

$35.49

$29.22

$27.08

$25.11

$28.54

Total

return

c

...................................

26.63%

15.85%

29.16%

(5.16)%

20.40%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.98%

1.00%

0.98%

0.97%

0.97%

Expenses

net

of

waiver

and

payments

by

affiliates

d,e

.....

0.98%

1.00%

0.98%

0.97%

0.97%

Net

investment

income

...........................

0.56%

0.85%

0.99%

1.03%

1.14%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$72,589

$51,137

$46,539

$32,825

$36,407

Portfolio

turnover

rate

............................

3.92%

12.83%

7.26%

f

3.09%

f

3.36%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Rising

Dividends

VIP

Fund

Annual

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

98.6%

Aerospace

&

Defense

3.4%

General

Dynamics

Corp.

................................

United

States

98,552

$

20,545,135

Raytheon

Technologies

Corp.

............................

United

States

438,946

37,775,693

58,320,828

Air

Freight

&

Logistics

2.1%

United

Parcel

Service,

Inc.,

B

............................

United

States

171,517

36,762,954

Banks

1.4%

JPMorgan

Chase

&

Co.

.................................

United

States

153,925

24,374,024

Beverages

1.7%

PepsiCo,

Inc.

........................................

United

States

167,430

29,084,265

Biotechnology

1.2%

AbbVie,

Inc.

.........................................

United

States

151,636

20,531,514

Building

Products

2.9%

Carlisle

Cos.,

Inc.

.....................................

United

States

67,002

16,624,536

Johnson

Controls

International

plc

.........................

United

States

417,210

33,923,345

50,547,881

Capital

Markets

1.2%

Nasdaq,

Inc.

.........................................

United

States

101,800

21,379,018

Chemicals

10.4%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

150,067

45,659,385

Albemarle

Corp.

......................................

United

States

158,410

37,031,506

Ecolab,

Inc.

..........................................

United

States

109,309

25,642,798

Linde

plc

............................................

United

Kingdom

169,032

58,557,756

Sherwin-Williams

Co.

(The)

..............................

United

States

36,700

12,924,272

179,815,717

Commercial

Services

&

Supplies

1.9%

Cintas

Corp.

.........................................

United

States

72,772

32,250,367

Electrical

Equipment

0.7%

nVent

Electric

plc

.....................................

United

States

298,826

11,355,388

Food

&

Staples

Retailing

1.3%

Walmart,

Inc.

........................................

United

States

154,908

22,413,639

Food

Products

1.4%

McCormick

&

Co.,

Inc.

.................................

United

States

257,694

24,895,817

Health

Care

Equipment

&

Supplies

9.6%

Abbott

Laboratories

....................................

United

States

269,795

37,970,949

Becton

Dickinson

and

Co.

...............................

United

States

144,815

36,418,076

Medtronic

plc

........................................

United

States

332,354

34,382,021

Stryker

Corp.

........................................

United

States

215,745

57,694,528

166,465,574

Health

Care

Providers

&

Services

2.9%

CVS

Health

Corp.

.....................................

United

States

78,993

8,148,918

UnitedHealth

Group,

Inc.

................................

United

States

83,400

41,878,476

50,027,394

Hotels,

Restaurants

&

Leisure

1.8%

McDonald's

Corp.

.....................................

United

States

113,499

30,425,677

Household

Products

2.8%

Colgate-Palmolive

Co.

.................................

United

States

217,740

18,581,932

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Rising

Dividends

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FRD-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Household

Products

(continued)

Procter

&

Gamble

Co.

(The)

.............................

United

States

178,094

$

29,132,616

47,714,548

Industrial

Conglomerates

6.3%

Honeywell

International,

Inc.

.............................

United

States

182,975

38,152,117

Roper

Technologies,

Inc.

................................

United

States

141,883

69,786,573

107,938,690

Insurance

0.6%

Erie

Indemnity

Co.,

A

...................................

United

States

56,670

10,918,042

IT

Services

6.9%

Accenture

plc,

A

......................................

United

States

193,978

80,413,580

Visa,

Inc.,

A

..........................................

United

States

175,362

38,002,699

118,416,279

Life

Sciences

Tools

&

Services

2.6%

West

Pharmaceutical

Services,

Inc.

........................

United

States

97,501

45,728,944

Machinery

3.4%

Donaldson

Co.,

Inc.

...................................

United

States

162,197

9,611,794

Dover

Corp.

.........................................

United

States

163,488

29,689,421

Pentair

plc

..........................................

United

States

258,794

18,899,726

58,200,941

Multiline

Retail

2.4%

Target

Corp.

.........................................

United

States

178,637

41,343,747

Oil,

Gas

&

Consumable

Fuels

2.0%

Chevron

Corp.

.......................................

United

States

134,194

15,747,666

EOG

Resources,

Inc.

..................................

United

States

127,061

11,286,829

Exxon

Mobil

Corp.

.....................................

United

States

130,961

8,013,503

35,047,998

Pharmaceuticals

2.7%

Johnson

&

Johnson

...................................

United

States

170,129

29,103,968

Pfizer,

Inc.

...........................................

United

States

297,515

17,568,261

46,672,229

Road

&

Rail

1.9%

JB

Hunt

Transport

Services,

Inc.

..........................

United

States

41,900

8,564,360

Norfolk

Southern

Corp.

.................................

United

States

80,547

23,979,647

32,544,007

Semiconductors

&

Semiconductor

Equipment

6.1%

Analog

Devices,

Inc.

...................................

United

States

304,619

53,542,882

Texas

Instruments,

Inc.

.................................

United

States

278,668

52,520,558

106,063,440

Software

9.5%

Microsoft

Corp.

.......................................

United

States

487,628

163,999,049

Specialty

Retail

4.1%

Lowe's

Cos.,

Inc.

......................................

United

States

169,300

43,760,664

Ross

Stores,

Inc.

.....................................

United

States

234,930

26,847,801

70,608,465

Textiles,

Apparel

&

Luxury

Goods

2.4%

NIKE,

Inc.,

B

.........................................

United

States

248,084

41,348,160

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Rising

Dividends

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FRD-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Trading

Companies

&

Distributors

1.0%

WW

Grainger,

Inc.

.....................................

United

States

34,693

$

17,979,300

Total

Common

Stocks

(Cost

$562,094,573)

.....................................

1,703,173,896

Short

Term

Investments

1.1%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.1%

a,b

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

19,398,008

19,398,008

Total

Money

Market

Funds

(Cost

$19,398,008)

..................................

19,398,008

Total

Short

Term

Investments

(Cost

$19,398,008

)

................................

19,398,008

a

Total

Investments

(Cost

$581,492,581)

99.7%

...................................

$1,722,571,904

Other

Assets,

less

Liabilities

0.3%

.............................................

5,355,891

Net

Assets

100.0%

...........................................................

$1,727,927,795

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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FRD-13

Franklin

Rising

Dividends

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$562,094,573

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

$

19,398,008

Value

-

Unaffiliated

issuers

..................................................................

$1,703,173,896

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

19,398,008

Cash

....................................................................................

2,966

Receivables:

Investment

securities

sold

...................................................................

7,135,777

Capital

shares

sold

........................................................................

867,300

Dividends

and

interest

.....................................................................

1,204,427

Total

assets

..........................................................................

1,731,782,374

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

2,444,710

Management

fees

.........................................................................

876,784

Distribution

fees

..........................................................................

336,220

Accrued

expenses

and

other

liabilities

...........................................................

196,865

Total

liabilities

.........................................................................

3,854,579

Net

assets,

at

value

.................................................................

$1,727,927,795

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$407,652,063

Total

distributable

earnings

(losses)

.............................................................

1,320,275,732

Net

assets,

at

value

.................................................................

$1,727,927,795

Franklin

Rising

Dividends

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$141,433,127

Shares

outstanding

........................................................................

3,849,609

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$36.74

Class

2:

Net

assets,

at

value

.......................................................................

$1,513,905,256

Shares

outstanding

........................................................................

42,746,494

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$35.42

Class

4:

Net

assets,

at

value

.......................................................................

$72,589,412

Shares

outstanding

........................................................................

2,045,389

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$35.49

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

intergral

part

of

these

financial

statments.

FRD-14

Franklin

Rising

Dividends

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$25,759,797

Non-controlled

affiliates

(Note

3e)

.............................................................

1,532

Total

investment

income

...................................................................

25,761,329

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,238,490

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

3,620,976

    Class

4

................................................................................

217,269

Custodian

fees

(Note

4

)

......................................................................

9,470

Reports

to

shareholders

fees

..................................................................

157,666

Professional

fees

...........................................................................

77,746

Trustees'

fees

and

expenses

..................................................................

15,217

Other

....................................................................................

43,133

Total

expenses

.........................................................................

14,379,967

Expense

reductions

(Note

4

)

...............................................................

(12)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(13,701)

Net

expenses

.........................................................................

14,366,254

Net

investment

income

................................................................

11,395,075

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

171,565,322

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

215,633,524

Net

realized

and

unrealized

gain

(loss)

............................................................

387,198,846

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$398,593,921

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.

Annual

Report

FRD-15

Franklin

Rising

Dividends

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$11,395,075

$13,661,769

Net

realized

gain

(loss)

.................................................

171,565,322

54,763,744

Net

change

in

unrealized

appreciation

(depreciation)

...........................

215,633,524

120,578,165

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

398,593,921

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

.............................................................

(47,704,793)

(6,915,276)

Class

2

.............................................................

(136,274,181)

(105,113,819)

Class

4

.............................................................

9,216,825

574,344

Total

capital

share

transactions

............................................

(174,762,149)

(111,454,751)

Net

increase

(decrease)

in

net

assets

...................................

154,461,349

(11,624,854)

Net

assets:

Beginning

of

year

.......................................................

1,573,466,446

1,585,091,300

End

of

year

...........................................................

$1,727,927,795

$1,573,466,446

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Franklin

Rising

Dividends

VIP

Fund

FRD-16

Annual

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

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

FRD-17

Annual

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

December

31,

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

FRD-18

Annual

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

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

244,064

$8,168,743

144,545

$3,628,818

Shares

issued

in

reinvestment

of

distributions

..........

215,162

6,930,364

386,747

9,363,148

Shares

redeemed

...............................

(1,798,891)

(62,803,900)

(749,651)

(19,907,242)

Net

increase

(decrease)

..........................

(1,339,665)

$(47,704,793)

(218,359)

$(6,915,276)

Class

2

Shares:

Shares

sold

...................................

1,868,187

$60,306,863

6,981,462

$173,231,502

Shares

issued

in

reinvestment

of

distributions

..........

1,926,844

59,905,574

3,284,457

76,921,977

Shares

redeemed

...............................

(7,913,034)

(256,486,618)

(14,809,098)

(355,267,298)

Net

increase

(decrease)

..........................

(4,118,003)

$(136,274,181)

(4,543,179)

$(105,113,819)

Class

4

Shares:

Shares

sold

...................................

463,060

$14,756,595

261,260

$6,613,767

Shares

issued

in

reinvestment

of

distributions

..........

81,311

2,534,485

122,974

2,888,656

Shares

redeemed

...............................

(249,162)

(8,074,255)

(352,750)

(8,928,079)

Net

increase

(decrease)

..........................

295,209

$9,216,825

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

FRD-19

Annual

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.612%

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

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

year

ended

December

31,

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)

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

FRD-20

Annual

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

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.

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

151,706,473

$

(150,444,336)

$

—

$

—

$

19,398,008

19,398,008

$

1,532

Total

Affiliated

Securities

...

$18,135,871

$151,706,473

$(150,444,336)

$—

$—

$19,398,008

$1,532

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$16,837,653

$20,921,386

Long

term

capital

gain

......................................................

52,532,770

68,252,395

$69,370,423

$89,173,781

Cost

of

investments

..........................................................................

$584,036,451

Unrealized

appreciation

........................................................................

$1,144,255,433

Unrealized

depreciation

........................................................................

(5,719,980)

Net

unrealized

appreciation

(depreciation)

..........................................................

$1,138,535,453

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$17,241,144

Undistributed

long

term

capital

gains

..............................................................

$164,499,135

Total

distributable

earnings

.....................................................................

$181,740,279

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FRD-21

Annual

Report

Franklin

Rising

Dividends

VIP

Fund

(continued)

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$64,384,259

and

$303,814,081,

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

December

31,

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FRD-22

Annual

Report

Franklin

Rising

Dividends

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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,

other

than

those

already

disclosed

in

the

financial

statements.

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FRD-23

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Rising

Dividends

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Rising

Dividends

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

transfer

agent.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FRD-24

Annual

Report

Franklin

Rising

Dividends

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$52,532,770

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$21,801,735

FSV-1

Annual

Report

Franklin

Small

Cap

Value

VIP

Fund

This

annual

report

for

Franklin

Small

Cap

Value

VIP

Fund

covers

the

fiscal

year

ended

December

31,

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

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+25.37%

5-Year

+9.94%

10-Year

+12.13%

FSV-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Russell

2000

®

Value

Index.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FSV-3

Annual

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

Fund’s

investment

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.

Securities

issued

by

small-capitalization

companies

may

be

more

volatile

in

price

than

those

of

larger

companies

and

may

involve

substantial

risks.

Such

risks

may

include

greater

sensitivity

to

economic

conditions,

less

certain

growth

prospects,

lack

of

depth

of

management

and

funds

for

growth

and

development

and

limited

or

less

developed

product

lines

and

markets.

A

value

stock

may

not

increase

in

price

as

anticipated

by

the

investment

manager

if

other

investors

fail

to

recognize

the

company’s

value

and

bid

up

the

price,

the

markets

favor

faster-growing

companies,

or

the

factors

that

the

investment

manager

believes

will

increase

the

price

of

the

security

do

not

occur

or

do

not

have

the

anticipated

effect.

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.

A

REIT’s

performance

depends

on

the

types,

values

and

locations

of

the

properties

it

owns

and

how

well

those

properties

are

managed.

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Russell

2000

®

Value

Index

posted

a

+28.27%

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

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Insurance

10.0%

Banks

9.4%

Machinery

7.5%

Chemicals

7.3%

Hotels,

Restaurants

&

Leisure

6.9%

Construction

&

Engineering

5.0%

Electronic

Equipment,

Instruments

&

Components

5.0%

Software

4.6%

Building

Products

4.5%

Specialty

Retail

3.9%

Trading

Companies

&

Distributors

3.8%

Oil,

Gas

&

Consumable

Fuels

3.3%

Equity

Real

Estate

Investment

Trusts

(REITs)

3.1%

Health

Care

Equipment

&

Supplies

2.5%

Other*

21.3%

Short-Term

Investments

&

Other

Net

Assets

1.9%

Franklin

Small

Cap

Value

VIP

Fund

FSV-4

Annual

Report

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

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

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

real

estate

investment

trusts

(REITs).

Manager’s

Discussion

During

2021,

the

Fund

underperformed

its

benchmark.

Security

selection

in

the

consumer

discretionary

and

financials

sectors,

as

well

as

an

underweight

in

energy,

curbed

relative

results.

In

contrast,

security

selection

in

industrials,

an

underweight

in

health

care,

and

stock

selection

and

an

overweight

in

materials

contributed

to

relative

results.

During

the

12-month

period,

investments

that

detracted

from

Fund

performance

included

The

Timken

Company,

Horace

Mann

Educators

and

Jack

in

the

Box.

The

Timken

Company

detracted

from

relative

returns.

The

company’s

recent

earnings

have

come

under

pressure

from

significant

cost

headwinds.

Looking

ahead,

management

struck

a

positive

tone

with

regards

to

demand,

citing

strength

from

every

end

market

and

geographic

region.

The

one

end-

market

exception

was

automotive

due

to

the

semiconductor

shortage,

but

we

have

begun

to

see

a

recovery.

Horace

Mann

Educators,

a

multi-line

insurer

focused

on

the

educator

market,

hampered

relative

returns

as

COVID-19

continued

to

adversely

impact

the

company’s

new

policy

sales.

Although

lower

claim

frequency

in

its

supplemental

segment

benefited

Horace

Mann’s

2021

profitability

outlook,

personal

lines

and

supplemental

policy

sales

have

been

pressured

as

leads

are

often

generated

through

in-person

meetings.

Sales

activity

is

on

a

positive

trajectory

in

these

segments,

although

this

remains

dependent

on

schools

remaining

open

with

improving

access

for

agents.

Top

10

Holdings

12/31/21

Company

Industry

%

of

Total

Net

Assets

A

aa

WillScot

Mobile

Mini

Holdings

Corp.

3.6%

Construction

&

Engineering

ACI

Worldwide,

Inc.

3.2%

Software

Hanover

Insurance

Group,

Inc.

(The)

3.1%

Insurance

Knowles

Corp.

2.8%

Electronic

Equipment,

Instruments

&

Components

Ashland

Global

Holdings,

Inc.

2.7%

Chemicals

NetScout

Systems,

Inc.

2.5%

Communications

Equipment

McGrath

RentCorp

2.4%

Trading

Companies

&

Distributors

Timken

Co.

(The)

2.4%

Machinery

Summit

Materials,

Inc.

2.4%

Construction

Materials

Crescent

Point

Energy

Corp.

2.3%

Oil,

Gas

&

Consumable

Fuels

Franklin

Small

Cap

Value

VIP

Fund

FSV-5

Annual

Report

Jack

in

the

Box,

an

operator

and

franchisor

of

quick

service

restaurants,

was

a

relative

detractor.

Weaker-than-expected

revenue

growth

and

larger-than-expected

cost

pressures

caused

by

input

and

labor

inflation

stemming

from

staffing

shortages

weighed

on

its

financial

performance.

While

some

of

these

cost

pressures

are

expected

to

persist

into

2022,

we

believe

the

company’s

franchised,

asset-light

business

model

positions

it

well

to

navigate

these

headwinds

over

the

longer

term.

Top

positive

contributors

to

performance

during

the

12-month

period

included

Crescent

Point

Energy,

Meggitt

and

Willscot

Mobile

Mini

Holdings.

In

contrast,

Crescent

Point

Energy,

a

Canada-based

exploration

and

production

company,

boosted

relative

performance.

Multiple

factors

contributed

to

the

strong

performance

including

a

surprise

dividend

boost,

a

share

buyback

announcement,

a

reduction

in

debt,

a

positive

free

cash

flow

outlook

and

an

increase

in

oil

prices.

Meggitt,

a

U.K.-based

producer

of

commercial

and

military

aerospace

parts,

contributed

to

relative

results

in

2021.

The

stock

rose

sharply

following

an

announcement

that

U.S.-

based

Parker-Hannifin

(not

a

Fund

holding)

had

offered

to

acquire

the

company

for

800

pence

per

share,

or

70%

more

than

the

closing

stock

price

on

July

30,

2021.

The

stock

rose

further

after

U.S.-based

TransDigm

Group

(not

held

at

period-end)

offered

a

topping

bid

of

900

pence.

TransDigm

withdrew

its

bid

for

Meggitt

in

September.

Willscot

Mobile

Mini

Holdings

(WSC),

a

provider

of

modular

rental

offices

and

portable

storage

containers,

outperformed

during

the

period

following

the

successful

integration

of

the

Mobile

Mini

acquisition

and

continuation

of

favorable

rental

rate

increases

for

both

products.

Specifically,

WSC

continues

to

experience

above-peer

rental

revenue

growth

in

its

modular

offices

due

to

the

inclusion

of

value-added

products,

or

VAPs,

such

as

office

furniture,

white

boards

and

coffee

makers,

etc.

The

VAPs

provide

their

customers

with

a

“move-in

ready”

office

and

allow

WSC

to

charge

a

higher

rental

rate.

WSC

is

expanding

relevant

VAPs

offerings

to

the

portable

storage

side

of

the

business.

Lastly,

in

November,

the

company

held

an

investor

day

and

unveiled

longer-term

financial

targets

that

were

higher

than

investors

anticipated.

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

December

31,

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

2

Fund

Expenses

Franklin

Small

Cap

Value

VIP

Fund

FSV-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,043.40

$4.72

$1,020.58

$4.67

0.92%

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.

Annual

Report

FSV-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$15.20

$15.73

$15.14

$20.43

$19.93

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.19

0.20

0.24

c

0.21

0.21

d

Net

realized

and

unrealized

gains

(losses)

...........

3.71

0.31

3.35

(2.29)

1.82

Total

from

investment

operations

....................

3.90

0.51

3.59

(2.08)

2.03

Less

distributions

from:

Net

investment

income

..........................

(0.21)

(0.23)

(0.22)

(0.23)

(0.15)

Net

realized

gains

.............................

(0.46)

(0.81)

(2.78)

(2.98)

(1.38)

Total

distributions

...............................

(0.67)

(1.04)

(3.00)

(3.21)

(1.53)

Net

asset

value,

end

of

year

.......................

$18.43

$15.20

$15.73

$15.14

$20.43

Total

return

e

...................................

25.67%

5.41%

26.72%

(12.69)%

10.92%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.66%

0.68%

0.67%

0.66%

0.66%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.66%

f

0.68%

f,g

0.67%

f,g

0.65%

g

0.65%

g

Net

investment

income

...........................

1.07%

1.54%

1.58%

c

1.13%

1.06%

d

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$73,715

$50,572

$46,980

$40,644

$51,245

Portfolio

turnover

rate

............................

60.41%

69.40%

54.36%

47.82%

33.36%

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.

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

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.50

$15.05

$14.60

$19.80

$19.36

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.14

0.16

0.20

c

0.16

0.15

d

Net

realized

and

unrealized

gains

(losses)

...........

3.53

0.30

3.20

(2.20)

1.77

Total

from

investment

operations

....................

3.67

0.46

3.40

(2.04)

1.92

Less

distributions

from:

Net

investment

income

..........................

(0.17)

(0.19)

(0.17)

(0.18)

(0.10)

Net

realized

gains

.............................

(0.46)

(0.82)

(2.78)

(2.98)

(1.38)

Total

distributions

...............................

(0.63)

(1.01)

(2.95)

(3.16)

(1.48)

Net

asset

value,

end

of

year

.......................

$17.54

$14.50

$15.05

$14.60

$19.80

Total

return

e

...................................

25.37%

5.19%

26.35%

(12.88)%

10.65%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.91%

0.93%

0.92%

0.91%

0.91%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.91%

f

0.93%

f,g

0.92%

f,g

0.90%

g

0.90%

g

Net

investment

income

...........................

0.83%

1.28%

1.33%

c

0.88%

0.81%

d

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,135,623

$1,103,373

$1,123,093

$978,675

$1,302,055

Portfolio

turnover

rate

............................

60.41%

69.40%

54.36%

47.82%

33.36%

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.

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

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSV-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.99

$15.51

$14.96

$20.22

$19.74

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.13

0.15

0.19

c

0.15

0.14

d

Net

realized

and

unrealized

gains

(losses)

...........

3.64

0.32

3.30

(2.28)

1.81

Total

from

investment

operations

....................

3.77

0.47

3.49

(2.13)

1.95

Less

distributions

from:

Net

investment

income

..........................

(0.16)

(0.18)

(0.16)

(0.15)

(0.09)

Net

realized

gains

.............................

(0.46)

(0.81)

(2.78)

(2.98)

(1.38)

Total

distributions

...............................

(0.62)

(0.99)

(2.94)

(3.13)

(1.47)

Net

asset

value,

end

of

year

.......................

$18.14

$14.99

$15.51

$14.96

$20.22

Total

return

e

...................................

25.17%

5.13%

26.23%

(13.01)%

10.56%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.01%

1.03%

1.02%

1.01%

1.01%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.01%

f

1.03%

f,g

1.02%

f,g

1.00%

g

1.00%

g

Net

investment

income

...........................

0.73%

1.18%

1.23%

c

0.78%

0.71%

d

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$38,148

$29,461

$29,238

$24,592

$32,053

Portfolio

turnover

rate

............................

60.41

%

69.40%

54.36%

47.82%

33.36%

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.

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,

December

31,

2021

Franklin

Small

Cap

Value

VIP

Fund

Annual

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

98.1%

Auto

Components

2.1%

a

Adient

plc

...........................................

United

States

423,558

$

20,279,957

LCI

Industries

........................................

United

States

36,149

5,634,545

25,914,502

Banks

9.4%

Atlantic

Union

Bankshares

Corp.

..........................

United

States

294,870

10,995,702

Bryn

Mawr

Bank

Corp.

.................................

United

States

278,146

12,519,351

Camden

National

Corp.

.................................

United

States

85,185

4,102,510

Columbia

Banking

System,

Inc.

...........................

United

States

400,580

13,106,978

First

Horizon

Corp.

....................................

United

States

839,742

13,712,987

First

Interstate

BancSystem

,

Inc.,

A

........................

United

States

70,227

2,856,132

First

of

Long

Island

Corp.

(The)

...........................

United

States

317,915

6,863,785

German

American

Bancorp,

Inc.

..........................

United

States

173,793

6,774,451

Peoples

Bancorp,

Inc.

..................................

United

States

195,922

6,232,279

SouthState

Corp.

.....................................

United

States

267,726

21,447,530

TriCo

Bancshares

.....................................

United

States

170,046

7,305,176

Washington

Trust

Bancorp,

Inc.

...........................

United

States

197,439

11,129,636

117,046,517

Biotechnology

0.3%

a

Mirum

Pharmaceuticals,

Inc.

.............................

United

States

66,430

1,059,558

a

Rhythm

Pharmaceuticals,

Inc.

............................

United

States

288,452

2,878,751

3,938,309

Building

Products

4.5%

Apogee

Enterprises,

Inc.

................................

United

States

391,655

18,858,188

Insteel

Industries,

Inc.

..................................

United

States

39,005

1,552,789

a

Masonite

International

Corp.

.............................

United

States

110,214

12,999,742

UFP

Industries,

Inc.

....................................

United

States

254,299

23,398,051

56,808,770

Chemicals

7.3%

Ashland

Global

Holdings,

Inc.

............................

United

States

314,880

33,899,981

Avient

Corp.

.........................................

United

States

511,506

28,618,761

a

Elementis

plc

........................................

United

Kingdom

4,238,109

7,543,088

Minerals

Technologies,

Inc.

..............................

United

States

293,260

21,451,969

91,513,799

Communications

Equipment

2.5%

a

NetScout

Systems,

Inc.

.................................

United

States

941,584

31,147,599

Construction

&

Engineering

5.0%

Argan

,

Inc.

..........................................

United

States

68,824

2,662,801

a

Great

Lakes

Dredge

&

Dock

Corp.

........................

United

States

969,461

15,239,927

a

WillScot

Mobile

Mini

Holdings

Corp.

.......................

United

States

1,086,623

44,377,683

62,280,411

Construction

Materials

2.4%

a

Summit

Materials,

Inc.,

A

................................

United

States

739,996

29,703,439

Electric

Utilities

0.6%

IDACORP,

Inc.

.......................................

United

States

61,420

6,959,500

Electrical

Equipment

1.5%

Regal

Rexnord

Corp.

..................................

United

States

111,511

18,976,942

Electronic

Equipment,

Instruments

&

Components

5.0%

Benchmark

Electronics,

Inc.

.............................

United

States

635,574

17,224,055

CTS

Corp.

..........................................

United

States

59,994

2,202,980

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSV-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Electronic

Equipment,

Instruments

&

Components

(continued)

a

II-VI,

Inc.

............................................

United

States

107,026

$

7,313,087

a

Knowles

Corp.

.......................................

United

States

1,518,352

35,453,519

62,193,641

Energy

Equipment

&

Services

1.8%

Hunting

plc

..........................................

United

Kingdom

1,227,732

2,809,475

a

Natural

Gas

Services

Group,

Inc.

.........................

United

States

153,048

1,602,412

a

NexTier

Oilfield

Solutions,

Inc.

............................

United

States

866,751

3,076,966

a

TechnipFMC

plc

......................................

United

Kingdom

2,432,464

14,400,187

21,889,040

Equity

Real

Estate

Investment

Trusts

(REITs)

3.1%

Alexander

&

Baldwin,

Inc.

...............................

United

States

352,261

8,838,229

Healthcare

Realty

Trust,

Inc.

.............................

United

States

325,821

10,308,976

Highwoods

Properties,

Inc.

..............................

United

States

169,044

7,537,672

a

Sunstone

Hotel

Investors,

Inc.

............................

United

States

1,069,334

12,543,288

39,228,165

Food

&

Staples

Retailing

0.3%

a

BJ's

Wholesale

Club

Holdings,

Inc.

........................

United

States

50,771

3,400,134

Food

Products

1.4%

Glanbia

plc

..........................................

Ireland

1,285,277

17,942,933

Gas

Utilities

0.2%

Spire,

Inc.

...........................................

United

States

30,218

1,970,818

Health

Care

Equipment

&

Supplies

2.5%

a

Envista

Holdings

Corp.

.................................

United

States

407,158

18,346,540

a

Integer

Holdings

Corp.

.................................

United

States

153,956

13,177,094

31,523,634

Hotels,

Restaurants

&

Leisure

6.9%

a

Dalata

Hotel

Group

plc

.................................

Ireland

2,233,133

9,450,333

a

Denny's

Corp.

........................................

United

States

1,253,382

20,054,112

a

Hilton

Grand

Vacations,

Inc.

.............................

United

States

541,455

28,215,220

Jack

in

the

Box,

Inc.

...................................

United

States

328,392

28,727,732

86,447,397

Household

Durables

0.3%

a

M/I

Homes,

Inc.

.......................................

United

States

54,909

3,414,242

Insurance

10.0%

Argo

Group

International

Holdings

Ltd.

.....................

United

States

227,110

13,197,362

CNO

Financial

Group,

Inc.

..............................

United

States

710,486

16,937,986

Hanover

Insurance

Group,

Inc.

(The)

.......................

United

States

293,022

38,403,463

Horace

Mann

Educators

Corp.

...........................

United

States

610,203

23,614,856

Old

Republic

International

Corp.

..........................

United

States

590,483

14,514,072

Selective

Insurance

Group,

Inc.

...........................

United

States

227,760

18,662,655

125,330,394

IT

Services

1.2%

Alliance

Data

Systems

Corp.

.............................

United

States

222,662

14,822,609

Leisure

Products

1.7%

Brunswick

Corp.

......................................

United

States

215,421

21,699,357

Machinery

7.5%

Astec

Industries,

Inc.

...................................

United

States

51,760

3,585,415

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Annual

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)

Columbus

McKinnon

Corp.

..............................

United

States

19,801

$

915,994

Flowserve

Corp.

......................................

United

States

185,883

5,688,020

Greenbrier

Cos.,

Inc.

(The)

..............................

United

States

589,622

27,057,754

Mueller

Industries,

Inc.

.................................

United

States

110,000

6,529,600

Mueller

Water

Products,

Inc.,

A

...........................

United

States

410,639

5,913,202

REV

Group,

Inc.

......................................

United

States

565,076

7,995,826

Terex

Corp.

..........................................

United

States

123,853

5,443,339

Timken

Co.

(The)

.....................................

United

States

431,982

29,932,033

93,061,183

Media

0.2%

a

Loyalty

Ventures,

Inc.

..................................

United

States

82,239

2,472,927

Metals

&

Mining

0.3%

Kaiser

Aluminum

Corp.

.................................

United

States

39,516

3,712,133

Multi-Utilities

1.4%

Black

Hills

Corp.

......................................

United

States

244,148

17,229,524

Oil,

Gas

&

Consumable

Fuels

3.3%

Crescent

Point

Energy

Corp.

.............................

Canada

5,385,736

28,749,481

a

Green

Plains,

Inc.

.....................................

United

States

350,082

12,168,850

40,918,331

Professional

Services

1.2%

ICF

International,

Inc.

..................................

United

States

54,292

5,567,644

Stantec

,

Inc.

.........................................

Canada

178,690

10,043,099

15,610,743

Real

Estate

Management

&

Development

0.3%

a

Cushman

&

Wakefield

plc

...............................

United

States

152,886

3,400,185

Semiconductors

&

Semiconductor

Equipment

0.7%

a

Cohu

,

Inc.

...........................................

United

States

221,414

8,433,659

Software

4.6%

a

ACI

Worldwide,

Inc.

....................................

United

States

1,140,313

39,568,861

Software

AG

.........................................

Germany

454,043

18,075,008

57,643,869

Specialty

Retail

3.9%

a

Children's

Place,

Inc.

(The)

..............................

United

States

114,932

9,112,958

a

Dufry

AG

............................................

Switzerland

364,366

17,940,586

Group

1

Automotive,

Inc.

................................

United

States

110,929

21,655,560

48,709,104

Textiles,

Apparel

&

Luxury

Goods

0.5%

Carter's,

Inc.

.........................................

United

States

65,579

6,637,906

Thrifts

&

Mortgage

Finance

0.4%

Enact

Holdings,

Inc.

...................................

United

States

232,466

4,805,072

Trading

Companies

&

Distributors

3.8%

Herc

Holdings,

Inc.

....................................

United

States

108,485

16,983,327

McGrath

RentCorp

....................................

United

States

377,219

30,275,597

47,258,924

Total

Common

Stocks

(Cost

$932,130,479)

.....................................

1,224,045,712

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small

Cap

Value

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSV-13

Short

Term

Investments

1.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.9%

b,c

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

24,112,773

$

24,112,773

Total

Money

Market

Funds

(Cost

$24,112,773)

..................................

24,112,773

Total

Short

Term

Investments

(Cost

$24,112,773

)

................................

24,112,773

a

Total

Investments

(Cost

$956,243,252)

100.0%

..................................

$1,248,158,485

Other

Assets,

less

Liabilities

(0.0)%

†

...........................................

(672,082)

Net

Assets

100.0%

...........................................................

$1,247,486,403

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non

-income

producing.

b

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

c

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

December

31,

2021

Annual

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

...................................................................

$932,130,479

Cost

-

Non-controlled

affiliates

(

Note

3e)

........................................................

24,112,773

Value

-

Unaffiliated

issuers

..................................................................

$1,224,045,712

Value

-

Non-controlled

affiliates

(

Note

3e)

.......................................................

24,112,773

Receivables:

Investment

securities

sold

...................................................................

317,372

Capital

shares

sold

........................................................................

322,165

Dividends

...............................................................................

812,031

Total

assets

..........................................................................

1,249,610,053

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

266,202

Capital

shares

redeemed

...................................................................

563,309

Management

fees

.........................................................................

659,066

Distribution

fees

..........................................................................

246,495

Reports

to

shareholders

fees

................................................................

372,469

Accrued

expenses

and

other

liabilities

...........................................................

16,109

Total

liabilities

.........................................................................

2,123,650

Net

assets,

at

value

.................................................................

$1,247,486,403

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$750,535,695

Total

distributable

earnings

(losses)

.............................................................

496,950,708

Net

assets,

at

value

.................................................................

$1,247,486,403

Franklin

Small

Cap

Value

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$73,714,989

Shares

outstanding

........................................................................

3,999,050

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$18.43

Class

2:

Net

assets,

at

value

.......................................................................

$1,135,623,455

Shares

outstanding

........................................................................

64,748,023

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.54

Class

4:

Net

assets,

at

value

.......................................................................

$38,147,959

Shares

outstanding

........................................................................

2,102,402

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$18.14

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSV-15

Franklin

Small

Cap

Value

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$79,649)

Unaffiliated

issuers

........................................................................

$23,052,882

Non-controlled

affiliates

(

Note

3e)

.............................................................

1,884

Interest:

Unaffiliated

issuers

........................................................................

1,868

Total

investment

income

...................................................................

23,056,634

Expenses:

Management

fees

(

Note

3a)

...................................................................

8,345,066

Interest

expense

...........................................................................

27

Distribution

fees:

(Note

3c)

    Class

2

................................................................................

3,054,670

    Class

4

................................................................................

121,493

Custodian

fees

(

Note

4)

......................................................................

8,348

Reports

to

shareholders

fees

..................................................................

296,725

Professional

fees

...........................................................................

74,682

Trustees'

fees

and

expenses

..................................................................

12,301

Other

....................................................................................

34,042

Total

expenses

.........................................................................

11,947,354

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(19,367)

Net

expenses

.........................................................................

11,927,987

Net

investment

income

................................................................

11,128,647

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

199,381,865

Foreign

currency

transactions

................................................................

58,552

Net

realized

gain

(loss)

..................................................................

199,440,417

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

78,102,132

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(8,242)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

78,093,890

Net

realized

and

unrealized

gain

(loss)

............................................................

277,534,307

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$288,662,954

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSV-16

Franklin

Small

Cap

Value

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$11,128,647

$12,966,525

Net

realized

gain

(loss)

.................................................

199,440,417

35,583,469

Net

change

in

unrealized

appreciation

(depreciation)

...........................

78,093,890

9,897,496

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

288,662,954

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

.............................................................

12,468,955

3,879,512

Class

2

.............................................................

(189,934,717)

1,523,597

Class

4

.............................................................

2,438,024

226,802

Total

capital

share

transactions

............................................

(175,027,738)

5,629,911

Net

increase

(decrease)

in

net

assets

...................................

64,080,482

(15,905,510)

Net

assets:

Beginning

of

year

.......................................................

1,183,405,921

1,199,311,431

End

of

year

...........................................................

$1,247,486,403

$1,183,405,921

Franklin

Templeton

Variable

Insurance

Products

Trust

FSV-17

Annual

Report

Notes

to

Financial

Statements

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

December

31,

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

FSV-18

Annual

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

December

31,

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

FSV-19

Annual

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

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

1,117,537

$20,319,471

455,233

$5,805,187

Shares

issued

in

reinvestment

of

distributions

..........

136,633

2,503,125

275,768

3,163,057

Shares

redeemed

...............................

(581,230)

(10,353,641)

(392,293)

(5,088,732)

Net

increase

(decrease)

..........................

672,940

$12,468,955

338,708

$3,879,512

Class

2

Shares:

Shares

sold

...................................

8,044,540

$137,488,496

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

...............................

(21,998,749)

(373,161,098)

(15,190,634)

(186,228,741)

Net

increase

(decrease)

..........................

(11,334,628)

$(189,934,717)

1,462,517

$1,523,597

Class

4

Shares:

Shares

sold

...................................

593,014

$10,356,001

422,087

$4,787,696

Shares

issued

in

reinvestment

of

distributions

..........

65,014

1,174,804

175,927

1,993,248

Shares

redeemed

...............................

(521,176)

(9,092,781)

(517,251)

(6,554,142)

Net

increase

(decrease)

..........................

136,852

$2,438,024

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

FSV-20

Annual

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.630%

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)

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

FSV-21

Annual

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

year

ended

December

31,

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

year

ended

December

31,

2021,

there

were

no

credits

earned.

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

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

$

430,860,043

$

(428,107,981)

$

—

$

—

$

24,112,773

24,112,773

$

1,884

Total

Affiliated

Securities

...

$21,360,711

$430,860,043

$(428,107,981)

$—

$—

$24,112,773

$1,884

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$29,683,290

$20,917,706

Long

term

capital

gain

......................................................

19,871,444

59,065,205

$49,554,734

$79,982,911

Cost

of

investments

..........................................................................

$962,773,502

Unrealized

appreciation

........................................................................

$315,013,250

Unrealized

depreciation

........................................................................

(29,628,267)

Net

unrealized

appreciation

(depreciation)

..........................................................

$285,384,983

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$84,341,803

Undistributed

long

term

capital

gains

..............................................................

127,224,321

Total

distributable

earnings

.....................................................................

$211,566,124

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSV-22

Annual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatment

of

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$772,912,080

and

$992,486,044,

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

December

31,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSV-23

Annual

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. The

ASUs

are

effective

for

certain

reference

Level

1

Level

2

Level

3

Total

Franklin

Small

Cap

Value

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Auto

Components

......................

$

25,914,502

$

—

$

—

$

25,914,502

Banks

...............................

117,046,517

—

—

117,046,517

Biotechnology

.........................

3,938,309

—

—

3,938,309

Building

Products

......................

56,808,770

—

—

56,808,770

Chemicals

...........................

91,513,799

—

—

91,513,799

Communications

Equipment

..............

31,147,599

—

—

31,147,599

Construction

&

Engineering

...............

62,280,411

—

—

62,280,411

Construction

Materials

..................

29,703,439

—

—

29,703,439

Electric

Utilities

........................

6,959,500

—

—

6,959,500

Electrical

Equipment

....................

18,976,942

—

—

18,976,942

Electronic

Equipment,

Instruments

&

Components

........................

62,193,641

—

—

62,193,641

Energy

Equipment

&

Services

.............

21,889,040

—

—

21,889,040

Equity

Real

Estate

Investment

Trusts

(REITs)

.

39,228,165

—

—

39,228,165

Food

&

Staples

Retailing

.................

3,400,134

—

—

3,400,134

Food

Products

........................

—

17,942,933

—

17,942,933

Gas

Utilities

..........................

1,970,818

—

—

1,970,818

Health

Care

Equipment

&

Supplies

.........

31,523,634

—

—

31,523,634

Hotels,

Restaurants

&

Leisure

.............

86,447,397

—

—

86,447,397

Household

Durables

....................

3,414,242

—

—

3,414,242

Insurance

............................

125,330,394

—

—

125,330,394

IT

Services

...........................

14,822,609

—

—

14,822,609

Leisure

Products

.......................

21,699,357

—

—

21,699,357

Machinery

............................

93,061,183

—

—

93,061,183

Media

...............................

2,472,927

—

—

2,472,927

Metals

&

Mining

.......................

3,712,133

—

—

3,712,133

Multi-Utilities

..........................

17,229,524

—

—

17,229,524

Oil,

Gas

&

Consumable

Fuels

.............

40,918,331

—

—

40,918,331

Professional

Services

...................

15,610,743

—

—

15,610,743

Real

Estate

Management

&

Development

....

3,400,185

—

—

3,400,185

Semiconductors

&

Semiconductor

Equipment

.

8,433,659

—

—

8,433,659

Software

.............................

39,568,861

18,075,008

—

57,643,869

Specialty

Retail

........................

30,768,518

17,940,586

—

48,709,104

Textiles,

Apparel

&

Luxury

Goods

..........

6,637,906

—

—

6,637,906

Thrifts

&

Mortgage

Finance

...............

4,805,072

—

—

4,805,072

Trading

Companies

&

Distributors

..........

47,258,924

—

—

47,258,924

Short

Term

Investments

...................

24,112,773

—

—

24,112,773

Total

Investments

in

Securities

...........

$1,194,199,958

$53,958,527

a

$—

$1,248,158,485

a

Includes

foreign

securities

valued

at

$53,958,527,

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

FSV-24

Annual

Report

Franklin

Small

Cap

Value

VIP

Fund

(continued)

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

other

than

those

already

disclosed

in

the

financial

statements.

10.

New

Accounting

Pronouncements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FSV-25

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Small

Cap

Value

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Small

Cap

Value

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FSV-26

Annual

Report

Franklin

Small

Cap

Value

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$19,871,444

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$20,999,365

FSC-1

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

This

annual

report

for

Franklin

Small-Mid

Cap

Growth

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+10.01%

5-Year

+20.84%

10-Year

+15.70%

FSC-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Russell

Midcap

®

Growth

Index

and

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FSC-3

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

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

or

midsized

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

narrow

benchmark,

the

Russell

Midcap

Growth

®

Index,

posted

a

+12.73%

total

return,

and

its

broad

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

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

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

2

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Software

18.0%

IT

Services

7.2%

Semiconductors

&

Semiconductor

Equipment

6.0%

Health

Care

Equipment

&

Supplies

6.0%

Life

Sciences

Tools

&

Services

5.8%

Specialty

Retail

5.5%

Hotels,

Restaurants

&

Leisure

5.0%

Professional

Services

4.5%

Capital

Markets

4.3%

Textiles,

Apparel

&

Luxury

Goods

3.2%

Biotechnology

2.5%

Equity

Real

Estate

Investment

Trusts

(REITs)

2.5%

Electronic

Equipment,

Instruments

&

Components

2.5%

Health

Care

Technology

2.0%

Other*

23.7%

Short-Term

Investments

&

Other

Net

Assets

1.3%

1.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

2.

Source:

Morningstar.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

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-4

Annual

Report

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

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’s

absolute

returns

were

positive

but

lagged

those

of

the

Russell

Midcap

®

Growth

Index.

Much

of

the

Fund’s

underperformance

was

due

to

stock

selection

in

the

health

care,

information

technology

(IT)

and

industrials

sectors.

In

the

health

care

sector,

shares

of

cancer

immunotherapy

company

Iovance

Biotherapeutics

(not

held

at

period-end)

and

cardiac

device

maker

iRhythm

Technologies

(not

part

of

the

index;

not

held

at

period-end)

declined

and

hurt

Fund

performance.

Iovance

faced

regulatory

filing

delays

for

a

melanoma

treatment

it

developed.

while

Medicare

headwinds

were

a

drag

on

iRhythm’s

stock.

Conversely,

an

acquisition

offer

from

a

specialty

pharmaceutical

company

boosted

the

shares

of

cannabinoid-focused

drugmaker

GW

Pharmaceuticals

(not

part

of

the

index;

not

held

at

period-

end),

which

helped

annual

returns.

In

the

IT

sector,

relative

detractors

were

concentrated

in

the

software

industry

where

Zendesk

(not

held

at

period-

end)

and

Q2

Holdings

(not

part

of

the

index;

not

held

at

period-end)

underperformed.

Zendesk

is

a

supplier

of

online

customer

support

software,

and

the

company’s

pandemic

recovery

has

been

slower

than

that

of

its

peers.

Zendesk

also

announced

a

planned

all-stock

buyout

of

a

survey

software

company,

which

further

dampened

its

stock.

The

unfavorable

impact

from

distributor

inventory

levels

due

to

supply

chain

disruptions

was

a

drag

on

Q2

Holdings,

which

creates

software-as-a-service

solutions

to

help

banks.

In

contrast,

chipmaker

Synopsys

contributed

to

IT

sector

performance.

The

company

has

seen

broad

based

strength

in

chip

design

activity

across

automobiles,

high-performance

computing,

5G,

mobile

and

more.

In

the

industrials

sector,

defense

electronics

company

Mercury

Systems

(not

held

at

period-end)

was

a

leading

detractor.

Concerns

about

budget

cuts

under

the

new

Biden

administration

pressured

defense

stocks

overall.

Top

10

Holdings

12/31/21

Company

Industry

%

of

Total

Net

Assets

a

aa

Synopsys,

Inc.

2.8%

Software

IDEXX

Laboratories,

Inc.

2.3%

Health

Care

Equipment

&

Supplies

ANSYS,

Inc.

1.8%

Software

MSCI,

Inc.

1.8%

Capital

Markets

MongoDB,

Inc.

1.8%

IT

Services

CoStar

Group,

Inc.

1.7%

Professional

Services

Chipotle

Mexican

Grill,

Inc.

1.7%

Hotels,

Restaurants

&

Leisure

Bio-

Techne

Corp.

1.7%

Life

Sciences

Tools

&

Services

SiTime

Corp.

1.6%

Semiconductors

&

Semiconductor

Equipment

Okta

,

Inc.

1.5%

IT

Services

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-5

Annual

Report

Elsewhere,

electric

vehicle

manufacturer

Lucid

Group

(not

part

of

the

index;

not

held

at

period-end)

was

an

individual

contributor

in

the

consumer

discretionary

sector.

Its

stock

rallied

as

the

company

began

production

of

its

luxury

sedan

that

will

directly

compete

with

Tesla

(not

a

Fund

holding).

Lucid

announced

it

expects

to

produce

20,000

Lucid

Air

sedans

in

2022.

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

December

31,

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

2

Fund

Expenses

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$997.30

$5.43

$1,019.77

$5.49

1.08%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSC-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.99

$19.74

$17.04

$19.71

$17.77

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.15)

(0.07)

(0.04)

(0.05)

(0.04)

Net

realized

and

unrealized

gains

(losses)

...........

2.79

9.96

5.31

(0.70)

3.74

Total

from

investment

operations

....................

2.64

9.89

5.27

(0.75)

3.70

Less

distributions

from:

Net

realized

gains

.............................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

Net

asset

value,

end

of

year

.......................

$26.72

$26.99

$19.74

$17.04

$19.71

Total

return

c

...................................

10.25%

55.52%

31.80%

(5.15)%

21.75%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.83%

0.85%

0.84%

0.86%

0.85%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.82%

0.84%

0.83%

0.85%

0.84%

Net

investment

(loss)

............................

(0.55)%

(0.33)%

(0.19)%

(0.24)%

(0.24)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$79,526

$72,039

$43,169

$33,518

$36,864

Portfolio

turnover

rate

............................

43.35%

48.93%

59.07%

44.78%

40.49%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$23.11

$17.29

$15.22

$17.83

$16.27

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.19)

(0.11)

(0.08)

(0.09)

(0.08)

Net

realized

and

unrealized

gains

(losses)

...........

2.38

8.57

4.72

(0.60)

3.40

Total

from

investment

operations

....................

2.19

8.46

4.64

(0.69)

3.32

Less

distributions

from:

Net

realized

gains

.............................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

Net

asset

value,

end

of

year

.......................

$22.39

$23.11

$17.29

$15.22

$17.83

Total

return

c

...................................

10.01%

55.09%

31.44%

(5.37)%

21.40%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.08%

1.10%

1.09%

1.11%

1.10%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.07%

1.09%

1.08%

1.10%

1.09%

Net

investment

(loss)

............................

(0.80)%

(0.61)%

(0.44)%

(0.49)%

(0.49)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$472,565

$503,032

$372,442

$310,300

$390,094

Portfolio

turnover

rate

............................

43.35%

48.93%

59.07%

44.78%

40.49%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

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.

Annual

Report

FSC-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$24.26

$18.04

$15.81

$18.47

$16.81

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..........................

(0.22)

(0.14)

(0.10)

(0.11)

(0.10)

Net

realized

and

unrealized

gains

(losses)

...........

2.49

9.00

4.90

(0.63)

3.52

Total

from

investment

operations

....................

2.27

8.86

4.80

(0.74)

3.42

Less

distributions

from:

Net

realized

gains

.............................

(2.91)

(2.64)

(2.57)

(1.92)

(1.76)

Net

asset

value,

end

of

year

.......................

$23.62

$24.26

$18.04

$15.81

$18.47

Total

return

c

...................................

9.86%

55.01%

31.26%

(5.46)%

21.30%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.18%

1.20%

1.19%

1.21%

1.20%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.17%

1.19%

1.18%

1.20%

1.19%

Net

investment

(loss)

............................

(0.90)%

(0.71)%

(0.54)%

(0.59)%

(0.59)%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$26,518

$25,580

$17,662

$13,759

$15,829

Portfolio

turnover

rate

............................

43

.35%

48.93%

59.07%

44.78%

40.49%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Annual

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

97.3%

Aerospace

&

Defense

1.1%

a

TransDigm

Group,

Inc.

.................................

United

States

10,300

$

6,553,684

Airlines

0.5%

a

Southwest

Airlines

Co.

.................................

United

States

66,000

2,827,440

Banks

0.7%

a

SVB

Financial

Group

...................................

United

States

6,300

4,272,912

Biotechnology

2.5%

a

Alnylam

Pharmaceuticals,

Inc.

............................

United

States

16,700

2,831,986

a

Horizon

Therapeutics

plc

................................

United

States

44,400

4,784,544

a

Mirati

Therapeutics,

Inc.

................................

United

States

8,000

1,173,520

a

PTC

Therapeutics,

Inc.

.................................

United

States

45,000

1,792,350

a

Seagen

,

Inc.

.........................................

United

States

26,600

4,112,360

14,694,760

Building

Products

1.2%

Trane

Technologies

plc

.................................

United

States

34,000

6,869,020

Capital

Markets

4.3%

Ares

Management

Corp.

................................

United

States

79,500

6,460,965

MarketAxess

Holdings,

Inc.

..............................

United

States

11,900

4,894,113

MSCI,

Inc.

...........................................

United

States

17,000

10,415,730

Tradeweb

Markets,

Inc.,

A

...............................

United

States

33,100

3,314,634

25,085,442

Commercial

Services

&

Supplies

1.6%

a

Copart

,

Inc.

..........................................

United

States

29,400

4,457,628

Republic

Services,

Inc.

.................................

United

States

34,700

4,838,915

9,296,543

Communications

Equipment

0.9%

a

Arista

Networks,

Inc.

...................................

United

States

36,100

5,189,375

Containers

&

Packaging

2.0%

Avery

Dennison

Corp.

..................................

United

States

20,500

4,439,685

Ball

Corp.

...........................................

United

States

74,300

7,152,861

11,592,546

Electrical

Equipment

1.9%

a

Generac

Holdings,

Inc.

.................................

United

States

10,200

3,589,584

Rockwell

Automation,

Inc.

...............................

United

States

20,900

7,290,965

10,880,549

Electronic

Equipment,

Instruments

&

Components

2.5%

Cognex

Corp.

........................................

United

States

49,400

3,841,344

a

Keysight

Technologies,

Inc.

..............................

United

States

35,150

7,258,826

a

Zebra

Technologies

Corp.,

A

.............................

United

States

5,500

3,273,600

14,373,770

Entertainment

1.6%

a

Roku,

Inc.

...........................................

United

States

31,856

7,269,539

a

Zynga,

Inc.,

A

........................................

United

States

273,300

1,749,120

9,018,659

Equity

Real

Estate

Investment

Trusts

(REITs)

2.5%

Equity

LifeStyle

Properties,

Inc.

...........................

United

States

27,400

2,401,884

SBA

Communications

Corp.

.............................

United

States

21,657

8,425,006

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSC-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

Terreno

Realty

Corp.

...................................

United

States

45,050

$

3,842,315

14,669,205

Food

Products

0.5%

a

Freshpet

,

Inc.

........................................

United

States

32,300

3,077,221

Health

Care

Equipment

&

Supplies

6.0%

a

Dexcom

,

Inc.

.........................................

United

States

10,088

5,416,752

a,b

Figs,

Inc.,

A

..........................................

United

States

54,500

1,502,020

a

IDEXX

Laboratories,

Inc.

................................

United

States

20,350

13,399,661

a

Inari

Medical,

Inc.

.....................................

United

States

31,200

2,847,624

a

Insulet

Corp.

.........................................

United

States

20,500

5,454,435

Teleflex,

Inc.

.........................................

United

States

18,450

6,060,456

34,680,948

Health

Care

Providers

&

Services

1.0%

a

Guardant

Health,

Inc.

..................................

United

States

39,400

3,940,788

a

HealthEquity

,

Inc.

.....................................

United

States

36,300

1,605,912

5,546,700

Health

Care

Technology

2.0%

a

Certara

,

Inc.

.........................................

United

States

50,100

1,423,842

a

Teladoc

Health,

Inc.

...................................

United

States

20,466

1,879,188

a

Veeva

Systems,

Inc.,

A

.................................

United

States

32,800

8,379,744

11,682,774

Hotels,

Restaurants

&

Leisure

5.0%

a

Chipotle

Mexican

Grill,

Inc.

..............................

United

States

5,630

9,842,647

Darden

Restaurants,

Inc.

...............................

United

States

24,700

3,720,808

a,b

DraftKings

,

Inc.,

A

.....................................

United

States

116,233

3,192,921

a

Expedia

Group,

Inc.

...................................

United

States

9,600

1,734,912

a,b

Sweetgreen

,

Inc.,

A

....................................

United

States

6,000

192,000

Vail

Resorts,

Inc.

......................................

United

States

15,500

5,082,450

a

Wynn

Resorts

Ltd.

....................................

United

States

61,100

5,195,944

28,961,682

Household

Durables

0.9%

a

NVR,

Inc.

...........................................

United

States

882

5,211,623

Interactive

Media

&

Services

1.8%

a

Match

Group,

Inc.

.....................................

United

States

51,624

6,827,274

a

Pinterest,

Inc.,

A

......................................

United

States

100,700

3,660,445

10,487,719

Internet

&

Direct

Marketing

Retail

0.9%

a

Etsy,

Inc.

............................................

United

States

22,500

4,926,150

IT

Services

7.2%

a

BigCommerce

Holdings,

Inc.,

1

...........................

United

States

67,400

2,383,938

a

Cloudflare

,

Inc.,

A

.....................................

United

States

49,200

6,469,800

a

EPAM

Systems,

Inc.

...................................

United

States

6,400

4,278,080

a

Marqeta

,

Inc.,

A

.......................................

United

States

151,378

2,599,160

a

MongoDB,

Inc.

.......................................

United

States

19,200

10,163,520

a

Okta

,

Inc.

...........................................

United

States

39,600

8,877,132

a

Twilio

,

Inc.,

A

.........................................

United

States

13,400

3,528,756

a

Wix.com

Ltd.

.........................................

Israel

19,900

3,140,021

41,440,407

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Annual

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)

Leisure

Products

1.1%

a,c,d

Fanatics

Holdings,

Inc.

.................................

United

States

94,539

$

4,026,670

a

YETI

Holdings,

Inc.

....................................

United

States

27,600

2,286,108

6,312,778

Life

Sciences

Tools

&

Services

5.8%

a

10X

Genomics,

Inc.,

A

..................................

United

States

26,500

3,947,440

a

Avantor

,

Inc.

.........................................

United

States

121,300

5,111,582

Bio-

Techne

Corp.

.....................................

United

States

18,625

9,635,457

a

Mettler

-Toledo

International,

Inc.

..........................

United

States

5,080

8,621,827

West

Pharmaceutical

Services,

Inc.

........................

United

States

13,400

6,284,734

33,601,040

Machinery

1.2%

IDEX

Corp.

..........................................

United

States

14,350

3,391,192

a

Proterra

,

Inc.

.........................................

United

States

54,000

476,820

Stanley

Black

&

Decker,

Inc.

.............................

United

States

16,846

3,177,493

7,045,505

Oil,

Gas

&

Consumable

Fuels

0.3%

Coterra

Energy,

Inc.

...................................

United

States

101,700

1,932,300

Personal

Products

0.7%

a,b

BellRing

Brands,

Inc.,

A

.................................

United

States

129,700

3,700,341

a

Olaplex

Holdings,

Inc.

..................................

United

States

17,100

498,123

4,198,464

Pharmaceuticals

0.6%

a

Catalent

,

Inc.

........................................

United

States

11,200

1,433,936

a

Jazz

Pharmaceuticals

plc

...............................

United

States

15,800

2,012,920

3,446,856

Professional

Services

4.5%

a

CoStar

Group,

Inc.

....................................

United

States

125,250

9,898,507

TransUnion

..........................................

United

States

65,300

7,743,274

Verisk

Analytics,

Inc.

...................................

United

States

37,661

8,614,201

26,255,982

Road

&

Rail

1.5%

Old

Dominion

Freight

Line,

Inc.

...........................

United

States

23,550

8,439,849

Semiconductors

&

Semiconductor

Equipment

6.0%

a

Allegro

MicroSystems

,

Inc.

..............................

Japan

58,900

2,131,002

Entegris

,

Inc.

.........................................

United

States

39,900

5,529,342

a,b

GLOBALFOUNDRIES,

Inc.

..............................

United

States

18,600

1,208,442

a

Lattice

Semiconductor

Corp.

.............................

United

States

72,655

5,598,794

Monolithic

Power

Systems,

Inc.

...........................

United

States

12,750

6,289,958

a

Semtech

Corp.

.......................................

United

States

53,600

4,766,648

a

SiTime

Corp.

.........................................

United

States

31,700

9,273,518

34,797,704

Software

16.8%

a

Alkami

Technology,

Inc.

.................................

United

States

52,525

1,053,651

a

ANSYS,

Inc.

.........................................

United

States

26,100

10,469,232

a

Arteris

,

Inc.

..........................................

United

States

91,900

1,940,009

a

Avalara,

Inc.

.........................................

United

States

50,100

6,468,411

a

Bill.com

Holdings,

Inc.

..................................

United

States

25,048

6,240,709

a

Black

Knight,

Inc.

.....................................

United

States

81,300

6,738,957

a

Coupa

Software,

Inc.

...................................

United

States

29,500

4,662,475

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSC-13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

(continued)

a

Crowdstrike

Holdings,

Inc.,

A

.............................

United

States

27,900

$

5,712,525

a

Datadog

,

Inc.,

A

......................................

United

States

14,200

2,529,162

a

DocuSign,

Inc.

.......................................

United

States

48,200

7,341,342

a

Duck

Creek

Technologies,

Inc.

...........................

United

States

73,570

2,215,193

a

Five9,

Inc.

...........................................

United

States

25,900

3,556,588

a,b

Freshworks

,

Inc.,

A

....................................

United

States

29,200

766,792

a

HashiCorp

,

Inc.,

A

.....................................

United

States

5,100

464,304

a

HubSpot

,

Inc.

........................................

United

States

11,800

7,777,970

a

Lightspeed

Commerce,

Inc.

..............................

Canada

46,200

1,867,866

a

Paylocity

Holding

Corp.

.................................

United

States

36,050

8,513,568

a

Synopsys,

Inc.

.......................................

United

States

43,550

16,048,174

a

Zscaler

,

Inc.

.........................................

United

States

9,000

2,891,970

97,258,898

Specialty

Retail

5.5%

a

Burlington

Stores,

Inc.

..................................

United

States

22,500

6,558,975

a

Five

Below,

Inc.

.......................................

United

States

32,150

6,651,514

a

O'Reilly

Automotive,

Inc.

................................

United

States

10,500

7,415,415

a

Petco

Health

&

Wellness

Co.,

Inc.

.........................

United

States

126,500

2,503,435

Tractor

Supply

Co.

....................................

United

States

36,137

8,622,288

31,751,627

Textiles,

Apparel

&

Luxury

Goods

3.2%

a,b

Allbirds

,

Inc.,

A

.......................................

United

States

91,800

1,384,344

a,c,d

Allbirds

,

Inc.,

A

.......................................

United

States

92,392

1,330,614

Levi

Strauss

&

Co.,

A

..................................

United

States

84,200

2,107,526

a

Lululemon

Athletica

,

Inc.

................................

United

States

21,600

8,455,320

VF

Corp.

............................................

United

States

69,100

5,059,502

18,337,306

Trading

Companies

&

Distributors

1.5%

Fastenal

Co.

.........................................

United

States

130,800

8,379,048

Total

Common

Stocks

(Cost

$355,731,845)

.....................................

563,096,486

Convertible

Preferred

Stocks

1.4%

Diversified

Consumer

Services

0.2%

a,c,d

Newsela

,

Inc.,

D

......................................

United

States

48,915

987,771

a

Software

1.2%

a,c,d

Benchling

,

Inc.,

F

.....................................

United

States

35,200

1,150,910

a,c,d,e

Blaize

,

Inc.,

D

........................................

United

States

206,272

2,050,037

a,c,d

Databricks

,

Inc.,

G

....................................

United

States

8,626

1,943,750

a,c,d

OneTrust

LLC,

C

......................................

United

States

82,367

1,547,478

6,692,175

Total

Convertible

Preferred

Stocks

(Cost

$7,484,934)

............................

7,679,946

Warrants

Warrants

0.0%

†

Software

0.0%

†

a,c,d,e

Blaize

,

Inc.,

2/28/24

...................................

United

States

26,474

31,313

Total

Warrants

(Cost

$—)

.....................................................

31,313

Total

Long

Term

Investments

(Cost

$363,216,779)

...............................

570,807,745

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSC-14

Short

Term

Investments

2.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.4%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

8,439,570

$

8,439,570

Total

Money

Market

Funds

(Cost

$8,439,570)

...................................

8,439,570

a

a

a

a

a

h

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.5%

Money

Market

Funds

1.5%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

8,496,850

8,496,850

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$8,496,850)

............................................................

8,496,850

Total

Short

Term

Investments

(Cost

$16,936,420

)

................................

16,936,420

a

Total

Investments

(Cost

$380,153,199)

101.6%

..................................

$587,744,165

Other

Assets,

less

Liabilities

(1.6)%

...........................................

(9,136,044)

Net

Assets

100.0%

...........................................................

$578,608,121

†

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

December

31,

2021.

See

Note

1(c).

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

d

See

Note

7

regarding

restricted

securities.

e

See

Note

8

regarding

holdings

of

5%

voting

securities.

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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSC-15

Franklin

Small-

Mid

Cap

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$361,062,779

Cost

-

Non-controlled

affiliates

(Note

3e

and

8)

...................................................

19,090,420

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$8,128,798)

.................................

$568,726,395

Value

-

Non-controlled

affiliates

(Note

3e

and

8)

..................................................

19,017,770

Cash

....................................................................................

19,954

Receivables:

Capital

shares

sold

........................................................................

66,022

Dividends

and

interest

.....................................................................

73,399

Total

assets

..........................................................................

587,903,540

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

96,842

Management

fees

.........................................................................

384,610

Distribution

fees

..........................................................................

108,117

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

8,496,850

Accrued

expenses

and

other

liabilities

...........................................................

209,000

Total

liabilities

.........................................................................

9,295,419

Net

assets,

at

value

.................................................................

$578,608,121

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$265,294,250

Total

distributable

earnings

(losses)

.............................................................

313,313,871

Net

assets,

at

value

.................................................................

$578,608,121

Franklin

Small-

Mid

Cap

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$79,525,998

Shares

outstanding

........................................................................

2,976,293

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$26.72

Class

2:

Net

assets,

at

value

.......................................................................

$472,564,618

Shares

outstanding

........................................................................

21,109,916

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$22.39

Class

4:

Net

assets,

at

value

.......................................................................

$26,517,505

Shares

outstanding

........................................................................

1,122,612

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$23.62

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

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

........................................................................

$1,580,582

Non-controlled

affiliates

(Note

3e

and

8)

........................................................

1,511

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

95,735

Non-controlled

affiliates

(Note

3e

)

.............................................................

741

Total

investment

income

...................................................................

1,678,569

Expenses:

Management

fees

(Note

3

a

)

...................................................................

4,727,524

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,249,751

    Class

4

................................................................................

95,672

Custodian

fees

(Note

4

)

......................................................................

4,280

Reports

to

shareholders

fees

..................................................................

130,232

Professional

fees

...........................................................................

95,387

Trustees'

fees

and

expenses

..................................................................

6,257

Other

....................................................................................

38,421

Total

expenses

.........................................................................

6,347,524

Expense

reductions

(Note

4

)

...............................................................

(5)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(17,063)

Net

expenses

.........................................................................

6,330,456

Net

investment

income

(loss)

............................................................

(4,651,887)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

110,269,401

Foreign

currency

transactions

................................................................

(1,499)

Net

realized

gain

(loss)

..................................................................

110,267,902

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(47,948,092)

Non-controlled

affiliates

(Note

3e

and

8)

.......................................................

(72,650)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(48,020,742)

Net

realized

and

unrealized

gain

(loss)

............................................................

62,247,160

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$57,595,273

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.

Annual

Report

FSC-17

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(4,651,887)

$(2,771,523)

Net

realized

gain

(loss)

.................................................

110,267,902

72,207,047

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(48,020,742)

144,395,647

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

57,595,273

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

.............................................................

7,817,577

11,218,927

Class

2

.............................................................

(19,844,931)

2,617,481

Class

4

.............................................................

1,399,650

1,452,781

Total

capital

share

transactions

............................................

(10,627,704)

15,289,189

Net

increase

(decrease)

in

net

assets

...................................

(22,044,079)

167,379,691

Net

assets:

Beginning

of

year

.......................................................

600,652,200

433,272,509

End

of

year

...........................................................

$578,608,121

$600,652,200

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Franklin

Small-Mid

Cap

Growth

VIP

Fund

FSC-18

Annual

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

December

31,

2021,

40.1%

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

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

December

31,

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

FSC-19

Annual

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

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

FSC-20

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

December

31,

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

FSC-21

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

576,234

$15,810,750

706,229

$16,500,714

Shares

issued

in

reinvestment

of

distributions

..........

290,492

7,430,783

289,889

5,568,768

Shares

redeemed

...............................

(559,560)

(15,423,956)

(514,114)

(10,850,555)

Net

increase

(decrease)

..........................

307,166

$7,817,577

482,004

$11,218,927

Class

2

Shares:

Shares

sold

...................................

815,205

$18,971,660

2,526,425

$47,366,200

Shares

issued

in

reinvestment

of

distributions

..........

2,725,170

58,482,161

3,261,133

53,710,860

Shares

redeemed

...............................

(4,194,907)

(97,298,752)

(5,564,626)

(98,459,579)

Net

increase

(decrease)

..........................

(654,532)

$(19,844,931)

222,932

$2,617,481

Class

4

Shares:

Shares

sold

...................................

227,811

$5,628,165

319,307

$6,396,773

Shares

issued

in

reinvestment

of

distributions

..........

136,748

3,098,704

142,257

2,461,041

Shares

redeemed

...............................

(296,435)

(7,327,219)

(385,938)

(7,405,033)

Net

increase

(decrease)

..........................

68,124

$1,399,650

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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-22

Annual

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.782%

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

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

year

ended

December

31,

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

FSC-23

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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

year

ended

December

31,

2021,

these

purchase

and

sale

transactions

aggregated

$0

and

$238,900,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations.

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

160,529,330

$

(164,760,935)

$

—

$

—

$

8,439,570

8,439,570

$

1,511

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

8,418,420

137,741,526

(137,663,096)

—

—

8,496,850

8,496,850

741

Total

Affiliated

Securities

...

$21,089,595

$298,270,856

$(302,424,031)

$—

$—

$16,936,420

$2,252

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$5,306,215

$4,542,643

Long

term

capital

gain

......................................................

63,705,433

57,198,026

$69,011,648

$61,740,669

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-24

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$253,820,703

and

$333,655,985,

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$8,496,850

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Restricted

Securities

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

December

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Cost

of

investments

..........................................................................

$380,116,741

Unrealized

appreciation

........................................................................

$225,065,490

Unrealized

depreciation

........................................................................

(17,438,066)

Net

unrealized

appreciation

(depreciation)

..........................................................

$207,627,424

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$17,727,490

Undistributed

long

term

capital

gains

..............................................................

87,958,956

Total

distributable

earnings

.....................................................................

$105,686,446

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Small-Mid

Cap

Growth

VIP

Fund

92,392

a

Allbirds,

Inc.,

A

..............................

9/22/20

$

1,068,276

$

1,330,614

35,200

Benchling,

Inc.,

F

............................

10/20/21

1,150,910

1,150,910

26,474

Blaize,

Inc.,

2/28/24

..........................

3/01/21

-

11/09/21

—

31,313

206,272

Blaize,

Inc.,

D

..............................

3/02/21

-

11/09/21

2,154,000

2,050,037

8,626

Databricks,

Inc.,

G

...........................

2/01/21

1,529,975

1,943,750

94,539

Fanatics

Holdings,

Inc.

........................

8/13/20

-

3/22/21

1,669,739

4,026,670

48,915

Newsela,

Inc.,

D

.............................

1/21/21

1,034,807

987,771

82,367

OneTrust

LLC,

C

............................

4/01/21

1,615,242

1,547,478

Total

Restricted

Securities

(Value

is

2.3%

of

Net

Assets)

..............

$10,222,949

$13,068,543

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$1,384,344

as

of

December

31,

2021.

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-25

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

8.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

The

1940

Act

defines

"affiliated

companies"

to

include

investments

in

portfolio

companies

in

which

a

fund

owns

5%

or

more

of

the

outstanding

voting

securities.

Additionally,

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

companies’

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

company.

During

the

year

ended

December

31,

2021,

investments

in

“affiliated

companies”

were

as

follows:

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.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Non-Controlled

Affiliates

Dividends

Blaize,

Inc

.,

2/28/24

...

$

—

$

—

$

—

$

—

$

31,313

$

31,313

26,474

$

—

Blaize,

Inc.,

D

.......

—

2,154,000

—

—

(103,963)

2,050,037

206,272

—

Total

Affiliated

Securities

(Value

is

0.4%

of

Net

Assets)

..........

$—

$2,154,000

$—

$

—

$

(72,650)

$2,081,350

$—

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-26

Annual

Report

Franklin

Small-Mid

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

December

31,

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

...................

$

6,553,684

$

—

$

—

$

6,553,684

Airlines

..............................

2,827,440

—

—

2,827,440

Banks

...............................

4,272,912

—

—

4,272,912

Biotechnology

.........................

14,694,760

—

—

14,694,760

Building

Products

......................

6,869,020

—

—

6,869,020

Capital

Markets

........................

25,085,442

—

—

25,085,442

Commercial

Services

&

Supplies

...........

9,296,543

—

—

9,296,543

Communications

Equipment

..............

5,189,375

—

—

5,189,375

Containers

&

Packaging

.................

11,592,546

—

—

11,592,546

Electrical

Equipment

....................

10,880,549

—

—

10,880,549

Electronic

Equipment,

Instruments

&

Components

........................

14,373,770

—

—

14,373,770

Entertainment

.........................

9,018,659

—

—

9,018,659

Equity

Real

Estate

Investment

Trusts

(REITs)

.

14,669,205

—

—

14,669,205

Food

Products

........................

3,077,221

—

—

3,077,221

Health

Care

Equipment

&

Supplies

.........

34,680,948

—

—

34,680,948

Health

Care

Providers

&

Services

..........

5,546,700

—

—

5,546,700

Health

Care

Technology

.................

11,682,774

—

—

11,682,774

Hotels,

Restaurants

&

Leisure

.............

28,961,682

—

—

28,961,682

Household

Durables

....................

5,211,623

—

—

5,211,623

Interactive

Media

&

Services

..............

10,487,719

—

—

10,487,719

Internet

&

Direct

Marketing

Retail

..........

4,926,150

—

—

4,926,150

IT

Services

...........................

41,440,407

—

—

41,440,407

Leisure

Products

.......................

2,286,108

—

4,026,670

6,312,778

Life

Sciences

Tools

&

Services

............

33,601,040

—

—

33,601,040

Machinery

............................

7,045,505

—

—

7,045,505

Oil,

Gas

&

Consumable

Fuels

.............

1,932,300

—

—

1,932,300

Personal

Products

.....................

4,198,464

—

—

4,198,464

Pharmaceuticals

.......................

3,446,856

—

—

3,446,856

Professional

Services

...................

26,255,982

—

—

26,255,982

Road

&

Rail

..........................

8,439,849

—

—

8,439,849

Semiconductors

&

Semiconductor

Equipment

.

34,797,704

—

—

34,797,704

Software

.............................

97,258,898

—

—

97,258,898

Specialty

Retail

........................

31,751,627

—

—

31,751,627

Textiles,

Apparel

&

Luxury

Goods

..........

17,006,692

—

1,330,614

18,337,306

Trading

Companies

&

Distributors

..........

8,379,048

—

—

8,379,048

Convertible

Preferred

Stocks

...............

—

—

7,679,946

7,679,946

Warrants

..............................

—

—

31,313

31,313

Short

Term

Investments

...................

16,936,420

—

—

16,936,420

Total

Investments

in

Securities

...........

$574,675,622

$—

$13,068,543

$587,744,165

11.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-27

Annual

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 year.

At

December

31,

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

December

31,

2021,

are

as

follows:

Balance

at

Beginning

of

Year

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

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

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

:

IT

Services

........

$

1,208,923

$

—

$

(1,077,009)

$

—

$

—

$

—

$

—

$

(131,914)

$

—

$

—

Leisure

Products

....

—

1,669,739

—

—

—

—

—

2,356,931

4,026,670

2,356,931

Textiles,

Apparel

&

Luxury

Goods

....

—

1,068,276

—

—

—

—

—

262,338

1,330,614

262,338

Convertible

Preferred

Stocks

:

Diversified

Consumer

Services

........

—

1,034,805

—

—

—

—

—

(47,034)

987,771

(47,034)

Software

..........

—

6,450,127

—

—

—

—

—

242,048

6,692,175

242,048

Textiles,

Apparel

&

Luxury

Goods

....

1,068,276

—

(1,068,276)

—

—

—

—

—

—

—

Preferred

Stocks

:

Internet

&

Direct

Marketing

Retail

...

1,657,023

—

(1,600,000)

—

—

—

—

(57,023)

—

—

Software

..........

768,400

—

(768,400)

—

—

—

—

—

—

—

Warrants

:

Software

..........

—

—

c

—

—

—

—

—

31,313

31,313

31,313

Total

Investments

in

Securities

............

$4,702,622

$10,222,947

$(4,513,685)

$—

$—

$—

$—

$2,656,659

$13,068,543

$2,845,596

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.

c

Includes

securities

determined

to

have

no

value.

11.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-28

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

Abbreviations

List

EV

-

Enterprise

value

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. The

ASUs

are

effective

for

certain

reference

Description

Fair

Value

at

End

of

Year

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

Leisure

Products

.............

$4,026,670

Market

comparables

EV

/

revenue

multiple

5.3x

Increase

c

Discount

for

lack

of

marketability

14.8%

Decrease

d

Textiles,

Apparel

&

Luxury

Goods

.

1,330,614

Market

comparables

Discount

for

lack

of

marketability

4.5%

Decrease

Convertible

Preferred

Stocks

Diversified

Consumer

Services.

.

.

987,771

Discounted

cash

flow

Discount

for

lack

of

marketability

17.9%

Decrease

d

Weighted

average

cost

of

capital

14.8%

Decrease

c

 Long-term

growth

rate

5.0%

Increase

Software

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

5,541,265

Discounted

cash

flow

Discount

for

lack

of

marketability

15.6%

Decrease

d

Weighted

average

cost

of

capital

15.8%

Decrease

c

Long-term

growth

rate

2.5%

Increase

Market

comparables

EV

/

revenue

multiple

12.5x

-

40.6x

(25.0x)

Increase

d

Discount

for

lack

of

marketability

12.0%

-

12.9%

(12.5)%

Decrease

d

All

Other

Investments

..........

1,182,223

e

Total

$13,068,543

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

and

net

assets.

d

Represents

a

significant

impact

to

fair

value

but

not

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.

11.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FSC-29

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(continued)

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,

other

than

those

already

disclosed

in

the

financial

statements.

12.

New

Accounting

Pronouncements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FSC-30

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Small-Mid

Cap

Growth

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

Small-Mid

Cap

Growth

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent,

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FSC-31

Annual

Report

Franklin

Small-Mid

Cap

Growth

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$63,705,433

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$1,383,811

FSI-1

Annual

Report

Franklin

Strategic

Income

VIP

Fund

This

annual

report

for

Franklin

Strategic

Income

VIP

Fund

covers

the

fiscal

year

ended

December

31,

202

1

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

+2.11%

5-Year

+3.15%

10-Year

+3.70%

FSI-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/2

1

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Bloomberg

U.S.

Aggregate

Bond

Index

and

the

Lipper

Multi-Sector

Income

Funds

Classification

Average.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

***Source:

Lipper,

a

Thomson

Reuters

Company.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FSI-3

Annual

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

Summary

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

one-year

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

benchmark,

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

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

+1.86%

return.

2

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

As

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

investor

appetite

for

risk

increased

and

the

search

for

yield

intensified.

Consequently,

lower-rated

bonds

posted

greater

returns

than

higher-rated

bonds.

The

inflation

rate

rose

significantly

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

Shorter-term

bonds

generally

outperformed

longer-term

bonds,

which

tend

to

be

more

sensitive

to

inflation.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

-2.32%

total

return

for

the

12-month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

was

relatively

low

as

the

period

began.

However,

yields

rose

thereafter

as

inflation

grew

and

many

investors

expected

future

interest-rate

increases

to

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Corporate

Bonds

50.8%

Foreign

Government

and

Agency

Securities

12.7%

Residential

Mortgage-Backed

Securities

8.1%

Management

Investment

Companies

7.9%

Asset-Backed

Securities

6.8%

U.S.

Government

and

Agency

Securities

3.8%

Senior

Floating

Rate

Interests

1.6%

Marketplace

Loans

1.5%

Mortgage-Backed

Securities

1.3%

Other

1.8%

Short-Term

Investments

&

Other

Net

Assets

3.7%

Franklin

Strategic

Income

VIP

Fund

FSI-4

Annual

Report

accelerate.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

U.S.

MBS

Index,

posted

a

-1.04%

total

return

for

the

period.

1

Fed

action

was

a

catalyst

for

the

corporate

bond

market.

The

strengthening

economy

and

prospect

of

a

return

to

normal

conditions

tempered

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+5.28%

total

return.

In

contrast,

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

declined

overall,

posting

a

-1.04%

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.

The

portfolio

held

sizable

exposure

across

corporate

credit

sectors.

We

maintained

our

largest

exposure

in

high-yield

corporate

credit

and

increased

allocation

over

the

period.

With

limited

defaults,

ample

issuer

liquidity

and

strong

economic

underpinnings,

U.S.

high-yield

spreads

more

than

compensate

for

expected

intermediate-term

default

losses,

in

our

view.

While

2022

could

see

continued

volatility

arising

from

persistent

inflationary

pressures,

a

shifting

U.S.

Federal

Reserve

(Fed)

reaction

function,

increased

equity

volatility

and

ongoing

uncertainty

from

COVID-19

variants

such

as

the

latest

Omicron

variant,

we

nonetheless

believe

U.S.

high-

yield

is

positioned

to

provide

attractive

risk-adjusted

returns

given

a

combination

of

relative

yield,

moderate

duration,

and

improving

credit

quality.

The

portfolio’s

second

largest

allocation

was

in

investment-

grade

corporate

credit,

which

we

reduced

exposure

to

over

the

period.

We

believe

investment-grade

corporate

bonds

should

still

benefit

from

above

trend

growth,

even

if

gross

domestic

product

(GDP)

and

earnings

growth

have

peaked.

However,

the

opportunity

has

become

less

compelling

given

tight

valuations

and

marginally

worse

index

credit

quality.

We

remain

comfortable

with

investment-grade

corporates

but

see

a

risk

reward

balance

that

is

more

skewed

to

the

downside.

We

increased

our

senior

secured

floating-rate

bank

loans,

while

paring

collateralized

loan

obligation

(CLO)

exposure.

We

do

not

expect

a

high

probability

of

large-scale

fundamental

weakness

in

the

loan

market

over

the

next

year,

especially

to

such

a

degree

that

it

eclipses

the

significant

technical

tailwinds

for

floating-rate

assets.

We

maintain

a

moderately

bullish

outlook

for

the

bank

loan

sector,

with

the

view

that

over

the

next

12

months,

technical

conditions

should

remain

strong

and

fundamentals

broadly

constructive

with

subdued

default

rates,

against

the

backdrop

of

a

rising

interest-rate

environment.

We

remained

allocated

to

sovereign

emerging

market

debt

as

we

retained

our

positive

outlook

for

the

asset

class.

After

the

autumn

2021

sell-off,

valuations

now

appear

more

attractive.

Sovereign

emerging

markets

securities

continue

to

recover

from

the

pandemic,

with

conspicuous

improvements

in

fiscal

balances

and

debt-to-GDP

metrics.

External

debt

servicing

positions

have

been

bolstered

by

the

International

Monetary

Fund’s

allocation

of

special

drawing

rights

(SDRs),

in

addition

to

Covid-related

emergency

funding.

Key

risks

include

a

further

slowdown

in

economic

growth,

higher

inflation

and

a

sharper

than

expected

tightening

of

U.S.

monetary

policy.

That

said,

the

asset

class

is

better

positioned

to

avoid

a

taper

tantrum

than

was

the

case

in

2013.

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.

A

fundamentally

solid

housing

backdrop

is

positive

for

mortgage

credit

and

should

continue

to

support

the

RMBS

sector

over

the

near

to

intermediate-term.

Increased

inflation

expectations

along

with

the

Fed

tapering

that

began

in

November

2021

(which

will

be

accelerated

as

announced

by

the

Fed

in

December)

are

factors

that

could

result

in

higher

interest-rates,

which

could

lead

to

modest

headwinds

for

the

RMBS

sector.

Franklin

Strategic

Income

VIP

Fund

FSI-5

Annual

Report

In

our

foreign-currency

exposure,

we

closed

out

our

long

Japanese

yen

and

short

Canadian

and

Singapore

dollar

positions.

We

moved

from

a

short

Australian

dollar

to

slight

long

position

and

from

long

Euro

to

a

short

position

on

the

currency.

Allocation

across

corporate

credit

boosted

performance

with

the

Fund’s

high-yield

corporate

credit

allocation

being

the

most

significant

contributor

to

returns.

Additionally,

allocations

to

senior

secured

floating-rate

loans,

RMBS

and

marketplace

loans

boosted

performance.

CLOs

and

investment-grade

corporate

credit

also

contributed.

In

contrast,

the

Fund’s

allocation

to

non-dollar

developed

securities

was

a

slight

detractor

from

performance.

Foreign

currency

exposure

negatively

contributed

to

returns

driven

by

negative

returns

from

Japanese

yen,

Colombian

peso,

Turkish

lira

and

Uruguayan

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.

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

December

31,

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

2

Fund

Expenses

Franklin

Strategic

Income

VIP

Fund

FSI-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,002.90

$5.05

$1,020.16

$5.10

1.00%

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Highlights

Franklin

Strategic

Income

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Annual

Report

FSI-7

a

Year

Ended

December

31,

2021*

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.76

$10.93

$10.65

$11.15

$11.01

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.33

0.36

0.45

0.47

0.45

Net

realized

and

unrealized

gains

(losses)

...........

(0.08)

0.01

0.43

(0.65)

0.04

Total

from

investment

operations

....................

0.25

0.37

0.88

(0.18)

0.49

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.37)

(0.54)

(0.60)

(0.32)

(0.35)

Net

asset

value,

end

of

year

.......................

$10.64

$10.76

$10.93

$10.65

$11.15

Total

return

c

...................................

2.28%

3.75%

8.41%

(1.65)%

4.46%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.78%

0.75%

0.71%

0.67%

0.68%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.74%

0.73%

0.68%

0.63%

0.63%

Net

investment

income

...........................

3.11%

3.46%

4.09%

4.28%

4.00%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$248,352

$261,409

$285,437

$302,610

$361,465

Portfolio

turnover

rate

............................

58.28%

e

114.19%

114.89%

e

107.90%

e

108.73%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

43.00%

e

73.45%

72.45%

e

40.38%

e

48.11%

*

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(f).

f

See

Note

1(g)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Highlights

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-8

a

Year

Ended

December

31,

2021*

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.36

$10.55

$10.28

$10.76

$10.64

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.29

0.33

0.40

0.42

0.40

Net

realized

and

unrealized

gains

(losses)

...........

(0.07)

—

c

0.42

(0.61)

0.04

Total

from

investment

operations

....................

0.22

0.33

0.82

(0.19)

0.44

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.35)

(0.52)

(0.55)

(0.29)

(0.32)

Net

asset

value,

end

of

year

.......................

$10.23

$10.36

$10.55

$10.28

$10.76

Total

return

d

...................................

2.11%

3.43%

8.05%

(1.77)%

4.17%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.03%

1.01%

0.96%

0.92%

0.93%

Expenses

net

of

waiver

and

payments

by

affiliates

e

......

0.99%

0.99%

0.93%

0.88%

0.88%

Net

investment

income

...........................

2.86%

3.23%

3.84%

4.03%

3.75%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$89,733

$100,758

$94,928

$89,264

$214,271

Portfolio

turnover

rate

............................

58.28%

f

114.19%

114.89%

f

107.90%

f

108.73%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

....

43.00%

f

73.45%

72.45%

f

40.38%

f

48.11%

*

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.

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.

See

Note

3(f).

g

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.

Annual

Report

FSI-9

a

Year

Ended

December

31,

2021*

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.66

$10.83

$10.56

$11.04

$10.90

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.29

0.32

0.41

0.43

0.40

Net

realized

and

unrealized

gains

(losses)

...........

(0.07)

0.01

0.42

(0.64)

0.04

Total

from

investment

operations

....................

0.22

0.33

0.83

(0.21)

0.44

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.34)

(0.50)

(0.56)

(0.27)

(0.30)

Net

asset

value,

end

of

year

.......................

$10.54

$10.66

$10.83

$10.56

$11.04

Total

return

c

...................................

2.06%

3.34%

7.93%

(1.88)%

4.08%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.13%

1.10%

1.06%

1.02%

1.03%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.09%

1.09%

1.03%

0.98%

0.98%

Net

investment

income

...........................

2.76%

3.12%

3.74%

3.93%

3.65%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$50,381

$51,709

$54,485

$60,763

$74,013

Portfolio

turnover

rate

............................

58.28%

e

114.19%

114.89%

e

107.90%

e

108.73%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

43.00%

e

73.45%

72.45%

e

40.38%

e

48.11%

*

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(f).

f

See

Note

1(g)

regarding

mortgage

dollar

rolls.

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments,

December

31,

2021

Franklin

Strategic

Income

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-10

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

$

382,370

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

68,861

a

iHeartMedia

,

Inc.,

A

....................................

United

States

8,384

176,399

a,b

iHeartMedia

,

Inc.,

B

...................................

United

States

142

2,779

248,039

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

1,340

a,b,c

Riviera

Resources,

Inc.

.................................

United

States

6,620

—

1,340

Specialty

Retail

0.0%

†

a

Party

City

Holdco,

Inc.

..................................

United

States

1

4

Total

Common

Stocks

(Cost

$2,063,659)

.......................................

1,218,165

Management

Investment

Companies

7.9%

Capital

Markets

7.9%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

3,420,372

27,739,219

SPDR

Blackstone

Senior

Loan

ETF

.......................

United

States

65,000

2,965,950

30,705,169

Total

Management

Investment

Companies

(Cost

$34,601,922)

....................

30,705,169

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

879

2

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

1,098

1

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

1,412

—

3

Paper

&

Forest

Products

0.0%

†

a

Verso

Corp.,

7/25/23

...................................

United

States

592

6,689

Total

Warrants

(Cost

$—)

.....................................................

6,692

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

28,116

23,986

Total

Convertible

Bonds

(Cost

$6,871)

.........................................

23,986

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-11

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

50.8%

Aerospace

&

Defense

0.6%

Boeing

Co.

(The)

,

Senior

Note

,

5.15

%

,

5/01/30

...............

United

States

700,000

$

816,238

g

TransDigm

,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

3/15/26

....

United

States

1,400,000

1,456,896

2,273,134

Air

Freight

&

Logistics

0.3%

g

DAE

Funding

LLC

,

Senior

Note

,

144A,

1.55

%

,

8/01/24

.........

United

Arab

Emirates

300,000

298,114

FedEx

Corp.

,

Senior

Bond

,

4.05

%

,

2/15/48

..................

United

States

650,000

731,616

1,029,730

Airlines

1.2%

g

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

4/20/29

............................

United

States

600,000

642,453

g

Azul

Investments

LLP

,

Senior

Note

,

144A,

7.25

%

,

6/15/26

.......

Brazil

700,000

642,110

g

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

1,100,000

1,156,795

g

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

900,000

942,835

g

International

Consolidated

Airlines

Group

SA

,

Senior

Note

,

Reg

S,

3.75

%

,

3/25/29

.....................................

United

Kingdom

1,000,000

EUR

1,115,267

g

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

100,000

104,405

4,603,865

Auto

Components

1.5%

g

Allison

Transmission,

Inc.

,

Senior

Bond,

144A,

5.875%,

6/01/29

.....................

United

States

800,000

871,104

Senior

Bond,

144A,

3.75%,

1/30/31

......................

United

States

500,000

488,387

Dana,

Inc.

,

Senior

Note

,

5.625

%

,

6/15/28

...................

United

States

1,200,000

1,276,656

g

Dornoch

Debt

Merger

Sub,

Inc.

,

Senior

Note

,

144A,

6.625

%

,

10/15/29

..........................................

United

States

900,000

889,875

Goodyear

Tire

&

Rubber

Co.

(The)

,

g

Senior

Note,

144A,

5%,

7/15/29

........................

United

States

800,000

860,880

Senior

Note

,

4.875%,

3/15/27

..........................

United

States

500,000

529,945

g

Real

Hero

Merger

Sub

2,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

2/01/29

.

United

States

1,000,000

999,845

5,916,692

Automobiles

0.3%

g

Jaguar

Land

Rover

Automotive

plc

,

Senior

Note

,

144A,

5.5

%

,

7/15/29

...........................................

United

Kingdom

1,200,000

1,202,976

Banks

1.8%

Banco

Santander

SA

,

Sub.

Note

,

2.749

%

,

12/03/30

............

Spain

300,000

293,921

g

BNP

Paribas

SA

,

Senior

Note

,

144A,

2.219%

to

6/09/25,

FRN

thereafter

,

6/09/26

...................................

France

500,000

505,061

g

China

Construction

Bank

Corp.

,

Sub.

Note

,

Reg

S,

4.25%

to

2/27/24,

FRN

thereafter

,

2/27/29

...............................

China

800,000

842,368

HSBC

Holdings

plc

,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

.....

United

Kingdom

800,000

810,105

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

300,000

293,424

JPMorgan

Chase

&

Co.

,

f

R,

Junior

Sub.

Bond,

6%

to

8/01/23,

FRN

thereafter,

Perpetual

.

United

States

213,000

222,345

Senior

Bond,

2.522%

to

4/22/30,

FRN

thereafter,

4/22/31

.....

United

States

1,000,000

1,011,815

Senior

Note

,

3.2%,

6/15/26

............................

United

States

1,213,000

1,287,579

g

Societe

Generale

SA

,

Senior

Bond

,

144A,

2.889%

to

6/09/31,

FRN

thereafter

,

6/09/32

...................................

France

800,000

798,665

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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)

Banks

(continued)

SVB

Financial

Group

,

Senior

Note

,

3.125

%

,

6/05/30

...........

United

States

300,000

$

315,203

g

UniCredit

SpA

,

Senior

Bond

,

144A,

3.127%

to

6/03/31,

FRN

thereafter

,

6/03/32

...................................

Italy

500,000

494,639

6,875,125

Beverages

0.7%

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/30

Belgium

1,700,000

1,865,325

g

Primo

Water

Holdings,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

4/30/29

..

Canada

1,000,000

991,640

2,856,965

Biotechnology

0.2%

AbbVie,

Inc.

,

Senior

Note

,

3.2

%

,

11/21/29

...................

United

States

700,000

749,210

Building

Products

0.4%

Owens

Corning

,

Senior

Bond

,

4.3

%

,

7/15/47

.................

United

States

700,000

803,165

g

Standard

Industries,

Inc.

,

Senior

Bond,

144A,

4.75%,

1/15/28

......................

United

States

500,000

517,158

Senior

Bond,

144A,

4.375%,

7/15/30

.....................

United

States

200,000

204,456

Senior

Bond,

144A,

3.375%,

1/15/31

.....................

United

States

200,000

193,000

1,717,779

Capital

Markets

0.6%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

3.21%

to

4/22/41,

FRN

thereafter

,

4/22/42

...............................

United

States

400,000

415,604

Morgan

Stanley

,

Senior

Bond

,

3.591%

to

7/22/27,

FRN

thereafter

,

7/22/28

...........................................

United

States

809,000

872,835

g

MSCI,

Inc.

,

Senior

Bond

,

144A,

3.25

%

,

8/15/33

...............

United

States

1,200,000

1,215,366

2,503,805

Chemicals

4.0%

g

Alpek

SAB

de

CV

,

Senior

Note

,

144A,

4.25

%

,

9/18/29

..........

Mexico

800,000

852,148

e,g

Anagram

International,

Inc.

/

Anagram

Holdings

LLC

,

Secured

Note

,

144A,

PIK,

10

%

,

8/15/26

..............................

United

States

134,384

137,811

g

Braskem

Idesa

SAPI

,

Senior

Secured

Bond

,

144A,

6.99

%

,

2/20/32

Mexico

900,000

904,860

g

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

1,600,000

1,704,368

CF

Industries,

Inc.

,

Senior

Bond

,

5.15

%

,

3/15/34

..............

United

States

400,000

484,442

g

CNAC

HK

Finbridge

Co.

Ltd.

,

Senior

Note

,

Reg

S,

4.875

%

,

3/14/25

China

800,000

869,461

g

Consolidated

Energy

Finance

SA

,

Senior

Note

,

144A,

5.625

%

,

10/15/28

..........................................

Switzerland

700,000

685,234

g

CVR

Partners

LP

/

CVR

Nitrogen

Finance

Corp.

,

Senior

Secured

Note

,

144A,

6.125

%

,

6/15/28

...........................

United

States

300,000

316,942

g

Diamond

BC

BV

,

Senior

Note

,

144A,

4.625

%

,

10/01/29

.........

United

States

300,000

298,046

g

Element

Solutions,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

9/01/28

.....

United

States

1,100,000

1,107,078

g

Gates

Global

LLC

/

Gates

Corp.

,

Senior

Note

,

144A,

6.25

%

,

1/15/26

United

States

1,200,000

1,240,314

g

INEOS

Quattro

Finance

1

plc

,

Senior

Note

,

144A,

3.75

%

,

7/15/26

.

United

Kingdom

800,000

EUR

917,201

g

Ingevity

Corp.

,

Senior

Note

,

144A,

3.875

%

,

11/01/28

...........

United

States

400,000

390,106

e,g

Kobe

US

Midco

2,

Inc.

,

Senior

Note

,

144A,

PIK,

9.25

%

,

11/01/26

..

United

States

300,000

308,218

g

LSF11

A5

HoldCo

LLC

,

Senior

Note

,

144A,

6.625

%

,

10/15/29

....

United

States

600,000

591,843

Methanex

Corp.

,

Senior

Note

,

5.125

%

,

10/15/27

..............

Canada

500,000

525,500

g

SABIC

Capital

II

BV

,

Senior

Note

,

144A,

4.5

%

,

10/10/28

........

Saudi

Arabia

600,000

678,279

Sasol

Financing

USA

LLC

,

Senior

Bond

,

6.5

%

,

9/27/28

.........

South

Africa

900,000

976,464

g

SCIH

Salt

Holdings,

Inc.

,

Senior

Note,

144A,

6.625%,

5/01/29

.....................

United

States

500,000

468,202

Senior

Secured

Note,

144A,

4.875%,

5/01/28

..............

United

States

300,000

288,470

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-13

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Chemicals

(continued)

g

Syngenta

Finance

NV

,

Senior

Note

,

144A,

4.892

%

,

4/24/25

......

Switzerland

800,000

$

859,820

g

Unifrax

Escrow

Issuer

Corp.

,

Senior

Note,

144A,

7.5%,

9/30/29

.......................

United

States

200,000

202,284

Senior

Secured

Note,

144A,

5.25%,

9/30/28

...............

United

States

300,000

303,810

Westlake

Chemical

Corp.

,

Senior

Note

,

3.375

%

,

6/15/30

........

United

States

200,000

212,201

g

Yara

International

ASA

,

Senior

Note

,

144A,

3.148

%

,

6/04/30

.....

Brazil

100,000

103,280

15,426,382

Commercial

Services

&

Supplies

0.9%

g

Allied

Universal

Holdco

LLC

/

Allied

Universal

Finance

Corp.

/

Atlas

LuxCo

4

SARL

,

Senior

Secured

Note

,

144A,

4.625

%

,

6/01/28

..

United

States

200,000

196,600

g

APCOA

Parking

Holdings

GmbH

,

Senior

Secured

Note

,

144A,

4.625

%

,

1/15/27

.....................................

Germany

200,000

EUR

226,143

g

APX

Group,

Inc.

,

Senior

Note

,

144A,

5.75

%

,

7/15/29

...........

United

States

700,000

690,487

g

Prime

Security

Services

Borrower

LLC

/

Prime

Finance,

Inc.

,

Senior

Secured

Note

,

144A,

3.375

%

,

8/31/27

....................

United

States

1,300,000

1,256,678

g

Stericycle,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

1/15/29

...........

United

States

1,000,000

986,475

3,356,383

Communications

Equipment

0.3%

g

CommScope

Technologies

LLC

,

Senior

Note

,

144A,

5

%

,

3/15/27

..

United

States

1,374,000

1,286,064

Construction

&

Engineering

0.2%

g

Arcosa

,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

4/15/29

.............

United

States

300,000

304,569

g

Great

Lakes

Dredge

&

Dock

Corp.

,

Senior

Note

,

144A,

5.25

%

,

6/01/29

...........................................

United

States

500,000

515,753

g

Rutas

2

and

7

Finance

Ltd.

,

Senior

Secured

Bond

,

144A,

Zero

Cpn

.,

9/30/36

...........................................

United

States

200,000

147,768

968,090

Construction

Materials

0.2%

g

Cemex

SAB

de

CV

,

Senior

Bond

,

144A,

3.875

%

,

7/11/31

.......

Mexico

700,000

698,541

Consumer

Finance

0.5%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust

,

Senior

Bond

,

3.4

%

,

10/29/33

.................................

Ireland

500,000

509,681

g

PRA

Group,

Inc.

,

Senior

Note

,

144A,

5

%

,

10/01/29

............

United

States

300,000

301,203

g

PROG

Holdings,

Inc.

,

Senior

Note

,

144A,

6

%

,

11/15/29

.........

United

States

1,000,000

1,030,380

1,841,264

Containers

&

Packaging

1.4%

g

Ardagh

Metal

Packaging

Finance

USA

LLC

/

Ardagh

Metal

Packaging

Finance

plc

,

Senior

Note

,

144A,

4

%

,

9/01/29

.......

United

States

800,000

793,868

g

Ardagh

Packaging

Finance

plc

/

Ardagh

Holdings

USA,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

8/15/27

............................

United

States

300,000

302,213

g

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25

%

,

4/15/25

...........................................

United

States

1,278,000

1,282,665

g

Owens-Brockway

Glass

Container,

Inc.

,

Senior

Note,

144A,

5.875%,

8/15/23

.....................

United

States

566,000

593,459

Senior

Note,

144A,

6.625%,

5/13/27

.....................

United

States

100,000

105,600

g

Pactiv

Evergreen

Group

Issuer

LLC

/

Pactiv

Evergreen

Group

Issuer,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

10/15/28

..........

United

States

500,000

497,008

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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)

Containers

&

Packaging

(continued)

g

Pactiv

Evergreen

Group

Issuer,

Inc./Pactiv

Evergreen

Group

Issuer

LLC/Reynolds

Group

Holdings

Ltd.

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

.......................................

United

States

600,000

$

584,292

g

Sealed

Air

Corp.

,

Senior

Bond,

144A,

5.5%,

9/15/25

.......................

United

States

124,000

137,299

Senior

Note

,

144A,

5.125%,

12/01/24

....................

United

States

709,000

760,154

WRKCo

,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

400,000

411,940

5,468,498

Diversified

Consumer

Services

0.2%

Grand

Canyon

University

,

5.125

%

,

10/01/28

.................

United

States

800,000

823,444

Diversified

Financial

Services

0.6%

g

Jefferson

Capital

Holdings

LLC

,

Senior

Note

,

144A,

6

%

,

8/15/26

..

United

States

700,000

709,471

g

MPH

Acquisition

Holdings

LLC

,

Senior

Note

,

144A,

5.75

%

,

11/01/28

United

States

1,500,000

1,428,772

2,138,243

Diversified

Telecommunication

Services

1.3%

g

Altice

France

Holding

SA

,

Senior

Note

,

144A,

6

%

,

2/15/28

......

Luxembourg

900,000

861,120

g

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

1/15/28

....

France

200,000

198,785

AT&T,

Inc.

,

Senior

Bond

,

3.65

%

,

9/15/59

....................

United

States

800,000

809,484

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

g

Senior

Bond,

144A,

4.5%,

8/15/30

.......................

United

States

300,000

307,570

Senior

Bond,

4.5%,

5/01/32

............................

United

States

1,000,000

1,030,415

g

Iliad

Holding

SASU

,

Senior

Secured

Note,

144A,

6.5%,

10/15/26

...............

France

300,000

315,627

Senior

Secured

Note,

144A,

7%,

10/15/28

.................

France

600,000

631,968

Telefonica

Emisiones

SA

,

Senior

Bond

,

4.895

%

,

3/06/48

........

Spain

150,000

180,857

g

Virgin

Media

Secured

Finance

plc

,

Senior

Secured

Bond

,

144A,

4.5

%

,

8/15/30

......................................

United

Kingdom

900,000

907,137

5,242,963

Electric

Utilities

1.6%

g

CGNPC

International

Ltd.

,

Senior

Note

,

Reg

S,

3.75

%

,

12/11/27

..

China

300,000

318,125

Duke

Energy

Corp.

,

Senior

Bond

,

2.45

%

,

6/01/30

.............

United

States

400,000

397,593

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

1,300,000

1,445,909

Southern

Co.

(The)

,

Senior

Bond

,

4.4

%

,

7/01/46

..............

United

States

400,000

469,747

g

State

Grid

Overseas

Investment

BVI

Ltd.

,

Senior

Note

,

144A,

3.5

%

,

5/04/27

...........................................

China

1,651,000

1,784,223

Virginia

Electric

and

Power

Co.

,

Senior

Bond

,

6.35

%

,

11/30/37

...

United

States

85,000

121,164

g

Vistra

Operations

Co.

LLC

,

Senior

Note,

144A,

4.375%,

5/01/29

.....................

United

States

1,100,000

1,104,010

Senior

Secured

Bond,

144A,

4.3%,

7/15/29

................

United

States

500,000

535,218

6,175,989

Electrical

Equipment

0.5%

g

Sensata

Technologies

BV

,

Senior

Note

,

144A,

4

%

,

4/15/29

......

United

States

1,000,000

1,022,980

g

Vertiv

Group

Corp.

,

Senior

Secured

Note

,

144A,

4.125

%

,

11/15/28

United

States

900,000

910,543

1,933,523

Electronic

Equipment,

Instruments

&

Components

0.5%

CDW

LLC

/

CDW

Finance

Corp.

,

Senior

Note

,

3.25

%

,

2/15/29

....

United

States

900,000

909,328

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-15

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Electronic

Equipment,

Instruments

&

Components

(continued)

Flex

Ltd.

,

Senior

Note

,

4.875

%

,

5/12/30

.....................

United

States

800,000

$

913,250

1,822,578

Energy

Equipment

&

Services

0.7%

g

Nabors

Industries

Ltd.

,

Senior

Note

,

144A,

7.25

%

,

1/15/26

......

United

States

800,000

740,832

g

Nabors

Industries,

Inc.

,

Senior

Note

,

144A,

7.375

%

,

5/15/27

.....

United

States

200,000

207,238

g

Schlumberger

Holdings

Corp.

,

Senior

Note

,

144A,

3.9

%

,

5/17/28

..

United

States

400,000

432,423

g

Weatherford

International

Ltd.

,

Senior

Note,

144A,

11%,

12/01/24

.......................

United

States

51,000

52,583

Senior

Note,

144A,

8.625%,

4/30/30

.....................

United

States

1,200,000

1,247,766

2,680,842

Entertainment

0.5%

g

Live

Nation

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

3.75

%

,

1/15/28

...........................................

United

States

600,000

597,000

Netflix,

Inc.

,

Senior

Bond,

4.375%,

11/15/26

.........................

United

States

300,000

332,644

Senior

Bond,

5.875%,

11/15/28

.........................

United

States

1,000,000

1,204,180

2,133,824

Equity

Real

Estate

Investment

Trusts

(REITs)

1.2%

g

American

Finance

Trust,

Inc.

/

American

Finance

Operating

Partner

LP

,

Senior

Note

,

144A,

4.5

%

,

9/30/28

.....................

United

States

500,000

504,438

AvalonBay

Communities,

Inc.

,

Senior

Bond

,

2.45

%

,

1/15/31

.....

United

States

500,000

513,062

g

Global

Net

Lease,

Inc.

/

Global

Net

Lease

Operating

Partnership

LP

,

Senior

Note

,

144A,

3.75

%

,

12/15/27

......................

United

States

400,000

390,970

g

MGM

Growth

Properties

Operating

Partnership

LP

/

MGP

Finance

Co-Issuer,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

2/15/29

..........

United

States

300,000

315,431

MPT

Operating

Partnership

LP

/

MPT

Finance

Corp.

,

Senior

Bond

,

3.5

%

,

3/15/31

......................................

United

States

300,000

303,837

Simon

Property

Group

LP

,

Senior

Bond

,

4.25

%

,

11/30/46

.......

United

States

800,000

950,233

g

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Note

,

144A,

3.75

%

,

2/15/27

...........................................

United

States

1,400,000

1,447,628

g

XHR

LP

,

Senior

Secured

Note

,

144A,

4.875

%

,

6/01/29

.........

United

States

400,000

407,684

4,833,283

Food

&

Staples

Retailing

0.2%

g

Cencosud

SA

,

Senior

Note

,

144A,

4.375

%

,

7/17/27

............

Chile

700,000

750,582

Food

Products

1.2%

g

Bimbo

Bakeries

USA,

Inc.

,

Senior

Bond

,

144A,

4

%

,

5/17/51

.....

Mexico

200,000

216,954

g

Chobani

LLC

/

Chobani

Finance

Corp.,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

11/15/28

...............................

United

States

1,200,000

1,234,680

g

JBS

Finance

Luxembourg

SARL

,

Senior

Bond,

144A,

3.625%,

1/15/32

.....................

United

States

400,000

402,196

Senior

Note,

144A,

2.5%,

1/15/27

.......................

United

States

700,000

693,007

g

Lamb

Weston

Holdings,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

1/31/30

.

United

States

1,200,000

1,233,504

g

Post

Holdings,

Inc.

,

Senior

Bond

,

144A,

4.5

%

,

9/15/31

.........

United

States

800,000

795,296

4,575,637

Gas

Utilities

0.1%

Piedmont

Natural

Gas

Co.,

Inc.

,

Senior

Bond

,

3.35

%

,

6/01/50

....

United

States

300,000

308,928

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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)

Health

Care

Equipment

&

Supplies

0.2%

g

Mozart

Debt

Merger

Sub,

Inc.

,

Senior

Note,

144A,

5.25%,

10/01/29

.....................

United

States

500,000

$

507,860

Senior

Secured

Note,

144A,

3.875%,

4/01/29

..............

United

States

400,000

399,388

907,248

Health

Care

Providers

&

Services

1.5%

Anthem,

Inc.

,

Senior

Bond

,

3.7

%

,

9/15/49

...................

United

States

150,000

167,345

Centene

Corp.

,

Senior

Note,

4.25%,

12/15/27

..........................

United

States

300,000

313,269

Senior

Note,

2.45%,

7/15/28

...........................

United

States

100,000

98,654

Senior

Note,

4.625%,

12/15/29

.........................

United

States

200,000

216,038

Senior

Note,

3.375%,

2/15/30

..........................

United

States

600,000

612,033

Senior

Note,

2.625%,

8/01/31

..........................

United

States

200,000

196,333

g

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

....................

United

States

800,000

816,224

Senior

Secured

Note,

144A,

5.625%,

3/15/27

..............

United

States

700,000

741,685

CVS

Health

Corp.

,

Senior

Bond

,

1.75

%

,

8/21/30

..............

United

States

400,000

381,645

g

DaVita,

Inc.

,

Senior

Note

,

144A,

4.625

%

,

6/01/30

.............

United

States

1,200,000

1,230,672

HCA,

Inc.

,

Senior

Bond

,

3.5

%

,

9/01/30

.....................

United

States

100,000

105,887

g

ModivCare

Escrow

Issuer,

Inc.

,

Senior

Note

,

144A,

5

%

,

10/01/29

.

United

States

500,000

511,390

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

330,000

360,607

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

2.8

%

,

6/30/31

...........

United

States

200,000

206,755

5,958,537

Hotels,

Restaurants

&

Leisure

2.6%

g

Carnival

Corp.

,

Senior

Note

,

144A,

5.75

%

,

3/01/27

............

United

States

720,000

721,080

g

Everi

Holdings,

Inc.

,

Senior

Note

,

144A,

5

%

,

7/15/29

...........

United

States

700,000

708,151

g

Golden

Nugget,

Inc.

,

Senior

Note

,

144A,

6.75

%

,

10/15/24

.......

United

States

632,000

632,822

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

800,000

806,380

g

Melco

Resorts

Finance

Ltd.

,

Senior

Note

,

144A,

5.75

%

,

7/21/28

..

Hong

Kong

600,000

604,164

g

Motion

Bondco

DAC

,

Senior

Note

,

144A,

6.625

%

,

11/15/27

......

United

Kingdom

200,000

202,283

g

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

...........

United

States

1,800,000

1,794,375

g

Papa

John's

International,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

9/15/29

United

States

300,000

298,943

g

Penn

National

Gaming,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

7/01/29

.

United

States

300,000

291,454

g

Premier

Entertainment

Sub

LLC

/

Premier

Entertainment

Finance

Corp.

,

Senior

Bond,

144A,

5.875%,

9/01/31

.....................

United

States

400,000

402,000

Senior

Note,

144A,

5.625%,

9/01/29

.....................

United

States

500,000

496,797

g

Royal

Caribbean

Cruises

Ltd.

,

Senior

Note

,

144A,

5.5

%

,

8/31/26

..

United

States

1,400,000

1,425,088

g

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

5

%

,

1/15/29

.......

Macau

1,200,000

1,075,878

g

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

.........

Macau

700,000

649,250

10,108,665

Household

Durables

0.7%

M/I

Homes,

Inc.

,

Senior

Note

,

3.95

%

,

2/15/30

................

United

States

600,000

591,909

Mohawk

Industries,

Inc.

,

Senior

Note

,

3.625

%

,

5/15/30

.........

United

States

1,300,000

1,395,576

g

Williams

Scotsman

International,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

8/15/28

.....................................

United

States

700,000

723,761

2,711,246

Household

Products

0.7%

g

Central

Garden

&

Pet

Co.

,

Senior

Bond

,

144A,

4.125

%

,

4/30/31

..

United

States

700,000

704,532

g

Energizer

Holdings,

Inc.

,

Senior

Note

,

144A,

4.375

%

,

3/31/29

....

United

States

1,300,000

1,270,705

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-17

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Household

Products

(continued)

g

Kimberly-Clark

de

Mexico

SAB

de

CV

,

Senior

Bond

,

144A,

2.431

%

,

7/01/31

...........................................

Mexico

300,000

$

296,894

g

Spectrum

Brands,

Inc.

,

Senior

Bond

,

144A,

3.875

%

,

3/15/31

.....

United

States

500,000

494,487

2,766,618

Independent

Power

and

Renewable

Electricity

Producers

1.8%

g

Atlantica

Sustainable

Infrastructure

plc

,

Senior

Note

,

144A,

4.125

%

,

6/15/28

...........................................

Spain

400,000

403,574

g

Calpine

Corp.

,

Senior

Bond,

144A,

5%,

2/01/31

........................

United

States

600,000

600,927

Senior

Note,

144A,

5.125%,

3/15/28

.....................

United

States

200,000

203,356

Senior

Note,

144A,

4.625%,

2/01/29

.....................

United

States

700,000

691,436

g

Clearway

Energy

Operating

LLC

,

Senior

Note

,

144A,

3.75

%

,

2/15/31

United

States

700,000

699,328

g

Colbun

SA

,

Senior

Note

,

144A,

3.95%,

10/11/27

.....................

Chile

800,000

846,420

Senior

Note

,

144A,

3.15%,

3/06/30

......................

Chile

300,000

300,487

g

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

1,100,000

1,093,427

g

Leeward

Renewable

Energy

Operations

LLC

,

Senior

Note

,

144A,

4.25

%

,

7/01/29

.....................................

United

States

1,000,000

1,011,480

g

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

7.25

%

,

5/15/27

...........................................

United

States

1,300,000

1,151,800

7,002,235

Insurance

0.3%

Arch

Capital

Group

Ltd.

,

Senior

Bond

,

3.635

%

,

6/30/50

.........

United

States

1,000,000

1,072,783

Interactive

Media

&

Services

0.5%

g

Tencent

Holdings

Ltd.

,

Senior

Note

,

144A,

2.39

%

,

6/03/30

.......

China

2,100,000

2,059,704

Internet

&

Direct

Marketing

Retail

0.6%

Alibaba

Group

Holding

Ltd.

,

Senior

Bond

,

4

%

,

12/06/37

.........

China

400,000

434,334

JD.com,

Inc.

,

Senior

Note

,

3.375

%

,

1/14/30

..................

China

1,200,000

1,253,067

g

Match

Group

Holdings

II

LLC

,

Senior

Note

,

144A,

3.625

%

,

10/01/31

United

States

600,000

583,635

2,271,036

IT

Services

1.1%

g

Cablevision

Lightpath

LLC

,

Senior

Secured

Note

,

144A,

3.875

%

,

9/15/27

...........................................

United

States

900,000

873,936

g

Gartner,

Inc.

,

Senior

Note,

144A,

4.5%,

7/01/28

.......................

United

States

700,000

732,207

Senior

Note,

144A,

3.625%,

6/15/29

.....................

United

States

200,000

202,535

g

Northwest

Fiber

LLC

/

Northwest

Fiber

Finance

Sub,

Inc.

,

Senior

Note

,

144A,

6

%

,

2/15/28

..............................

United

States

1,100,000

1,079,760

g

Presidio

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

2/01/27

United

States

1,200,000

1,237,272

4,125,710

Machinery

0.7%

g

ATS

Automation

Tooling

Systems,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

12/15/28

..........................................

Canada

1,400,000

1,412,586

g

TK

Elevator

U.S.

Newco

,

Inc.

,

Senior

Secured

Note

,

144A,

5.25

%

,

7/15/27

...........................................

Germany

1,100,000

1,157,783

2,570,369

Marine

0.3%

g

ICTSI

Treasury

BV

,

Senior

Note

,

Reg

S,

4.625

%

,

1/16/23

.......

Philippines

1,200,000

1,249,980

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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)

Media

2.4%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

1,300,000

$

1,287,937

g

Clear

Channel

Outdoor

Holdings,

Inc.

,

Senior

Note,

144A,

7.75%,

4/15/28

......................

United

States

400,000

428,612

Senior

Note,

144A,

7.5%,

6/01/29

.......................

United

States

300,000

320,766

g

Clear

Channel

Worldwide

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

8/15/27

................................

United

States

300,000

310,800

g

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

600,000

300,690

g

Directv

Financing

LLC

/

Directv

Financing

Co-Obligor,

Inc.

,

Senior

Secured

Note

,

144A,

5.875

%

,

8/15/27

....................

United

States

200,000

205,040

g

DISH

DBS

Corp.

,

Senior

Secured

Note

,

144A,

5.75

%

,

12/01/28

...

United

States

1,400,000

1,416,625

g

Nexstar

Media,

Inc.

,

Senior

Note

,

144A,

4.75

%

,

11/01/28

........

United

States

800,000

816,460

g

Outfront

Media

Capital

LLC

/

Outfront

Media

Capital

Corp.

,

Senior

Note

,

144A,

4.25

%

,

1/15/29

............................

United

States

1,100,000

1,103,669

g

Sinclair

Television

Group,

Inc.

,

Senior

Bond,

144A,

5.5%,

3/01/30

.......................

United

States

300,000

291,421

Senior

Secured

Note,

144A,

4.125%,

12/01/30

.............

United

States

800,000

759,212

g

Sirius

XM

Radio,

Inc.

,

Senior

Note

,

144A,

4

%

,

7/15/28

.........

United

States

600,000

604,392

g

Univision

Communications,

Inc.

,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

..............

United

States

1,321,000

1,335,855

Senior

Secured

Note,

144A,

4.5%,

5/01/29

................

United

States

100,000

101,178

9,282,657

Metals

&

Mining

1.2%

Commercial

Metals

Co.

,

Senior

Bond

,

3.875

%

,

2/15/31

.........

United

States

1,200,000

1,192,770

g

Constellium

SE

,

Senior

Note

,

144A,

3.75

%

,

4/15/29

...........

United

States

1,000,000

985,370

g

CSN

Inova

Ventures

,

Senior

Note

,

144A,

6.75

%

,

1/28/28

........

Brazil

800,000

843,364

g

FMG

Resources

August

2006

Pty.

Ltd.

,

Senior

Bond

,

144A,

4.375

%

,

4/01/31

...........................................

Australia

700,000

736,211

g

Novelis

Corp.

,

Senior

Bond

,

144A,

3.875

%

,

8/15/31

...........

United

States

200,000

199,061

g

SunCoke

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

6/30/29

United

States

600,000

597,903

4,554,679

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

96,896

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

5.0%

g

Antero

Resources

Corp.

,

Senior

Note,

144A,

8.375%,

7/15/26

.....................

United

States

130,000

148,179

Senior

Note,

144A,

7.625%,

2/01/29

.....................

United

States

166,000

184,523

Apache

Corp.

,

Senior

Note,

4.625%,

11/15/25

.........................

United

States

600,000

644,994

Senior

Note,

4.875%,

11/15/27

.........................

United

States

500,000

545,713

Canadian

Natural

Resources

Ltd.

,

Senior

Bond

,

2.95

%

,

7/15/30

..

Canada

450,000

456,241

Cenovus

Energy,

Inc.

,

Senior

Note

,

5.375

%

,

7/15/25

...........

Canada

277,000

305,928

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-19

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

g

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.

,

Senior

Note

,

144A,

6

%

,

2/01/29

....................

United

States

1,500,000

$

1,560,225

g

CrownRock

LP

/

CrownRock

Finance,

Inc.

,

Senior

Note

,

144A,

5

%

,

5/01/29

...........................................

United

States

300,000

311,706

g

CVR

Energy,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

2/15/25

..........

United

States

500,000

483,038

g

DT

Midstream,

Inc.

,

Senior

Bond

,

144A,

4.375

%

,

6/15/31

.......

United

States

500,000

520,770

Energy

Transfer

LP

,

Senior

Bond

,

3.75

%

,

5/15/30

.............

United

States

200,000

212,158

EnLink

Midstream

LLC

,

Senior

Bond,

5.375%,

6/01/29

..........................

United

States

1,100,000

1,126,598

g

Senior

Note,

144A,

5.625%,

1/15/28

.....................

United

States

100,000

104,146

e,g

EnQuest

plc

,

Senior

Note

,

144A,

Reg

S,

PIK,

7

%

,

10/15/23

......

United

Kingdom

909,763

846,462

g

Hilcorp

Energy

I

LP

/

Hilcorp

Finance

Co.

,

Senior

Bond,

144A,

6%,

2/01/31

........................

United

States

700,000

725,375

Senior

Note,

144A,

5.75%,

2/01/29

......................

United

States

200,000

206,425

g

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

10%,

2/29/24

......................

United

States

307,101

316,079

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

1,394,630

1,468,943

MPLX

LP

,

Senior

Note

,

2.65

%

,

8/15/30

.....................

United

States

1,500,000

1,494,896

Occidental

Petroleum

Corp.

,

Senior

Bond,

6.125%,

1/01/31

..........................

United

States

600,000

730,008

Senior

Bond,

6.45%,

9/15/36

...........................

United

States

500,000

638,500

Senior

Note

,

8.875%,

7/15/30

..........................

United

States

700,000

945,266

g

Rattler

Midstream

LP

,

Senior

Note

,

144A,

5.625

%

,

7/15/25

......

United

States

1,400,000

1,457,400

Sabine

Pass

Liquefaction

LLC

,

Senior

Secured

Note

,

4.5

%

,

5/15/30

United

States

1,600,000

1,806,386

Sunoco

LP

/

Sunoco

Finance

Corp.

,

Senior

Note,

6%,

4/15/27

.............................

United

States

500,000

521,950

Senior

Note,

4.5%,

5/15/29

............................

United

States

1,200,000

1,220,664

g

Venture

Global

Calcasieu

Pass

LLC

,

Senior

Secured

Bond,

144A,

4.125%,

8/15/31

..............

United

States

300,000

318,519

Senior

Secured

Note,

144A,

3.875%,

8/15/29

..............

United

States

300,000

311,749

19,612,841

Paper

&

Forest

Products

0.4%

g

Glatfelter

Corp.

,

Senior

Note

,

144A,

4.75

%

,

11/15/29

...........

United

States

400,000

413,092

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

700,000

712,593

Senior

Bond,

3.125%,

1/15/32

..........................

Brazil

400,000

387,696

1,513,381

Personal

Products

0.3%

g

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

800,000

741,576

g

Prestige

Brands,

Inc.

,

Senior

Bond

,

144A,

3.75

%

,

4/01/31

.......

United

States

600,000

582,909

1,324,485

Pharmaceuticals

1.6%

g

Bausch

Health

Cos.,

Inc.

,

Senior

Bond,

144A,

5.25%,

2/15/31

......................

United

States

300,000

264,090

Senior

Secured

Note,

144A,

4.875%,

6/01/28

..............

United

States

1,000,000

1,021,810

g

Bayer

US

Finance

II

LLC

,

Senior

Bond

,

144A,

4.375

%

,

12/15/28

..

Germany

889,000

993,847

g

Jazz

Securities

DAC

,

Senior

Secured

Note

,

144A,

4.375

%

,

1/15/29

United

States

1,200,000

1,244,604

g

Organon

&

Co.

/

Organon

Foreign

Debt

Co-Issuer

BV

,

Senior

Bond,

144A,

5.125%,

4/30/31

.....................

United

States

600,000

627,885

Senior

Secured

Note,

144A,

4.125%,

4/30/28

..............

United

States

700,000

712,586

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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

Corporate

Bonds

(continued)

Pharmaceuticals

(continued)

Royalty

Pharma

plc

,

Senior

Bond

,

3.3

%

,

9/02/40

..............

United

States

500,000

$

499,474

Teva

Pharmaceutical

Finance

Netherlands

III

BV

,

Senior

Note

,

5.125

%

,

5/09/29

.....................................

Israel

900,000

883,845

6,248,141

Real

Estate

Management

&

Development

1.1%

g

China

Overseas

Finance

Cayman

VI

Ltd.

,

Senior

Note

,

Reg

S,

5.95

%

,

5/08/24

.....................................

China

700,000

760,901

g

Country

Garden

Holdings

Co.

Ltd.

,

Senior

Secured

Note

,

Reg

S,

7.25

%

,

4/08/26

.....................................

China

800,000

791,113

g

Five

Point

Operating

Co.

LP

/

Five

Point

Capital

Corp.

,

Senior

Note

,

144A,

7.875

%

,

11/15/25

...............................

United

States

800,000

835,312

g

Forestar

Group,

Inc.

,

Senior

Note

,

144A,

3.85

%

,

5/15/26

........

United

States

500,000

501,785

g

Howard

Hughes

Corp.

(The)

,

Senior

Note

,

144A,

5.375

%

,

8/01/28

.

United

States

1,000,000

1,066,460

g

Vivion

Investments

SARL

,

Senior

Note

,

Reg

S,

3

%

,

8/08/24

.....

Luxembourg

200,000

EUR

223,425

4,178,996

Road

&

Rail

1.0%

CSX

Corp.

,

Senior

Bond

,

4.1

%

,

3/15/44

....................

United

States

550,000

637,949

g

First

Student

Bidco

,

Inc.

/

First

Transit

Parent,

Inc.

,

Senior

Secured

Note

,

144A,

4

%

,

7/31/29

..............................

United

States

800,000

778,812

g

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

1,500,000

2,005,050

g

NESCO

Holdings

II,

Inc.

,

Secured

Note

,

144A,

5.5

%

,

4/15/29

....

United

States

500,000

517,137

3,938,948

Software

0.3%

g

Rocket

Software,

Inc.

,

Senior

Note

,

144A,

6.5

%

,

2/15/29

........

United

States

1,100,000

1,074,706

Specialty

Retail

1.0%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

200,000

228,704

g

Lithia

Motors,

Inc.

,

Senior

Bond,

144A,

4.375%,

1/15/31

.....................

United

States

500,000

534,468

Senior

Note,

144A,

3.875%,

6/01/29

.....................

United

States

700,000

715,767

g

Michaels

Cos.,

Inc.

(The)

,

Senior

Note

,

144A,

7.875

%

,

5/01/29

...

United

States

600,000

592,023

g

Park

River

Holdings,

Inc.

,

Senior

Note

,

144A,

6.75

%

,

8/01/29

....

United

States

1,200,000

1,177,314

h

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

FRN

,

5.75

%

,

(

6-month

USD

LIBOR

+

5

%

),

7/15/25

.....................

United

States

236,150

222,825

g

Victoria's

Secret

&

Co.

,

Senior

Note

,

144A,

4.625

%

,

7/15/29

.....

United

States

400,000

409,612

3,880,713

Technology

Hardware,

Storage

&

Peripherals

0.1%

Teledyne

FLIR

LLC

,

Senior

Note

,

2.5

%

,

8/01/30

..............

United

States

200,000

200,670

Textiles,

Apparel

&

Luxury

Goods

0.1%

g

Kontoor

Brands,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

11/15/29

......

United

States

300,000

300,501

Thrifts

&

Mortgage

Finance

0.1%

g

Ladder

Capital

Finance

Holdings

LLLP

/

Ladder

Capital

Finance

Corp.

,

Senior

Note

,

144A,

4.75

%

,

6/15/29

.................

United

States

300,000

308,012

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Note

,

3.4

%

,

5/06/30

................

United

States

1,200,000

1,242,855

Trading

Companies

&

Distributors

0.6%

g

H&E

Equipment

Services,

Inc.

,

Senior

Note

,

144A,

3.875

%

,

12/15/28

United

States

1,200,000

1,193,130

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-21

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Trading

Companies

&

Distributors

(continued)

g

Herc

Holdings,

Inc.

,

Senior

Note

,

144A,

5.5

%

,

7/15/27

..........

United

States

1,000,000

$

1,041,205

2,234,335

Wireless

Telecommunication

Services

0.6%

e,g

Digicel

Group

Holdings

Ltd.

,

Senior

Note

,

144A,

PIK,

8

%

,

4/01/25

.

Bermuda

20,381

18,744

Hughes

Satellite

Systems

Corp.

,

Senior

Note

,

6.625

%

,

8/01/26

...

United

States

500,000

560,125

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

500,000

489,488

Senior

Secured

Note,

3.875%,

4/15/30

...................

United

States

1,300,000

1,423,144

2,491,501

Total

Corporate

Bonds

(Cost

$196,559,037)

.....................................

197,482,787

h,i

Senior

Floating

Rate

Interests

1.6%

Aerospace

&

Defense

0.2%

Dynasty

Acquisition

Co.,

Inc.

,

2020

Term

Loan,

B1,

3.724%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

446,430

435,590

2020

Term

Loan,

B2,

3.724%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

240,016

234,189

669,779

a

a

a

a

a

a

Airlines

0.3%

Air

Canada

,

Term

Loan

,

4.25

%

,

(

3-month

USD

LIBOR

+

3.5

%

),

8/11/28

...........................................

Canada

1,000,000

1,000,535

Kestrel

Bidco

,

Inc.

,

Term

Loan

,

4

%

,

(

3-month

USD

LIBOR

+

3

%

),

12/11/26

..........................................

Canada

280,186

272,816

1,273,351

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

724,712

711,580

Entertainment

0.2%

Diamond

Sports

Group

LLC

,

Term

Loan

,

3.36

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

444,874

208,966

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

544,078

533,672

742,638

a

a

a

a

a

a

Leisure

Products

0.3%

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

784,310

771,075

Motion

Acquisition

Ltd.

,

Term

Loan,

B1,

3.474%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

348,342

341,531

Term

Loan,

B2,

3.474%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

49,660

48,689

1,161,295

a

a

a

a

a

a

Media

0.3%

Cengage

Learning,

Inc.

,

First

Lien,

Term

Loan,

B

,

5.75

%

,

(

3-month

USD

LIBOR

+

4.75

%

),

7/14/26

..........................

United

States

745,545

748,535

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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

h,i

Senior

Floating

Rate

Interests

(continued)

Media

(continued)

Clear

Channel

Outdoor

Holdings,

Inc.

,

Term

Loan,

B

,

3.629

%

,

(

3-month

USD

LIBOR

+

3.5

%

),

8/21/26

...................

United

States

298,473

$

294,774

1,043,309

a

a

a

a

a

a

Personal

Products

0.1%

Coty,

Inc.

,

USD

Term

Loan,

B

,

2.353

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

579,300

572,783

Total

Senior

Floating

Rate

Interests

(Cost

$6,307,134)

...........................

6,174,735

j,k

Marketplace

Loans

1.5%

Diversified

Financial

Services

1.5%

b

Freedom

Financial

Asset

Management

LLC,

5.99%

-

26.49%,

8/12/23

-

2/12/27

....................................

United

States

2,144,992

2,154,237

b

LendingClub

Corp.

-

LCX

PM,

10.19%

-

20.49%,

10/08/23

-

2/03/26

United

States

146,404

135,206

b

LendingClub

Corp.

-

LCX,

7.56%

-

25.65%,

9/26/22

-

2/28/25

....

United

States

380,018

345,191

b

Prosper

Funding

LLC,

10.4%

-

26.13%,

12/16/24

-

12/20/26

.....

United

States

963,163

952,657

b

Upstart

Network,

Inc.,

6.01%

-

32.86%,

9/20/24

-

12/13/26

.......

United

States

2,323,564

2,305,116

5,892,407

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$5,997,498)

.....................................

5,892,407

l

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

1,516,568

Total

Loan

Participations

and

Assignments

(Cost

$1,508,535)

....................

1,516,568

Foreign

Government

and

Agency

Securities

12.7%

g

African

Export-Import

Bank

(The)

,

Senior

Note

,

144A,

3.994

%

,

9/21/29

...........................................

Supranational

m

2,000,000

2,069,032

g

Angola

Government

Bond

,

Senior

Note

,

144A,

8.25

%

,

5/09/28

...

Angola

2,500,000

2,518,312

g

Banque

Centrale

de

Tunisie

,

Senior

Note

,

Reg

S,

5.625

%

,

2/17/24

Tunisia

2,300,000

EUR

2,084,811

g

Banque

Ouest

Africaine

de

Developpement

,

Senior

Note

,

144A,

5

%

,

7/27/27

...........................................

Supranational

m

1,200,000

1,328,736

g

Belarus

Government

Bond

,

Senior

Bond,

144A,

6.2%,

2/28/30

.......................

Belarus

1,200,000

956,280

Senior

Note

,

144A,

7.625%,

6/29/27

......................

Belarus

1,200,000

1,108,488

Brazil

Notas

do

Tesouro

Nacional

,

Senior

Bond

,

3.875

%

,

6/12/30

.

Brazil

1,000,000

971,750

Colombia

Government

Bond

,

Senior

Bond,

3.875%,

4/25/27

..........................

Colombia

1,400,000

1,413,300

Senior

Bond,

9.85%,

6/28/27

...........................

Colombia

5,315,000,000

COP

1,489,093

Senior

Bond,

4.5%,

3/15/29

............................

Colombia

500,000

513,035

Senior

Bond,

5%,

6/15/45

.............................

Colombia

1,900,000

1,721,875

g

Comision

Federal

de

Electricidad

,

Senior

Bond

,

144A,

3.348

%

,

2/09/31

...........................................

Mexico

1,000,000

982,270

g

Dominican

Republic

Government

Bond

,

Senior

Bond,

144A,

6.85%,

1/27/45

......................

Dominican

Republic

700,000

773,500

Senior

Note,

144A,

8.9%,

2/15/23

.......................

Dominican

Republic

81,500,000

DOP

1,469,592

Ecopetrol

SA

,

Senior

Bond,

4.125%,

1/16/25

..........................

Colombia

400,000

407,030

Senior

Bond,

4.625%,

11/02/31

.........................

Colombia

400,000

389,604

g

Egypt

Government

Bond

,

Senior

Bond

,

144A,

7.625

%

,

5/29/32

...

Egypt

600,000

570,057

f,g

Electricite

de

France

SA

,

Junior

Sub.

Bond

,

144A,

5.25%

to

1/29/23,

FRN

thereafter

,

Perpetual

.............................

France

2,425,000

2,518,508

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-23

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

g

Export-Import

Bank

of

India

,

Senior

Note

,

144A,

3.875

%

,

2/01/28

.

India

1,655,000

$

1,773,627

g

Gabon

Government

Bond

,

Senior

Bond

,

144A,

6.625

%

,

2/06/31

..

Gabon

1,600,000

1,558,120

g

Indonesia

Asahan

Aluminium

Persero

PT

,

Senior

Note

,

144A,

5.45

%

,

5/15/30

...........................................

Indonesia

1,400,000

1,598,268

Indonesia

Government

Bond

,

g

Senior

Bond,

144A,

4.35%,

1/08/27

......................

Indonesia

900,000

1,003,724

g

Senior

Bond,

144A,

4.625%,

4/15/43

.....................

Indonesia

300,000

353,616

g

Senior

Note,

144A,

3.85%,

7/18/27

.......................

Indonesia

1,200,000

1,315,944

FR64,

6.125%,

5/15/28

...............................

Indonesia

9,500,000,000

IDR

679,208

g

Iraq

Government

Bond

,

Senior

Bond

,

144A,

5.8

%

,

1/15/28

......

Iraq

1,625,000

1,559,285

g

Israel

Electric

Corp.

Ltd.

,

Senior

Secured

Bond

,

144A,

Reg

S,

4.25

%

,

8/14/28

...........................................

Israel

1,000,000

1,100,650

g

Kazakhstan

Government

Bond

,

Senior

Bond

,

144A,

4.875

%

,

10/14/44

..........................................

Kazakhstan

1,500,000

1,845,525

Mexico

Government

Bond

,

Senior

Bond,

4.75%,

4/27/32

...........................

Mexico

600,000

679,800

Senior

Note

,

3.75%,

1/11/28

............................

Mexico

500,000

537,888

Peru

Government

Bond

,

Senior

Bond

,

6.55

%

,

3/14/37

..........

Peru

800,000

1,093,444

Petroleos

Mexicanos

,

Senior

Bond

,

6.625

%

,

6/15/35

...........

Mexico

700,000

673,750

g

Romania

Government

Bond

,

Senior

Bond

,

144A,

6.125

%

,

1/22/44

.

Romania

500,000

657,498

g

Russia

Government

Bond

,

Senior

Note

,

Reg

S,

4.75

%

,

5/27/26

...

Russia

1,200,000

1,314,173

South

Africa

Government

Bond

,

Senior

Bond,

4.85%,

9/30/29

...........................

South

Africa

600,000

621,180

Senior

Bond,

5.875%,

6/22/30

..........................

South

Africa

700,000

781,918

Turkey

Government

Bond

,

Senior

Bond,

4.875%,

10/09/26

.........................

Turkey

800,000

727,069

Senior

Bond,

5.95%,

1/15/31

...........................

Turkey

1,600,000

1,435,824

g

Ukraine

Government

Bond

,

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

500,000

447,565

Senior

Note,

144A,

7.75%,

9/01/22

.......................

Ukraine

200,000

198,702

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

369,000

361,850

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

369,000

358,985

n

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

Reg

S,

5/31/40

..

Ukraine

978,000

893,868

o

Uruguay

Government

Bond

,

Index

Linked,

Senior

Bond,

4.375%,

12/15/28

...............

Uruguay

5,581,686

UYU

148,957

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

.................

Uruguay

93,155,571

UYU

2,348,910

Total

Foreign

Government

and

Agency

Securities

(Cost

$50,995,661)

..............

49,354,621

U.S.

Government

and

Agency

Securities

3.8%

U.S.

Treasury

Notes

,

1.625%,

11/15/22

....................................

United

States

2,700,000

2,729,016

1.75%,

1/31/23

.....................................

United

States

2,700,000

2,738,180

2.75%,

2/15/24

.....................................

United

States

3,700,000

3,854,070

1.125%,

2/28/27

.....................................

United

States

5,500,000

5,457,890

Total

U.S.

Government

and

Agency

Securities

(Cost

$14,843,232)

.................

14,779,156

Asset-Backed

Securities

6.8%

Airlines

0.0%

†

United

Airlines

Pass-Through

Trust

,

2020-1

,

B

,

4.875

%

,

7/15/27

..

United

States

89,800

93,621

Consumer

Finance

0.4%

p

Citibank

Credit

Card

Issuance

Trust

,

2017-A7

,

A7

,

FRN

,

0.473

%

,

(

1-month

USD

LIBOR

+

0.37

%

),

8/08/24

..................

United

States

1,494,000

1,496,700

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

6.4%

g,p

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.781

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

1,455,000

$

1,449,562

g,p

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.282

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

700,000

697,468

g,p

BlueMountain

CLO

Ltd.

,

2018-1A

,

D

,

144A,

FRN

,

3.182

%

,

(

3-month

USD

LIBOR

+

3.05

%

),

7/30/30

..........................

United

States

1,000,000

964,833

g,p

BlueMountain

Fuji

EUR

CLO

V

DAC

,

5A

,

B

,

144A,

FRN

,

1.55

%

,

(

3-month

EURIBOR

+

1.55

%

),

1/15/33

....................

Ireland

600,000

EUR

683,004

g,p

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.631

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

460,000

459,047

g,p

Buttermilk

Park

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.224

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

10/15/31

..................

United

States

1,408,860

1,408,854

g,p

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-4RA

,

C

,

144A,

FRN

,

3.024

%

,

(

3-month

USD

LIBOR

+

2.9

%

),

7/15/30

........

United

States

300,000

286,984

g,p

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

1,213,000

1,207,133

g,p

Carlyle

US

CLO

Ltd.

,

2021-1A

,

A2

,

144A,

FRN

,

1.574

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

4/15/34

..........................

United

States

1,500,000

1,501,497

g,q

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2019-51,

PT,

144A,

FRN,

16.892%,

1/15/45

................

United

States

333,666

331,828

2019-52,

PT,

144A,

FRN,

16.224%,

1/15/45

................

United

States

366,907

366,934

2019-S8,

PT,

144A,

FRN,

10.684%,

1/15/45

................

United

States

236,111

231,444

2020-2,

PT,

144A,

FRN,

16.149%,

3/15/45

.................

United

States

345,357

344,320

2020-7,

PT,

144A,

FRN,

16.127%,

4/17/45

.................

United

States

196,681

193,710

g,p

Dryden

38

Senior

Loan

Fund

,

2015-38A

,

CR

,

144A,

FRN

,

2.124

%

,

(

3-month

USD

LIBOR

+

2

%

),

7/15/30

.....................

United

States

863,000

857,839

g,p

Dryden

55

CLO

Ltd.

,

2018-55A

,

D

,

144A,

FRN

,

2.974

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/15/31

..........................

United

States

300,000

288,512

g,p

Galaxy

XVIII

CLO

Ltd.

,

2018-28A

,

C

,

144A,

FRN

,

2.074

%

,

(

3-month

USD

LIBOR

+

1.95

%

),

7/15/31

..........................

United

States

250,000

249,427

g,p

Galaxy

XXVII

CLO

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.955

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

5/16/31

...........................

United

States

400,000

399,835

g

Home

Partners

of

America

Trust

,

2021-2,

B,

144A,

2.302%,

12/17/26

......................

United

States

1,269,255

1,255,235

2021-3,

B,

144A,

2.649%,

1/17/41

.......................

United

States

480,000

479,187

g,p

LCM

26

Ltd.

,

26A

,

B

,

144A,

FRN

,

1.532

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/20/31

......................................

United

States

250,000

248,754

g,p

LCM

XVII

LP

,

17A,

BRR,

144A,

FRN,

1.724%,

(3-month

USD

LIBOR

+

1.6%),

10/15/31

..........................................

United

States

350,000

350,349

17A,

CRR,

144A,

FRN,

2.224%,

(3-month

USD

LIBOR

+

2.1%),

10/15/31

..........................................

United

States

320,000

319,320

g,p

LCM

XVIII

LP

,

18A

,

DR

,

144A,

FRN

,

2.932

%

,

(

3-month

USD

LIBOR

+

2.8

%

),

4/20/31

....................................

United

States

770,000

738,865

g,p

Madison

Park

Euro

Funding

VIII

DAC

,

8A

,

BRN

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

4/15/32

.....................

Ireland

400,000

EUR

455,694

g,p

Magnetite

XXIX

Ltd.

,

2021-29A

,

B

,

144A,

FRN

,

1.524

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/15/34

...........................

United

States

1,500,000

1,499,134

g,q

Mill

City

Mortgage

Loan

Trust

,

2018-4

,

A1B

,

144A,

FRN

,

3.5

%

,

4/25/66

...........................................

United

States

902,246

926,299

g,p

Octagon

Investment

Partners

28

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.924

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

10/24/30

............

United

States

250,000

250,485

g,p

Octagon

Investment

Partners

36

Ltd.

,

2018-1A

,

A1

,

144A,

FRN

,

1.094

%

,

(

3-month

USD

LIBOR

+

0.97

%

),

4/15/31

............

United

States

500,000

499,629

g,p

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

C

,

144A,

FRN

,

2.974

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

7/25/30

............

United

States

400,000

392,742

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-25

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

g,p

Octagon

Investment

Partners

38

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

3.081

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

7/20/30

............

United

States

1,000,000

$

959,776

g,q

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

209,893

213,405

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

231,592

227,628

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

63,950

64,525

g,p

Strata

CLO

I

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

1/15/31

...............................

United

States

1,300,000

1,298,613

g,q

Upgrade

Master

Pass-Thru

Trust

,

2019-PT2

,

A

,

144A,

FRN

,

13.266

%

,

2/15/26

....................................

United

States

192,834

197,002

g,p

Voya

CLO

Ltd.

,

2013-2A,

BR,

144A,

FRN,

1.974%,

(3-month

USD

LIBOR

+

1.85%),

4/25/31

.....................................

United

States

780,000

771,186

2014-1A,

CR2,

144A,

FRN,

2.922%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

1,000,000

948,199

2015-2A,

BR,

144A,

FRN,

1.624%,

(3-month

USD

LIBOR

+

1.5%),

7/23/27

...........................................

United

States

820,000

821,434

24,839,692

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$26,542,557)

...............................

26,430,013

Commercial

Mortgage-Backed

Securities

0.2%

Diversified

Financial

Services

0.2%

g,p

BX

Commercial

Mortgage

Trust

,

2021-VOLT,

A,

144A,

FRN,

0.81%,

(1-month

USD

LIBOR

+

0.7%),

9/15/36

...........................................

United

States

250,000

249,493

2021-VOLT,

B,

144A,

FRN,

1.06%,

(1-month

USD

LIBOR

+

0.95%),

9/15/36

.....................................

United

States

400,000

398,171

q

Commercial

Mortgage

Trust

,

2006-GG7

,

AJ

,

FRN

,

6.012

%

,

7/10/38

United

States

186,216

156,732

804,396

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$829,606)

...................

804,396

Mortgage-Backed

Securities

1.3%

r

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

4,835

4,855

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.1%

FHLMC

Gold

Pools,

30

Year,

5%,

4/01/34

-

8/01/35

............

United

States

118,368

133,243

FHLMC

Gold

Pools,

30

Year,

5.5%,

3/01/33

-

1/01/35

..........

United

States

74,831

83,322

FHLMC

Gold

Pools,

30

Year,

6%,

4/01/33

-

2/01/36

............

United

States

65,210

73,406

FHLMC

Gold

Pools,

30

Year,

6.5%,

11/01/27

-

7/01/32

..........

United

States

9,181

10,242

FHLMC

Gold

Pools,

30

Year,

7%,

4/01/30

...................

United

States

1,168

1,312

FHLMC

Gold

Pools,

30

Year,

7.5%,

8/01/30

..................

United

States

136

157

301,682

r

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.0%

†

FNMA,

2.289%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

12/01/34

..

United

States

43,411

44,222

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

1.1%

FNMA,

10

Year,

2.5%,

7/01/22

...........................

United

States

509

526

FNMA,

20

Year,

5%,

4/01/30

.............................

United

States

22,447

24,692

FNMA,

30

Year,

3%,

9/01/48

-

9/01/51

......................

United

States

2,331,768

2,437,000

FNMA,

30

Year,

4.5%,

5/01/48

...........................

United

States

1,733,213

1,878,827

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

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

Mortgage-Backed

Securities

(continued)

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

(continued)

FNMA,

30

Year,

6.5%,

6/01/28

-

10/01/37

...................

United

States

66,908

$

75,517

4,416,562

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

0.1%

GNMA

I,

Single-family,

30

Year,

5%,

11/15/33

-

7/15/34

.........

United

States

98,154

112,510

GNMA

I,

Single-family,

30

Year,

7%,

10/15/28

-

2/15/29

.........

United

States

10,626

10,702

GNMA

I,

Single-family,

30

Year,

7.5%,

9/15/30

................

United

States

912

1,033

GNMA

II,

30

Year,

6.5%,

2/20/34

..........................

United

States

1,863

1,909

GNMA

II,

Single-family,

30

Year,

5%,

9/20/33

-

11/20/33

.........

United

States

27,776

30,986

GNMA

II,

Single-family,

30

Year,

6%,

11/20/34

................

United

States

40,795

47,009

GNMA

II,

Single-family,

30

Year,

6.5%,

4/20/31

-

1/20/33

........

United

States

17,732

20,360

GNMA

II,

Single-family,

30

Year,

7.5%,

1/20/28

-

4/20/32

........

United

States

6,537

7,322

231,831

Total

Mortgage-Backed

Securities

(Cost

$4,825,608)

.............................

4,999,152

Municipal

Bonds

0.9%

California

0.1%

San

Bernardino

Community

College

District

,

GO

,

2019

A-1

,

3.271

%

,

8/01/39

...........................................

United

States

210,000

222,366

Illinois

0.2%

State

of

Illinois

,

GO

,

2003

,

5.1

%

,

6/01/33

...................

United

States

695,000

803,861

New

Jersey

0.1%

New

Jersey

Transportation

Trust

Fund

Authority

,

Revenue

,

2019

B

,

Refunding

,

4.131

%

,

6/15/42

............................

United

States

345,000

387,888

New

York

0.2%

Metropolitan

Transportation

Authority

,

Revenue

,

2020

E

,

Refunding

,

4

%

,

11/15/45

.......................................

United

States

535,000

611,741

New

York

State

Dormitory

Authority

,

State

University

of

New

York

,

Revenue

,

2019

B

,

Refunding

,

3.142

%

,

7/01/43

..............

United

States

305,000

315,351

927,092

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

202,497

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

571,024

Texas

0.1%

Texas

State

University

System

,

Revenue

,

2019

B

,

Refunding

,

3.289

%

,

3/15/40

.....................................

United

States

190,000

198,751

Total

Municipal

Bonds

(Cost

$2,998,209)

.......................................

3,313,479

Residential

Mortgage-Backed

Securities

8.1%

Diversified

Financial

Services

2.0%

g

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

257,291

261,220

q

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

514,649

529,779

g,q

CIM

Trust

,

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

172,375

174,031

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

333,969

339,343

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

g,q

J.P.

Morgan

Mortgage

Trust

,

2021-13,

A4,

144A,

FRN,

2.5%,

4/25/52

...................

United

States

1,587,377

$

1,598,452

2021-15,

A4,

144A,

FRN,

2.5%,

6/25/52

...................

United

States

490,000

494,211

2021-6,

A4,

144A,

FRN,

2.5%,

10/25/51

...................

United

States

883,959

892,337

g,q

OBX

Trust

,

2021-J3

,

A4

,

144A,

FRN

,

2.5

%

,

10/25/51

...........

United

States

324,034

327,510

g,q

Provident

Funding

Associates

LLP

,

2021-J1

,

A3

,

144A,

FRN

,

2.5

%

,

2/20/49

...........................................

United

States

975,956

986,425

g,q

Provident

Funding

Mortgage

Trust

,

2019-1

,

A2

,

144A,

FRN

,

3

%

,

12/25/49

..........................................

United

States

192,036

192,161

g,q

PSMC

Trust

,

2021-3

,

A3

,

144A,

FRN

,

2.5

%

,

8/25/51

...........

United

States

1,930,190

1,948,482

7,743,951

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

6.1%

p

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.353%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

894,294

922,133

2014-DN2,

M3,

FRN,

3.703%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

1,229,404

1,259,682

2014-DN3,

M3,

FRN,

4.103%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

49,515

50,450

2014-DN4,

M3,

FRN,

4.653%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

304,252

311,957

2014-HQ1,

M3,

FRN,

4.203%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

24,110

24,224

2014-HQ3,

M3,

FRN,

4.853%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

22,920

22,997

2015-DNA1,

M3,

FRN,

3.403%,

(1-month

USD

LIBOR

+

3.3%),

10/25/27

..........................................

United

States

81,441

82,740

2015-DNA3,

M3,

FRN,

4.803%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

1,064,769

1,098,531

2016-DNA2,

M3,

FRN,

4.753%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

899,061

932,123

2017-DNA2,

M2,

FRN,

3.553%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

1,340,000

1,380,197

2017-DNA3,

M2,

FRN,

2.603%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

2,901,345

2,960,196

2017-HQA2,

M2,

FRN,

2.753%,

(1-month

USD

LIBOR

+

2.65%),

12/25/29

..........................................

United

States

232,389

238,525

p

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.353%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

115,880

120,648

2014-C01,

M2,

FRN,

4.503%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

196,873

204,051

2014-C02,

1M2,

FRN,

2.703%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

614,575

626,497

2014-C02,

2M2,

FRN,

2.703%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

219,099

222,392

2014-C03,

1M2,

FRN,

3.103%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

1,226,362

1,246,212

2014-C03,

2M2,

FRN,

3.003%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

38,842

39,440

2015-C01,

1M2,

FRN,

4.403%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

270,728

276,273

2015-C02,

1M2,

FRN,

4.103%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

663,908

676,272

2015-C02,

2M2,

FRN,

4.103%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

40,451

40,567

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-28

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

p

FNMA

Connecticut

Avenue

Securities,

(continued)

2015-C03,

1M2,

FRN,

5.103%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

942,559

$

969,871

2015-C03,

2M2,

FRN,

5.103%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

69,574

69,824

2016-C01,

1M2,

FRN,

6.853%,

(1-month

USD

LIBOR

+

6.75%),

8/25/28

...........................................

United

States

182,382

191,639

2016-C02,

1M2,

FRN,

6.103%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

1,154,181

1,193,935

2016-C03,

1M2,

FRN,

5.403%,

(1-month

USD

LIBOR

+

5.3%),

10/25/28

..........................................

United

States

907,913

941,538

2016-C05,

2M2,

FRN,

4.553%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

844,080

875,074

2016-C06,

1M2,

FRN,

4.353%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

296,959

306,877

2016-C07,

2M2,

FRN,

4.453%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

625,920

650,428

2017-C01,

1M2,

FRN,

3.653%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

1,245,150

1,276,223

2017-C03,

1M2,

FRN,

3.103%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

2,255,769

2,310,318

2017-C04,

2M2,

FRN,

2.953%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

525,434

539,173

2017-C05,

1M2,

FRN,

2.303%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

1,519,795

1,547,274

23,608,281

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$32,425,652)

.................

31,352,232

Shares

a

Escrows

and

Litigation

Trusts

0.0%

†

a,b

K2016470219

South

Africa

Ltd.,

Escrow

Account

..............

South

Africa

72,822

—

Mesquite

Energy,

Inc.,

Escrow

Account

.....................

United

States

243,000

9,416

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)

.............................

9,416

Total

Long

Term

Investments

(Cost

$380,748,181)

...............................

374,062,974

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.0%

†

Calls

-

Over-the-Counter

Interest

Rate

Swaptions

0.0%

†

Receive

Fixed

1.35%,

Pay

Floating

3-month

USD

LIBOR,

Counterparty

CITI,

Expires

5/16/22

.......................

1

12,100,000

77,013

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

EUR/RUB,

Counterparty

MSCO,

October

Strike

Price

82.83

RUB,

Expires

10/27/22

......................

1

2,060,000

EUR

30,516

Total

Options

Purchased

(Cost

$126,007)

......................................

107,529

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-29

Short

Term

Investments

2.3%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.3%

d,s

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

9,106,742

$

9,106,742

Total

Money

Market

Funds

(Cost

$9,106,742)

...................................

9,106,742

Total

Short

Term

Investments

(Cost

$9,106,742

)

.................................

9,106,742

a

Total

Investments

(Cost

$389,980,930)

98.6%

...................................

$383,277,245

Options

Written

(0.0)%

†

......................................................

(56,093)

Other

Assets,

less

Liabilities

1.4%

.............................................

5,245,117

Net

Assets

100.0%

...........................................................

$388,466,269

Number

of

Contracts

Notional

Amount

#

a

a

a

a

a

t

Options

Written

(0.0)%

†

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

(0.0)%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.75%,

Counterparty

CITI,

Expires

5/16/22

.......................

1

(12,100,000)

(56,093)

(56,093)

Total

Options

Written

(Premiums

received

$92,323)

.............................

$

(56,093)

#

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$210,014,353,

representing

54.1%

of

net

assets.

h

The

coupon

rate

shown

represents

the

rate

at

period

end.

i

See

Note

1(h)

regarding

senior

floating

rate

interests.

j

See

Note

1(i)

regarding

Marketplace

Lending.

k

Marketplace

loans

holdings

are

presented

in

a

summary

format. For

a

full

breakdown

of

the

holdings,

please

refer

to

Item

6

of

the

Fund's

N-CSR

filing

found

on

sec.gov.

l

See

Note

1(e)

regarding

loan

participations

and

assignments.

m

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

n

The

principal

represents

the

notional

amount.

See

Note

1(d)

regarding

value

recovery

instruments.

o

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(k).

p

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

q

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.

r

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).

s

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

t

See

Note

1(d)

regarding

written

options.

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-30

At

December

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(d). 

At

December

31,

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)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

96

$

12,525,000

3/22/22

$

(147,725)

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

27

3,953,812

3/22/22

(12,415)

U.S.

Treasury

2

Year

Notes

.....................

Long

26

5,672,469

3/31/22

(5,601)

U.S.

Treasury

5

Year

Notes

.....................

Short

190

22,985,547

3/31/22

(127,898)

U.S.

Treasury

Long

Bonds

.....................

Short

12

1,925,250

3/22/22

(26,642)

Total

Futures

Contracts

......................................................................

$(320,281)

*

As

of

year

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

Euro

.............

JPHQ

Sell

4,507,600

5,235,491

1/18/22

$

106,173

$

—

Indonesian

Rupiah

..

JPHQ

Buy

8,900,000,000

621,726

1/18/22

2,351

—

Indonesian

Rupiah

..

JPHQ

Sell

8,900,000,000

625,879

1/18/22

1,802

—

South

Korean

Won

..

JPHQ

Buy

1,050,000,000

885,635

1/27/22

—

(3,169)

Australian

Dollar

....

JPHQ

Buy

1,200,000

869,550

1/31/22

2,505

—

Australian

Dollar

....

JPHQ

Sell

1,200,000

862,357

1/31/22

—

(9,698)

Indonesian

Rupiah

..

JPHQ

Buy

12,618,000,000

878,446

2/22/22

3,615

—

Indonesian

Rupiah

..

JPHQ

Sell

23,000,000,000

1,598,332

2/22/22

—

(9,483)

Euro

.............

JPHQ

Sell

1,230,000

1,379,577

2/24/22

—

(21,091)

Euro

.............

JPHQ

Sell

1,040,034

1,189,381

3/18/22

4,804

(346)

Columbian

Peso

....

JPHQ

Sell

1,700,000,000

425,418

6/03/22

15,211

—

Total

Forward

Exchange

Contracts

...................................................

$136,461

$(43,787)

Net

unrealized

appreciation

(depreciation)

............................................

$92,674

*

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

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FSI-31

At

December

31,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1(d). 

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

Centrally

Cleared

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Traded

Index

CDX.NA.HY.37

.

(5.00)%

Quarterly

12/20/26

3,875,000

$

(363,086)

$

(353,089)

$

(9,997)

Contracts

to

Sell

Protection

(c)(d)

Traded

Index

CDX.NA.EM.36

.

1.00%

Quarterly

12/20/26

2,150,000

(86,073)

(71,244)

(14,829)

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$(449,159)

$(424,333)

$(24,826)

OTC

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

20,000

EUR

486

360

126

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

60,000

EUR

1,458

943

515

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

660,000

EUR

17,766

621

17,145

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

200,000

483

(875)

1,358

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/26

1,080,000

(147,111)

(135,060)

(12,051)

B-

Mexico

Government

Bond

......

1.00%

Quarterly

GSCO

6/20/26

925,000

7,897

2,402

5,495

BBB

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

12/20/26

1,000,000

(106,932)

(84,832)

(22,100)

BB+

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

JPHQ

12/20/26

800,000

29,781

24,316

5,465

B

Traded

Index

(e)

BNP

Paribas

Bespoke

Haverhill

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

BNDP

12/20/23

350,000

EUR

9,442

—

9,442

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kenai

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/23

800,000

(297,267)

(239,917)

(57,350)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kona

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

1,000,000

(176,411)

(133,678)

(42,733)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kona

Index,

Mezzanine

Tranche

5-10%

2.42%

Quarterly

CITI

12/20/22

800,000

6,164

—

6,164

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach

Index,

Mezzanine

Tranche

5-10%

1.97%

Quarterly

CITI

12/20/22

1,100,000

10,308

—

10,308

Non-

Investment

Grade

Franklin

Templeton

Variable

Insurance

Products

Trust

Summary

Statement

of

Investments

Franklin

Strategic

Income

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FSI-32

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Traded

Index

(continued)

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

2,270,000

$

27,367

$

9,041

$

18,326

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(616,569)

$(556,679)

$(59,890)

Total

Credit

Default

Swap

Contracts

....................................

$(1,065,728)

$

(981,012)

$(84,716)

(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.

See

Note 10 regarding

other

derivative

information.

See

Abbreviations

on

page

FSI-

57

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Annual

Report

FSI-33

Franklin

Strategic

Income

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$349,245,171

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

40,735,759

Value

-

Unaffiliated

issuers

..................................................................

$346,431,284

Value

-

Non-

controlled

affiliates

(Note

3e)

.......................................................

36,845,961

Cash

....................................................................................

96,099

Foreign

currency,

at

value

(cost

$16,216)

.........................................................

16,217

Receivables:

Investment

securities

sold

...................................................................

62

Capital

shares

sold

........................................................................

219,819

Dividends

and

interest

.....................................................................

3,882,604

Deposits

with

brokers

for:

OTC

derivative

contracts

..................................................................

540,000

Futures

contracts

........................................................................

424,874

Centrally

cleared

swap

contracts

............................................................

361,753

Variation

margin

on

centrally

cleared

swap

contracts

...............................................

482,132

OTC

swap

contracts

(upfront

payments

$37,683)

...................................................

37,683

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

136,461

Unrealized

appreciation

on

OTC

swap

contracts

....................................................

74,344

Deferred

tax

benefit

(Note

1f)

..................................................................

309,566

Total

assets

..........................................................................

389,858,859

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

70,856

Management

fees

.........................................................................

187,400

Distribution

fees

..........................................................................

33,931

Reports

to

shareholders

fees

................................................................

172,772

Variation

margin

on

futures

contracts

...........................................................

30,112

OTC

swap

contracts

(upfront

receipts

$594,362)

...................................................

594,362

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

134,234

Options

written,

at

value

(premiums

received

$92,323)

...............................................

56,093

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

43,787

Deferred

tax

...............................................................................

13,698

Accrued

expenses

and

other

liabilities

...........................................................

55,345

Total

liabilities

.........................................................................

1,392,590

Net

assets,

at

value

.................................................................

$388,466,269

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$430,564,912

Total

distributable

earnings

(losses)

.............................................................

(42,098,643)

Net

assets,

at

value

.................................................................

$388,466,269

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

December

31,

2021

Annual

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

.......................................................................

$248,352,081

Shares

outstanding

........................................................................

23,352,129

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.64

Class

2:

Net

assets,

at

value

.......................................................................

$89,732,969

Shares

outstanding

........................................................................

8,767,780

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.23

Class

4:

Net

assets,

at

value

.......................................................................

$50,381,219

Shares

outstanding

........................................................................

4,780,307

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.54

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Consolidated

Statement

of

Operations*

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Annual

Report

FSI-35

Franklin

Strategic

Income

VIP

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$95,958

Non-controlled

affiliates

(Note

3e)

.............................................................

927,823

Interest:

(net

of

foreign

taxes

of

$40,765)

Unaffiliated

issuers:

Paydown

gain

(loss)

.....................................................................

(1,210,021)

Paid

in

cash

a

...........................................................................

15,683,913

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

439

Non-controlled

affiliates

(Note

3

e

)

.............................................................

13

Total

investment

income

...................................................................

15,498,125

Expenses:

Management

fees

(Note

3

a

)

...................................................................

2,516,803

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

235,993

    Class

4

................................................................................

184,645

Custodian

fees

(Note

4

)

......................................................................

7,843

Reports

to

shareholders

fees

..................................................................

135,095

Professional

fees

...........................................................................

145,536

Trustees'

fees

and

expenses

..................................................................

4,663

Marketplace

lending

fees

(Note

1

i

)

..............................................................

207,513

Other

....................................................................................

119,821

Total

expenses

.........................................................................

3,557,912

Expense

reductions

(Note

4

)

...............................................................

(1,818)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(156,485)

Net

expenses

.........................................................................

3,399,609

Net

investment

income

................................................................

12,098,516

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Consolidated

Statement

of

Operations*

(continued)

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

FSI-36

Franklin

Strategic

Income

VIP

Fund

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$36,065)

Unaffiliated

issuers

......................................................................

4,212,111

Written

options

...........................................................................

51,549

Foreign

currency

transactions

................................................................

8,661

Forward

exchange

contracts

.................................................................

(561,345)

Futures

contracts

.........................................................................

(227,550)

TBA

sale

commitments

.....................................................................

1,944

Swap

contracts

...........................................................................

1,409,620

Net

realized

gain

(loss)

..................................................................

4,894,990

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(9,515,363)

Non-controlled

affiliates

(Note

3e)

...........................................................

1,559,640

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(168,744)

Written

options

...........................................................................

36,230

Forward

exchange

contracts

.................................................................

384,828

Futures

contracts

.........................................................................

(355,245)

Swap

contracts

...........................................................................

(166,298)

Change

in

deferred

tax

benefit

(Note

1f)

........................................................

172,344

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

40,563

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(8,012,045)

Net

realized

and

unrealized

gain

(loss)

............................................................

(3,117,055)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$8,981,461

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

III

from

January

1,

2021

through

April

27,

2021.

See

Note

1(f).

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Templeton

Variable

Insurance

Products

Trust

Consolidated

Financial

Statements

Consolidated

Statements

of

Changes

in

Net

Assets

The

accompanying

notes

are

an

integral

part

of

these

consolidated

financial

statements.

Annual

Report

FSI-37

Franklin

Strategic

Income

VIP

Fund

Year

Ended

December

31,

2021*

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$12,098,516

$13,770,916

Net

realized

gain

(loss)

.................................................

4,894,990

(11,417,686)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(8,012,045)

10,293,646

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

8,981,461

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

.............................................................

(10,251,021)

(18,953,107)

Class

2

.............................................................

(9,912,221)

7,309,317

Class

4

.............................................................

(718,968)

(1,743,816)

Total

capital

share

transactions

............................................

(20,882,210)

(13,387,606)

Net

increase

(decrease)

in

net

assets

...................................

(25,410,199)

(20,973,658)

Net

assets:

Beginning

of

year

.......................................................

413,876,468

434,850,126

End

of

year

...........................................................

$388,466,269

$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

Notes

to

Consolidated

Financial

Statements

Franklin

Strategic

Income

VIP

Fund

FSI-38

Annual

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

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

December

31,

2021,

77.8%

of

the

Fund’s

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

three

classes

of

shares:

Class

1,

Class

2

and

Class

4.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

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

FSI-39

Annual

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

December

31,

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

year.

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,

and/or

a

joint

repurchase

agreement

in

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

Consolidated

Statement

of

Operations.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-40

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

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

December

31,

2021,

the

Fund

had

no

securities

on

loan.

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

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

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Securities

Lending

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-41

Annual

Report

Franklin

Strategic

Income

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

entered

into

credit

default

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

risk.

A

credit

default

swap

is

an

agreement

between

the

Fund

and

a

counterparty

whereby

the

buyer

of

the

contract

receives

credit

protection

and

the

seller

of

the

contract

guarantees

the

credit

worthiness

of

a

referenced

debt

obligation.

These

agreements

may

be

privately

negotiated

in

the

over-the-

counter

market

(OTC

credit

default

swaps)

or

may

be

executed

in

a

multilateral

trade

facility

platform,

such

as

a

registered

exchange

(centrally

cleared

credit

default

swaps).

The

underlying

referenced

debt

obligation

may

be

a

single

issuer

of

corporate

or

sovereign

debt,

a

credit

index,

a

basket

of

issuers

or

indices,

or

a

tranche

of

a

credit

index

or

basket

of

issuers

or

indices.

In

the

event

of

a

default

of

the

underlying

referenced

debt

obligation,

the

buyer

is

entitled

to

receive

the

notional

amount

of

the

credit

default

swap

contract

from

the

seller

in

exchange

for

the

referenced

debt

obligation,

a

net

settlement

amount

equal

to

the

notional

amount

of

the

credit

default

swap

less

the

recovery

value

of

the

referenced

debt

obligation,

or

other

agreed

upon

amount.

For

centrally

cleared

credit

default

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

Over

the

term

of

the

contract,

the

buyer

pays

the

seller

a

periodic

stream

of

payments,

provided

that

no

event

of

default

has

occurred.

Such

periodic

payments

are

accrued

daily

as

an

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the Statement

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

credit

default

swap

agreement

and

prevailing

market

conditions

(credit

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the 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

FSI-42

Annual

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

10

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

FSI-43

Annual

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.

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

December

31,

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. 

k.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Senior

Floating

Rate

Interests

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-44

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Consolidated

Statement

of

Operations.

l.

Accounting

Estimates

The

preparation

of

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

year.

Actual

results

could

differ

from

those

estimates.

m.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

1,119,217

$11,967,151

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

...............................

(2,899,771)

(30,998,439)

(4,401,405)

(45,668,828)

Net

increase

(decrease)

..........................

(949,876)

$(10,251,021)

(1,815,171)

$(18,953,107)

Class

2

Shares:

Shares

sold

...................................

1,656,006

$17,067,289

2,449,602

$24,706,622

Shares

issued

in

reinvestment

of

distributions

..........

299,698

3,050,922

480,115

4,661,916

Shares

redeemed

...............................

(2,909,726)

(30,030,432)

(2,205,780)

(22,059,221)

Net

increase

(decrease)

..........................

(954,022)

$(9,912,221)

723,937

$7,309,317

1.

Organization

and

Significant

Accounting

Policies

(continued)

k.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-45

Annual

Report

Franklin

Strategic

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

year

ended

December

31,

2021,

the

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.

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

4

Shares:

Shares

sold

...................................

516,341

$5,494,257

667,460

$6,966,802

Shares

issued

in

reinvestment

of

distributions

..........

159,987

1,678,261

230,681

2,304,505

Shares

redeemed

...............................

(744,790)

(7,891,486)

(1,079,161)

(11,015,123)

Net

increase

(decrease)

..........................

(68,462)

$(718,968)

(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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

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

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-46

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

Class

2

and

Class

4

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.25%

and

0.35%

per

year

of

its

average

daily

net

assets

of

Class

2

and

Class

4,

respectively.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

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

year

ended

December

31,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

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.

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

—

$

—

$

1,559,640

$

27,739,219

3,420,372

$

926,964

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

12,853,316

114,283,382

(118,029,956)

—

—

9,106,742

9,106,742

859

Total

Non-Controlled

Affiliates

$21,334,968

$131,981,309

$(118,029,956)

$

—

$

1,559,640

$36,845,961

$

927,823

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$—

$5,548,000

$(5,548,000)

$—

$—

$—

—

$13

Total

Affiliated

Securities

...

$21,334,968

$137,529,309

$(123,577,956)

$—

$1,559,640

$36,845,961

$927,836

3.

Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-47

Annual

Report

Franklin

Strategic

Income

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

year

ended

December

31,

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,

2021,

the

capital

loss

carryforwards

were

as

follows:

During

the

year

ended December

31,

2021,

the

Fund

utilized

$2,803,356

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

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,

paydown

losses,

bond

discounts

and

premiums,

swaps,

financial

futures

transactions,

transfer

in-kind

and

investments

in

FT

Subsidiary.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$229,415,536

and

$280,368,627,

respectively.

Purchases

and

sales

of

investments

exclude

in-kind

transactions

of

$17,697,927.

See

Note

3(f).

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$381,451

Long

term

................................................................................

49,000,530

Total

capital

loss

carryforwards

...............................................................

$49,381,981

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$13,509,450

$20,232,928

Cost

of

investments

..........................................................................

$388,140,652

Unrealized

appreciation

........................................................................

$11,820,271

Unrealized

depreciation

........................................................................

(18,033,106)

Net

unrealized

appreciation

(depreciation)

..........................................................

$(6,212,835)

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$13,470,093

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-48

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

7.

Credit Risk

At

December

31,

2021,

the

Fund

had

46.2%

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

December

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Strategic

Income

VIP

Fund

14,792,309

a

K2016470219

South

Africa

Ltd.,

A

...............

2/01/17

$

114,768

$

—

1,472,041

a

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

1,093

—

6,620

Riviera

Resources,

Inc.

.......................

8/08/18

98,638

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$214,499

$—

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$0

as

of

December

31,

2021.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-49

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

10.

Other

Derivative

Information

At

December

31,

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

Strategic

Income

VIP

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

$

77,013

a

Options

written,

at

value

$

56,093

Variation

margin

on

futures

contracts

—

Variation

margin

on

futures

contracts

320,281

b

Foreign

exchange

contracts

..

Investments

in

securities,

at

value

30,516

a

Options

written,

at

value

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

136,461

Unrealized

depreciation

on

OTC

forward

exchange

contracts

43,787

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

—

Variation

margin

on

centrally

cleared

swap

contracts

24,826

c

OTC

swap

contracts

(upfront

payments)

37,683

OTC

swap

contracts

(upfront

receipts)

594,362

Unrealized

appreciation

on

OTC

swap

contracts

74,344

Unrealized

depreciation

on

OTC

swap

contracts

134,234

Value

recovery

instruments

...

Investments

in

securities,

at

value

893,868

d

Investments

in

securities,

at

value

—

Total

....................

$1,249,885

$1,173,583

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

Summary

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

Summary

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-50

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Consolidated

Statement

of

Operations

was

as

follows:

For

the year

ended

December

31,

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

Year

Consolidated

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Strategic

Income

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Interest

rate

contracts

..........

Investments

$(144,268)

a

Investments

$(11,619)

a

Written

options

51,549

Written

options

36,230

Futures

contracts

(227,550)

Futures

contracts

(355,245)

Swap

contracts

380,278

Swap

contracts

(65,742)

Foreign

exchange

contracts

.....

Investments

—

Investments

(6,859)

a

Swap

contracts

(20,726)

Swap

contracts

30,316

Forward

exchange

contracts

(561,345)

Forward

exchange

contracts

384,828

Credit

contracts

...............

Swap

contracts

1,050,068

Swap

contracts

(130,872)

Value

recovery

instruments

Investments

—

Investments

(117,281)

b

Total

.......................

$528,006

$(236,244)

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Consolidated

Statement

of

Operations.

b

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

.........................

$58,974,332

Swap

Contracts

..........................

19,186,903

Forward

exchange

contracts

.................

17,293,601

Options

.................................

14,189,312

VRI

....................................

1,049,170

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-51

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

At

December

31,

2021,

the

Fund's

OTC

derivative

assets

and

liabilities

are

as

follows:

At

December

31,

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

.............................

$

136,461

$

43,787

Options

purchased

.....................................

107,529

—

Options

written

........................................

—

56,093

Swap

contracts

.......................................

112,027

728,596

Total

.............................................

$356,017

$828,476

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

...................

$9,442

$—

$—

$—

$9,442

BOFA

....................

486

—

—

—

486

CITI

.....................

120,852

(120,852)

—

—

—

GSCO

...................

9,255

(875)

—

—

8,380

JPHQ

...................

167,700

(150,719)

—

—

16,981

MSCO

...................

48,282

—

—

—

48,282

Total

...................

$356,017

$(272,446)

$

—

$—

$83,571

$

1

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-52

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

At

December

31,

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-

57

.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

Amounts

Not

Offset

in

the

Statement

of

Assets

and

Liabilities

Gross

Amounts

of

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Pledged

Cash

Collateral

Pledged

Net

Amount

(Not

less

than

zero)

Franklin

Strategic

Income

VIP

Fund

Counterparty

BNDP

...................

$—

$—

$—

$—

$—

BOFA

....................

—

—

—

—

—

CITI

.....................

676,882

(120,852)

—

(540,000)

16,030

GSCO

...................

875

(875)

—

—

—

JPHQ

...................

150,719

(150,719)

—

—

—

MSCO

...................

—

—

—

—

—

Total

...................

$828,476

$(272,446)

$—

$(540,000)

$16,030

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-53

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

December

31,

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

.............

$

382,370

$

—

$

—

$

382,370

Machinery

............................

—

586,412

—

586,412

Media

...............................

245,260

—

2,779

248,039

Multiline

Retail

........................

—

—

—

a

—

Oil,

Gas

&

Consumable

Fuels

.............

1,340

—

—

a

1,340

Specialty

Retail

........................

4

—

—

4

Management

Investment

Companies

.........

30,705,169

—

—

30,705,169

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

3

3

Paper

&

Forest

Products

.................

6,689

—

—

6,689

Convertible

Bonds

.......................

—

23,986

—

23,986

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

2,273,134

—

2,273,134

Air

Freight

&

Logistics

...................

—

1,029,730

—

1,029,730

Airlines

..............................

—

4,603,865

—

4,603,865

Auto

Components

......................

—

5,916,692

—

5,916,692

Automobiles

..........................

—

1,202,976

—

1,202,976

Banks

...............................

—

6,875,125

—

6,875,125

Beverages

...........................

—

2,856,965

—

2,856,965

Biotechnology

.........................

—

749,210

—

749,210

Building

Products

......................

—

1,717,779

—

1,717,779

Capital

Markets

........................

—

2,503,805

—

2,503,805

Chemicals

...........................

—

15,426,382

—

15,426,382

Commercial

Services

&

Supplies

...........

—

3,356,383

—

3,356,383

Communications

Equipment

..............

—

1,286,064

—

1,286,064

Construction

&

Engineering

...............

—

968,090

—

968,090

Construction

Materials

..................

—

698,541

—

698,541

Consumer

Finance

.....................

—

1,841,264

—

1,841,264

Containers

&

Packaging

.................

—

5,468,498

—

5,468,498

Diversified

Consumer

Services

............

—

823,444

—

823,444

Diversified

Financial

Services

.............

—

2,138,243

—

2,138,243

Diversified

Telecommunication

Services

.....

—

5,242,963

—

5,242,963

Electric

Utilities

........................

—

6,175,989

—

6,175,989

Electrical

Equipment

....................

—

1,933,523

—

1,933,523

Electronic

Equipment,

Instruments

&

Components

........................

—

1,822,578

—

1,822,578

Energy

Equipment

&

Services

.............

—

2,680,842

—

2,680,842

Entertainment

.........................

—

2,133,824

—

2,133,824

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

4,833,283

—

4,833,283

Food

&

Staples

Retailing

.................

—

750,582

—

750,582

Food

Products

........................

—

4,575,637

—

4,575,637

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-54

Annual

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:

Gas

Utilities

..........................

$

—

$

308,928

$

—

$

308,928

Health

Care

Equipment

&

Supplies

.........

—

907,248

—

907,248

Health

Care

Providers

&

Services

..........

—

5,958,537

—

5,958,537

Hotels,

Restaurants

&

Leisure

.............

—

10,108,665

—

10,108,665

Household

Durables

....................

—

2,711,246

—

2,711,246

Household

Products

....................

—

2,766,618

—

2,766,618

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

7,002,235

—

7,002,235

Insurance

............................

—

1,072,783

—

1,072,783

Interactive

Media

&

Services

..............

—

2,059,704

—

2,059,704

Internet

&

Direct

Marketing

Retail

..........

—

2,271,036

—

2,271,036

IT

Services

...........................

—

4,125,710

—

4,125,710

Machinery

............................

—

2,570,369

—

2,570,369

Marine

..............................

—

1,249,980

—

1,249,980

Media

...............................

—

9,282,657

—

9,282,657

Metals

&

Mining

.......................

—

4,554,679

—

4,554,679

Mortgage

Real

Estate

Investment

Trusts

(REITs)

............................

—

96,896

—

96,896

Multiline

Retail

........................

—

—

—

a

—

Oil,

Gas

&

Consumable

Fuels

.............

—

19,612,841

—

19,612,841

Paper

&

Forest

Products

.................

—

1,513,381

—

1,513,381

Personal

Products

.....................

—

1,324,485

—

1,324,485

Pharmaceuticals

.......................

—

6,248,141

—

6,248,141

Real

Estate

Management

&

Development

....

—

4,178,996

—

4,178,996

Road

&

Rail

..........................

—

3,938,948

—

3,938,948

Software

.............................

—

1,074,706

—

1,074,706

Specialty

Retail

........................

—

3,880,713

—

3,880,713

Technology

Hardware,

Storage

&

Peripherals

.

—

200,670

—

200,670

Textiles,

Apparel

&

Luxury

Goods

..........

—

300,501

—

300,501

Thrifts

&

Mortgage

Finance

...............

—

308,012

—

308,012

Tobacco

.............................

—

1,242,855

—

1,242,855

Trading

Companies

&

Distributors

..........

—

2,234,335

—

2,234,335

Wireless

Telecommunication

Services

.......

—

2,491,501

—

2,491,501

Senior

Floating

Rate

Interests

...............

—

6,174,735

—

6,174,735

Marketplace

Loans

......................

—

—

5,892,407

5,892,407

Loan

Participations

and

Assignments

.........

—

1,516,568

—

1,516,568

Foreign

Government

and

Agency

Securities

....

—

49,354,621

—

49,354,621

U.S.

Government

and

Agency

Securities

.......

—

14,779,156

—

14,779,156

Asset-Backed

Securities

..................

—

26,430,013

—

26,430,013

Commercial

Mortgage-Backed

Securities

......

—

804,396

—

804,396

Mortgage-Backed

Securities

................

—

4,999,152

—

4,999,152

Municipal

Bonds

.........................

—

3,313,479

—

3,313,479

Residential

Mortgage-Backed

Securities

......

—

31,352,232

—

31,352,232

Escrows

and

Litigation

Trusts

...............

—

9,416

—

a

9,416

Options

purchased

.......................

—

107,529

—

107,529

Short

Term

Investments

...................

9,106,742

—

—

9,106,742

Total

Investments

in

Securities

...........

$40,447,574

$336,934,482

$5,895,189

$383,277,245

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

136,461

$

—

$

136,461

Swap

contracts

.........................

—

7

4

,

344

—

7

4

,

344

Total

Other

Financial

Instruments

.........

$—

$210,805

$—

$210,805

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-55

Annual

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

year.

At

December

31,

2021,

the

reconciliation

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

VIP

Fund

(continued)

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

56,093

$

—

$

56,093

Forward

exchange

contracts

................

—

43,787

—

43,787

Futures

contracts

........................

320,281

—

—

320,281

Swap

contracts

..........................

—

1

59

,

060

—

1

59

,

060

Total

Other

Financial

Instruments

.........

$320,281

$258,940

$—

$579,221

a

Includes

securities

determined

to

have

no

value

at

December

31,

2021.

Balance

at

Beginning

of

Year

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

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Strategic

Income

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

$

—

c

$

—

$

(95,085)

$

—

$

—

$

—

$

—

$

95,085

$

—

$

—

Media

...........

1,714

—

—

—

—

—

—

1,065

2,779

1,065

Multiline

Retail

......

—

c

—

—

—

—

—

—

—

—

c

—

Oil,

Gas

&

Consumable

Fuels

..........

1,710

—

—

—

—

—

—

(1,710)

—

c

(1,710)

Paper

&

Forest

Products

322,094

—

(252,711)

—

—

—

—

(69,383)

—

—

Road

&

Rail

.......

3,858

—

—

c

—

—

—

—

(3,858)

—

—

Warrants

:

Machinery

.........

310

—

—

c

—

—

—

—

(310)

—

—

Oil,

Gas

&

Consumable

Fuels

..........

101

—

—

—

—

—

—

(98)

3

(98)

Corporate

Bonds

:

Multiline

Retail

......

1,738

c

221

c

—

—

—

(38,656)

—

36,697

—

c

36,697

Road

&

Rail

.......

238,337

—

(259,044)

—

—

5,550

(11)

15,168

—

—

Senior

Floating

Rate

Interests

:

Household

Products

..

451,602

—

(836,827)

—

—

—

1,661

383,564

—

—

Road

&

Rail

.......

178,343

—

(190,819)

—

—

134

(4)

12,346

—

—

Marketplace

Loans

:

Diversified

Financial

Services

........

1,058,322

5,715,373

(843,268)

—

—

—

571

(38,591)

5,892,407

(77,740)

Escrows

and

Litigation

Trusts

...........

4,500

c

—

c

(6,119)

c

—

—

—

(76,529)

78,148

—

c

—

Total

Investments

in

Securities

............

$2,262,629

$5,715,594

$(2,483,873)

$—

$—

$(32,972)

$(74,312)

$508,123

$5,895,189

$(41,786)

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.

c

Includes

securities

determined

to

have

no

value.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-56

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

Significant

unobservable

valuation

inputs

for

material

Level

3

assets

and/or

liabilities

and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

December

31,

2021,

are

as

follows:

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

LIBOR

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

consolidated

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

other

than

those

already

disclosed

in

the

financial

statements.

Description

Fair

Value

at

End

of

Year

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Strategic

Income

VIP

Fund

Assets:

Investments

in

Securities:

Marketplace

Loans:

Diversified

Financial

Services.

$5,412,010

Discounted

cash

flow

Loss-adjusted

discount

rate

2.5%

–

11.2%

(7.4%)

Decrease

c

Projected

loss

rate

13.7%

–

17.8%

(16.0%)

Decrease

c

All

other

Investments

.

.

.

.

.

.

.

483,179

d,e

Total

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.........

$5,895,189

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments.

b

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.

c

Represents

a

significant

impact

to

fair

value

and

net

assets.

d

Includes

financial

instruments

with

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

May

also

include

fair

value

of

immaterial

financial

instruments

and

developed

using

various

valuation

techniques

and

unobservable

inputs.

e

Includes

securities

determined

to

have

no

value

at

December

31,

2021.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Consolidated

Financial

Statements

FSI-57

Annual

Report

Franklin

Strategic

Income

VIP

Fund

(continued)

Abbreviations

Counterparty

BNDP

BNP

Paribas

SA

BOFA

Bank

of

America

NA

CITI

Citibank

NA

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

Index

MCDX.

NA.Series

number

MCDX

North

America

Index

Selected

Portfolio

CLO

Collateralized

Loan

Obligation

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

CVR

Contingent

Voting

Rights

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

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FSI-58

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

Strategic

Income

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

summary

statement

of

investments,

of

Franklin

Strategic

Income

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FSI-59

Annual

Report

Franklin

Strategic

Income

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$562

Interest

Earned

from

Federal

Obligations

Note

(1)

$274,619

FUS-1

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

This

annual

report

for

Franklin

U.S.

Government

Securities

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

-1.83%

5-Year

+1.75%

10-Year

+1.28%

FUS-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Bloomberg

U.S.

Government

-

Intermediate

Index

and

the

Lipper

VIP

General

U.S.

Government

Funds

Classification

Average.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

**Source:

Lipper,

a

Thomson

Reuters

Company.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FUS-3

Annual

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

primary

benchmark,

the

Bloomberg

U.S.

Government

-

Intermediate

Index,

posted

a

-1.69%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Lipper

VIP

General

U.S.

Government

Funds

Classification

Average,

posted

a

-1.71%

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

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

As

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

investor

appetite

for

risk

increased

and

the

search

for

yield

intensified.

Consequently,

lower-rated

bonds

posted

greater

returns

than

higher-rated

bonds.

The

inflation

rate

rose

significantly

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

Shorter-term

bonds

generally

outperformed

longer-term

bonds,

which

tend

to

be

more

sensitive

to

inflation.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

-2.32%

total

return

for

the

12-month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

was

relatively

low

as

the

period

began.

However,

yields

rose

thereafter

as

inflation

grew

and

many

investors

expected

future

interest-rate

increases

to

accelerate.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

U.S.

MBS

Index,

posted

a

-1.04%

total

return

for

the

period.

1

Fed

action

was

a

catalyst

for

the

corporate

bond

market.

The

strengthening

economy

and

prospect

of

a

return

to

normal

conditions

tempered

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+5.28%

total

return.

In

contrast,

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

declined

overall,

posting

a

-1.04%

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.

government

securities.

Analyzing

securities

using

proprietary

and

nonproprietary

research,

we

seek

to

identify

attractive

investment

opportunities.

Portfolio

Composition

12/31/21

%

of

Total

Net

Assets

Mortgage-Backed

Securities

79.1%

U.S.

Government

and

Agency

Securities

13.0%

Foreign

Government

and

Agency

Securities

1.8%

Corporate

Bonds

1.6%

Short-Term

Investments

&

Other

Net

Assets

4.5%

Franklin

U.S.

Government

Securities

VIP

Fund

FUS-4

Annual

Report

Manager’s

Discussion

For

the

fixed

income

sectors

in

which

the

Fund

invests,

Treasury

Inflation-Protected

Securities

(TIPS)

posted

positive

returns

and

was

the

best

performing

sector

on

an

excess

returns

basis,

as

measured

by

the

Bloomberg

indexes.

The

other

major

fixed

income

sectors

in

which

the

Fund

allocates

posted

negative

total

returns

and

underperformed

similar

duration

U.S.

Treasuries

during

the

period.

Within

the

agency

MBS

sector,

on

an

excess

return

basis,

all

major

MBS

sectors

posted

negative

excess

returns

with

Fannie

Mae

MBS

and

Freddie

Mac

MBS

performing

the

best,

while

Ginnie

Mae

(GNMA)

MBS

lagged.

For

the

GNMA

coupon

stack,

GNMA

I

3.0%

and

5.0%

were

the

best

performers,

while

GNMA

II

2.5%

and

3.5%

coupons

lagged.

In

the

Federal

Reserve

Open

Market

Committee

meeting

on

December

15,

2021,

the

Federal

Reserve

(Fed)

announced

an

accelerated

taper

of

asset

purchases,

with

an

intent

to

purchase

$20

billion

in

MBS

starting

in

January

2022,

down

from

$35

billion

in

December

2021.

With

this

accelerated

pace,

we

expect

the

operation

to

conclude

in

March

2022.

Since

March

15,

2020,

the

Fed

has

purchased

$2.83

trillion

of

agency

MBS

and

as

of

January

10,

2022,

owned

31.9%

of

the

agency

MBS

market.

For

comparison,

the

Fed

purchased

$1.25

trillion

and

$900

billion

during

the

first

and

second

round

of

quantitative

easing.

Zero-volatility

option

adjusted

spreads

fluctuated

throughout

the

period

but

ended

the

12-month

reporting

period

tighter

by

2

basis

points

(bps),

moving

from

60

bps

on

December

31,

2020,

to

58

bps

as

on

December

31,

2021.

We

believe

spreads

could

start

widening

into

accelerated

taper

as

origination

increases

in

the

spring

and

summer

months

of

2022.

Throughout

2020,

capacity

constraints

in

the

mortgage

market

led

to

higher

primary

and

secondary

market

spreads

and

kept

mortgage

rates

rangebound,

despite

a

large

rally

in

U.S.

Treasury

rates.

Primary

and

secondary

spreads

are

now

at

81

bps,

closer

to

the

long-term

historical

average

of

99

bps,

and

we

expect

them

to

have

a

lower

impact

on

prepayments

in

2022.

The

Primary

Mortgage

Market

Survey

rate

remains

historically

low,

however,

currently

slightly

over

a

quarter

of

the

MBS

universe

is

in-the-money

to

refinance,

compared

to

a

significantly

larger

figure

in

2020.

We

expect

prepayments

at

the

index

level

to

continue

to

slow

in

the

near-term

to

the

low

teens

on

a

conditional

prepayment

rate

basis.

Tighter

yield

spreads

compared

to

long-term

averages,

combined

with

the

possibility

of

spread

widening

due

to

Fed

tapering

leads

us

to

our

cautious

stance

on

agency

MBS.

We

believe

that

there

will

be

buying

opportunities

on

market

dips,

and

that

agency

MBS

should

continue

to

provide

high-

quality

allocation

and

a

modestly

attractive

carry

profile.

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

fixed-rate

agency

MBS

and

decreased

allocation

to

TIPS,

agency

bonds

and

adjustable-rate

mortgage

securities.

The

Fund’s

largest

MBS

allocation

remained

in

3.0%

and

2.5%

coupons.

We

reduced

our

exposure

to

3.5%,

4.5%

and

5.0%

coupons,

while

adding

to

2.5%,

2.0%,

3.0%

and

4.0%

securities

over

the

period.

The

Fund’s

U.S.

yield

curve

positioning

was

a

significant

contributor

to

performance.

The

Fund’s

allocation

to

TIPS

also

benefited

returns.

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

December

31,

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

2

Fund

Expenses

Franklin

U.S.

Government

Securities

VIP

Fund

FUS-5

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$993.10

$3.93

$1,021.26

$3.99

0.78%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

U.S.

Government

Securities

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-6

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.37

$12.34

$12.07

$12.36

$12.51

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.12

0.22

0.27

0.29

0.25

Net

realized

and

unrealized

gains

(losses)

...........

(0.32)

0.28

0.38

(0.22)

(0.04)

Total

from

investment

operations

....................

(0.20)

0.50

0.65

0.07

0.21

Less

distributions

from:

Net

investment

income

..........................

(0.32)

(0.47)

(0.38)

(0.36)

(0.36)

Net

asset

value,

end

of

year

.......................

$11.85

$12.37

$12.34

$12.07

$12.36

Total

return

c

...................................

(1.62)%

4.08%

5.47%

0.60%

1.66%

Ratios

to

average

net

assets

Expenses

d

....................................

0.53%

0.53%

0.51%

0.50%

0.50%

Net

investment

income

...........................

1.03%

1.81%

2.23%

2.38%

2.00%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$45,733

$52,307

$54,104

$59,213

$66,404

Portfolio

turnover

rate

............................

80.81%

56.32%

24.16%

22.25%

80.49%

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.

d

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)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FUS-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.08

$12.05

$11.79

$12.09

$12.24

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.09

0.19

0.24

0.25

0.21

Net

realized

and

unrealized

gains

(losses)

...........

(0.31)

0.27

0.37

(0.22)

(0.04)

Total

from

investment

operations

....................

(0.22)

0.46

0.61

0.03

0.17

Less

distributions

from:

Net

investment

income

..........................

(0.29)

(0.43)

(0.35)

(0.33)

(0.32)

Net

asset

value,

end

of

year

.......................

$11.57

$12.08

$12.05

$11.79

$12.09

Total

return

c

...................................

(1.83)%

3.83%

5.23%

0.34%

1.34%

Ratios

to

average

net

assets

Expenses

d

....................................

0.78%

0.78%

0.76%

0.75%

0.75%

Net

investment

income

...........................

0.78%

1.56%

1.98%

2.13%

1.75%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$730,340

$771,332

$771,866

$1,105,627

$1,223,491

Portfolio

turnover

rate

............................

80.81

%

56.32%

24.16%

22.25%

80.49%

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.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

U.S.

Government

Securities

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-8

I

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

1.6%

Oil,

Gas

&

Consumable

Fuels

1.6%

Reliance

Industries

Ltd.

,

Senior

Bond,

2.512%,

1/15/26

..........................

India

5,906,250

$

6,068,363

Senior

Note,

1.87%,

1/15/26

...........................

India

3,315,789

3,364,505

Senior

Note

,

2.06%,

1/15/26

...........................

India

2,812,500

2,864,478

12,297,346

Total

Corporate

Bonds

(Cost

$11,971,951)

......................................

12,297,346

Foreign

Government

and

Agency

Securities

1.8%

Israel

Government

Bond

,

Senior

Bond

,

5.5

%

,

9/18/23

..........

Israel

12,000,000

12,964,745

Petroleos

Mexicanos

,

Senior

Bond

,

2.378

%

,

4/15/25

...........

Mexico

1,151,500

1,178,226

Total

Foreign

Government

and

Agency

Securities

(Cost

$13,737,519)

..............

14,142,971

U.S.

Government

and

Agency

Securities

13.0%

FHLB,

2.625%,

9/12/25

.................................

United

States

10,000,000

10,527,026

New

Valley

Generation

IV,

4.687%,

1/15/22

..................

United

States

160,544

160,640

Tennessee

Valley

Authority,

1.875%,

8/15/22

.................

United

States

6,000,000

6,060,074

U.S.

Treasury

Bonds,

2.5%,

2/15/46

.......................

United

States

6,000,000

6,630,234

U.S.

Treasury

Notes

,

a

0.125%,

7/15/24

.....................................

United

States

6,350,000

7,886,555

2.375%,

8/15/24

.....................................

United

States

22,000,000

22,845,625

2.25%,

8/15/27

.....................................

United

States

31,040,000

32,567,750

0.625%,

8/15/30

.....................................

United

States

8,500,000

7,928,906

United

States

International

Development

Finance

Corp.

,

2.12%,

3/20/24

.....................................

United

States

4,583,333

4,645,735

4.01%,

5/15/30

.....................................

United

States

1,440,000

1,600,074

Total

U.S.

Government

and

Agency

Securities

(Cost

$98,654,457)

.................

100,852,619

Mortgage-Backed

Securities

79.1%

b

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.8%

FHLMC,

2.035%

-

2.148%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/36

-

4/01/40

....................................

United

States

5,418,194

5,668,712

FHLMC,

2.31%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/37

...

United

States

161,987

162,021

5,830,733

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

9.6%

FHLMC

Gold

Pools,

15

Year,

4.5%,

3/01/25

-

4/01/25

..........

United

States

342,440

356,185

FHLMC

Gold

Pools,

20

Year,

3.5%,

3/01/32

..................

United

States

1,317,092

1,407,730

FHLMC

Gold

Pools,

30

Year,

3%,

5/01/43

...................

United

States

182,997

193,375

FHLMC

Gold

Pools,

30

Year,

3.5%,

5/01/43

..................

United

States

29,227

31,468

FHLMC

Gold

Pools,

30

Year,

4%,

9/01/40

-

12/01/41

...........

United

States

2,776,416

3,049,437

FHLMC

Gold

Pools,

30

Year,

4.5%,

5/01/40

-

7/01/41

..........

United

States

826,480

909,411

FHLMC

Gold

Pools,

30

Year,

5%,

9/01/33

-

4/01/40

............

United

States

2,696,152

3,053,741

FHLMC

Gold

Pools,

30

Year,

5.5%,

7/01/33

-

5/01/38

..........

United

States

534,287

609,332

FHLMC

Gold

Pools,

30

Year,

6%,

1/01/24

-

8/01/35

............

United

States

448,963

502,894

FHLMC

Gold

Pools,

30

Year,

6.5%,

12/01/23

-

5/01/35

.........

United

States

154,093

170,809

FHLMC

Gold

Pools,

30

Year,

7%,

4/01/24

-

9/01/31

............

United

States

52,367

56,671

FHLMC

Gold

Pools,

30

Year,

7.5%,

12/01/22

.................

United

States

23

23

FHLMC

Gold

Pools,

30

Year,

8%,

5/01/22

...................

United

States

119

120

FHLMC

Gold

Pools,

30

Year,

8.5%,

7/01/31

..................

United

States

111,061

125,147

FHLMC

Pool,

15

Year,

1.5%,

1/01/37

.......................

United

States

11,683,000

11,724,657

FHLMC

Pool,

15

Year,

2%,

9/01/36

........................

United

States

3,854,658

3,951,086

FHLMC

Pool,

15

Year,

2%,

10/01/35

.......................

United

States

8,213,186

8,439,695

FHLMC

Pool,

30

Year,

2%,

11/01/50

.......................

United

States

2,361,231

2,364,190

FHLMC

Pool,

30

Year,

2%,

1/01/51

........................

United

States

5,456,086

5,458,911

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FUS-9

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

(continued)

FHLMC

Pool,

30

Year,

2.5%,

7/01/51

.......................

United

States

12,256,470

$

12,527,723

FHLMC

Pool,

30

Year,

3%,

8/01/50

........................

United

States

4,816,518

5,085,897

FHLMC

Pool,

30

Year,

4%,

11/01/45

.......................

United

States

10,563,846

11,452,525

FHLMC

Pool,

30

Year,

4.5%,

1/01/49

.......................

United

States

3,296,867

3,614,159

75,085,186

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

2.5%

FNMA,

2.162%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/37

.

United

States

6,106,277

6,435,493

FNMA,

0.97%

-

2.505%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

6/01/23

-

3/01/37

....................................

United

States

379,863

386,440

FNMA,

1.283%

-

2.489%,

(12-month

average

of

1-year

CMT

+/-

MBS

Margin),

9/01/35

-

10/01/44

........................

United

States

174,881

178,453

FNMA,

1.424%

-

2.38%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/32

-

4/01/41

....................................

United

States

7,716,463

8,047,446

FNMA,

1.475%

-

5.201%,

(COFI

11th

District

+/-

MBS

Margin),

6/01/25

-

6/01/38

....................................

United

States

66,513

68,785

FNMA,

1.726%

-

5.109%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

12/01/22

-

12/01/40

..................................

United

States

4,421,901

4,641,881

19,758,498

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

21.7%

FNMA,

2.64%,

7/01/25

.................................

United

States

2,346,722

2,439,533

FNMA,

2.77%,

4/01/25

.................................

United

States

3,500,000

3,650,141

FNMA,

3.28%,

7/01/27

.................................

United

States

4,000,000

4,295,619

FNMA,

3.51%,

8/01/23

.................................

United

States

3,000,000

3,090,123

FNMA,

5.5%,

4/01/34

..................................

United

States

437,134

463,989

FNMA,

15

Year,

2%,

9/01/35

.............................

United

States

6,007,324

6,174,165

FNMA,

15

Year,

5.5%,

1/01/25

...........................

United

States

119,963

123,381

FNMA,

30

Year,

2%,

8/01/51

.............................

United

States

8,163,162

8,147,810

FNMA,

30

Year,

2.5%,

7/01/51

...........................

United

States

15,455,931

15,788,588

FNMA,

30

Year,

2.5%,

8/01/51

...........................

United

States

10,697,347

10,935,336

FNMA,

30

Year,

2.5%,

9/01/51

...........................

United

States

23,406,093

23,929,534

FNMA,

30

Year,

2.5%,

11/01/51

...........................

United

States

5,299,366

5,413,424

FNMA,

30

Year,

2.5%,

12/01/51

...........................

United

States

7,178,608

7,333,113

FNMA,

30

Year,

3%,

12/01/42

............................

United

States

67,395

70,846

FNMA,

30

Year,

3%,

7/01/50

.............................

United

States

9,348,720

9,736,822

FNMA,

30

Year,

3%,

8/01/50

.............................

United

States

13,007,895

13,601,058

FNMA,

30

Year,

3%,

7/01/51

.............................

United

States

5,313,906

5,510,051

FNMA,

30

Year,

3%,

9/01/51

.............................

United

States

22,972,919

23,862,145

FNMA,

30

Year,

3.5%,

7/01/45

...........................

United

States

11,687,355

12,546,494

FNMA,

30

Year,

4%,

1/01/41

-

8/01/41

......................

United

States

2,874,435

3,144,377

FNMA,

30

Year,

4.5%,

8/01/40

-

6/01/41

....................

United

States

2,516,456

2,779,616

FNMA,

30

Year,

5%,

3/01/34

-

7/01/41

......................

United

States

1,937,529

2,176,315

FNMA,

30

Year,

5.5%,

12/01/32

-

8/01/35

...................

United

States

1,132,773

1,275,672

FNMA,

30

Year,

6%,

1/01/24

-

8/01/38

......................

United

States

1,015,194

1,139,550

FNMA,

30

Year,

6.5%,

1/01/24

-

9/01/36

....................

United

States

143,298

160,565

FNMA,

30

Year,

7.5%,

4/01/23

-

8/01/25

....................

United

States

1,422

1,512

FNMA,

30

Year,

8%,

3/01/23

-

12/01/24

.....................

United

States

12,633

12,803

FNMA,

30

Year,

9%,

10/01/26

............................

United

States

33,009

33,383

167,835,965

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

44.5%

GNMA

I,

30

Year,

5%,

9/15/40

............................

United

States

9,743,877

11,129,095

GNMA

I,

30

Year,

5.5%,

3/15/32

-

2/15/38

...................

United

States

306,305

350,853

GNMA

I,

30

Year,

6%,

7/15/29

-

11/15/38

....................

United

States

244,776

279,393

GNMA

I,

30

Year,

6.5%,

12/15/28

-

1/15/33

..................

United

States

124,017

141,340

GNMA

I,

30

Year,

7%,

12/15/28

...........................

United

States

7,159

8,009

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-10

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

(continued)

GNMA

I,

30

Year,

7.5%,

12/15/31

-

8/15/33

..................

United

States

126,524

$

143,983

GNMA

I,

Single-family,

30

Year,

3%,

7/15/42

.................

United

States

235,701

247,997

GNMA

I,

Single-family,

30

Year,

4%,

10/15/40

-

8/15/46

.........

United

States

4,189,938

4,583,279

GNMA

I,

Single-family,

30

Year,

4.5%,

1/15/39

-

6/15/41

........

United

States

6,235,385

7,062,901

GNMA

I,

Single-family,

30

Year,

5.5%,

12/15/28

-

10/15/39

.......

United

States

2,303,014

2,593,841

GNMA

I,

Single-family,

30

Year,

6%,

11/15/23

-

9/15/38

.........

United

States

989,214

1,105,809

GNMA

I,

Single-family,

30

Year,

6.5%,

9/15/23

-

5/15/37

........

United

States

536,725

591,923

GNMA

I,

Single-family,

30

Year,

7%,

10/15/22

-

9/15/31

.........

United

States

79,164

81,978

GNMA

I,

Single-family,

30

Year,

7.5%,

2/15/22

-

11/15/27

........

United

States

22,162

22,500

GNMA

I,

Single-family,

30

Year,

8%,

2/15/22

-

7/15/23

..........

United

States

8,812

8,890

GNMA

I,

Single-family,

30

Year,

8.5%,

5/15/23

-

12/15/24

........

United

States

13,175

13,247

GNMA

II,

30

Year,

6.5%,

4/20/34

..........................

United

States

22,055

22,203

GNMA

II,

Single-family,

30

Year,

2%,

8/20/51

.................

United

States

5,899,567

5,961,074

GNMA

II,

Single-family,

30

Year,

2%,

12/20/51

................

United

States

12,500,000

12,630,321

GNMA

II,

Single-family,

30

Year,

2.5%,

6/20/51

...............

United

States

13,656,051

14,006,286

GNMA

II,

Single-family,

30

Year,

2.5%,

7/20/51

...............

United

States

5,624,238

5,768,482

GNMA

II,

Single-family,

30

Year,

2.5%,

8/20/51

...............

United

States

37,232,735

38,187,638

GNMA

II,

Single-family,

30

Year,

2.5%,

10/20/51

..............

United

States

11,910,934

12,216,413

GNMA

II,

Single-family,

30

Year,

3%,

12/20/42

-

9/20/45

........

United

States

4,024,946

4,206,321

GNMA

II,

Single-family,

30

Year,

3%,

4/20/46

.................

United

States

7,898,723

8,242,294

GNMA

II,

Single-family,

30

Year,

3%,

7/20/51

.................

United

States

20,042,604

20,769,464

GNMA

II,

Single-family,

30

Year,

3%,

8/20/51

.................

United

States

7,481,156

7,764,642

GNMA

II,

Single-family,

30

Year,

3%,

9/20/51

.................

United

States

18,608,621

19,307,482

GNMA

II,

Single-family,

30

Year,

3%,

10/20/51

................

United

States

19,759,329

20,505,684

GNMA

II,

Single-family,

30

Year,

3%,

11/20/51

................

United

States

22,396,250

23,251,974

GNMA

II,

Single-family,

30

Year,

3.5%,

12/20/40

-

10/20/47

......

United

States

19,527,429

20,869,565

GNMA

II,

Single-family,

30

Year,

3.5%,

9/20/42

...............

United

States

8,145,810

8,728,734

GNMA

II,

Single-family,

30

Year,

3.5%,

11/20/42

..............

United

States

4,963,909

5,318,637

GNMA

II,

Single-family,

30

Year,

3.5%,

1/20/43

...............

United

States

6,641,984

7,116,407

GNMA

II,

Single-family,

30

Year,

3.5%,

5/20/43

...............

United

States

5,326,858

5,705,685

GNMA

II,

Single-family,

30

Year,

3.5%,

5/20/47

...............

United

States

13,020,552

13,682,060

GNMA

II,

Single-family,

30

Year,

3.5%,

9/20/47

...............

United

States

22,390,955

23,591,597

GNMA

II,

Single-family,

30

Year,

3.5%,

11/20/47

..............

United

States

5,961,587

6,270,721

GNMA

II,

Single-family,

30

Year,

4%,

11/20/39

-

2/20/44

.........

United

States

8,885,725

9,634,218

GNMA

II,

Single-family,

30

Year,

4.5%,

10/20/39

-

10/20/44

......

United

States

12,019,994

13,285,973

GNMA

II,

Single-family,

30

Year,

5%,

9/20/33

-

6/20/44

.........

United

States

5,102,156

5,751,798

GNMA

II,

Single-family,

30

Year,

5.5%,

5/20/34

-

6/20/38

........

United

States

2,161,351

2,481,608

GNMA

II,

Single-family,

30

Year,

6%,

11/20/23

-

7/20/39

.........

United

States

1,433,883

1,650,744

GNMA

II,

Single-family,

30

Year,

6.5%,

12/20/27

-

4/20/32

.......

United

States

200,146

226,575

GNMA

II,

Single-family,

30

Year,

7%,

5/20/32

.................

United

States

4,498

5,237

GNMA

II,

Single-family,

30

Year,

7.5%,

9/20/22

-

11/20/26

.......

United

States

21,146

22,597

GNMA

II,

Single-family,

30

Year,

8%,

8/20/26

.................

United

States

2,097

2,297

345,549,769

Total

Mortgage-Backed

Securities

(Cost

$613,512,961)

...........................

614,060,151

Total

Long

Term

Investments

(Cost

$737,876,888)

...............................

741,353,087

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FUS-11

See

Abbreviations

on

page

FUS-

20

.

Short

Term

Investments

4.4%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

4.4%

c

Joint

Repurchase

Agreement,

0.031%,

1/03/22

(Maturity

Value

$33,900,485)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$14,358,889)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$1,736,383)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$17,805,213)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

5%,

1/20/48

-

10/20/51;

U.S.

Treasury

Note,

2.5%,

1/31/24;

and

U.S.

Cash

Management

Bill,

Discount

Note,

1/25/22

(valued

at

$34,588,610)

.......................................

33,900,398

$

33,900,398

Total

Repurchase

Agreements

(Cost

$33,900,398)

...............................

33,900,398

Total

Short

Term

Investments

(Cost

$33,900,398

)

................................

33,900,398

a

Total

Investments

(Cost

$771,777,286)

99.9%

...................................

$775,253,485

Other

Assets,

less

Liabilities

0.1%

.............................................

819,429

Net

Assets

100.0%

...........................................................

$776,072,914

*

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

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-12

Franklin

U.S.

Government

Securities

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$737,876,888

Cost

-

Unaffiliated

repurchase

agreements

......................................................

33,900,398

Value

-

Unaffiliated

issuers

..................................................................

$

741,353,087

Value

-

Unaffiliated

repurchase

agreements

......................................................

33,900,398

Cash

....................................................................................

24,292

Receivables:

Investment

securities

sold

...................................................................

144,965

Capital

shares

sold

........................................................................

31,710

Interest

.................................................................................

2,496,544

Total

assets

..........................................................................

777,950,996

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

1,080,025

Management

fees

.........................................................................

320,037

Distribution

fees

..........................................................................

156,163

Reports

to

shareholders

fees

................................................................

160,916

Accrued

expenses

and

other

liabilities

...........................................................

160,941

Total

liabilities

.........................................................................

1,878,082

Net

assets,

at

value

.................................................................

$776,072,914

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$872,611,324

Total

distributable

earnings

(losses)

.............................................................

(96,538,410)

Net

assets,

at

value

.................................................................

$776,072,914

Franklin

U.S.

Government

Securities

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$45,732,649

Shares

outstanding

........................................................................

3,859,737

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.85

Class

2:

Net

assets,

at

value

.......................................................................

$730,340,265

Shares

outstanding

........................................................................

63,149,692

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.57

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FUS-13

Franklin

U.S.

Government

Securities

VIP

Fund

Investment

income:

Interest:

Unaffiliated

issuers:

Paydown

gain

(loss)

.....................................................................

$(8,944,776)

Paid

in

cash

a

...........................................................................

21,513,346

Total

investment

income

...................................................................

12,568,570

Expenses:

Management

fees

(Note

3

a

)

...................................................................

3,874,344

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,890,386

Custodian

fees

(Note

4

)

......................................................................

5,741

Reports

to

shareholders

fees

..................................................................

150,436

Professional

fees

...........................................................................

85,412

Trustees'

fees

and

expenses

..................................................................

8,155

Other

....................................................................................

149,684

Total

expenses

.........................................................................

6,164,158

Expense

reductions

(Note

4

)

...............................................................

(1,750)

Net

expenses

.........................................................................

6,162,408

Net

investment

income

................................................................

6,406,162

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

(1,244,942)

TBA

sale

commitments

.....................................................................

25,961

Net

realized

gain

(loss)

..................................................................

(1,218,981)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(20,478,100)

Net

realized

and

unrealized

gain

(loss)

............................................................

(21,697,081)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(15,290,919)

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FUS-14

Franklin

U.S.

Government

Securities

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$6,406,162

$13,015,951

Net

realized

gain

(loss)

.................................................

(1,218,981)

1,813,789

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(20,478,100)

16,480,201

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(15,290,919)

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

.............................................................

(4,450,471)

(1,952,576)

Class

2

.............................................................

(8,028,841)

(3,169,153)

Total

capital

share

transactions

............................................

(12,479,312)

(5,121,729)

Net

increase

(decrease)

in

net

assets

...................................

(47,566,321)

(2,330,206)

Net

assets:

Beginning

of

year

.......................................................

823,639,235

825,969,441

End

of

year

...........................................................

$776,072,914

$823,639,235

Franklin

Templeton

Variable

Insurance

Products

Trust

FUS-15

Annual

Report

Notes

to

Financial

Statements

Franklin

U.S.

Government

Securities

VIP

Fund

1.

Organization

and

Significant

Accounting

Policies

Franklin

Templeton

Variable

Insurance

Products

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

eighteen separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

U.S.

Government

Securities

VIP

Fund

(Fund)

is

included

in

this

report.

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

At

December

31,

2021,

57.0%

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

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FUS-16

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

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

year

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

December

31,

2021.

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

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

December

31,

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

b.

Joint

Repurchase

Agreement

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FUS-17

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

329,260

$3,998,564

332,787

$4,150,714

Shares

issued

in

reinvestment

of

distributions

..........

109,579

1,306,180

165,439

2,038,214

Shares

redeemed

...............................

(806,875)

(9,755,215)

(653,755)

(8,141,504)

Net

increase

(decrease)

..........................

(368,036)

$(4,450,471)

(155,529)

$(1,952,576)

Class

2

Shares:

Shares

sold

...................................

7,704,467

$91,000,875

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

...............................

(9,976,144)

(117,519,626)

(15,470,648)

(189,050,058)

Net

increase

(decrease)

..........................

(685,922)

$(8,028,841)

(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)

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Guarantees

and

Indemnifications

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FUS-18

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.481%

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.

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

year

ended

December

31,

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,

2021,

the

capital

loss

carryforwards

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$45,193,949

Long

term

................................................................................

67,027,146

Total

capital

loss

carryforwards

...............................................................

$112,221,095

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$19,796,090

$28,518,418

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FUS-19

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

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

paydown

losses

and

bond

discounts

and

premiums.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$616,421,997

and

$631,866,635,

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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:

Cost

of

investments

..........................................................................

$774,225,890

Unrealized

appreciation

........................................................................

$9,928,159

Unrealized

depreciation

........................................................................

(8,900,564)

Net

unrealized

appreciation

(depreciation)

..........................................................

$1,027,595

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$14,655,112

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FUS-20

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

(continued)

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

December

31,

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

rates

as

of

the

end

of

2021

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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,

other

than

those

already

disclosed

in

the

financial

statements.

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

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FUS-21

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

U.S.

Government

Securities

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

U.S.

Government

Securities

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FUS-22

Annual

Report

Franklin

U.S.

Government

Securities

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amount,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amount,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Interest

Earned

from

Federal

Obligations

Note

(1)

$2,654,141

FVA-1

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

This

annual

report

for

Franklin

VolSmart

Allocation

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

202

1

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*Prior

to

5/1/15,

the

Fund

followed

different

investment

strategies,

had

different

subadvisory

arrangements,

allocated

its

core

portfolio

differently,

had

a

different

current

target

volatility

goal

and

made

different

use

of

derivative

instruments.

As

a

result,

the

Fund

generally

held

different

investments

and

had

a

different

investment

profile.

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

2

operating

expenses,

but

does

n

ot

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.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

+17.62%

5-Year

+11.73%

Since

Inception

(4/1/13)

+7.42%

FVA-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(4/1/13–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

the

Bloomberg

U.S.

Aggregate

Bond

Index

and

the

Fund’s

Blended

Benchmark,

a

combination

of

leading

stock

and

bond

indexes

that

better

reflects

the

asset

allocation

of

the

Fund’s

portfolio.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

***Source:

FactSet.

The

Fund’s

Blended

Benchmark

was

calculated

internally

and

was

composed

of

60%

S&P

500,

30%

Bloomberg

U.S.

Aggregate

Bond

Index

and

10%

Bloomberg

1-3

Month

U.S.

Treasury

Bill

Index.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

FVA-3

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

Fund

Goal

and

Main

Investments

The

Fund

seeks

total

return

(including

income

and

capital

gains)

while

seeking

to

manage

volatility.

The

Fund

is

structured

as

a

limited

fund-of-funds

that

seeks

to

achieve

its

investment

goal

by

investing

its

assets

partially

in

other

mutual

funds,

which

include

other

Franklin

Templeton

and

Legg

Mason

mutual

funds

and

exchange-traded

funds

(ETFs)

and

third-party

ETFs

(underlying

funds).

Each

underlying

fund

is

allocated

to

the

equity,

fixed

income,

multi-

class

or

cash

asset

class

based

on

its

predominant

asset

class

and

strategies.

These

underlying

funds,

in

turn,

invest

in

a

variety

of

U.S.

and

foreign

equity,

fixed-income

and

money

market

securities.

The

Fund

also

obtains

exposure

to

certain

strategies

and

investments

in

its

core

portfolio

by

directly

investing

in

the

securities

and

instruments

in

that

strategy.

Fund

Risks

All

investments

involve

risks,

including

possible

loss

of

principal.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

There

can

be

no

guarantee

that

the

Fund

will

stay

within

its

Target

Volatility.

Also,

the

managed

volatility

strategy

could

negatively

impact

the

Fund’s

return

and

expose

the

Fund

to

additional

costs.

Generally,

investors

should

be

comfortable

with

fluctuation

in

the

value

of

their

investments,

especially

over

the

short

term.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

Derivatives

involve

costs

and

can

create

economic

leverage

in

the

portfolio,

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

in

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform.

Because

the

Fund

allocates

assets

to

a

variety

of

investment

strategies,

ETFs

and

other

mutual

funds,

which

involve

certain

risks,

it

may

be

subject

to

those

same

risks.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

*The

portfolio

composition

is

based

on

the

Statement

of

Investments

(SOI),

which

classifies

each

underlying

fund

into

a

broad

asset

class.

Performance

Overview

You

can

find

the

Fund’s

one-year

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

equity

benchmark,

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

total

return,

while

the

Fund’s

fixed

income

benchmark,

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

total

return

for

the

period

under

review.

1

The

Fund’s

Blended

Benchmark,

a

combination

of

leading

stock

and

bond

indexes

that

better

reflects

the

asset

allocation

of

the

Fund’s

portfolio,

posted

a

+16.05%

total

return

for

the

same

period.

2

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+28.71%

total

return

for

the

12

months

ended

December

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

rollout

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

Portfolio

Composition

*

12/31/21

%

of

Total

Net

Assets

Common

Stocks

66.7%

Domestic

Fixed

Income

20.4%

Domestic

Hybrid

8.1%

Foreign

Equity

3.3%

Short-Term

Investments

&

Other

Net

Assets

1.5%

1.

Source:

Morningstar.

2.

Source:

FactSet.

The

Fund’s

Blended

Benchmark

was

calculated

internally

and

was

composed

of

60%

S&P

500,

30%

Bloomberg

U.S.

Aggregate

Bond

Index

and

10%

Bloomberg

1-3

Month

U.S.

Treasury

Bill

Index.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

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

VolSmart

Allocation

VIP

Fund

FVA-4

Annual

Report

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

The

inflation

rate

was

notably

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

surged

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.7%

in

December

2020

to

3.9%

in

December

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-1.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

As

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

investor

appetite

for

risk

increased

and

the

search

for

yield

intensified.

Consequently,

lower-rated

bonds

posted

greater

returns

than

higher-rated

bonds.

The

inflation

rate

rose

significantly

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

Shorter-term

bonds

generally

outperformed

longer-term

bonds,

which

tend

to

be

more

sensitive

to

inflation.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

-2.32%

total

return

for

the

12-month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

was

relatively

low

as

the

period

began.

However,

yields

rose

thereafter

as

inflation

grew

and

many

investors

expected

future

interest-rate

increases

to

accelerate.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

U.S.

MBS

Index,

posted

a

-1.04%

total

return

for

the

period.

1

Fed

action

was

a

catalyst

for

the

corporate

bond

market.

The

strengthening

economy

and

prospect

of

a

return

to

normal

conditions

tempered

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+5.28%

total

return.

In

contrast,

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

declined

overall,

posting

a

-1.04%

total

return.

1

Investment

Strategy

Under

normal

market

conditions,

the

Fund

seeks

to

achieve

its

investment

goal

by

allocating

its

assets

across

certain

asset

classes,

sectors

and

strategies

in

an

attempt

to

produce

a

diversified

portfolio

that

will

generate

returns,

while

minimizing

the

expected

volatility

of

the

Fund’s

returns

so

that

volatility

does

not

exceed

a

target

of

10%

per

year.

(Volatility

within

the

10%

target

is

referred

to

as

“Target

Volatility.”)

The

Fund’s

assets

are

primarily

invested

in

its

“core

portfolio,”

which

is

principally

composed

of

various

U.S.

equity

and

fixed

income

investments

and

strategies,

including

investments

in

other

mutual

funds

and

ETFs

that

provide

exposure

to

such

investments

and

strategies.

In

addition,

the

Fund

employs

a

volatility

management

strategy,

which

is

designed

to

manage

the

expected

volatility

of

the

Fund’s

returns

so

that

volatility

remains

within

the

Fund’s

Target

Volatility.

Thus,

the

Fund

may

utilize

certain

derivative

instruments

(primarily

futures

contracts

on

indexes)

in

an

effort

to

adjust

the

Fund’s

expected

volatility

to

within

the

Target

Volatility.

There

is

no

guarantee

that

the

Fund

will

stay

within

its

Target

Volatility.

Manager’s

Discussion

Asset

Allocation

As

of

the

end

of

the

reporting

period,

at

the

asset

allocation

level,

the

Fund’s

equity

position

remained

near

the

upper

band

of

its

50%-70%

allocation

range,

with

fixed

income

at

Top

10

Holdings

12/31/21

Issuer

%

of

Total

Net

Assets

a

a

Franklin

Liberty

U.S.

Core

Bond

ETF

12.2%

Western

Asset

Core

Plus

Bond

Fund,

Class

IS

8.2%

Franklin

Income

VIP

Fund,

Class

1

8.1%

Microsoft

Corp.

3.5%

iShares

Core

MSCI

EAFE

ETF

3.3%

Accenture

plc

2.0%

Roper

Technologies,

Inc.

1.4%

Texas

Instruments,

Inc.

1.3%

UnitedHealth

Group,

Inc.

1.2%

Air

Products

and

Chemicals,

Inc.

1.2%

Franklin

VolSmart

Allocation

VIP

Fund

FVA-5

Annual

Report

the

lower

band

of

its

13%-33%

allocation

range

and

multi-

asset

class

consisting

of

equities

and

fixed

income

at

the

lower

band

of

its

5%-15%

allocation

range.

Equities

The

Fund’s

overweight

to

equites

and

underweight

to

fixed

income

relative

to

its

Blended

Benchmark

benefited

performance

as

U.S.

equity

markets

rallied

in

2021.

At

the

underlying

equity

strategy

level,

the

Franklin

Rising

Dividends

Strategy,

the

largest

underlying

equity

strategy

held

in

the

Fund,

gained

but

slightly

lagged

the

S&P

500,

detracting

from

relative

performance.

The

strategy’s

sector

positioning

was

beneficial,

though

cyclical

holdings

and

a

focus

on

dividend-paying

equities

limited

relative

gains.

The

Franklin

U.S.

Smart

Beta

Equity

Strategy

also

lagged

the

S&P

500,

as

its

focus

on

quality

and

value

factors

was

out

of

favor

relative

to

growth

for

the

majority

of

the

reporting

period.

Fixed

Income

The

Fund’s

underweight

to

fixed

income

benefited

performance

as

most

broad

measures

of

the

U.S.

fixed

income

market

finished

with

negative

total

returns.

At

the

underlying

fund

level,

Franklin

Strategic

Income

Fund

–

Class

R6

outperformed

the

Bloomberg

U.S.

Aggregate

Bond

Index

in

2021

due

in

part

to

sector

positioning

among

lower-

rated

corporate

credits,

including

selected

exposures

to

U.S.

high

yield

and

emerging

markets

sovereign

debt.

Multi-Asset

A

small

allocation

to

Franklin

Income

VIP

Fund

–

Class

1,

which

blends

equity

and

fixed

income

holdings,

generated

strong

current

income

and

produced

strong

absolute

returns.

A

sizable

allocation

to

equities

relative

to

fixed

income

benefited

performance.

In

addition,

equity

sector

positioning,

namely

in

financials

and

energy,

benefited

performance,

as

did

credit

selection,

as

below

investment-grade

debt

was

additive.

Hedging

The

Fund’s

risk-hedging

strategies

slightly

detracted

from

performance

during

a

period

of

mostly

low

volatility

and

positive

performance

by

risk

assets.

Positioning

Portfolio

positioning

was

additive

to

performance

during

the

reporting

period.

The

Fund

reduced

its

hedge

from

10%

to

6%

in

the

first

quarter

of

2021.

Profits

were

taken

in

the

Franklin

Rising

Dividends

Strategy

with

the

proceeds

reallocated

to

Franklin

Strategic

Income

–

Class

R6

and

Franklin

Liberty

U.S.

Core

Bond

Fund

ETF,

and

a

smaller

percentage

into

Franklin

Income

VIP

Fund

–

Class

1.

In

the

second

quarter,

the

weighting

in

the

Franklin

U.S.

Smart

Beta

Equity

Strategy

was

reduced

and

the

proceeds

allocated

to

Franklin

Low

Duration

Total

Return

Fund

–

Class

R6,

following

recommendations

from

the

Investment

Strategy

and

Research

Committee

to

decrease

equity

exposure.

During

the

reporting

period,

equity

diversification

was

increased

by

reinitiating

a

small

position

in

the

iShares

Core

MSCI

EAFE

ETF.

Later

in

the

reporting

period,

the

fixed

income

allocation

pivoted

into

strategies

that

more

closely

track

the

Bloomberg

U.S.

Aggregate

Bond

Index.

Western

Asset

Core

Plus

Bond

Fund

–

Class

S

was

added,

while

Franklin

Low

Duration

Total

Return

Fund

–

Class

R6

and

Franklin

Strategic

Income

Fund

–

Class

R6

were

liquidated.

Thank

you

for

your

participation

in

Franklin

VolSmart

Allocation

VIP

Fund

.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

December

31,

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

2

Fund

Expenses

Franklin

VolSmart

Allocation

VIP

Fund

FVA-6

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/2

1–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$1,078.30

$3.40

$1,021.94

$3.30

0.65%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

VolSmart

Allocation

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-7

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.55

$12.60

$10.82

$11.67

$10.10

Income

from

investment

operations

a

:

Net

investment

income

b,c

........................

0.26

0.24

0.22

0.21

0.16

Net

realized

and

unrealized

gains

(losses)

...........

2.19

1.86

1.70

(1.02)

1.41

Total

from

investment

operations

....................

2.45

2.10

1.92

(0.81)

1.57

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.64)

(0.15)

—

(0.04)

—

Net

realized

gains

.............................

(0.79)

—

(0.14)

—

—

Total

distributions

...............................

(1.43)

(0.15)

(0.14)

(0.04)

—

Net

asset

value,

end

of

year

.......................

$15.57

$14.55

$12.60

$10.82

$11.67

Total

return

d

...................................

17.62%

16.85%

17.82%

(6.93)%

15.54%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

e

.....

0.88%

0.88%

1.12%

1.10%

1.14%

Expenses

net

of

waiver

and

payments

by

affiliates

e,

f

.....

0.65%

0.65%

0.90%

0.75%

0.73%

Net

investment

income

c

...........................

1.75%

1.85%

1.87%

1.85%

1.44%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$48

$45

$39

$33

$36

Portfolio

turnover

rate

............................

41.28%

69.19%

4.99%

6.28%

5.69%

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

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

Products

Trust

serves

as

an

underlying

investment

vehicle.

e

Does

not

include

expenses

of

the

Underlying

Funds

in

which

the

Fund

invests.

The

weighted

average

indirect

expenses

of

the

Underlying

Funds

was

0.10%

for

the

year

ended

December

31,

2021.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

5

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.52

$12.59

$10.80

$11.65

$10.07

Income

from

investment

operations

a

:

Net

investment

income

b,c

........................

0.23

0.23

0.23

0.22

0.17

Net

realized

and

unrealized

gains

(losses)

...........

2.18

1.86

1.70

(1.01)

1.41

Total

from

investment

operations

....................

2.41

2.09

1.93

(0.79)

1.58

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.62)

(0.16)

—

(0.06)

—

Net

realized

gains

.............................

(0.79)

—

(0.14)

—

—

Total

distributions

...............................

(1.41)

(0.16)

(0.14)

(0.06)

—

Net

asset

value,

end

of

year

.......................

$15.52

$14.52

$12.59

$10.80

$11.65

Total

return

d

...................................

17.36%

16.78%

17.95%

(6.85)%

15.69%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

e

.....

1.03%

1.03%

1.02%

1.00%

1.04%

Expenses

net

of

waiver

and

payments

by

affiliates

e,

f

.....

0.80%

0.80%

0.80%

0.65%

0.63%

Net

investment

income

...........................

1.57%

1.70%

1.97%

1.95%

1.54%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$209,784

$195,818

$185,381

$171,173

$188,240

Portfolio

turnover

rate

............................

41.28%

69.19%

4.99%

6.28%

5.69%

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

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

Products

Trust

serves

as

an

underlying

investment

vehicle.

e

Does

not

include

expenses

of

the

Underlying

Funds

in

which

the

Fund

invests.

The

weighted

average

indirect

expenses

of

the

Underlying

Funds

was

0.10%

for

the

year

ended

December

31,

2021.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Franklin

VolSmart

Allocation

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-9

a

a

Shares

a

Value

a

Common

Stocks

66.7%

Aerospace

&

Defense

1.8%

General

Dynamics

Corp.

..............................................

5,145

$

1,072,578

Huntington

Ingalls

Industries,

Inc.

.......................................

419

78,244

Lockheed

Martin

Corp.

...............................................

1,929

685,586

Northrop

Grumman

Corp.

.............................................

1,212

469,129

Raytheon

Technologies

Corp.

..........................................

18,060

1,554,244

3,859,781

Air

Freight

&

Logistics

1.3%

CH

Robinson

Worldwide,

Inc.

..........................................

1,467

157,893

Expeditors

International

of

Washington,

Inc.

...............................

1,888

253,540

United

Parcel

Service,

Inc.,

B

..........................................

10,424

2,234,280

2,645,713

Auto

Components

0.1%

Gentex

Corp.

......................................................

2,793

97,336

Banks

0.5%

JPMorgan

Chase

&

Co.

...............................................

6,420

1,016,607

People's

United

Financial,

Inc.

..........................................

2,488

44,336

1,060,943

Beverages

1.4%

a

Boston

Beer

Co.,

Inc.

(The),

A

..........................................

60

30,306

Coca-Cola

Co.

(The)

.................................................

12,435

736,276

a

Monster

Beverage

Corp.

..............................................

3,632

348,817

PepsiCo,

Inc.

......................................................

10,967

1,905,078

3,020,477

Biotechnology

2.3%

AbbVie,

Inc.

.......................................................

11,802

1,597,991

Amgen,

Inc.

.......................................................

3,306

743,751

a

Biogen,

Inc.

.......................................................

1,573

377,394

Gilead

Sciences,

Inc.

................................................

9,397

682,316

a

Moderna

,

Inc.

......................................................

1,735

440,655

a

Regeneron

Pharmaceuticals,

Inc.

.......................................

846

534,266

a

United

Therapeutics

Corp.

.............................................

180

38,894

a

Vertex

Pharmaceuticals,

Inc.

...........................................

1,801

395,500

4,810,767

Building

Products

1.2%

A

O

Smith

Corp.

....................................................

963

82,673

Allegion

plc

........................................................

682

90,324

Carlisle

Cos.,

Inc.

...................................................

2,825

700,939

Johnson

Controls

International

plc

.......................................

17,122

1,392,190

Lennox

International,

Inc.

.............................................

296

96,011

a

Trex

Co.,

Inc.

......................................................

803

108,429

2,470,566

Capital

Markets

1.4%

Cboe

Global

Markets,

Inc.

.............................................

247

32,209

Evercore

,

Inc.,

A

....................................................

280

38,038

FactSet

Research

Systems,

Inc.

........................................

402

195,376

Invesco

Ltd.

.......................................................

3,268

75,229

Jefferies

Financial

Group,

Inc.

..........................................

1,479

57,385

Lazard

Ltd.,

A

......................................................

1,088

47,470

Moody's

Corp.

......................................................

1,430

558,529

Nasdaq,

Inc.

.......................................................

4,210

884,142

S&P

Global,

Inc.

....................................................

1,449

683,827

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-10

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Capital

Markets

(continued)

SEI

Investments

Co.

.................................................

1,085

$

66,120

T

Rowe

Price

Group,

Inc.

.............................................

1,797

353,362

2,991,687

Chemicals

4.1%

Air

Products

and

Chemicals,

Inc.

........................................

8,034

2,444,425

Albemarle

Corp.

....................................................

6,510

1,521,843

Celanese

Corp.

.....................................................

1,020

171,421

Dow,

Inc.

.........................................................

3,496

198,293

Ecolab,

Inc.

........................................................

4,475

1,049,790

Huntsman

Corp.

....................................................

1,424

49,669

Linde

plc

..........................................................

6,935

2,402,492

LyondellBasell

Industries

NV,

A

.........................................

3,256

300,301

NewMarket

Corp.

...................................................

76

26,047

Sherwin-Williams

Co.

(The)

............................................

1,500

528,240

8,692,521

Commercial

Services

&

Supplies

1.0%

Cintas

Corp.

.......................................................

3,821

1,693,352

a

Copart

,

Inc.

........................................................

2,139

324,315

Rollins,

Inc.

........................................................

2,460

84,157

2,101,824

Communications

Equipment

0.8%

a

Arista

Networks,

Inc.

.................................................

1,546

222,238

Cisco

Systems,

Inc.

.................................................

11,874

752,455

a

F5,

Inc.

...........................................................

621

151,965

Motorola

Solutions,

Inc.

...............................................

1,692

459,716

1,586,374

Construction

&

Engineering

0.0%

†

Quanta

Services,

Inc.

................................................

577

66,159

Construction

Materials

0.0%

†

Eagle

Materials,

Inc.

.................................................

171

28,465

Consumer

Finance

0.1%

Synchrony

Financial

.................................................

2,575

119,454

Containers

&

Packaging

0.2%

Amcor

plc

.........................................................

6,646

79,818

Avery

Dennison

Corp.

................................................

577

124,961

International

Paper

Co.

...............................................

2,413

113,363

Packaging

Corp.

of

America

...........................................

940

127,981

Silgan

Holdings,

Inc.

.................................................

349

14,951

461,074

Distributors

0.2%

Genuine

Parts

Co.

..................................................

612

85,802

Pool

Corp.

........................................................

444

251,304

337,106

Diversified

Consumer

Services

0.0%

†

a

Grand

Canyon

Education,

Inc.

..........................................

287

24,599

H&R

Block,

Inc.

.....................................................

2,186

51,502

76,101

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-11

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Diversified

Telecommunication

Services

0.7%

AT&T,

Inc.

.........................................................

27,992

$

688,603

Verizon

Communications,

Inc.

..........................................

12,951

672,934

1,361,537

Electric

Utilities

0.6%

Alliant

Energy

Corp.

.................................................

2,255

138,615

American

Electric

Power

Co.,

Inc.

.......................................

3,440

306,057

Evergy

,

Inc.

........................................................

1,942

133,241

Hawaiian

Electric

Industries,

Inc.

........................................

1,045

43,367

NRG

Energy,

Inc.

...................................................

672

28,950

OGE

Energy

Corp.

..................................................

839

32,201

Southern

Co.

(The)

..................................................

8,809

604,121

1,286,552

Electrical

Equipment

1.0%

Acuity

Brands,

Inc.

..................................................

145

30,699

Eaton

Corp.

plc

.....................................................

2,154

372,254

Emerson

Electric

Co.

................................................

6,049

562,376

a

Generac

Holdings,

Inc.

...............................................

418

147,103

Hubbell,

Inc.

.......................................................

299

62,273

nVent

Electric

plc

...................................................

12,370

470,060

Rockwell

Automation,

Inc.

.............................................

1,270

443,039

2,087,804

Electronic

Equipment,

Instruments

&

Components

0.0%

†

a

Keysight

Technologies,

Inc.

............................................

434

89,625

a

Entertainment

0.3%

Activision

Blizzard,

Inc.

...............................................

4,878

324,533

Electronic

Arts,

Inc.

..................................................

1,796

236,893

a

Skillz

,

Inc.

.........................................................

741

5,513

World

Wrestling

Entertainment,

Inc.,

A

....................................

191

9,424

576,363

Equity

Real

Estate

Investment

Trusts

(REITs)

0.8%

CubeSmart

........................................................

851

48,431

Extra

Space

Storage,

Inc.

.............................................

732

165,966

Life

Storage,

Inc.

....................................................

331

50,703

National

Retail

Properties,

Inc.

.........................................

1,891

90,900

a

Orion

Office

REIT,

Inc.

................................................

394

7,356

Public

Storage

.....................................................

1,840

689,190

Realty

Income

Corp.

.................................................

3,902

279,344

SL

Green

Realty

Corp.

...............................................

312

22,370

Spirit

Realty

Capital,

Inc.

..............................................

1,169

56,334

STORE

Capital

Corp.

................................................

2,325

79,980

VICI

Properties,

Inc.

.................................................

3,187

95,961

WP

Carey,

Inc.

.....................................................

1,694

138,993

1,725,528

Food

&

Staples

Retailing

1.4%

Casey's

General

Stores,

Inc.

...........................................

355

70,059

Costco

Wholesale

Corp.

..............................................

1,203

682,943

Kroger

Co.

(The)

....................................................

6,751

305,550

Walgreens

Boots

Alliance,

Inc.

.........................................

7,298

380,664

Walmart,

Inc.

......................................................

10,948

1,584,066

3,023,282

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-12

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Food

Products

1.4%

Archer-Daniels-Midland

Co.

...........................................

2,283

$

154,308

Bunge

Ltd.

........................................................

570

53,215

Campbell

Soup

Co.

..................................................

1,322

57,454

Conagra

Brands,

Inc.

................................................

1,959

66,900

Flowers

Foods,

Inc.

..................................................

2,027

55,682

General

Mills,

Inc.

...................................................

6,635

447,066

Hershey

Co.

(The)

..................................................

1,704

329,673

Hormel

Foods

Corp.

.................................................

2,943

143,648

Ingredion,

Inc.

......................................................

676

65,329

J

M

Smucker

Co.

(The)

...............................................

1,048

142,339

Kellogg

Co.

........................................................

2,313

149,004

McCormick

&

Co.,

Inc.

...............................................

10,620

1,025,998

Tyson

Foods,

Inc.,

A

.................................................

2,944

256,599

2,947,215

Gas

Utilities

0.0%

†

National

Fuel

Gas

Co.

................................................

396

25,320

UGI

Corp.

.........................................................

912

41,870

67,190

Health

Care

Equipment

&

Supplies

3.7%

Abbott

Laboratories

..................................................

11,240

1,581,918

Becton

Dickinson

and

Co.

.............................................

5,930

1,491,277

Cooper

Cos.,

Inc.

(The)

...............................................

111

46,502

a

Hologic

,

Inc.

.......................................................

584

44,711

a

IDEXX

Laboratories,

Inc.

..............................................

579

381,248

Medtronic

plc

......................................................

13,600

1,406,920

a

Quidel

Corp.

.......................................................

230

31,048

ResMed

,

Inc.

......................................................

1,465

381,603

Stryker

Corp.

......................................................

8,845

2,365,330

7,730,557

Health

Care

Providers

&

Services

1.8%

Cardinal

Health,

Inc.

.................................................

1,269

65,341

Chemed

Corp.

.....................................................

157

83,059

CVS

Health

Corp.

...................................................

8,742

901,825

a

Laboratory

Corp.

of

America

Holdings

....................................

392

123,170

Premier,

Inc.,

A

.....................................................

856

35,241

Quest

Diagnostics,

Inc.

...............................................

757

130,969

UnitedHealth

Group,

Inc.

..............................................

4,879

2,449,941

3,789,546

Health

Care

Technology

0.1%

Cerner

Corp.

.......................................................

2,839

263,658

Hotels,

Restaurants

&

Leisure

0.9%

McDonald's

Corp.

...................................................

7,322

1,962,809

Household

Durables

0.5%

DR

Horton,

Inc.

.....................................................

2,480

268,956

Garmin

Ltd.

........................................................

1,574

214,332

Lennar

Corp.,

A

.....................................................

1,162

134,978

a

NVR,

Inc.

.........................................................

33

194,993

PulteGroup,

Inc.

....................................................

2,321

132,668

Whirlpool

Corp.

.....................................................

273

64,062

1,009,989

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-13

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Household

Products

1.6%

Church

&

Dwight

Co.,

Inc.

.............................................

2,517

$

257,992

Colgate-Palmolive

Co.

...............................................

10,825

923,806

Kimberly-Clark

Corp.

.................................................

1,529

218,525

Procter

&

Gamble

Co.

(The)

...........................................

11,750

1,922,065

3,322,388

Industrial

Conglomerates

2.5%

3M

Co.

...........................................................

3,810

676,770

Honeywell

International,

Inc.

...........................................

7,535

1,571,123

Roper

Technologies,

Inc.

..............................................

5,935

2,919,189

5,167,082

Insurance

0.4%

Assured

Guaranty

Ltd.

...............................................

305

15,311

Erie

Indemnity

Co.,

A

.................................................

2,340

450,824

Old

Republic

International

Corp.

........................................

1,220

29,988

Progressive

Corp.

(The)

..............................................

4,023

412,961

909,084

Interactive

Media

&

Services

0.7%

a

Alphabet,

Inc.,

A

....................................................

118

341,851

a

Alphabet,

Inc.,

C

....................................................

111

321,188

a

Meta

Platforms,

Inc.,

A

...............................................

2,055

691,200

1,354,239

Internet

&

Direct

Marketing

Retail

0.1%

eBay,

Inc.

.........................................................

4,057

269,791

Qurate

Retail,

Inc.,

A

.................................................

2,414

18,346

288,137

IT

Services

4.4%

Accenture

plc,

A

....................................................

9,923

4,113,580

a

Akamai

Technologies,

Inc.

.............................................

1,041

121,839

Amdocs

Ltd.

.......................................................

1,402

104,926

Automatic

Data

Processing,

Inc.

........................................

2,816

694,369

Cognizant

Technology

Solutions

Corp.,

A

..................................

5,052

448,213

a

EPAM

Systems,

Inc.

.................................................

241

161,096

International

Business

Machines

Corp.

...................................

5,360

716,418

Jack

Henry

&

Associates,

Inc.

..........................................

794

132,590

Mastercard

,

Inc.,

A

..................................................

2,140

768,945

Paychex,

Inc.

......................................................

3,614

493,311

Visa,

Inc.,

A

........................................................

7,170

1,553,811

Western

Union

Co.

(The)

..............................................

1,022

18,232

9,327,330

Leisure

Products

0.0%

†

Brunswick

Corp.

....................................................

335

33,744

Polaris,

Inc.

........................................................

258

28,357

62,101

Life

Sciences

Tools

&

Services

1.7%

a

Bio-Rad

Laboratories,

Inc.,

A

...........................................

123

92,935

a

Mettler

-Toledo

International,

Inc.

........................................

252

427,697

Thermo

Fisher

Scientific,

Inc.

..........................................

1,030

687,257

a

Waters

Corp.

......................................................

433

161,336

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-14

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Life

Sciences

Tools

&

Services

(continued)

West

Pharmaceutical

Services,

Inc.

......................................

4,524

$

2,121,801

3,491,026

Machinery

2.0%

Allison

Transmission

Holdings,

Inc.

......................................

997

36,241

Cummins,

Inc.

......................................................

1,599

348,806

Donaldson

Co.,

Inc.

.................................................

6,640

393,486

Dover

Corp.

.......................................................

6,729

1,221,986

Graco

,

Inc.

........................................................

1,705

137,457

Illinois

Tool

Works,

Inc.

...............................................

2,831

698,691

Lincoln

Electric

Holdings,

Inc.

..........................................

390

54,393

PACCAR,

Inc.

......................................................

2,699

238,214

Pentair

plc

........................................................

10,665

778,865

Snap-on,

Inc.

......................................................

515

110,921

Toro

Co.

(The)

.....................................................

1,170

116,895

4,135,955

Media

0.5%

Comcast

Corp.,

A

...................................................

13,101

659,374

Fox

Corp.,

A

.......................................................

1,361

50,221

Interpublic

Group

of

Cos.,

Inc.

(The)

.....................................

3,809

142,647

Omnicom

Group,

Inc.

................................................

2,338

171,305

1,023,547

Metals

&

Mining

0.4%

a

Cleveland-Cliffs,

Inc.

.................................................

1,160

25,253

Newmont

Corp.

.....................................................

5,106

316,674

Nucor

Corp.

.......................................................

2,835

323,615

Reliance

Steel

&

Aluminum

Co.

.........................................

529

85,814

Southern

Copper

Corp.

...............................................

497

30,670

Steel

Dynamics,

Inc.

.................................................

2,009

124,699

United

States

Steel

Corp.

.............................................

674

16,048

922,773

Multiline

Retail

1.4%

Dollar

General

Corp.

.................................................

2,492

587,688

Target

Corp.

.......................................................

10,036

2,322,732

2,910,420

Multi-Utilities

0.3%

Ameren

Corp.

......................................................

2,077

184,874

Consolidated

Edison,

Inc.

.............................................

3,275

279,423

WEC

Energy

Group,

Inc.

..............................................

1,992

193,363

657,660

Oil,

Gas

&

Consumable

Fuels

0.7%

Chevron

Corp.

.....................................................

5,575

654,226

Coterra

Energy,

Inc.

.................................................

4,878

92,682

EOG

Resources,

Inc.

................................................

5,245

465,914

Exxon

Mobil

Corp.

...................................................

5,320

325,531

Texas

Pacific

Land

Corp.

..............................................

14

17,484

1,555,837

Paper

&

Forest

Products

0.0%

†

Louisiana-Pacific

Corp.

...............................................

489

38,313

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-15

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Paper

&

Forest

Products

(continued)

a

Sylvamo

Corp.

.....................................................

219

$

6,108

44,421

Personal

Products

0.4%

Estee

Lauder

Cos.,

Inc.

(The),

A

........................................

1,960

725,592

Pharmaceuticals

3.0%

Bristol-Myers

Squibb

Co.

..............................................

11,666

727,375

Eli

Lilly

&

Co.

......................................................

2,660

734,745

Johnson

&

Johnson

.................................................

11,201

1,916,155

Merck

&

Co.,

Inc.

...................................................

8,596

658,797

Organon

&

Co.

.....................................................

1,329

40,468

Pfizer,

Inc.

.........................................................

24,029

1,418,913

Zoetis,

Inc.

........................................................

2,928

714,520

6,210,973

Professional

Services

0.1%

Booz

Allen

Hamilton

Holding

Corp.

......................................

1,135

96,237

a

FTI

Consulting,

Inc.

..................................................

225

34,519

ManpowerGroup

,

Inc.

................................................

236

22,970

Robert

Half

International,

Inc.

..........................................

1,350

150,552

304,278

Road

&

Rail

1.3%

AMERCO

.........................................................

39

28,323

JB

Hunt

Transport

Services,

Inc.

........................................

2,602

531,849

Knight-Swift

Transportation

Holdings,

Inc.

.................................

381

23,218

Landstar

System,

Inc.

................................................

412

73,756

Norfolk

Southern

Corp.

...............................................

3,275

975,000

Old

Dominion

Freight

Line,

Inc.

.........................................

832

298,172

Ryder

System,

Inc.

..................................................

121

9,974

Schneider

National,

Inc.,

B

............................................

388

10,441

Union

Pacific

Corp.

..................................................

2,782

700,870

2,651,603

Semiconductors

&

Semiconductor

Equipment

4.6%

Analog

Devices,

Inc.

.................................................

12,474

2,192,555

Applied

Materials,

Inc.

................................................

4,451

700,409

Intel

Corp.

.........................................................

13,485

694,478

KLA

Corp.

.........................................................

1,618

695,918

Lam

Research

Corp.

.................................................

968

696,137

Monolithic

Power

Systems,

Inc.

.........................................

301

148,492

QUALCOMM,

Inc.

...................................................

3,603

658,881

Skyworks

Solutions,

Inc.

..............................................

1,895

293,990

Teradyne,

Inc.

......................................................

883

144,397

Texas

Instruments,

Inc.

...............................................

14,907

2,809,522

Xilinx,

Inc.

.........................................................

2,594

550,006

9,584,785

Software

4.8%

a

Adobe,

Inc.

........................................................

983

557,420

a

Aspen

Technology,

Inc.

...............................................

609

92,690

a

Cadence

Design

Systems,

Inc.

.........................................

657

122,432

a

Fair

Isaac

Corp.

....................................................

174

75,459

a

Fortinet,

Inc.

.......................................................

931

334,601

Intuit,

Inc.

.........................................................

1,022

657,371

a

Manhattan

Associates,

Inc.

............................................

144

22,390

Microsoft

Corp.

.....................................................

22,090

7,429,309

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-16

a

a

Shares

a

Value

a

Common

Stocks

(continued)

Software

(continued)

Oracle

Corp.

.......................................................

7,553

$

658,697

a

Zoom

Video

Communications,

Inc.,

A

....................................

936

172,140

10,122,509

Specialty

Retail

2.8%

a

AutoNation,

Inc.

....................................................

208

24,305

a

AutoZone,

Inc.

.....................................................

219

459,109

Best

Buy

Co.,

Inc.

...................................................

2,814

285,902

Dick's

Sporting

Goods,

Inc.

............................................

318

36,567

Foot

Locker,

Inc.

....................................................

1,266

55,236

Home

Depot,

Inc.

(The)

...............................................

1,617

671,071

Lowe's

Cos.,

Inc.

....................................................

8,518

2,201,733

a

O'Reilly

Automotive,

Inc.

..............................................

761

537,441

Penske

Automotive

Group,

Inc.

.........................................

147

15,761

Ross

Stores,

Inc.

...................................................

9,700

1,108,516

Tractor

Supply

Co.

..................................................

1,335

318,531

a

Victoria's

Secret

&

Co.

...............................................

199

11,053

Williams-Sonoma,

Inc.

...............................................

933

157,798

5,883,023

Technology

Hardware,

Storage

&

Peripherals

0.8%

Apple,

Inc.

........................................................

3,965

704,065

a

Dell

Technologies,

Inc.,

C

.............................................

627

35,218

Hewlett

Packard

Enterprise

Co.

.........................................

5,780

91,151

HP,

Inc.

...........................................................

15,903

599,066

NetApp,

Inc.

.......................................................

2,488

228,871

1,658,371

Textiles,

Apparel

&

Luxury

Goods

1.1%

Carter's,

Inc.

.......................................................

460

46,561

NIKE,

Inc.,

B

.......................................................

13,139

2,189,877

2,236,438

Thrifts

&

Mortgage

Finance

0.0%

†

New

York

Community

Bancorp,

Inc.

......................................

1,941

23,700

Tobacco

0.7%

Altria

Group,

Inc.

....................................................

15,138

717,390

Philip

Morris

International,

Inc.

.........................................

7,612

723,140

1,440,530

Trading

Companies

&

Distributors

0.8%

Fastenal

Co.

.......................................................

6,745

432,085

MSC

Industrial

Direct

Co.,

Inc.,

A

........................................

465

39,088

Watsco

,

Inc.

.......................................................

354

110,759

WW

Grainger,

Inc.

...................................................

1,947

1,009,013

1,590,945

Total

Common

Stocks

(Cost

$76,634,408)

......................................

139,952,750

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

31.8%

Domestic

Fixed

Income

20.4%

b

Franklin

Liberty

U.S.

Core

Bond

ETF

.....................................

1,022,500

25,689,597

b

Western

Asset

Core

Plus

Bond

Fund,

Class

IS

.............................

1,438,974

17,152,572

42,842,169

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-17

a

a

Shares

a

Value

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(continued)

Domestic

Hybrid

8.1%

b

Franklin

Income

VIP

Fund,

Class

1

......................................

972,363

$

16,987,187

Foreign

Equity

3.3%

iShares

Core

MSCI

EAFE

ETF

.........................................

91,662

6,841,652

Total

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(Cost

$66,759,343)

................................................................

66,671,008

Total

Long

Term

Investments

(Cost

$143,393,751)

...............................

206,623,758

a

a

a

a

a

Short

Term

Investments

1.9%

a

Money

Market

Funds

1.9%

b,c

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

...................

4,067,757

4,067,757

Total

Money

Market

Funds

(Cost

$4,067,757)

...................................

4,067,757

Total

Short

Term

Investments

(Cost

$4,067,757

)

.................................

4,067,757

a

Total

Investments

(Cost

$147,461,508)

100.4%

..................................

$210,691,515

Other

Assets,

less

Liabilities

(0.4)%

...........................................

(859,793)

Net

Assets

100.0%

...........................................................

$209,831,722

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

See

Note

3(e)

regarding

investments

in

FT

Underlying

Funds.

c

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-18

At

December

31,

2021,

the

Fund

had

the

following total

return swap

contracts

outstanding.

See

Note

1(c). 

Total

Return

Swap

Contracts

Underlying

Instruments

Financing

Rate

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Value

*

Value/

Unrealized

Appreciation

(Depreciation)

OTC

Swap

Contracts

Long

Dynamic

VIX

Backwardation

(BEFSDVB1

Index)

..

—

Monthly

BZWS

3/01/22

4,200,000

$

(33)

Total

Return

Swap

Contracts

....................................................................

$(33)

*

In

U.S.

dollars

unless

otherwise

indicated.

See

Note 8 regarding

other

derivative

information.

See

A

bbreviations

on

page

FVA-

30

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

FVA-19

Franklin

VolSmart

Allocation

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$83,618,213

Cost

-

Non-controlled

affiliates

(Not

e

3e)

........................................................

63,843,295

Value

-

Unaffiliated

issuers

..................................................................

$146,794,402

Value

-

Non-controlled

affiliates

(Not

e

3e)

.......................................................

63,897,113

Cash

....................................................................................

1,605

Receivables:

Capital

shares

sold

........................................................................

1,422

Dividend

s

...............................................................................

134,593

Total

assets

..........................................................................

210,829,135

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

845,809

Management

fees

.........................................................................

85,338

Distribution

fees

..........................................................................

26,395

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

33

Accrued

expenses

and

other

liabilities

...........................................................

39,838

Total

liabilities

.........................................................................

997,413

Net

assets,

at

value

.................................................................

$209,831,722

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$128,522,419

Total

distributable

earnings

(losses)

.............................................................

81,309,303

Net

assets,

at

value

.................................................................

$209,831,722

Franklin

VolSmart

Allocation

VIP

Fund

Class

2:

Net

assets,

at

value

.......................................................................

$47,677

Shares

outstanding

........................................................................

3,061

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$15.57

Class

5:

Net

assets,

at

value

.......................................................................

$209,784,045

Shares

outstanding

........................................................................

13,516,159

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$15.52

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

FVA-20

Franklin

VolSmart

Allocation

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$2)

Unaffiliated

issuers

........................................................................

$2,561,869

Non-controlled

affiliates

(

Note

3e)

.............................................................

2,285,364

Total

investment

income

...................................................................

4,847,233

Expenses:

Management

fees

(Note

3

a

)

...................................................................

1,634,841

Distribution

fees:

(Note

3c

)

    Class

5

................................................................................

306,464

Custodian

fees

(Note

4

)

......................................................................

2,845

Reports

to

shareholders

fees

..................................................................

18,781

Professional

fees

...........................................................................

105,014

Trustees'

fees

and

expenses

..................................................................

2,893

Other

....................................................................................

30,898

Total

expenses

.........................................................................

2,101,736

Expense

reductions

(Note

4

)

...............................................................

(248)

Expenses

waived/paid

by

affiliates

(Note

3e

and

3f)

..............................................

(469,048)

Net

expenses

.........................................................................

1,632,440

Net

investment

income

................................................................

3,214,793

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

15,324,491

Non-controlled

affiliates

(

N

ote

3e)

...........................................................

1,792,054

Futures

contracts

.........................................................................

(1,524,228)

Swap

contracts

...........................................................................

20,919

Capital

gain

distributions

from

Underlying

Funds:

Non-controlled

affiliates

(Note

3e)

...........................................................

52,514

Net

realized

gain

(loss)

..................................................................

15,665,750

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

14,800,920

Non-controlled

affiliates

(Note

3e)

...........................................................

(1,267,691)

Futures

contracts

.........................................................................

325,338

Swap

contracts

...........................................................................

447

Net

change

in

unrealized

appreciation

(depreciation)

............................................

13,859,014

Net

realized

and

unrealized

gain

(loss)

............................................................

29,524,764

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$32,739,557

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.

Annual

Report

FVA-21

Franklin

VolSmart

Allocation

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$3,214,793

$3,086,186

Net

realized

gain

(loss)

.................................................

15,665,750

15,170,163

Net

change

in

unrealized

appreciation

(depreciation)

...........................

13,859,014

9,681,207

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

32,739,557

27,937,556

Distributions

to

shareholders:

Class

2

.............................................................

(4,360)

(470)

Class

5

.............................................................

(18,228,062)

(2,132,195)

Total

distributions

to

shareholders

..........................................

(18,232,422)

(2,132,665)

Capital

share

transactions:

(Note

2

)

Class

5

.............................................................

(537,826)

(15,361,900)

Total

capital

share

transactions

............................................

(537,826)

(15,361,900)

Net

increase

(decrease)

in

net

assets

...................................

13,969,309

10,442,991

Net

assets:

Beginning

of

year

.......................................................

195,862,413

185,419,422

End

of

year

...........................................................

$209,831,722

$195,862,413

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Franklin

VolSmart

Allocation

VIP

Fund

FVA-22

Annual

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

VolSmart

Allocation

VIP

Fund

(Fund)

is

included

in

this

report. 

The

Fund

invests

a

large

percentage

of

its

assets

in

mutual

funds

(Underlying

Funds)

and

exchange

traded

funds

(ETFs),

including

affiliated

funds

managed

by

Franklin

Templeton

(FT

Underlying

Funds).

Shares

of

the

Fund

are

generally

sold

only

to

insurance

company

separate

accounts

to

fund

the

benefits

of

variable

life

insurance

policies

or

variable

annuity

contracts.

At

December

31,

2021,

97.7%

of

the

Fund's

shares

were

held

through

one

insurance

company.

Investment

activities

of

these

insurance

company

separate

accounts

could

have

a

material

impact

on

the

Fund.

The

Fund

offers

two

classes

of

shares:

Class

2

and

Class

5.

Each

class

of

shares

may

differ

by

its

distribution

fees,

voting

rights

on

matters

affecting

a

single

class

and

its

exchange

privilege. 

The

accounting

policies

of

the

Underlying

Funds

are

outlined

in

their

respective

shareholder

reports.

A

copy

of

the

Underlying

Funds’

shareholder

reports

is

available

on

the

U.S.

Securities

and

Exchange

Commission

(SEC)

website

at

sec.gov.

The

Underlying

Funds’

shareholder

reports

are

not

covered

by

this

report.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Investments

in

the

Underlying

Funds

are

valued

at

their

closing

NAV

each

trading

day.

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. 

Certain

derivative

financial

instruments

trade

in

the

OTC

market.

The

Fund's

pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Fund's

net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-23

Annual

Report

Franklin

VolSmart

Allocation

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

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.

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

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-24

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

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

December

31,

2021, the

Fund

had

OTC

derivatives

in

a

net

liability

position

of

$33.

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

total

return

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

and

market

risk

of

an

underlying

instrument

such

as

a

stock,

bond,

index

or

basket

of

securities

or

indices.

A

total

return

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

a

return

linked

to

an

underlying

instrument

for

a

floating

or

fixed

rate

payment,

both

based

upon

a

notional

amount.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

or

received

are

accrued

daily

and

recorded

as

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

recognized

as

realized

gain

or

loss.

See

Note

8

regarding

other

derivative

information.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date. 

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

December

31,

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)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-25

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Estimated

expenses

are

accrued

daily.

Dividend

income

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.

The

Fund

indirectly

bears

its

proportionate

share

of

expenses

from

the

Underlying

Funds

and

ETFs.

Since

the

Underlying

Funds

and

ETFs

have

varied

expense

levels

and

the

Fund may

own

different

proportions

of

the

Underlying

Funds

and

ETFs

at

different

times,

the

amount

of

expenses

incurred

indirectly

by

the Fund

will

vary.

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)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-26

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

During

the

year ended

December

31,

2021

and

the

year

ended

December

31,

2020,

there

were

no

transactions

of

the

Fund’s

Class

2

shares.

Transactions

in

the

Fund's

Class

5

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,

directors

and/or

trustees

of

certain

of

the

Underlying

Funds

and

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

of

0.80%

per

year

of

the

average

daily

net

assets

of

the

Fund.

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

5

shares

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund's

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

0.35%

and

0.15%

per

year

of

its

average

daily

net

assets

of

Class

2

and

Class

5,

respectively.

The

Board

has

agreed

to

limit

the

current

rate

to

0.25%

per

year

for

Class

2.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

d.

Transfer

Agent

Fees

Investor

Services,

under

terms

of

an

agreement,

performs

shareholder

servicing

for

the

Fund

and

is

not

paid

by

the Fund

for

the

services.

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

5

Shares:

Shares

sold

...................................

1,228,354

$18,215,053

1,955,432

$26,179,712

Shares

issued

in

reinvestment

of

distributions

..........

1,272,021

18,228,062

165,415

2,132,195

Shares

redeemed

...............................

(2,466,397)

(36,980,941)

(3,368,455)

(43,673,807)

Net

increase

(decrease)

..........................

33,978

$(537,826)

(1,247,608)

$(15,361,900)

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-27

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

e.

Investments

in

Underlying

Funds

The Fund

invests in Underlying

Funds

which

are

managed

by

affiliates

of

the

Fund’s

administrative

manager,

Franklin

Templeton

Services,

LLC.

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

Underlying

Fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

Underlying

Fund.

The

Fund

does

not

invest

in

Underlying

Funds

for

the

purpose

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

are

waived

on

assets

invested

in

the

Underlying

Funds,

as

noted

in

the

Statement

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

the

Underlying

Funds.

Investments

in

Underlying

Funds

for

the

year

ended

December

31,

2021,

were

as

follows:

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

interest

expense,

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

0.65%,

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

year

ended

December

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Dividend

Income

a

a

a

a

a

a

a

a

a

Franklin

VolSmart

Allocation

VIP

Fund

Non-Controlled

Affiliates

Franklin

Income

Fund,

Class

R6

.

$

15,594,859

$

4,138,735

$

(20,664,426)

$

1,750,536

$

(819,704)

$

—

—

$

218,735

Franklin

Income

VIP

Fund,

Class

1

—

21,443,624

(5,504,000)

94,647

952,916

16,987,187

972,363

951,401

Franklin

Liberty

U.S.

Core

Bond

ETF

....................

26,945,614

3,996,383

(4,093,888)

(147,906)

(1,010,606)

25,689,597

1,022,500

639,447

a

Franklin

Low

Duration

Total

Return

Fund,

Class

R6

............

6,591,183

4,260,743

(10,785,767)

(52,533)

(13,626)

—

—

161,236

Franklin

Strategic

Income

Fund,

Class

R6

................

6,368,172

4,256,880

(10,552,905)

147,310

(219,457)

—

—

256,881

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

3,563,810

30,728,296

(30,224,349)

—

—

4,067,757

4,067,757

391

Western

Asset

Core

Plus

Bond

Fund,

Class

I

S

............

—

17,309,786

—

—

(157,214)

17,152,572

1,438,974

109,787

Total

Non-Controlled

Affiliates

$59,063,638

$86,134,447

$(81,825,335)

$1,792,054

$(1,267,691)

$63,897,113

$2,337,878

Total

Affiliated

Securities

....

$59,063,638

$86,134,447

$(81,825,335)

$1,792,054

$(1,267,691)

$63,897,113

$2,337,878

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statement

of

Operations.

3.Transactions

with

Affiliates

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-28

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

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

year

ended

December

31,

2021,

aggregated

$81,989,628

and

$96,772,717,

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

December

31,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$18,232,422

$2,132,665

Cost

of

investments

..........................................................................

$147,587,182

Unrealized

appreciation

........................................................................

$64,902,935

Unrealized

depreciation

........................................................................

(1,798,635)

Net

unrealized

appreciation

(depreciation)

..........................................................

$63,104,300

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$4,697,090

Undistributed

long

term

capital

gains

..............................................................

1

3,507,918

Total

distributable

earnings

.....................................................................

$18,205,008

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

VolSmart

Allocation

VIP

Fund

Equity

contracts

...........

Unrealized

appreciation

on

OTC

swap

contracts

$

—

Unrealized

depreciation

on

OTC

swap

contracts

$

3

3

Total

....................

$—

$33

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-29

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts

and

swap

contracts

represented

$4,034,202

and

$3,884,615,

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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)

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

VolSmart

Allocation

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

..............

Futures

contracts

$(1,524,228)

Futures

contracts

$325,338

Swap

contracts

20,919

Swap

contracts

447

Total

.......................

$(1,503,309)

$325,785

8.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

FVA-30

Annual

Report

Franklin

VolSmart

Allocation

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

December

31,

2021,

in

valuing

the

Fund's assets

and

liabilities

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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,

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Level

1

Level

2

Level

3

Total

Franklin

VolSmart

Allocation

VIP

Fund

Assets:

Investments

in

Securities:

a

Common

Stocks

........................

$

139,952,750

$

—

$

—

$

139,952,750

Management

Investment

Companies

.........

66,671,008

—

—

66,671,008

Short

Term

Investments

...................

4,067,757

—

—

4,067,757

Total

Investments

in

Securities

...........

$210,691,515

$—

$—

$210,691,515

Liabilities:

Other

Financial

Instruments:

Swap

contracts

..........................

$

—

$

33

$

—

$

33

Total

Other

Financial

Instruments

.........

$—

$33

$—

$33

a

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

Counterparty

BZWS

Barclays

Bank

plc

Selected

Portfolio

ETF

Exchange-Traded

Fund

REIT

Real

Estate

Investment

Trust

VIX

Market

Volatility

Index

10.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

FVA-31

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Franklin

VolSmart

Allocation

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Franklin

VolSmart

Allocation

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

FVA-32

Annual

Report

Franklin

VolSmart

Allocation

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

`

The

Fund

hereby

reports

the

following

amount,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amount,

for

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$2,052,016

TD-1

Annual

Report

Templeton

Developing

Markets

VIP

Fund

This

annual

report

for

Templeton

Developing

Markets

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

-5.74%

5-Year

+10.60%

10-Year

+4.84%

TD-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

MSCI

Emerging

Markets

(EM)

Index-NR.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries

.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

TD-3

Annual

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

one-year

total

return

in

the

Performance

Summary.

In

comparison,

the

Fund’s

benchmark,

the

MSCI

Emerging

Markets

(EM)

Index-NR,

posted

a

-2.54%

total

return

for

the

same

period.

1

Please

note,

index

performance

numbers

are

for

reference

and

we

do

not

attempt

to

track

an

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

Economic

and

Market

Overview

Emerging

market

countries

continued

their

economic

recovery

during

the

12

months

ended

December

31,

2021,

though

resurgent

COVID-19

outbreaks

hampered

growth

in

many

countries.

Several

emerging

market

central

banks

raised

benchmark

interest

rates

to

stem

inflation,

a

reversal

of

the

accommodative

monetary

policies

adopted

at

the

beginning

of

the

pandemic

in

2020.

During

the

period,

investor

concerns

about

the

global

spread

of

the

COVID-19

Delta

and

Omicron

variants,

rising

inflation

and

new

Chinese

government

regulations

on

certain

businesses

tempered

optimism

about

increased

vaccinations

and

economies

reopening.

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

moderated

in

2021’s

second,

third

and

fourth

quarters

due

to

supply

chain

issues,

domestic

COVID-19

outbreaks,

power

shortages

and

a

speculative

bubble

in

the

property

market.

Taiwan’s

year-on-year

growth

rate

accelerated

in

2021’s

first

quarter,

as

a

surge

in

global

demand

for

electronic

products

boosted

its

export-

dependent

economy.

Growth

moderated

in

the

second

and

third

quarters

as

private

consumption

was

impacted

by

a

spike

in

infections.

South

Korea’s

year-on-year

growth

rate

accelerated

in

2021’s

first

and

second

quarters,

following

three

straight

quarters

of

contraction.

Accelerating

private

consumption,

government

spending

and

exports

contributed

to

the

recovery.

Growth

moderated

in

the

third

quarter

in

part

due

to

new

restrictions

to

contain

the

Delta

variant.

India’s

year-on-year

growth

rate

accelerated

in

2021’s

first

and

second

quarters

due

to

surges

in

construction,

manufacturing

and

private

spending.

Growth

continued

in

2021’s

third

quarter,

albeit

at

a

less

robust

pace,

as

progress

in

vaccine

distribution

eased

COVID-19-related

economic

disruptions.

Russia’s

year-on-year

growth

rate

contracted

for

the

fourth

consecutive

time

in

2021’s

first

quarter

before

returning

to

growth

in

the

second

and

third

quarters,

aided

by

an

increase

in

oil

prices.

Following

four

straight

quarters

of

contractions,

Brazil’s

year-on-year

growth

rate

turned

positive

in

2021’s

first

quarter

and

accelerated

in

the

second

quarter

based

on

strength

in

manufacturing,

particularly

automotive

production,

and

transportation

and

storage.

Growth

moderated

in

the

third

quarter

as

imports

outpaced

exports.

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

Asia

77.7%

Europe

9.3%

Latin

America

&

Caribbean

7.8%

North

America

2.1%

Middle East & Africa

1.5%

Short-Term

Investments

&

Other

Net

Assets

1.6%

Templeton

Developing

Markets

VIP

Fund

TD-4

Annual

Report

Turning

to

specific

countries’

monetary

policies,

the

People’s

Bank

of

China

lowered

its

benchmark

loan

prime

rate

in

December

2021—its

first

cut

since

April

2020—in

an

effort

to

spur

growth.

The

central

banks

of

Taiwan

and

India

left

their

benchmark

interest

rates

unchanged.

In

contrast,

the

central

banks

of

South

Korea,

Russia

and

Brazil

all

raised

their

respective

benchmark

interest

rates

multiple

times

to

combat

rising

inflation.

In

this

environment,

emerging

market

stocks,

as

measured

by

the

MSCI

EM

Index-NR,

posted

a

-2.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Chinese

equities

fell

during

the

period

due

to

new

government

regulations

of

internet

companies,

political

and

economic

tensions

with

the

U.S.,

and

strict

lockdowns

to

suppress

new

COVID-19

outbreaks.

Taiwanese

equities

rose

significantly

during

the

period,

supported

by

the

country’s

strong

technology

export

sector.

Russian

equities

also

rose,

aided

by

increased

oil

prices,

though

political

tensions

with

the

U.S.

and

Ukraine

caused

a

dip

near

period-end.

Brazilian

equities

fell

during

the

period

due

to

investor

concerns

about

rising

inflation,

mounting

debt

levels,

increased

interest

rates

and

political

uncertainties

ahead

of

the

country’s

general

election

in

October

2022.

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

included

Taiwan

Semiconductor

Manufacturing

Co.

(TSMC),

MediaTek

and

ICICI

Bank.

Despite

some

short-term

demand

weakness

for

smartphones,

positive

sentiment

for

the

growth

prospects

of

TSMC

and

MediaTek

was

driven

by

higher

memory

chip

prices

coupled

with

rising

silicon

content,

amid

continued

fifth-generation

wireless

technology

(5G)

development,

growing

higher

performance

computing

(HPC)

applications

and

accelerating

digital

transformation.

TSMC

is

one

of

the

world’s

leading

semiconductor

manufacturers,

with

major

technology

companies

among

its

clients.

Following

solid

first-

and

second-quarter

2021

corporate

results,

the

company

posted

better-than-expected

third-quarter

earnings,

a

quarter-on-quarter

improvement

in

profit

margins

and

lifted

its

full-year

sales

growth

forecast.

Benefiting

from

its

strong

technology

leadership,

the

company

also

raised

its

long-term

gross

margin

estimates.

MediaTek

is

a

major

chip

designer

in

the

semiconductor

industry

and

develops

chips

for

smartphones

and

other

technology

devices.

The

company

consistently

reported

solid

quarterly

corporate

results

in

2021.

In

addition

to

positive

Top

10

Countries

12/31/21

A

%

of

Total

Net

Assets

a

a

China

25.5%

South

Korea

21.8%

Taiwan

18.0%

India

9.1%

Russia

7.0%

Brazil

5.7%

United

States

2.1%

Mexico

1.7%

Thailand

1.6%

United

Kingdom

1.5%

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

12.4%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Samsung

Electronics

Co.

Ltd.

11.1%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Alibaba

Group

Holding

Ltd.

5.3%

Internet

&

Direct

Marketing

Retail,

China

ICICI

Bank

Ltd.

5.2%

Banks,

India

Tencent

Holdings

Ltd.

4.4%

Interactive

Media

&

Services,

China

MediaTek

,

Inc.

4.1%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

NAVER

Corp.

3.8%

Interactive

Media

&

Services,

South

Korea

LUKOIL

PJSC

2.5%

Oil,

Gas

&

Consumable

Fuels,

Russia

Sberbank

of

Russia

PJSC

2.3%

Banks,

Russia

China

Merchants

Bank

Co.

Ltd.

2.2%

Banks,

China

Templeton

Developing

Markets

VIP

Fund

TD-5

Annual

Report

fourth-quarter

2021

guidance,

management

voiced

solid

growth

and

stronger

profitability

expectations

for

2022.

Signaling

commitment

to

enhancing

shareholder

returns,

a

special

dividend

payment

from

2021-2024

was

also

announced.

Investors

were

also

optimistic

about

demand

for

the

company’s

newly

launched

chip

for

5G

smartphones.

Shares

in

ICICI

Bank,

one

of

the

largest

private-sector

banks

in

India,

generally

remained

on

an

upward

trend

in

2021

on

the

back

of

solid

quarterly

earnings

growth.

Improving

margins

and

asset

quality

along

with

a

strong

balance

sheet

and

improving

digital

footprint

further

supported

returns.

Although

concerns

about

non-performing

assets

rose

in

the

second

quarter

amid

the

second

COVID-19

wave,

the

bank’s

prudent

asset

provision

policies,

healthy

capital

buffer,

strong

deposit

franchise

and

risk-conscious

lending

practices

enabled

the

bank

to

continue

to

excel

operationally.

Economic

normalization

and

expectations

that

rising

credit

penetration

in

India

could

create

longer-term

growth

opportunities

for

the

bank

also

supported

investor

confidence.

In

contrast,

key

detractors

from

absolute

performance

included

Alibaba

Group

Holding,

Tencent

Holdings

and

Samsung

Electronics.

Alibaba

is

the

leading

e-commerce

company

in

China.

It

also

provides

cloud

computing

services

and

is

involved

in

logistics

services.

Tencent

is

one

of

the

largest

online

gaming

companies

in

the

world

and

operates

the

most

popular

messaging

application

with

social

network

features

in

China.

As

a

major

internet

company

in

China,

it

also

provides

non-

gaming

value

added

services,

digital

advertising,

financial

technology

and

other

services.

China’s

increased

scrutiny

of

monopolistic

practices,

personal

data

protection,

content

release,

online

platform’s

social

responsibilities,

financial

technology

and

other

areas

in

the

internet

industry

weighed

on

both

companies.

Despite

Alibaba

reporting

solid

second-

and

third-quarter

2021

revenue

growth,

a

downward

revision

in

fiscal

year

2022

revenue

guidance

amid

a

weak

consumption

environment

and

intensifying

competition

in

China’s

e-commerce

market

disappointed

investors.

However,

a

substantial

increase

in

the

company’s

share

repurchase

program,

the

largest

buyback

program

in

the

company’s

history,

signaled

continued

management

confidence.

The

organizational

restructure

in

late

2021

also

suggested

management

actively

took

actions

to

meet

these

challenges.

Although

further

regulatory

news

could

drive

share-price

volatility

in

the

near

term,

Alibaba

is

generally

viewed

as

well-diversified

and

resilient,

with

longer-term

growth

drivers

across

multiple

areas

such

as

domestic

retail,

international

e-commerce,

cloud

computing

and

other

enterprise

services.

Although

Tencent

reported

continued

growth

in

quarterly

revenue,

third-quarter

2021

corporate

results

missed

market

expectations.

Regulatory

and

macroeconomic

headwinds

especially

impacted

growth

in

online

advertising

revenues.

Tencent

declared

a

special

dividend

in

the

form

of

shares

of

Chinese

e-commerce

company

JD.com

(not

a

Fund

holding),

which

would

reduce

Tencent’s

holding

in

JD.com,

in

December

2021,

unlocking

value

for

shareholders

and

providing

capital

to

fund

other

investment

and

social

initiatives.

Reducing

its

investment

in

other

internet

companies

could

also

reduce

potential

concerns

on

Tencent

from

an

anti-trust

regulatory

perspective.

Although

further

regulatory

changes

could

result

in

some

volatility

in

the

short-term,

we

believe

strength

in

Tencent’s

core

gaming

and

social

businesses,

and

longer-term

monetization

opportunities

in

its

enterprise

services

and

other

services

bode

well

for

the

company’s

longer-term

future.

A

leading

global

semiconductor

manufacturer,

Samsung

Electronics

is

also

one

of

the

world’s

largest

smartphone

producers

as

well

as

a

key

supplier

of

organic

light-emitting

diode

(LED)

displays.

Third-quarter

2021

revenues

reached

a

record-high

supported

by

favorable

conditions

in

the

memory

market

and

strong

performance

in

the

display

segment.

The

company’s

foundry,

consumer

electronics

and

display

businesses

benefited

from

a

robust

environment

for

technology

exports

driven

by

increased

consumer

demand

for

computers,

game

consoles,

smartphones

and

tablets

during

the

pandemic.

Although

the

company

reported

strong

quarterly

earnings

growth

during

2021,

concerns

about

a

decline

in

future

smartphone

demand,

component

shortages

and

worries

of

a

slowdown

in

memory

chip

prices

and

demand

checked

investor

sentiment.

Market

concerns

that

the

family

of

Samsung

Electronics’

late

chairman

may

sell

shares

in

the

company

to

raise

funds

for

a

substantial

inheritance

tax

bill

also

impacted

share-price

performance.

In

the

last

12

months,

the

Fund

increased

its

holdings

in

Brazil,

China

and

Peru

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.

Some

additions

were

also

made

to

the

industrials

and

health

care

sectors.

New

additions

to

the

portfolio

included

Daqo

New

Energy,

a

Chinese

manufacturer

of

polysilicon

for

solar

power

equipment,

Tata

Consultancy

Services,

one

of

India’s

biggest

IT

consulting

and

services

firms,

and

Soulbrain,

a

major

South

Korean

supplier

of

key

chemicals

for

semiconductor

and

display

manufacturing.

We

Templeton

Developing

Markets

VIP

Fund

TD-6

Annual

Report

also

added

to

our

existing

high-conviction

portfolio

holdings

with

purchases

in

B3,

one

of

the

largest

financial

exchanges

in

South

America,

China

Resources

Cement

Holdings,

a

leading

cement

and

concrete

producer

in

Southern

China,

and

the

aforementioned

Alibaba.

The

Fund

reduced

its

investments

in

Taiwan,

South

Africa,

India

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,

energy

and

consumer

staples.

In

terms

of

key

sales,

we

closed

positions

in

CNOOC,

a

Chinese

energy

company,

China

Mobile,

a

Chinese

wireless

telecommunications

provider,

and

Flat

Glass

Group,

a

Chinese

glass

products

manufacturer.

We

also

trimmed

positions

in

several

key

holdings,

including

NAVER,

a

dominant

search

engine

company

in

South

Korea,

and

the

previously

mentioned

TSMC

and

Tencent.

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

12

months

ended

December

31,

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

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

December

31,

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

2

Fund

Expenses

Templeton

Developing

Markets

VIP

Fund

TD-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$875.30

$7.06

$1,017.67

$7.60

1.49%

TD-8

Annual

Report

TD

P1

P2

P4

01/22

SUPPLEMENT

DATED

JANUARY

28,

2022

TO

THE

PROSPECTUSES

DATED

MAY

1,

2021

OF

TEMPLETON

DEVELOPING

MARKETS

VIP

FUND

(a

series

of

Franklin

Templeton

Variable

Insurance

Products

Trust)

The

prospectuses

of

the

Fund

are

amended

as

follows:

I.

The

following

is

added

after

the

third

sentence

in

the

second

paragraph

in

the

“Fund

Summaries

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Investment

Strategies”

section

of

the

prospectus:

Investments

in

Chinese

companies

also

may

be

made

through

a

special

structure

known

as

a

variable

interest

entity

(VIE)

that

is

designed

to

provide

foreign

investors

with

exposure

to

Chinese

companies

that

operate

in

certain

sectors

in

which

China

restricts

or

prohibits

foreign

investments.

II.

The

following

is

added

after

the

third

paragraph

in

the

“Fund

Summaries

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Risks

–

Foreign

Securities

(non-U.S.)”

section

of

the

prospectus:

Certain

investments

in

Chinese

companies

may

be

made

through

a

special

structure

known

as

a

VIE.

In

a

VIE

structure,

foreign

investors,

such

as

the

Fund,

will

only

own

stock

in

a

shell

company

rather

than

directly

in

the

VIE,

which

must

be

owned

by

Chinese

nationals

(and/or

Chinese

companies)

to

obtain

the

licenses

and/or

assets

required

to

operate

in

a

restricted

or

prohibited

sector

in

China.

The

value

of

the

shell

company

is

derived

from

its

ability

to

consolidate

the

VIE

into

its

financials

pursuant

to

contractual

arrangements

that

allow

the

shell

company

to

exert

a

degree

of

control

over,

and

obtain

economic

benefits

arising

from,

the

VIE

without

formal

legal

ownership.

While

VIEs

are

a

longstanding

industry

practice

and

are

well

known

by

Chinese

officials

and

regulators,

the

structure

historically

has

not

been

formally

recognized

under

Chinese

law

and

it

is

uncertain

whether

Chinese

officials

or

regulators

will

withdraw

their

acceptance

of

the

structure.

It

is

also

uncertain

whether

the

contractual

arrangements,

which

may

be

subject

to

conflicts

of

interest

between

the

legal

owners

of

the

VIE

and

foreign

investors,

would

be

enforced

by

Chinese

courts

or

arbitration

bodies.

Prohibitions

of

these

structures

by

the

Chinese

government,

or

the

inability

to

enforce

such

contracts,

from

which

the

shell

company

derives

its

value,

would

likely

cause

the

VIE-structured

holding(s)

to

suffer

significant,

detrimental,

and

possibly

permanent

losses,

and

in

turn,

adversely

affect

the

Fund’s

returns

and

net

asset

value.

III.

The

following

is

added

to

the

end

of

the

sixth

paragraph

in

the

“Fund

Details

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Investment

Policies

and

Practices”

section

of

the

prospectus:

Investments

in

Chinese

companies

also

may

be

made

through

a

special

structure

known

as

a

variable

interest

entity

(VIE)

that

is

designed

to

provide

foreign

investors

with

exposure

to

Chinese

companies

that

operate

in

certain

sectors

in

which

China

restricts

or

prohibits

foreign

investments.

IV.

The

following

replaces

the

first

paragraph

in

the

“Fund

Details

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Investment

Policies

and

Practices

–

Portfolio

Selection”

section

of

the

prospectus:

When

choosing

equity

investments

for

the

Fund,

the

investment

manager

applies

a

fundamental,

research-driven,

long-

term

approach,

focusing

on

companies

with

sustainable

earnings

power

that

are

trading

at

a

discount

to

intrinsic

worth.

Alongside

traditional

financial

and

economic

analyses,

the

investment

manager

assesses

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

a

company,

which

the

investment

manager

believes

provide

a

measure

of

the

company’s

sustainability.

In

analyzing

ESG

factors,

the

investment

manager

assesses

how

a

company's

practices

are

aimed

at

improving

or

maintaining

the

ESG

footprint

of

its

operating

model

and

conducts

a

materiality-based

ESG

assessment.

The

following

provides

examples

of

ESG

elements

that

can

be

taken

into

consideration

when

assessing

a

company:

TD-9

Annual

Report

Please

keep

this

supplement

with

your

prospectus

for

future

reference.

Environmental

considerations,

which

can

include

issues

such

as

resource

efficiency,

carbon

emissions

management,

waste

prevention

and

recycling

and

pollution

prevention

and

control.

Social

considerations,

which

can

include

issues

such

as

labor

standards,

fair

wages,

diversity

and

gender

balance,

health

and

safety

practices

and

product

safety.

Governance

considerations,

which

can

include

issues

such

as

appropriate

accounting

practices,

alignment

of

interests,

board

effectiveness,

capital

allocation,

shareholder

rights

and

quality

of

disclosures.

Consideration

of

ESG

factors

and

risks

is

only

one

component

of

the

investment

manager’s

assessment

of

issuers

eligible

for

investment.

The

weight

given

to

ESG

factors

may

vary

across

types

of

investments,

industries,

regions

and

issuers

and

may

change

over

time,

and

not

every

ESG

factor

may

be

identified

or

evaluated

in

the

investment

manager’s

analysis.

V.

The

following

is

added

to

the

“Fund

Details

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Risks

–

Foreign

Securities

(non-U.S.)

–

China

companies”

section

of

the

prospectus:

Certain

investments

in

Chinese

companies

may

be

made

through

a

special

structure

known

as

a

VIE.

In

a

VIE

structure,

foreign

investors,

such

as

the

Fund,

will

only

own

stock

in

a

shell

company

rather

than

directly

in

the

VIE,

which

must

be

owned

by

Chinese

nationals

(and/or

Chinese

companies)

to

obtain

the

licenses

and/or

assets

required

to

operate

in

a

restricted

or

prohibited

sector

in

China.

The

value

of

the

shell

company

is

derived

from

its

ability

to

consolidate

the

VIE

into

its

financials

pursuant

to

contractual

arrangements

that

allow

the

shell

company

to

exert

a

degree

of

control

over,

and

obtain

economic

benefits

arising

from,

the

VIE

without

formal

legal

ownership.

While

VIEs

are

a

longstanding

industry

practice

and

are

well

known

by

Chinese

officials

and

regulators,

the

structure

historically

has

not

been

formally

recognized

under

Chinese

law

and

it

is

uncertain

whether

Chinese

officials

or

regulators

will

withdraw

their

implicit

acceptance

of

the

structure.

It

is

also

uncertain

whether

the

contractual

arrangements,

which

may

be

subject

to

conflicts

of

interest

between

the

legal

owners

of

the

VIE

and

foreign

investors,

would

be

enforced

by

Chinese

courts

or

arbitration

bodies.

Prohibitions

of

these

structures

by

the

Chinese

government,

or

the

inability

to

enforce

such

contracts,

from

which

the

shell

company

derives

its

value,

would

likely

cause

the

VIE-structured

holding(s)

to

suffer

significant,

detrimental,

and

possibly

permanent

losses,

and

in

turn,

adversely

affect

the

Fund’s

returns

and

net

asset

value.

VI.

The

following

is

added

after

the

“Fund

Details

–

Templeton

Developing

Markets

VIP

Fund

–

Principal

Risks

–

Management”

section

of

the

prospectus:

Environmental,

Social

and

Governance

(ESG)

Considerations

Risk

The

investment

manager’s

portfolio

selection

strategy

is

not

solely

based

on

ESG

considerations,

and

therefore

the

issuers

in

which

the

Fund

invests

may

not

be

considered

ESG-focused

companies

or

may

not

have

a

high

ESG

risk

profile.

Consideration

of

ESG

factors

may

affect

the

Fund’s

exposure

to

certain

issuers

or

industries

and

may

not

work

as

intended.

In

addition,

ESG

considerations

assessed

as

part

of

the

Fund’s

investment

process

may

vary

across

types

of

eligible

investments

and

issuers,

and

not

every

ESG

factor

may

be

identified

or

evaluated

for

every

investment.

The

investment

manager’s

assessment

of

an

issuer

may

differ

from

that

of

other

funds

or

an

investor’s

assessment

of

such

issuer.

As

a

result,

securities

selected

by

the

investment

manager

may

not

reflect

the

beliefs

and

values

of

any

particular

investor.

The

investment

manager

also

may

be

dependent

on

the

availability

of

timely,

complete

and

accurate

ESG

data

being

reported

by

issuers

and/or

third-party

research

providers

to

evaluate

ESG

factors.

ESG

factors

are

often

not

uniformly

measured

or

defined,

which

could

impact

the

investment

manager’s

ability

to

assess

an

issuer.

The

Fund

may

underperform

other

funds

that

do

not

consider

an

issuer’s

ESG

factors

or

that

use

a

different

methodology

to

identify

and/or

incorporate

ESG

factors.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Developing

Markets

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.73

$10.80

$8.62

$10.31

$7.42

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.10

0.07

0.18

0.09

0.08

Net

realized

and

unrealized

gains

(losses)

...........

(0.70)

1.57

2.12

(1.67)

2.92

Total

from

investment

operations

....................

(0.60)

1.64

2.30

(1.58)

3.00

Less

distributions

from:

Net

investment

income

..........................

(0.13)

(0.45)

(0.12)

(0.11)

(0.11)

Net

realized

gains

.............................

(0.24)

(0.26)

—

—

—

Total

distributions

...............................

(0.37)

(0.71)

(0.12)

(0.11)

(0.11)

Net

asset

value,

end

of

year

.......................

$10.76

$11.73

$10.80

$8.62

$10.31

Total

return

c

...................................

(5.51)%

17.39%

26.92%

(15.44)%

40.65%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.19%

1.19%

1.15%

1.24%

1.36%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.19%

d

1.19%

d

1.15%

d

1.24%

d

1.35%

e

Net

investment

income

...........................

0.82%

0.73%

1.83%

0.99%

0.86%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$83,269

$89,165

$97,271

$85,397

$105,493

Portfolio

turnover

rate

............................

19.35%

11.60%

18.04%

9.22%

10.76%

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.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

e

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.

Annual

Report

TD-11

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.64

$10.71

$8.54

$10.23

$7.36

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.07

0.05

0.15

0.07

0.05

Net

realized

and

unrealized

gains

(losses)

...........

(0.69)

1.56

2.11

(1.68)

2.91

Total

from

investment

operations

....................

(0.62)

1.61

2.26

(1.61)

2.96

Less

distributions

from:

Net

investment

income

..........................

(0.11)

(0.42)

(0.09)

(0.08)

(0.09)

Net

realized

gains

.............................

(0.24)

(0.26)

—

—

—

Total

distributions

...............................

(0.35)

(0.68)

(0.09)

(0.08)

(0.09)

Net

asset

value,

end

of

year

.......................

$10.67

$11.64

$10.71

$8.54

$10.23

Total

return

c

...................................

(5.74)%

17.18%

26.70%

(15.79)%

40.41%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.44%

1.45%

1.40%

1.49%

1.61%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.44%

d

1.44%

1.40%

d

1.49%

d

1.60%

e

Net

investment

income

...........................

0.57%

0.49%

1.58%

0.74%

0.61%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$215,977

$241,104

$231,645

$195,305

$270,433

Portfolio

turnover

rate

............................

19.35%

11.60%

18.04%

9.22%

10.76%

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.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Developing

Markets

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-12

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.71

$10.77

$8.59

$10.28

$7.39

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.05

0.04

0.15

0.06

0.05

Net

realized

and

unrealized

gains

(losses)

...........

(0.70)

1.57

2.11

(1.68)

2.92

Total

from

investment

operations

....................

(0.65)

1.61

2.26

(1.62)

2.97

Less

distributions

from:

Net

investment

income

..........................

(0.09)

(0.41)

(0.08)

(0.07)

(0.08)

Net

realized

gains

.............................

(0.24)

(0.26)

—

—

—

Total

distributions

...............................

(0.33)

(0.67)

(0.08)

(0.07)

(0.08)

Net

asset

value,

end

of

year

.......................

$10.73

$11.71

$10.77

$8.59

$10.28

Total

return

c

...................................

(5.90)%

17.05%

26.49%

(15.81)%

40.30%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.54%

1.54%

1.50%

1.59%

1.71%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.54%

d

1.54%

d

1.50%

d

1.59%

d

1.70%

e

Net

investment

income

...........................

0.46%

0.44%

1.48%

0.64%

0.51%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$4,846

$5,518

$5,590

$5,203

$7,199

Portfolio

turnover

rate

............................

19.35%

11.60%

18.04%

9.22%

10.76%

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.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Templeton

Developing

Markets

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TD-13

a

a

Industry

Shares

a

Value

a

Common

Stocks

95.7%

Brazil

3.0%

a

Americanas

SA

..................

Internet

&

Direct

Marketing

Retail

301,924

$

1,700,943

B3

SA

-

Brasil

Bolsa

Balcao

........

Capital

Markets

1,201,744

2,392,555

a

M

Dias

Branco

SA

................

Food

Products

106,200

486,303

TOTVS

SA

.....................

Software

56,245

285,773

Vale

SA

........................

Metals

&

Mining

266,919

3,718,164

a

XP,

Inc.,

A

......................

Capital

Markets

21,386

614,634

9,198,372

Cambodia

0.4%

NagaCorp

Ltd.

..................

Hotels,

Restaurants

&

Leisure

1,371,750

1,196,934

China

25.5%

a

Alibaba

Group

Holding

Ltd.

.........

Internet

&

Direct

Marketing

Retail

1,100,205

16,170,435

b

BAIC

Motor

Corp.

Ltd.,

H,

144A,

Reg

S

Automobiles

1,500,600

644,685

a

Baidu,

Inc.,

ADR

.................

Interactive

Media

&

Services

12,214

1,817,321

a,c

Brilliance

China

Automotive

Holdings

Ltd.

.........................

Automobiles

7,756,600

2,772,041

a

Chervon

Holdings

Ltd.

.............

Machinery

72,000

534,705

China

Merchants

Bank

Co.

Ltd.,

A

....

Banks

464,411

3,559,868

China

Merchants

Bank

Co.

Ltd.,

H

....

Banks

421,159

3,276,902

China

Resources

Cement

Holdings

Ltd.

Construction

Materials

3,360,915

2,542,326

China

Resources

Land

Ltd.

.........

Real

Estate

Management

&

Development

481,046

2,027,221

COSCO

SHIPPING

Ports

Ltd.

.......

Transportation

Infrastructure

306,259

266,216

a

Daqo

New

Energy

Corp.,

ADR

......

Semiconductors

&

Semiconductor

Equipment

69,995

2,822,198

b

Greentown

Service

Group

Co.

Ltd.,

Reg

S

...........................

Real

Estate

Management

&

Development

721,400

666,219

Guangzhou

Tinci

Materials

Technology

Co.

Ltd.,

A

....................

Chemicals

286,541

5,168,493

Health

&

Happiness

H&H

International

Holdings

Ltd.

..................

Food

Products

512,800

794,544

Keshun

Waterproof

Technologies

Co.

Ltd.,

A

.......................

Construction

Materials

1,290,508

3,305,053

Longshine

Technology

Group

Co.

Ltd.,

A

Software

394,139

2,298,547

NetEase

,

Inc.,

ADR

...............

Entertainment

19,026

1,936,466

a

New

Oriental

Education

&

Technology

Group,

Inc.,

ADR

...............

Diversified

Consumer

Services

97,455

204,656

Ping

An

Bank

Co.

Ltd.,

A

...........

Banks

802,600

2,080,688

Ping

An

Insurance

Group

Co.

of

China

Ltd.,

H

.......................

Insurance

343,406

2,474,974

a

Prosus

NV

.....................

Internet

&

Direct

Marketing

Retail

55,257

4,573,047

Tencent

Holdings

Ltd.

.............

Interactive

Media

&

Services

231,584

13,515,092

a

Tencent

Music

Entertainment

Group,

ADR

........................

Entertainment

295,283

2,022,689

Uni

-President

China

Holdings

Ltd.

....

Food

Products

1,568,351

1,520,495

Weifu

High-Technology

Group

Co.

Ltd.,

B

...........................

Auto

Components

306,139

593,770

77,588,651

Egypt

0.1%

a

E-Finance

for

Digital

&

Financial

Investments

...................

IT

Services

324,869

419,579

a

Hungary

0.8%

Richter

Gedeon

Nyrt

.

.............

Pharmaceuticals

92,414

2,482,832

India

9.1%

ACC

Ltd.

.......................

Construction

Materials

9,600

284,923

Bajaj

Holdings

&

Investment

Ltd.

.....

Diversified

Financial

Services

63,532

4,622,921

ICICI

Bank

Ltd.

..................

Banks

1,579,654

15,671,582

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Developing

Markets

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-14

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

India

(continued)

Infosys

Ltd.

.....................

IT

Services

95,284

$

2,408,267

Tata

Consultancy

Services

Ltd.

......

IT

Services

93,626

4,686,385

27,674,078

Indonesia

0.8%

Astra

International

Tbk

.

PT

.........

Automobiles

5,939,400

2,377,258

Mexico

1.7%

Banco

Santander

Mexico

SA

Institucion

de

Banca

Multiple

Grupo

Financiero

Santand

,

ADR

.................

Banks

840,830

4,742,281

a,b

Nemak

SAB

de

CV,

144A,

Reg

S

....

Auto

Components

1,928,900

571,483

5,313,764

Pakistan

0.2%

Habib

Bank

Ltd.

.................

Banks

1,013,500

670,797

Peru

0.4%

Intercorp

Financial

Services,

Inc.

.....

Banks

49,450

1,304,491

Philippines

0.3%

BDO

Unibank

,

Inc.

...............

Banks

327,469

774,867

Russia

7.0%

Gazprom

PJSC,

ADR

.............

Oil,

Gas

&

Consumable

Fuels

115,071

1,062,583

LUKOIL

PJSC,

ADR

..............

Oil,

Gas

&

Consumable

Fuels

85,254

7,638,836

Sberbank

of

Russia

PJSC,

ADR

.....

Banks

432,289

6,936,079

a,b,d

VK

Co.

Ltd.,

GDR,

Reg

S

..........

Interactive

Media

&

Services

27,833

322,184

a

Yandex

NV,

A

...................

Interactive

Media

&

Services

88,921

5,379,721

21,339,403

South

Africa

1.4%

a

Massmart

Holdings

Ltd.

............

Food

&

Staples

Retailing

580,084

2,206,595

Naspers

Ltd.,

N

..................

Internet

&

Direct

Marketing

Retail

12,961

2,009,555

4,216,150

South

Korea

21.8%

a

Fila

Holdings

Corp.

...............

Textiles,

Apparel

&

Luxury

Goods

75,091

2,262,760

a

KT

Skylife

Co.

Ltd.

...............

Media

92,351

709,424

a

LegoChem

Biosciences,

Inc.

........

Life

Sciences

Tools

&

Services

24,169

1,131,256

a

LG

Corp.

.......................

Industrial

Conglomerates

90,582

6,165,162

a

NAVER

Corp.

...................

Interactive

Media

&

Services

35,949

11,410,023

POSCO

.......................

Metals

&

Mining

14,692

3,406,595

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

514,470

33,784,960

a

Samsung

Life

Insurance

Co.

Ltd.

.....

Insurance

81,487

4,387,479

a

Soulbrain

Co.

Ltd.

................

Chemicals

13,314

3,114,234

66,371,893

Taiwan

18.0%

Hon

Hai

Precision

Industry

Co.

Ltd.

...

Electronic

Equipment,

Instruments

&

Components

1,108,545

4,150,001

Largan

Precision

Co.

Ltd.

..........

Electronic

Equipment,

Instruments

&

Components

2,850

253,113

MediaTek

,

Inc.

..................

Semiconductors

&

Semiconductor

Equipment

290,072

12,425,296

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

1,709,749

37,755,853

54,584,263

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Developing

Markets

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TD-15

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Thailand

1.6%

Kasikornbank

PCL

...............

Banks

718,893

$

3,061,616

Kiatnakin

Phatra

Bank

PCL

.........

Banks

549,194

985,989

Thai

Beverage

PCL

...............

Beverages

1,450,900

710,592

4,758,197

United

Kingdom

1.5%

Unilever

plc

.....................

Personal

Products

82,875

4,442,338

United

States

2.1%

Cognizant

Technology

Solutions

Corp.,

A

...........................

IT

Services

62,978

5,587,408

Genpact

Ltd.

....................

IT

Services

16,034

851,085

6,438,493

Total

Common

Stocks

(Cost

$192,912,488)

.....................................

291,152,360

a

Preferred

Stocks

2.7%

Brazil

2.7%

e

Banco

Bradesco

SA,

ADR,

5.53%

....

Banks

1,337,146

4,573,039

e

Itau

Unibanco

Holding

SA,

ADR,

4.43%

Banks

926,309

3,473,659

8,046,698

Total

Preferred

Stocks

(Cost

$7,896,392)

.......................................

8,046,698

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

$200,808,880)

...............................

299,199,058

Short

Term

Investments

2.0%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

1.9%

United

States

1.9%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

5,805,544

5,805,544

Total

Money

Market

Funds

(Cost

$5,805,544)

...................................

5,805,544

h

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

Money

Market

Funds

0.1%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

170,471

170,471

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$170,471)

...................................................................

170,471

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$5,976,015

)

.................................

5,976,015

a

a

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Developing

Markets

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-16

See

Abbreviations

on

page

TD-

28

.

Short

Term

Investments

(continued)

a

a

Industry

Shares

a

Value

a

Total

Investments

(Cost

$206,784,895)

100.4%

..................................

$305,175,073

Other

Assets,

less

Liabilities

(0.4)%

...........................................

(1,084,026)

Net

Assets

100.0%

...........................................................

$304,091,047

a

a

a

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$2,204,571,

representing

0.7%

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

December

31,

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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TD-17

Templeton

Developing

Markets

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$200,808,880

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

5,976,015

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$161,086)

...................................

$299,199,058

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

5,976,015

Cash

....................................................................................

14

Receivables:

Investment

securities

sold

...................................................................

5,218

Capital

shares

sold

........................................................................

74,162

Dividends

...............................................................................

1,124,458

Total

assets

..........................................................................

306,378,925

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

35,389

Management

fees

.........................................................................

268,636

Distribution

fees

..........................................................................

46,922

Reports

to

shareholders

fees

................................................................

180,827

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

170,471

Deferred

tax

...............................................................................

1,470,403

Accrued

expenses

and

other

liabilities

...........................................................

115,230

Total

liabilities

.........................................................................

2,287,878

Net

assets,

at

value

.................................................................

$304,091,047

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$191,551,822

Total

distributable

earnings

(losses)

.............................................................

112,539,225

Net

assets,

at

value

.................................................................

$304,091,047

Templeton

Developing

Markets

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$83,268,713

Shares

outstanding

........................................................................

7,737,149

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.76

Class

2:

Net

assets,

at

value

.......................................................................

$215,976,739

Shares

outstanding

........................................................................

20,249,070

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.67

Class

4:

Net

assets,

at

value

.......................................................................

$4,845,595

Shares

outstanding

........................................................................

451,384

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$10.73

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TD-18

Templeton

Developing

Markets

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,014,924)

Unaffiliated

issuers

........................................................................

$6,773,709

Non-controlled

affiliates

(Note

3e)

.............................................................

152

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

10,627

Non-controlled

affiliates

(Note

3

e

)

.............................................................

9

Total

investment

income

...................................................................

6,784,497

Expenses:

Management

fees

(Note

3

a

)

...................................................................

3,540,911

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

604,470

    Class

4

................................................................................

18,547

Custodian

fees

.............................................................................

83,209

Reports

to

shareholders

fees

..................................................................

134,148

Professional

fees

...........................................................................

170,596

Trustees'

fees

and

expenses

..................................................................

4,054

Other

....................................................................................

86,352

Total

expenses

.........................................................................

4,642,287

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(1,282)

Net

expenses

.........................................................................

4,641,005

Net

investment

income

................................................................

2,143,492

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$170,470)

Unaffiliated

issuers

......................................................................

22,075,878

Foreign

currency

t

ransactions

................................................................

(106,930)

Net

realized

gain

(loss)

..................................................................

21,968,948

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(41,076,678)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(1,742)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

(919,061)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(41,997,481)

Net

realized

and

unrealized

gain

(loss)

............................................................

(20,028,533)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(17,885,041)

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.

Annual

Report

TD-19

Templeton

Developing

Markets

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$2,143,492

$1,602,657

Net

realized

gain

(loss)

.................................................

21,968,948

7,417,851

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(41,997,481)

35,703,143

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(17,885,041)

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

.............................................................

1,481,894

(15,688,037)

Class

2

.............................................................

(5,048,337)

(8,150,495)

Class

4

.............................................................

(263,658)

(515,345)

Total

capital

share

transactions

............................................

(3,830,101)

(24,353,877)

Net

increase

(decrease)

in

net

assets

...................................

(31,695,635)

1,280,504

Net

assets:

Beginning

of

year

.......................................................

335,786,682

334,506,178

End

of

year

...........................................................

$304,091,047

$335,786,682

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Templeton

Developing

Markets

VIP

Fund

TD-20

Annual

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

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

December

31,

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

TD-21

Annual

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.

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

TD-22

Annual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

December

31,

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

TD-23

Annual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

941,262

$11,146,256

551,169

$5,176,244

Shares

issued

in

reinvestment

of

distributions

..........

221,740

2,736,269

605,880

5,313,565

Shares

redeemed

...............................

(1,025,538)

(12,400,631)

(2,564,863)

(26,177,846)

Net

increase

(decrease)

..........................

137,464

$1,481,894

(1,407,814)

$(15,688,037)

Class

2

Shares:

Shares

sold

...................................

3,029,783

$35,782,088

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

...............................

(4,080,457)

(47,928,837)

(6,223,836)

(58,273,992)

Net

increase

(decrease)

..........................

(470,739)

$(5,048,337)

(907,107)

$(8,150,495)

Class

4

Shares:

Shares

sold

...................................

54,666

$636,847

25,280

$230,224

Shares

issued

in

reinvestment

of

distributions

..........

11,826

145,812

37,660

329,902

Shares

redeemed

...............................

(86,374)

(1,046,317)

(110,712)

(1,075,471)

Net

increase

(decrease)

..........................

(19,882)

$(263,658)

(47,772)

$(515,345)

Subsidiary

Affiliation

Templeton

Asset

Management

Ltd.

(Asset

Management)

Investment

manager

Franklin

Templeton

Investment

Management

Limited

(FTIML)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

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

TD-24

Annual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

For

the

year

ended

December

31,

2021,

the

gross

effective

management

fee

rate

was

1.050%

of

the

Fund’s

average

daily

net

assets.

Under

a

subadvisory

agreement,

FTIML,

an

affiliate

of

Asset

Management,

provides

subadvisory

services

to

the

Fund.

The

subadvisory

fee

is

paid

by

Asset

Management

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

b.

Administrative

Fees

Under

an

agreement

with

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

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

year

ended

December

31,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

51,629,717

$

(47,074,206)

$

—

$

—

$

5,805,544

5,805,544

$

152

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TD-25

Annual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

4.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

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

passive

foreign

investment

company

shares,

foreign

capital

gains

tax,

corporate

actions

and

wash

sales.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$64,156,215

and

$77,625,850,

respectively.

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Developing

Markets

VIP

Fund

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$518,425

$4,190,045

$(4,537,999)

$—

$—

$170,471

170,471

$9

Total

Affiliated

Securities

...

$1,768,458

$55,819,762

$(51,612,205)

$—

$—

$5,976,015

$161

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$9,445,508

$11,805,794

Long

term

capital

gain

......................................................

534,985

7,283,476

$9,980,493

$19,089,270

Cost

of

investments

..........................................................................

$215,883,210

Unrealized

appreciation

........................................................................

$125,072,228

Unrealized

depreciation

........................................................................

(35,780,365)

Net

unrealized

appreciation

(depreciation)

..........................................................

$89,291,863

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$8,704,438

Undistributed

long

term

capital

gains

..............................................................

$16,163,833

Total

distributable

earnings

.....................................................................

$24,868,271

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TD-26

Annual

Report

Templeton

Developing

Markets

VIP

Fund

(continued)

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$170,471

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.

Investing

in

China

A

shares

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities.

In

general,

A

shares

are

issued

by

companies

incorporated

in

the

People’s

Republic

of

China

(PRC)

and

listed

on

the

Shanghai

and

Shenzhen

Stock

Exchanges

and

available

for

investment

by

domestic

(Chinese)

investors

and

holders

of

a

QFII

license

and,

in

the

case

of

certain

eligible

A

shares,

through

the

Shanghai

and

Shenzhen

Stock

Connect

programs.

The

Shanghai

and

Shenzhen

Stock

Exchanges

are,

however,

substantially

smaller,

less

liquid

and

more

volatile

than

the

major

securities

markets

in

the

United

States.

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

December

31,

2021,

the

Fund

had

7.0%

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.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

5.

Investment

Transactions

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TD-27

Annual

Report

Templeton

Developing

Markets

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

year

ended

December

31,

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

December

31,

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

...............................

$

614,634

$

8,583,738

$

—

$

9,198,372

Cambodia

............................

—

1,196,934

—

1,196,934

China

...............................

10,132,579

64,684,031

2,772,041

77,588,651

Egypt

...............................

419,579

—

—

419,579

Hungary

.............................

2,482,832

—

—

2,482,832

India

................................

—

27,674,078

—

27,674,078

Indonesia

............................

—

2,377,258

—

2,377,258

Mexico

..............................

5,313,764

—

—

5,313,764

Pakistan

.............................

670,797

—

—

670,797

Peru

................................

1,304,491

—

—

1,304,491

Philippines

...........................

—

774,867

—

774,867

Russia

..............................

5,379,721

15,959,682

—

21,339,403

South

Africa

..........................

2,206,595

2,009,555

—

4,216,150

South

Korea

..........................

—

66,371,893

—

66,371,893

Taiwan

..............................

—

54,584,263

—

54,584,263

Thailand

.............................

—

4,758,197

—

4,758,197

United

Kingdom

.......................

—

4,442,338

—

4,442,338

United

States

.........................

6,438,493

—

—

6,438,493

Preferred

Stocks

........................

8,046,698

—

—

8,046,698

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

5,976,015

—

—

5,976,015

Total

Investments

in

Securities

...........

$48,986,198

$253,416,834

b

$2,772,041

$305,175,073

a

Includes

securities

determined

to

have

no

value

at

December

31,

2021.

8.

Credit

Facility

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TD-28

Annual

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 year.

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

b

Includes

foreign

securities

valued

at

$253,416,834,

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

ADR

American

Depositary

Receipt

GDR

Global

Depositary

Receipt

9.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

TD-29

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Templeton

Developing

Markets

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Templeton

Developing

Markets

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

transfer

agent.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TD-30

Annual

Report

Templeton

Developing

Markets

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

source

income

earned

by

the

fund

during

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$534,985

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$44,802

Amount

Reported

Foreign

Taxes

Paid

$1,170,843

Foreign

Source

Income

Earned

$6,715,881

TF-1

Annual

Report

Templeton

Foreign

VIP

Fund

This

annual

report

for

Templeton

Foreign

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

202

1

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

+4.16%

5-Year

+2.71%

10-Year

+4.00%

TF-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–12/31/21)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

Fund’s

new

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

and

the

Fund’s

former

benchmark,

the

MSCI

ACWI

ex

USA

Index.

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.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

TF-3

Annual

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)

in

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform

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

one-year

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

+7.82%

total

return

for

the

period

under

review.

1

Also

in

comparison,

the

Fund’s

former

benchmark,

the

MSCI

ACWI

ex

USA

Index,

posted

a

+8.29%

total

return

for

the

same

period.

1

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

All

Country

World

Index-NR,

posted

a

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

Europe

46.4%

Asia

43.7%

Latin

America

&

Caribbean

1.9%

North

America

1.7%

Short-Term

Investments

&

Other

Net

Assets

6.3%

Templeton

Foreign

VIP

Fund

TF-4

Annual

Report

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

Chinese

large

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

annual

review

period,

key

contributors

to

the

Fund’s

performance

relative

to

the

MSCI

ACWI

ex

USA

Index-NR

included

allocations

in

communication

services

(underweight)

and

energy

(overweight)

as

well

as

stock

selection

in

real

estate

and

utilities.

The

Fund’s

communication

services

holdings

were

led

by

Hong

Kong-based

social

media

platform

Kuaishou

Technology.

We

participated

in

the

firm’s

initial

public

offering

early

in

2021,

but

we

sold

the

shares

a

few

months

later

after

the

stock

price

had

more

than

doubled.

Following

the

rapid

ascent

of

Kuaishou’s

share

price,

valuations

no

longer

looked

cheap,

in

our

analysis,

particularly

in

light

of

increasing

regulatory

risks

in

China.

While

this

investment

ended

up

being

shorter

term

than

usual

for

a

Templeton

stock

holding,

we

strive

to

remain

nimble

and

flexible

enough

to

change

our

views

on

stocks

as

conditions

change.

In

this

case,

our

actions

were

vindicated

as

the

company

found

itself

on

the

wrong

side

of

regulatory

measures

intended

to

Top

10

Holdings

12/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Samsung

Electronics

Co.

Ltd.

4.7%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

4.0%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

BP

plc

3.3%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Hitachi

Ltd.

3.2%

Industrial

Conglomerates,

Japan

Royal

Dutch

Shell

plc

3.1%

Oil,

Gas

&

Consumable

Fuels,

Netherlands

NXP

Semiconductors

NV

2.9%

Semiconductors

&

Semiconductor

Equipment,

China

Housing

Development

Finance

Corp.

Ltd.

2.3%

Thrifts

&

Mortgage

Finance,

India

Bayer

AG

2.2%

Pharmaceuticals,

Germany

E.ON

SE

2.1%

Multi-Utilities,

Germany

AstraZeneca

plc

2.1%

Pharmaceuticals,

United

Kingdom

Templeton

Foreign

VIP

Fund

TF-5

Annual

Report

limit

time

spent

on

live-streaming

platforms,

which

led

to

a

downgrade

of

sky-high

growth

expectations

and

significant

share-price

pressure

after

we

exited

the

position.

The

energy

sector

was

led

by

Norwegian

oil

and

gas

major

Equinor,

which

advanced

as

the

price

of

oil

rallied

significantly

during

the

year.

We

believe

Equinor

continues

to

offer

leverage

to

improving

oil

and

gas

fundamentals

over

the

next

few

years,

while

also

being

regarded

as

an

ESG

leader

within

the

integrated

oil

sector.

The

stock’s

free

cash

flow

yield

should

rise

materially

in

the

coming

years,

in

our

assessment,

as

we

anticipate

commodity

prices

to

normalize

higher

and

as

Equinor

receives

some

benefit

from

near-term

tax

incentives

in

Norway.

We

remain

constructive

on

the

energy

sector

more

broadly.

COVID-19-related

production

disruptions

and

reduced

investment

due

to

environmental

pressures

have

curbed

output,

yet

energy

demand

has

remained

healthy

due

to

the

economic

recovery

and

reopening.

The

market

capitalization

of

the

energy

sector

relative

to

the

rest

of

the

world

fell

to

an

all-time

low

recently,

and

we

increased

our

exposure

in

2021

given

what

we

considered

compelling

opportunities

among

extremely

well-

managed

and

financially

savvy

oil

producers.

Many

of

these

companies

are

generating

double-digit

percentage

free

cash

flow

yields

and

creating

immense

value

for

shareholders

through

share

buybacks

and

dividends.

There

were

no

real

estate

stocks

among

the

top

10

contributors,

though

our

sole

utilities

holding,

German

power

provider

E.ON,

finished

among

the

biggest

individual

contributors

during

the

year

under

review.

The

company

benefited

from

strong

earnings

results

that

highlighted

improvements

across

multiple

business

lines.

We

continue

to

see

numerous

value

catalysts

for

E.ON

over

time,

including

balance

sheet

improvements,

lower

financing

costs

and

the

green

energy

transition,

which,

in

our

view,

will

spur

grid

investment

and

upgrades

in

Germany

that

should

ultimately

help

expand

E.ON’s

regulated-asset

base.

Turning

to

detractors,

stock

selection

in

the

financials,

industrials

and

health

care

sectors

negatively

impacted

relative

returns.

Our

financials

holdings

were

pressured

by

Hong

Kong-

based

life

insurer

AIA

Group.

Its

share

price

fell

as

regulatory

tightening

and

slowing

growth

in

China

led

to

decelerating

new

business

in

this

key

end-market.

However,

we

believe

that

current

growth

headwinds

in

China

are

likely

to

be

transient

and

that

long-term

growth

opportunities

in

this

attractive

market

remain

robust

for

an

industry

leader

like

AIA.

With

a

clear

competitive

advantage

centered

around

the

firm’s

premier

sales

agent

network

and

highly

profitable

protection

policies,

we

believe

AIA

is

well-positioned

for

success

over

the

long

term.

The

risk-reward

ratio

currently

appears

favorable,

in

our

view,

with

forward

price/embedded

value

toward

the

lower

end

of

the

stock’s

historical

valuation

range.

AIA

remains

a

core

holding

that

we

expect

will

benefit

from

Asia’s

rising

middle

class

and

compound

value

over

time.

Our

industrials

holdings

were

pressured

by

relatively

lackluster

overall

returns,

though

there

were

no

sector

holdings

among

the

Fund’s

biggest

detractors.

There

was,

however,

an

industrials

stock

among

the

Fund’s

top

contributors:

Japanese

industrial

technology

conglomerate

Hitachi.

Its

shares

rallied

after

the

firm

reported

rising

first-

half

2021

profits

on

strong

revenue

growth.

Hitachi

has

become

a

poster

child

for

successful

restructuring

and

is

emblematic

of

the

type

of

opportunities

we

are

finding

in

corporate

Japan.

In

the

past

decade,

Hitachi’s

corporate

governance

has

improved

markedly,

with

a

board

that

is

consistently

ranked

among

the

best

in

Japan

and

includes

10

independent

directors

(out

of

13

directors).

The

firm’s

operating

margin

has

also

improved

over

the

years,

more

than

doubling

since

the

start

of

the

firm’s

de-conglomeration

more

than

a

decade

ago,

while

management

has

prioritized

research

and

development

(R&D)

and

made

return

on

invested

capital

a

key

performance

metric.

After

years

of

far-sighted

portfolio

restructuring,

we

believe

Hitachi

is

now

a

major

player

in

all

the

right

places.

Its

Lumada

internet-

of-things

platform

is

poised

to

become

one

of

the

world’s

biggest

beneficiaries

of

the

digital

industrial

transformation,

in

our

view.

Hitachi

also

commands

dominant

positions

in

multiple

industries

critical

to

the

green

transformation.

It

controls

the

third-largest

auto-parts

maker

in

Japan,

with

leadership

in

high-growth

areas

such

as

electric

powertrains,

autonomous

driving

and

connected-car

technologies.

We

believe

its

energy

unit

also

stands

to

benefit

from

the

power-

infrastructure

upgrades

necessary

to

facilitate

smart-grid

development

and

electric

vehicle

deployment

worldwide,

and

its

low-emissions

railway

systems

should

benefit

from

global

decarbonization

efforts.

Hitachi

has

beaten

consensus

estimates

every

quarter

for

the

past

year,

but

in

our

analysis

at

period-end,

its

stock

still

traded

at

a

material

discount

to

its

sum-of-the-parts

valuation

and

less

than

half

its

Bloomberg

peer

group

on

price-to-free

cash

flow

ratio.

The

Fund’s

health

care

sector

holdings

were

pressured

by

Japanese

pharmaceuticals

firm

Takeda

Pharmaceutical

and

German

dialysis

specialist

Fresenius

Medical

Care.

Takeda’s

shares

slumped

after

investors

overlooked

the

company’s

first

share

buyback

in

13

years

and

focused

instead

on

concerns

relating

to

the

impending

loss

of

exclusivity

for

a

handful

of

meaningful

products.

Meanwhile,

Fresenius’s

share

price

was

pressured

by

weak

growth

Templeton

Foreign

VIP

Fund

TF-6

Annual

Report

and

high

mortality

rates

among

the

firm’s

medically-

vulnerable

customers

during

the

COVID-19

pandemic.

We

remain

constructive

on

both

stocks

longer

term.

In

the

pharmaceuticals

industry,

the

continual

race

to

invest

in

R&D

to

replace

revenues

lost

to

patent

expirations

creates

structural

challenges

that

too

often

prevent

sustainable

value

compounding.

Within

the

industry,

we

prefer

holding

higher-

growth

names

still

trading

at

what

we

view

as

reasonable

valuations

where

patent

expirations

are

manageable

over

the

next

10

years.

Within

medical

devices,

we

have

found

select

opportunities

in

turnaround

situations

benefiting

from

revamped

leadership,

in

addition

to

industry-leading

companies

with

attractive

future

growth

prospects

that

are

able

to

selectively

manage

near-term

pandemic-related

pressures.

From

a

geographical

standpoint,

Europe

was

the

biggest

regional

detractor

as

weakness

in

Germany

and

Switzerland

more

than

offset

strength

in

Norway

and

the

Netherlands.

On

the

other

hand,

Asian

holdings

contributed

to

the

Fund’s

relative

performance,

buoyed

by

stock

selection

in

Japan

and

our

early

decision

to

reduce

exposure

to

the

weak

Chinese

market.

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

12

months

ended

December

31,

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

December

31,

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

2

Fund

Expenses

Templeton

Foreign

VIP

Fund

TF-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$952.30

$5.53

$1,019.54

$5.72

1.12%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Foreign

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$13.57

$14.23

$13.01

$15.80

$13.89

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.23

0.32

c

0.44

0.29

0.30

Net

realized

and

unrealized

gains

(losses)

...........

0.39

(0.54)

1.19

(2.64)

2.03

Total

from

investment

operations

....................

0.62

(0.22)

1.63

(2.35)

2.33

Less

distributions

from:

Net

investment

income

..........................

(0.29)

(0.44)

(0.27)

(0.44)

(0.42)

Net

realized

gains

.............................

—

—

(0.14)

—

—

Total

distributions

...............................

(0.29)

(0.44)

(0.41)

(0.44)

(0.42)

Net

asset

value,

end

of

year

.......................

$13.90

$13.57

$14.23

$13.01

$15.80

Total

return

d

...................................

4.44%

(0.92)%

12.84%

(15.27)%

17.02%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.87%

0.86%

0.85%

0.83%

0.82%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.86%

0.84%

0.83%

0.81%

0.81%

e

Net

investment

income

...........................

1.58%

2.68%

c

3.25%

1.96%

1.99%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$114,563

$113,317

$121,948

$114,784

$152,684

Portfolio

turnover

rate

............................

26.13%

40.07%

28.52%

21.38%

26.81%

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.

e

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.

Annual

Report

TF-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$13.28

$13.93

$12.74

$15.47

$13.61

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.19

0.28

c

0.40

0.25

0.26

Net

realized

and

unrealized

gains

(losses)

...........

0.38

(0.53)

1.16

(2.58)

1.98

Total

from

investment

operations

....................

0.57

(0.25)

1.56

(2.33)

2.24

Less

distributions

from:

Net

investment

income

..........................

(0.26)

(0.40)

(0.23)

(0.40)

(0.38)

Net

realized

gains

.............................

—

—

(0.14)

—

—

Total

distributions

...............................

(0.26)

(0.40)

(0.37)

(0.40)

(0.38)

Net

asset

value,

end

of

year

.......................

$13.59

$13.28

$13.93

$12.74

$15.47

Total

return

d

...................................

4.16%

(1.16)%

12.53%

(15.44)%

16.69%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.11%

1.11%

1.10%

1.08%

1.07%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.11%

e

1.09%

1.08%

1.06%

1.06%

f

Net

investment

income

...........................

1.35%

2.42%

c

3.00%

1.71%

1.74%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$831,031

$1,084,789

$1,117,813

$1,060,101

$1,394,475

Portfolio

turnover

rate

............................

26.13%

40.07%

28.52%

21.38%

26.81%

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.

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

Foreign

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$13.54

$14.20

$12.96

$15.71

$13.71

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.18

0.28

c

0.39

0.24

0.23

Net

realized

and

unrealized

gains

(losses)

...........

0.39

(0.55)

1.20

(2.63)

2.03

Total

from

investment

operations

....................

0.57

(0.27)

1.59

(2.39)

2.26

Less

distributions

from:

Net

investment

income

..........................

(0.24)

(0.39)

(0.21)

(0.36)

(0.26)

Net

realized

gains

.............................

—

—

(0.14)

—

—

Total

distributions

...............................

(0.24)

(0.39)

(0.35)

(0.36)

(0.26)

Net

asset

value,

end

of

year

.......................

$13.87

$13.54

$14.20

$12.96

$15.71

Total

return

d

...................................

4.10%

(1.34)%

12.49%

(15.54)%

16.62%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.21%

1.21%

1.20%

1.18%

1.17%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.21%

e

1.19%

1.18%

1.16%

1.16%

f

Net

investment

income

...........................

1.22%

2.33%

c

2.90%

1.61%

1.64%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$91,428

$106,224

$113,681

$125,265

$159,944

Portfolio

turnover

rate

............................

26.13%

40.07%

28.52%

21.38%

26.81%

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.

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,

December

31,

2021

Templeton

Foreign

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TF-11

I

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

93.6%

Aerospace

&

Defense

2.5%

BAE

Systems

plc

.....................................

United

Kingdom

2,214,370

$

16,499,578

Dassault

Aviation

SA

...................................

France

85,498

9,239,918

25,739,496

Airlines

0.7%

a

International

Consolidated

Airlines

Group

SA

.................

United

Kingdom

3,911,187

7,605,901

Auto

Components

2.7%

a

Continental

AG

.......................................

Germany

128,419

13,481,737

Valeo

..............................................

France

469,185

14,137,747

27,619,484

Automobiles

4.5%

Bayerische

Motoren

Werke

AG

...........................

Germany

172,762

17,269,838

Honda

Motor

Co.

Ltd.

..................................

Japan

693,600

19,721,436

Isuzu

Motors

Ltd.

.....................................

Japan

756,600

9,411,287

46,402,561

Banks

11.4%

ING

Groep

NV

.......................................

Netherlands

999,391

13,883,558

Kasikornbank

PCL

....................................

Thailand

2,575,400

10,968,094

b

KB

Financial

Group,

Inc.,

ADR

...........................

South

Korea

464,206

21,427,749

Lloyds

Banking

Group

plc

...............................

United

Kingdom

25,913,630

16,814,438

Shinhan

Financial

Group

Co.

Ltd.

.........................

South

Korea

521,368

16,108,423

Standard

Chartered

plc

.................................

United

Kingdom

3,543,592

21,530,322

Sumitomo

Mitsui

Financial

Group,

Inc.

......................

Japan

510,700

17,428,423

118,161,007

Chemicals

1.3%

c

Covestro

AG,

144A,

Reg

S

..............................

Germany

216,099

13,289,956

Construction

&

Engineering

1.8%

Sinopec

Engineering

Group

Co.

Ltd.,

H

.....................

China

9,882,000

4,877,999

Taisei

Corp.

.........................................

Japan

447,600

13,603,276

18,481,275

Diversified

Financial

Services

0.7%

EXOR

NV

...........................................

Netherlands

85,710

7,666,500

Electronic

Equipment,

Instruments

&

Components

0.7%

a

Landis+Gyr

Group

AG

..................................

Switzerland

101,763

6,860,644

Energy

Equipment

&

Services

1.7%

SBM

Offshore

NV

.....................................

Netherlands

1,200,592

17,882,990

Food

&

Staples

Retailing

1.5%

Sundrug

Co.

Ltd.

......................................

Japan

581,900

15,203,604

Health

Care

Providers

&

Services

1.6%

Fresenius

Medical

Care

AG

&

Co.

KGaA

....................

Germany

249,526

16,163,538

Household

Durables

1.6%

Sony

Group

Corp.

.....................................

Japan

134,100

16,923,616

Industrial

Conglomerates

5.1%

b

CK

Hutchison

Holdings

Ltd.

..............................

United

Kingdom

3,085,500

19,868,566

Hitachi

Ltd.

..........................................

Japan

614,600

33,274,683

53,143,249

Insurance

3.1%

AIA

Group

Ltd.

.......................................

Hong

Kong

1,669,200

16,849,358

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Foreign

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Insurance

(continued)

Prudential

plc

........................................

United

Kingdom

902,158

$

15,588,213

32,437,571

Interactive

Media

&

Services

0.3%

a

Baidu,

Inc.,

ADR

......................................

China

23,330

3,471,271

Internet

&

Direct

Marketing

Retail

2.9%

a

Alibaba

Group

Holding

Ltd.

..............................

China

1,165,300

17,127,179

a,c

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...................

United

Kingdom

244,905

13,295,393

30,422,572

IT

Services

0.8%

a

Amadeus

IT

Group

SA

.................................

Spain

130,260

8,806,978

Machinery

1.6%

Komatsu

Ltd.

........................................

Japan

500,500

11,697,574

Toyota

Industries

Corp.

.................................

Japan

62,400

4,988,528

16,686,102

Media

1.5%

a

Informa

plc

..........................................

United

Kingdom

1,025,086

7,171,389

Nippon

Television

Holdings,

Inc.

..........................

Japan

285,400

2,894,099

TBS

Holdings,

Inc.

....................................

Japan

371,900

5,387,477

15,452,965

Metals

&

Mining

4.9%

Alamos

Gold,

Inc.,

A

...................................

Canada

956,452

7,355,116

ArcelorMittal

SA

......................................

Luxembourg

174,713

5,600,131

Sumitomo

Metal

Mining

Co.

Ltd.

..........................

Japan

466,900

17,672,828

Wheaton

Precious

Metals

Corp.

..........................

Brazil

458,400

19,677,305

50,305,380

Multiline

Retail

0.5%

Seria

Co.

Ltd.

........................................

Japan

164,700

4,767,681

Multi-Utilities

2.1%

E.ON

SE

............................................

Germany

1,575,398

21,876,704

Oil,

Gas

&

Consumable

Fuels

8.2%

BP

plc

..............................................

United

Kingdom

7,701,664

34,480,217

Cenovus

Energy,

Inc.

..................................

Canada

768,744

9,429,197

Equinor

ASA

.........................................

Norway

156,873

4,151,037

Galp

Energia

SGPS

SA,

B

..............................

Portugal

476,187

4,616,860

Royal

Dutch

Shell

plc,

B

................................

Netherlands

1,455,150

31,924,155

84,601,466

Pharmaceuticals

7.3%

AstraZeneca

plc

......................................

United

Kingdom

184,667

21,545,939

Bayer

AG

...........................................

Germany

425,850

22,724,258

Roche

Holding

AG

....................................

Switzerland

39,829

16,504,490

Takeda

Pharmaceutical

Co.

Ltd.

..........................

Japan

563,094

15,367,795

76,142,482

Professional

Services

1.9%

Adecco

Group

AG

.....................................

Switzerland

392,961

20,001,216

Real

Estate

Management

&

Development

2.8%

China

Overseas

Land

&

Investment

Ltd.

....................

China

3,591,000

8,507,562

CK

Asset

Holdings

Ltd.

.................................

Hong

Kong

2,268,500

14,311,641

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Foreign

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TF-13

See

Abbreviations

on

page

TF-

26

.

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

1,129,000

$

6,422,652

29,241,855

Semiconductors

&

Semiconductor

Equipment

8.9%

Infineon

Technologies

AG

...............................

Germany

449,967

20,699,417

NXP

Semiconductors

NV

...............................

China

134,300

30,590,854

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

...............

Taiwan

1,864,000

41,162,129

92,452,400

Technology

Hardware,

Storage

&

Peripherals

4.7%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

741,212

48,674,981

Thrifts

&

Mortgage

Finance

2.3%

Housing

Development

Finance

Corp.

Ltd.

...................

India

692,774

23,920,979

Tobacco

2.0%

Imperial

Brands

plc

....................................

United

Kingdom

945,557

20,704,852

Total

Common

Stocks

(Cost

$802,426,086)

.....................................

971,111,276

Warrants

Warrants

0.1%

Oil,

Gas

&

Consumable

Fuels

0.1%

a

Cenovus

Energy,

Inc.,

1/01/26

............................

Canada

75,750

569,698

Total

Warrants

(Cost

$255,280)

................................................

569,698

Total

Long

Term

Investments

(Cost

$802,681,366)

...............................

971,680,974

a

Short

Term

Investments

4.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

4.9%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

50,936,475

50,936,475

Total

Money

Market

Funds

(Cost

$50,936,475)

..................................

50,936,475

a

a

a

a

a

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.0%

†

Money

Market

Funds

0.0%

†

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

192,332

192,332

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$192,332)

.............................................................

192,332

Total

Short

Term

Investments

(Cost

$51,128,807

)

................................

51,128,807

a

Total

Investments

(Cost

$853,810,173)

98.6%

...................................

$1,022,809,781

Other

Assets,

less

Liabilities

1.4%

.............................................

14,211,525

Net

Assets

100.0%

...........................................................

$1,037,021,306

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Foreign

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-14

†

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

December

31,

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$26,585,349,

representing

2.6%

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

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TF-15

Templeton

Foreign

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$802,681,366

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

51,128,807

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$182,047)

...................................

$971,680,974

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

51,128,807

Receivables:

Capital

shares

sold

........................................................................

769,570

Dividends

and

interest

.....................................................................

3,326,990

European

Union

tax

reclaims

(Note

1

d

)

.........................................................

12,980,800

Total

assets

..........................................................................

1,039,887,141

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

186,186

Management

fees

.........................................................................

707,001

Distribution

fees

..........................................................................

201,328

Reports

to

shareholders

fees

................................................................

415,856

Payable

upon

return

of

securities

loaned

(Note

1

c

)

..................................................

192,332

Deferred

tax

...............................................................................

931,517

Contingent

fees

for

European

Union

tax

reclaims

(Note

1d)

...........................................

53,141

Accrued

expenses

and

other

liabilities

...........................................................

178,474

Total

liabilities

.........................................................................

2,865,835

Net

assets,

at

value

.................................................................

$1,037,021,306

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$893,617,211

Total

distributable

earnings

(losses)

.............................................................

143,404,095

Net

assets,

at

value

.................................................................

$1,037,021,306

Templeton

Foreign

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$114,562,892

Shares

outstanding

........................................................................

8,243,980

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.90

Class

2:

Net

assets,

at

value

.......................................................................

$831,030,735

Shares

outstanding

........................................................................

61,143,283

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.59

Class

4:

Net

assets,

at

value

.......................................................................

$91,427,679

Shares

outstanding

........................................................................

6,592,960

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.87

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TF-16

Templeton

Foreign

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$3,388,090)

Unaffiliated

issuers

........................................................................

$30,570,361

Non-controlled

affiliates

(Note

3e)

.............................................................

5,764

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

61,592

Non-controlled

affiliates

(Note

3

e

)

.............................................................

631

Other

income

(Note

1

d

)

......................................................................

467,018

Total

investment

income

...................................................................

31,105,366

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,211,662

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

2,623,170

    Class

4

................................................................................

350,363

Custodian

fees

.............................................................................

132,968

Reports

to

shareholders

fees

..................................................................

323,904

Professional

fees

...........................................................................

97,463

Trustees'

fees

and

expenses

..................................................................

12,278

Other

....................................................................................

173,628

Total

expenses

.........................................................................

13,925,436

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(61,529)

Net

expenses

.........................................................................

13,863,907

Net

investment

income

................................................................

17,241,459

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$180,372)

Unaffiliated

issuers

......................................................................

91,958,047

Foreign

currency

transactions

................................................................

(327,234)

Net

realized

gain

(loss)

..................................................................

91,630,813

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(43,395,191)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(1,093,392)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

578,267

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(43,910,316)

Net

realized

and

unrealized

gain

(loss)

............................................................

47,720,497

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$64,961,956

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.

Annual

Report

TF-17

Templeton

Foreign

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$17,241,459

$28,247,734

Net

realized

gain

(loss)

.................................................

91,630,813

(91,749,700)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(43,910,316)

51,110,547

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

64,961,956

(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

.............................................................

(1,488,235)

(3,329,454)

Class

2

.............................................................

(289,098,586)

9,474,525

Class

4

.............................................................

(17,919,519)

(3,288,883)

Total

capital

share

transactions

............................................

(308,506,340)

2,856,188

Net

increase

(decrease)

in

net

assets

...................................

(267,308,899)

(49,111,361)

Net

assets:

Beginning

of

year

.......................................................

1,304,330,205

1,353,441,566

End

of

year

...........................................................

$1,037,021,306

$1,304,330,205

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Templeton

Foreign

VIP

Fund

TF-18

Annual

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

December

31,

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

TF-19

Annual

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

TF-20

Annual

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

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

TF-21

Annual

Report

Templeton

Foreign

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

442,846

$6,305,829

806,359

$9,224,666

Shares

issued

in

reinvestment

of

distributions

..........

158,422

2,381,077

325,707

3,651,171

Shares

redeemed

...............................

(708,094)

(10,175,141)

(1,349,400)

(16,205,291)

Net

increase

(decrease)

..........................

(106,826)

$(1,488,235)

(217,334)

$(3,329,454)

Class

2

Shares:

Shares

sold

...................................

5,248,565

$73,689,135

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

...............................

(27,124,178)

(382,517,561)

(12,535,323)

(147,703,749)

Net

increase

(decrease)

..........................

(20,534,359)

$(289,098,586)

1,461,123

$9,474,525

Class

4

Shares:

Shares

sold

...................................

677,401

$9,654,639

1,219,556

$13,736,529

Shares

issued

in

reinvestment

of

distributions

..........

110,093

1,653,598

284,490

3,189,135

Shares

redeemed

...............................

(2,037,261)

(29,227,756)

(1,669,364)

(20,214,547)

Net

increase

(decrease)

..........................

(1,249,767)

$(17,919,519)

(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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TF-22

Annual

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.806%

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

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

year

ended

December

31,

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

TF-23

Annual

Report

Templeton

Foreign

VIP

Fund

(continued)

4.

Income

Taxes

During

the

year

ended December

31,

2021

the

Fund

utilized

$86,100,939

of

capital

loss

carryforwards.

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

December

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

358,133,144

$

(427,489,208)

$

—

$

—

$

50,936,475

50,936,475

$

5,764

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$—

$210,492,079

$(210,299,747)

$—

$—

$192,332

192,332

$631

Total

Affiliated

Securities

...

$120,292,539

$568,625,223

$(637,788,955)

$—

$—

$51,128,807

$6,395

Capital

loss

carryforwards

not

subject

to

expiration:

Long

term

................................................................................

$49,364,034

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$23,764,515

$39,576,130

Cost

of

investments

..........................................................................

$867,540,542

Unrealized

appreciation

........................................................................

$255,474,442

Unrealized

depreciation

........................................................................

(100,205,203)

Net

unrealized

appreciation

(depreciation)

..........................................................

$155,269,239

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$25,514,436

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TF-24

Annual

Report

Templeton

Foreign

VIP

Fund

(continued)

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatment

of

wash

sales,

EU

reclaims

and

passive

foreign

investment

company

shares.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$301,334,474

and

$548,383,488,

respectively.

At

December

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$192,332

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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:

4.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TF-25

Annual

Report

Templeton

Foreign

VIP

Fund

(continued)

• 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

December

31,

2021,

in

valuing

the

Fund's

assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Foreign

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

25,739,496

$

—

$

25,739,496

Airlines

..............................

—

7,605,901

—

7,605,901

Auto

Components

......................

—

27,619,484

—

27,619,484

Automobiles

..........................

—

46,402,561

—

46,402,561

Banks

...............................

21,427,749

96,733,258

—

118,161,007

Chemicals

...........................

—

13,289,956

—

13,289,956

Construction

&

Engineering

...............

—

18,481,275

—

18,481,275

Diversified

Financial

Services

.............

—

7,666,500

—

7,666,500

Electronic

Equipment,

Instruments

&

Components

........................

—

6,860,644

—

6,860,644

Energy

Equipment

&

Services

.............

—

17,882,990

—

17,882,990

Food

&

Staples

Retailing

.................

—

15,203,604

—

15,203,604

Health

Care

Providers

&

Services

..........

—

16,163,538

—

16,163,538

Household

Durables

....................

—

16,923,616

—

16,923,616

Industrial

Conglomerates

................

—

53,143,249

—

53,143,249

Insurance

............................

—

32,437,571

—

32,437,571

Interactive

Media

&

Services

..............

3,471,271

—

—

3,471,271

Internet

&

Direct

Marketing

Retail

..........

—

30,422,572

—

30,422,572

IT

Services

...........................

—

8,806,978

—

8,806,978

Machinery

............................

—

16,686,102

—

16,686,102

Media

...............................

—

15,452,965

—

15,452,965

Metals

&

Mining

.......................

27,032,421

23,272,959

—

50,305,380

Multiline

Retail

........................

—

4,767,681

—

4,767,681

Multi-Utilities

..........................

—

21,876,704

—

21,876,704

Oil,

Gas

&

Consumable

Fuels

.............

9,429,197

75,172,269

—

84,601,466

Pharmaceuticals

.......................

—

76,142,482

—

76,142,482

Professional

Services

...................

—

20,001,216

—

20,001,216

Real

Estate

Management

&

Development

....

—

29,241,855

—

29,241,855

Semiconductors

&

Semiconductor

Equipment

.

30,590,854

61,861,546

—

92,452,400

Technology

Hardware,

Storage

&

Peripherals

.

—

48,674,981

—

48,674,981

Thrifts

&

Mortgage

Finance

...............

—

23,920,979

—

23,920,979

Tobacco

.............................

—

20,704,852

—

20,704,852

Warrants

..............................

569,698

—

—

569,698

Short

Term

Investments

...................

51,128,807

—

—

51,128,807

Total

Investments

in

Securities

...........

$143,649,997

$879,159,784

a

$—

$1,022,809,781

a

Includes

foreign

securities

valued

at

$879,159,784,

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

TF-26

Annual

Report

Templeton

Foreign

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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,

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

TF-27

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Templeton

Foreign

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Templeton

Foreign

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

transfer

agent.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TF-28

Annual

Report

Templeton

Foreign

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

source

income

earned

by

the

Fund

during

the

fiscal

year

ended

December

31,

2021:

Amount

Reported

Foreign

Taxes

Paid

$3,212,660

Foreign

Source

Income

Earned

$24,703,611

TGB-1

Annual

Report

Templeton

Global

Bond

VIP

Fund

This

annual

report

for

Templeton

Global

Bond

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

202

1

Average

annual

total

return

of

Class

2

shares*

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

*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

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

–

2

1-Year

-4.99%

5-Year

-0.94%

10-Year

+1.13%

TGB-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/2

1

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance*

is

compared

to

the

performance

of

the

J.P.

Morgan

(JPM)

Global

Government

Bond

Index

(GGBI)

and

the

FTSE

World

Government

Bond

Index

(WGBI).

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

**Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

TGB-3

Annual

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

one-year

total

return

in

the

Performance

Summary.

For

comparison,

the

J.P.

Morgan

Global

Government

Bond

Index

posted

a

-6.50%

total

return

and

the

FTSE

World

Government

Bond

Index

posted

a

-6.97%

total

return

for

the

same

period.

1

Economic

and

Market

Overview

The

12-month

period

ended

December

31,

2021,

was

a

tale

of

two

halves.

The

first

half

was

characterized

by

exuberant

optimism

for

an

end

to

the

COVID-19

pandemic,

punctuated

by

a

surge

in

economic

activity

in

the

spring

as

lockdowns

were

eased

and

economies

reopened.

The

second

half

was

characterized

by

rising

inflation

and

incremental

shifts

towards

monetary

tightening,

with

several

emerging

markets

entering

rate

hiking

cycles

ahead

of

the

major

developed

markets.

On

the

whole,

sovereign

bond

yields

rose

in

most

countries

during

the

period

while

the

U.S.

dollar

(USD)

broadly

strengthened,

albeit

with

intermittent

episodes

of

declining

yields

in

various

countries

and

shifting

cycles

of

currency

appreciation/depreciation

in

individual

currency

pairings.

The

period

began

with

sovereign

bond

yields

rising

sharply

across

much

of

the

world

over

the

first

three

months.

The

yield

on

the

10-year

U.S.

Treasury

(UST)

note

would

reach

its

high

mark

for

the

entire

period

on

March

31

at

1.74%,

82

basis

points

(bps)

higher

than

where

it

finished

2020.

Vaccine

distributions,

ongoing

stimulus

measures

and

optimism

for

improving

economic

conditions

appeared

to

fuel

reflation

expectations

across

global

financial

markets.

However,

the

harsh

realities

of

the

worldwide

health

crisis

and

economic

hardship

continued

to

have

profound

consequences

for

lives

and

livelihoods

around

the

world

in

the

winter

and

early

spring

months

of

2021.

Vaccine

distributions

progressively

accelerated

in

many

countries

during

the

first

half

of

2021,

though

supply

setbacks

notably

affected

areas

of

Europe

in

March

and

April.

Governments

continued

to

struggle

with

balancing

the

needs

of

their

economies

with

the

health

of

their

citizens

during

much

of

the

first

quarter

of

2021

before

higher

vaccination

rates

and

lower

case

levels

enabled

many

regions

to

progressively

reopen

their

economies

in

the

spring.

Rising

yields

strained

valuations

across

many

areas

of

the

global

fixed

income

markets

during

2021’s

first

three

months.

USD-denominated

sovereign

credit

sectors

broadly

saw

negative

returns

in

January,

February

and

March

before

sharply

reversing

to

generate

offsetting

positive

returns

in

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

Asia

33.9%

North

America

20.6%

Latin

America

&

Caribbean

12.1%

Europe

3.9%

Middle East & Africa

1.7%

Other

0.4%

Short-Term

Investments

&

Other

Net

Assets

27.4%

Templeton

Global

Bond

VIP

Fund

TGB-4

Annual

Report

April,

May

and

June

as

UST

yields

pulled

back

from

their

late-March

peaks.

Sovereign

bond

yields

generally

resumed

their

rising

trends

in

May

and

June

amid

rising

inflation

in

many

areas

of

Europe

and

the

Americas.

In

currency

markets,

the

USD

broadly

strengthened

against

a

number

of

developed

market

and

emerging

market

currencies

in

the

first

quarter

of

2021,

reversing

the

broad-based

weakening

trend

from

the

second

half

of

2020.

Broad

USD

weakness

returned

in

April

and

May

before

the

strengthening

pattern

returned

in

June.

Business

and

consumer

confidence

surveys

notably

strengthened

in

multiple

regions

during

the

second

quarter

of

2021,

despite

some

growing

concerns

over

the

proliferation

of

the

Delta

variant

of

COVID-19

in

several

parts

of

the

world

in

June.

Economic

activity

continued

to

broadly

expand

in

many

countries

in

the

second

quarter,

largely

driven

by

strength

in

goods

sectors

and

manufacturing,

as

well

as

historically

high

savings

rates

in

many

countries

that

helped

fuel

demand.

On

the

whole,

the

second

quarter

would

represent

the

largest

quarterly

surge

in

GDP

for

most

countries

in

2021.

In

the

second

half

of

2021,

sovereign

bond

yields

would

largely

continue

to

rise

across

much

of

the

world

as

central

banks

continued

to

wade

deeper

into

monetary

tightening

cycles.

Developed

market

sovereign

bond

yields

initially

declined

in

July

and

early

August

as

the

Delta

variant

proliferated

across

multiple

regions.

The

10-year

UST

note’s

yield

dropped

to

1.17%

on

August

3

as

risk

aversion

resurfaced,

its

lowest

level

since

mid-February.

However,

sovereign

bond

yields

largely

trended

higher

from

that

point

through

the

end

of

the

year

as

investor

sentiments

appeared

to

refortify.

In

September,

the

U.S.

Federal

Reserve

(Fed)

announced

it

would

begin

tapering

its

asset

purchases

in

the

fourth

quarter

of

2021.

The

hawkish

shift

added

further

upward

pressure

on

UST

yields

and

drove

broad

strengthening

of

the

USD.

Sovereign

bond

yields

continued

to

trend

higher

in

many

regions

over

the

following

month,

with

the

10-

year

UST

note

reaching

1.70%

on

October

21,

its

highest

yield

since

early

April.

Sovereign

bond

yields

largely

maintained

their

levels

over

subsequent

weeks

until

the

Omicron

variant

of

COVID-19

emerged

in

the

final

days

of

November,

triggering

broad-based

risk

aversion

across

global

financial

markets

and

perceived

safe-haven

rallies

in

several

developed

market

assets.

Crude

oil

prices

dropped

around

20%

in

November

on

global

growth

concerns,

with

the

bulk

of

the

price

adjustments

occurring

in

the

wake

of

the

Omicron

news.

Sovereign

bond

yields

declined

in

several

developed

markets

in

late

November

and

early

December

on

the

heightened

risk

aversion

before

global

growth

concerns

eventually

dissipated

in

the

second

half

of

the

month,

even

as

COVID-19

cases

surged

to

record

levels.

Disease

severity

from

Omicron

appeared

milder

than

previous

variants,

leading

to

a

significant

decoupling

of

the

trend

lines

for

case

numbers

(rising

sharply)

and

mortality

rates

(moderating).

We

expected

COVID-19

variants

to

not

derail

global

growth

momentum,

though

the

risks

continued

to

bear

monitoring.

Commodity

and

energy

prices

ultimately

rebounded

in

December,

recovering

much

of

the

price

corrections

from

the

prior

month

as

reflation

sentiments

returned

to

global

financial

markets.

Manufacturing

and

business

surveys

largely

continued

to

remain

at

expansionary

levels

across

much

of

the

world

during

the

second

half

of

2021

but

moderated

from

their

mid-year

peaks.

Consumer

confidence

surveys

showed

similar

trends.

Labor

market

conditions

generally

continued

to

improve

in

many

countries,

though

labor

shortages

and

unemployment

remained

above

pre-pandemic

levels

in

several

regions.

Overall,

global

growth

showed

signs

of

moderating

from

the

historically

strong

rebound

in

the

first

half

of

2021

but

remained

largely

resilient,

in

our

view.

Inflation

figures

remained

historically

high

across

many

parts

of

the

world

during

the

second

half

of

the

period,

driven

by

a

combination

of

factors

that

included

resurgent

economic

activity,

supply

disruptions

in

certain

sectors,

and

the

effects

of

massive

fiscal

and

monetary

stimulus

measures.

Headline

inflation

(Consumer

Price

Index)

in

the

U.S.

remained

at

or

above

5.0%

year-over-year

from

May

through

the

end

of

2021,

coming

in

at

6.8%

in

November,

its

highest

level

since

1982.

A

growing

number

of

central

banks

pursued

monetary

tightening

measures

in

the

second

half

of

the

year,

with

persistent

inflationary

pressures

in

several

emerging

markets

motivating

aggressive

tightening

responses.

In

Latin

America,

Brazil’s

central

bank

hiked

its

policy

rate

by

725

bps

in

2021,

Chile

by

350

bps,

Peru

by

225

bps,

Mexico

by

150

bps

and

Colombia

by

125

bps.

In

eastern

Europe,

Russia

hiked

its

policy

rate

by

425

bps,

the

Czech

Republic

by

300

bps,

Hungary

by

180

bps

and

Poland

by

165

bps.

Most

countries

in

Asia

kept

policy

rates

unchanged

as

inflation

generally

remained

more

contained

and

within

central

bank

targets.

In

developed

markets,

most

central

banks

continued

to

keep

their

policy

rates

unchanged

at

extraordinarily

low

levels

during

the

year,

with

some

exceptions.

Norway

posted

two

25-bp

hikes

in

2021

to

bring

its

policy

rate

to

0.50%;

the

U.K.

Templeton

Global

Bond

VIP

Fund

TGB-5

Annual

Report

hiked

its

policy

rate

by

15

bps

to

0.25%

in

December,

its

first

rate

adjustment

since

March

2020;

New

Zealand

posted

consecutive

25-bp

hikes

in

October

and

November,

bringing

its

policy

rate

to

0.75%;

and

South

Korea

hiked

its

policy

rate

25

bps

in

August

and

November

to

1.00%.

Other

developed

market

central

banks,

such

as

in

Canada,

Sweden

and

Australia,

remained

on

hold

with

policy

rates

in

2021,

but

were

at

various

stages

of

tapering

their

asset

purchase

programs.

The

Fed

kept

the

federal

funds

target

rate

unchanged

(0.00%

to

0.25%)

at

each

of

its

policy

meetings

during

the

period

but

it

began

tapering

its

asset

purchases

in

November.

However,

the

Fed

quickly

shifted

in

a

hawkish

direction

at

its

December

meeting,

doubling

the

pace

of

its

asset

purchase

tapering

for

January.

The

accelerated

pace

put

the

asset

purchase

program

on

schedule

to

conclude

by

March

2022,

enabling

a

rate

hiking

cycle

to

start

in

March

or

May,

earlier

than

previously

indicated

at

the

November

meeting.

Additionally,

the

Fed’s

dot

plot

survey

in

December

showed

that

12

of

18

officials

expect

at

least

three

rate

hikes

in

2022,

a

substantial

change

from

the

September

survey

that

saw

nine

of

18

officials

project

no

hikes

until

2023.

We

expected

UST

term

premiums

to

ratchet

higher

in

upcoming

quarters,

with

a

bear-flattening

effect

driven

by

rising

yields

in

the

short-

to

intermediate-term

range

of

the

yield

curve.

The

European

Central

Bank

(ECB)

kept

monetary

policy

largely

unchanged

during

the

period,

leaving

the

main

refinancing

operations

rate

at

0.0%

and

the

main

deposit

facility

rate

at

-0.5%.

ECB

President

Christine

Lagarde

reaffirmed

at

the

October

and

December

meetings

that

key

rates

will

likely

remain

unchanged

through

2022.

The

ongoing

accommodative

policy

stance

from

the

ECB

appeared

likely

to

diverge

substantially

from

the

tightening

trajectory

of

the

Fed

in

2022.

We

expected

the

euro

to

weaken

against

the

USD

given

negative

rates

and

widening

rate

differentials

with

the

U.S.,

as

well

as

greater

headwinds

to

growth

in

Europe.

The

Bank

of

Japan

(BOJ)

also

kept

monetary

policy

largely

unchanged

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%.

In

December,

the

BOJ

announced

plans

to

scale

down

its

emergency

pandemic

purchasing

measures

by

tapering

its

corporate

debt

purchases

to

precrisis

levels

by

April.

We

expected

the

Japanese

yen

to

face

headwinds

from

widening

rate

differentials

with

the

U.S.

Overall,

most

developed

markets

saw

10-year

sovereign

bond

yields

rise

during

the

period,

including

Norway,

Sweden,

the

U.K.,

South

Korea,

Canada

and

core

Europe.

The

yield

on

the

10-year

UST

note

finished

the

year

at

1.51%,

59

bps

higher

than

where

it

ended

2020.

In

emerging

markets,

10-year

sovereign

bond

yields

rose

sharply

across

much

of

Latin

America,

including

Brazil,

Mexico,

Colombia,

Chile

and

Peru.

In

eastern

Europe,

10-year

yields

trended

higher

in

Poland,

Hungary,

Russia

and

the

Czech

Republic

on

elevated

inflation

and

ongoing

monetary

tightening.

Yields

also

rose

in

much

of

Asia,

including

India,

Indonesia,

Thailand

and

Singapore,

but

declined

in

China.

USD-denominated

sovereign

credit

sectors

broadly

saw

moderately

negative

returns

for

the

period

(with

some

exceptions

in

individual

countries),

as

the

investment-

grade

credit

tiers

came

under

pressure

from

the

rising

yield

environment

while

high-yield

credit

tiers

largely

endured

additional

spread

widening.

In

currency

markets,

the

USD

broadly

strengthened

against

most

developed

market

and

emerging

market

currencies

in

2021,

appreciating

against

the

euro,

the

British

pound,

the

Japanese

yen,

the

South

Korean

won,

the

Australian

dollar

and

the

New

Zealand

dollar.

In

specific

pairings,

the

Norwegian

krone

and

the

Canadian

dollar

appreciated

against

the

euro,

while

the

Swedish

krona

depreciated.

In

emerging

markets,

the

USD

depreciated

against

the

Chinese

yuan,

but

appreciated

against

most

currencies

in

Latin

America

and

Asia,

including

the

Brazilian

real,

Mexican

peso,

Colombian

peso,

Chilean

peso,

Indian

rupee,

Indonesian

rupiah,

Singapore

dollar

and

Thai

baht.

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.

Manager’s

Discussion

The

successful

development

of

vaccines

against

COVID-19

in

final

months

of

2020

substantially

changed

our

outlook

and

positioning

for

2021.

In

the

weeks

before

the

12-month

reporting

period

began,

we

significantly

shifted

the

emphasis

of

the

Fund’s

strategic

positioning

from

a

safe-haven

stance

toward

an

increasing

allocation

to

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

Templeton

Global

Bond

VIP

Fund

TGB-6

Annual

Report

increasingly

reengaged

with

the

world.

We

were

actively

constructive

in

a

number

of

regions

throughout

the

12-month

period,

particularly

in

areas

of

Asia

that

appeared

to

be

at

the

forefront

of

the

global

economic

recovery.

Overall,

the

Fund

was

focused

on

three

core

themes

during

the

period:

(1)

value

in

select

currencies

against

the

USD

and

the

euro,

specifically

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

against

the

USD

and

the

euro.

We

held

notable

exposures

to

the

Chinese

yuan,

the

South

Korean

won,

the

Indian

rupee,

the

Indonesian

rupiah

and

the

Japanese

yen

against

the

USD.

We

added

exposure

to

the

Singapore

dollar

in

April,

the

New

Zealand

dollar

in

June

and

the

Thai

baht

in

December.

We

held

an

overweighted

position

in

the

Japanese

yen

through

the

first

quarter

of

2021

before

reducing

it

to

around

a

neutral

weight

in

the

second

quarter.

In

the

fourth

quarter

of

2021,

we

reduced

our

Japanese

yen

position

to

a

significant

underweighting.

In

EMEA,

we

held

exposures

in

the

Norwegian

krone

and

Swedish

krona

against

the

euro

throughout

2021.

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.

After

exiting

our

local-currency

position

in

Brazil

in

the

first

quarter

of

2021

due

to

acute

political

and

economic

risks,

we

reestablished

the

position

in

the

second

quarter

as

political

compromises

in

the

spring

and

better-than

expected

economic

figures

supported

an

improved

outlook.

In

July,

we

added

to

our

local-currency

position

in

Brazil

and

reduced

our

position

in

Mexico.

We

also

saw

pockets

of

value

in

certain

USD-denominated

sovereign

credits

during

the

reporting

period,

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,

positions

in

the

Japanese

yen,

South

Korean

won,

Argentine

peso,

Colombian

peso

and

Chilean

peso

detracted

from

absolute

performance.

However,

the

Fund’s

net-negative

exposure

to

the

euro

contributed

to

absolute

results,

as

did

its

position

in

the

Norwegian

krone

against

the

euro.

Its

position

in

the

Chinese

yuan

against

the

USD

also

contributed

to

absolute

performance.

The

Fund

maintained

a

defensive

approach

regarding

interest

rates

in

developed

markets,

while

holding

duration

exposures

in

select

emerging

markets.

Duration

exposures

in

Argentina,

Indonesia

and

Ghana

contributed

to

absolute

results,

while

the

Fund’s

position

in

intermediate-term

USTs

detracted.

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.

Overweighted

duration

exposures

in

Argentina,

Indonesia

and

Ghana

contributed

to

relative

performance,

as

did

the

Fund’s

lack

of

duration

exposure

in

the

euro

area

and

underweighted

duration

exposure

in

USTs.

Among

currencies,

overweighted

positions

in

the

South

Korean

won,

Argentine

peso,

Colombian

peso

and

Chilean

peso

detracted

from

relative

results,

as

did

the

Fund’s

overweighted

position

in

the

Japanese

yen

for

part

of

the

period.

However,

its

underweighted

exposure

to

the

euro

contributed

to

relative

performance,

as

did

its

overweighted

position

in

the

Norwegian

krone

against

the

euro.

Its

overweighted

position

in

the

Chinese

yuan

also

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

December

31,

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

2

Fund

Expenses

Templeton

Global

Bond

VIP

Fund

TGB-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$977.70

$3.79

$1,021.37

$3.87

0.76%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Global

Bond

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.49

$16.63

$17.54

$17.17

$16.85

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.48

0.52

0.89

0.88

0.83

Net

realized

and

unrealized

gains

(losses)

...........

(1.15)

(1.31)

(0.54)

(0.51)

(0.46)

Total

from

investment

operations

....................

(0.67)

(0.79)

0.35

0.37

0.37

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

—

(1.35)

(1.26)

—

—

Net

realized

gains

.............................

—

—

—

—

(0.05)

Tax

return

of

capital

............................

—

(—)

c

—

—

—

Total

distributions

...............................

—

(1.35)

(1.26)

—

(0.05)

Net

asset

value,

end

of

year

.......................

$13.82

$14.49

$16.63

$17.54

$17.17

Total

return

d

...................................

(4.62)%

(4.73)%

1.89%

2.15%

2.15%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.51%

0.51%

0.53%

0.56%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.50%

0.46%

0.44%

0.47%

0.46%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.50%

e

0.45%

0.42%

0.45%

0.46%

e

Net

investment

income

...........................

3.42%

3.43%

5.22%

5.09%

4.81%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$204,318

$224,704

$322,794

$285,046

$286,502

Portfolio

turnover

rate

............................

27.65%

52.84%

22.58%

18.22%

37.97%

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.

e

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.

Annual

Report

TGB-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$13.82

$15.91

$16.83

$16.51

$16.25

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.43

0.46

0.82

0.81

0.76

Net

realized

and

unrealized

gains

(losses)

...........

(1.12)

(1.24)

(0.53)

(0.49)

(0.45)

Total

from

investment

operations

....................

(0.69)

(0.78)

0.29

0.32

0.31

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

—

(1.31)

(1.21)

—

—

Net

realized

gains

.............................

—

—

—

—

(0.05)

Tax

return

of

capital

............................

—

(—)

c

—

—

—

Total

distributions

...............................

—

(1.31)

(1.21)

—

(0.05)

Net

asset

value,

end

of

year

.......................

$13.13

$13.82

$15.91

$16.83

$16.51

Total

return

d

...................................

(4.99)%

(4.92)%

1.63%

1.94%

1.93%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.76%

0.75%

0.78%

0.81%

0.78%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.75%

0.71%

0.69%

0.72%

0.71%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.75%

e

0.70%

0.67%

0.70%

0.71%

e

Net

investment

income

...........................

3.17%

3.16%

4.97%

4.84%

4.56%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,859,619

$2,022,487

$2,389,610

$2,544,900

$2,730,081

Portfolio

turnover

rate

............................

27.65%

52.84%

22.58%

18.22%

37.97%

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.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Global

Bond

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$14.17

$16.27

$17.19

$16.88

$16.62

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.42

0.46

0.82

0.81

0.76

Net

realized

and

unrealized

gains

(losses)

...........

(1.13)

(1.27)

(0.55)

(0.50)

(0.45)

Total

from

investment

operations

....................

(0.71)

(0.81)

0.27

0.31

0.31

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

—

(1.29)

(1.19)

—

—

Net

realized

gains

.............................

—

—

—

—

(0.05)

Tax

return

of

capital

............................

—

(—)

c

—

—

—

Total

distributions

...............................

—

(1.29)

(1.19)

—

(0.05)

Net

asset

value,

end

of

year

.......................

$13.46

$14.17

$16.27

$17.19

$16.88

Total

return

d

...................................

(5.01)%

(5.00)%

1.48%

1.84%

1.76%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.86%

0.85%

0.88%

0.91%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.85%

0.81%

0.79%

0.82%

0.81%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.85%

e

0.80%

0.77%

0.80%

0.81%

e

Net

investment

income

...........................

3.07%

3.06%

4.87%

4.74%

4.46%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$71,454

$76,771

$90,272

$94,312

$98,934

Portfolio

turnover

rate

............................

27.65%

52.84%

22.58%

18.22%

37.97%

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.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Templeton

Global

Bond

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TGB-11

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

52.0%

Argentina

2.1%

a

Argentina

BONCER

,

Index

Linked,

1.2%,

3/18/22

.......

3,143,831,238

ARS

$

15,388,975

Index

Linked,

1.3%,

9/20/22

.......

674,980,531

ARS

3,320,634

Index

Linked,

1.4%,

3/25/23

.......

2,148,189,302

ARS

10,476,558

Index

Linked,

1.45%,

8/13/23

......

127,880,115

ARS

605,569

Index

Linked,

1.5%,

3/25/24

.......

1,835,793,892

ARS

8,786,559

b

Argentina

Bonos

del

Tesoro

Nacional

en

Pesos

Badlar

,

FRN,

36.165%,

(ARS

BADLAR

+

2%),

4/03/22

.........

24,036,000

ARS

117,434

Argentina

Government

Bond

,

16%,

10/17/23

.................

884,455,900

ARS

2,708,558

15.5%,

10/17/26

................

1,668,306,000

ARS

3,184,907

44,589,194

Brazil

2.2%

Brazil

Notas

do

Tesouro

Nacional

,

10%,

1/01/25

..................

41,020,000

BRL

7,258,584

10%,

1/01/27

..................

179,710,000

BRL

31,548,943

10%,

1/01/29

..................

17,690,000

BRL

3,076,444

10%,

1/01/31

..................

28,220,000

BRL

4,861,602

46,745,573

Colombia

3.2%

Colombia

Government

Bond

,

Senior

Bond,

4.375%,

3/21/23

.....

362,000,000

COP

88,516

Senior

Bond,

9.85%,

6/28/27

......

576,000,000

COP

161,377

Colombia

Titulos

de

Tesoreria

,

B,

7%,

5/04/22

.................

17,524,600,000

COP

4,352,876

B,

10%,

7/24/24

................

67,868,000,000

COP

17,868,343

B,

6.25%,

11/26/25

..............

32,036,000,000

COP

7,573,196

B,

7.5%,

8/26/26

...............

102,403,700,000

COP

24,998,576

B,

5.75%,

11/03/27

..............

22,036,000,000

COP

4,893,051

B,

6%,

4/28/28

.................

29,113,600,000

COP

6,470,557

B,

7.75%,

9/18/30

..............

8,450,000,000

COP

2,027,009

68,433,501

Ghana

1.7%

Ghana

Government

Bond

,

18.75%,

1/24/22

................

27,160,000

GHS

4,445,002

18.25%,

7/25/22

................

80,000

GHS

13,132

17.6%,

11/28/22

................

520,000

GHS

84,109

20.75%,

1/16/23

................

120,000

GHS

19,868

19%,

9/18/23

..................

150,000

GHS

24,225

18.85%,

9/28/23

................

3,100,000

GHS

499,354

19.25%,

11/27/23

...............

1,350,000

GHS

218,224

19.25%,

12/18/23

...............

110,000

GHS

17,771

19.75%,

3/25/24

................

26,840,000

GHS

4,355,465

19%,

11/02/26

.................

80,510,000

GHS

12,393,221

19.75%,

3/15/32

................

80,510,000

GHS

12,393,787

Senior

Note,

17.6%,

2/20/23

......

3,310,000

GHS

531,479

Senior

Note,

17.7%,

3/18/24

......

1,080,000

GHS

169,140

Senior

Note,

18.3%,

3/02/26

......

690,000

GHS

105,659

Senior

Note,

18.5%,

1/02/23

......

70,000

GHS

11,368

Senior

Note,

17.25%,

7/31/23

......

210,000

GHS

33,232

35,315,036

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

Annual

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)

India

4.6%

India

Government

Bond

,

8.2%,

2/15/22

.................

500,000,000

INR

$

6,748,248

6.84%,

12/19/22

................

98,000,000

INR

1,345,681

7.16%,

5/20/23

................

133,700,000

INR

1,852,228

8.83%,

11/25/23

................

1,468,100,000

INR

21,099,495

8.2%,

9/24/25

.................

297,100,000

INR

4,328,524

7.59%,

1/11/26

.................

1,629,000,000

INR

23,276,115

7.27%,

4/08/26

................

214,000,000

INR

3,026,155

Senior

Note,

5.22%,

6/15/25

......

313,000,000

INR

4,158,010

Senior

Note,

5.15%,

11/09/25

......

2,459,900,000

INR

32,463,573

98,298,029

Indonesia

10.6%

Indonesia

Government

Bond

,

FR35,

Senior

Bond,

12.9%,

6/15/22

.

71,229,000,000

IDR

5,209,197

FR39,

11.75%,

8/15/23

..........

5,491,000,000

IDR

433,561

FR40,

11%,

9/15/25

.............

46,856,000,000

IDR

3,964,404

FR43,

10.25%,

7/15/22

..........

147,832,000,000

IDR

10,771,484

FR44,

10%,

9/15/24

.............

4,454,000,000

IDR

356,694

FR46,

9.5%,

7/15/23

............

226,780,000,000

IDR

17,271,240

FR61,

7%,

5/15/22

..............

244,849,000,000

IDR

17,429,332

FR63,

5.625%,

5/15/23

..........

289,067,000,000

IDR

20,818,300

FR70,

8.375%,

3/15/24

..........

53,132,000,000

IDR

4,060,360

FR81,

6.5%,

6/15/25

............

599,166,000,000

IDR

44,309,487

FR86,

5.5%,

4/15/26

............

1,421,313,000,000

IDR

101,329,321

225,953,380

Mexico

4.6%

Mexican

Bonos

Desarr

Fixed

Rate

,

M,

6.5%,

6/09/22

...............

930,494,000

MXN

45,348,276

M,

Senior

Bond,

8%,

12/07/23

.....

836,490,000

MXN

41,330,632

M,

Senior

Note,

6.75%,

3/09/23

....

229,144,000

MXN

11,184,889

97,863,797

Norway

3.9%

c

Norway

Government

Bond

,

144A,

Reg

S,

2%,

5/24/23

........

315,007,000

NOK

36,177,281

144A,

Reg

S,

3%,

3/14/24

........

265,052,000

NOK

31,121,760

144A,

Reg

S,

1.75%,

3/13/25

......

89,312,000

NOK

10,205,786

144A,

Reg

S,

1.5%,

2/19/26

.......

52,969,000

NOK

5,990,471

83,495,298

South

Korea

18.7%

Korea

Monetary

Stabilization

Bond

,

1.285%,

2/02/22

................

33,410,000,000

KRW

28,104,114

Senior

Note,

0.87%,

2/02/23

......

59,850,000,000

KRW

50,028,828

Senior

Note,

0.905%,

4/02/23

......

61,390,000,000

KRW

51,253,062

Korea

Treasury

Bond

,

1.25%,

12/10/22

................

77,860,000,000

KRW

65,427,884

3%,

3/10/23

...................

3,919,000,000

KRW

3,356,573

2.25%,

9/10/23

................

88,312,000,000

KRW

75,062,515

0.875%,

12/10/23

...............

22,287,000,000

KRW

18,470,993

1.875%,

3/10/24

................

33,811,000,000

KRW

28,535,387

1.375%,

9/10/24

................

75,881,910,000

KRW

63,112,689

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TGB-13

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

$

16,045,955

399,398,000

Supranational

0.4%

d

Inter-American

Development

Bank,

Senior

Bond,

7.5%,

12/05/24

......

200,000,000

MXN

9,663,987

Total

Foreign

Government

and

Agency

Securities

(Cost

$1,332,266,753)

...........

1,109,755,795

U.S.

Government

and

Agency

Securities

20.6%

United

States

20.6%

U.S.

Treasury

Notes

,

1.5%,

10/31/24

................

64,160,000

65,172,525

1.5%,

11/30/24

.................

50,420,000

51,217,660

1.75%,

12/31/24

................

22,672,000

23,192,748

2%,

2/15/25

...................

49,140,000

50,621,878

2.125%,

5/15/25

................

58,760,000

60,832,667

2.875%,

5/31/25

................

76,680,000

81,313,749

2.625%,

12/31/25

...............

44,803,000

47,379,172

1.625%,

2/15/26

................

24,220,000

24,640,066

2.125%,

5/31/26

................

11,063,000

11,492,555

1.625%,

10/31/26

...............

24,220,000

24,637,227

440,500,247

Total

U.S.

Government

and

Agency

Securities

(Cost

$437,342,513)

................

440,500,247

Total

Long

Term

Investments

(Cost

$1,769,609,266)

.............................

1,550,256,042

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.2%

Calls

-

Over-the-Counter

Currency

Options

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

21.41

MXN,

Expires

2/03/22

..

1

42,504,000

165,461

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

22.32

MXN,

Expires

8/29/22

..

1

16,562,000

409,675

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

May

Strike

Price

22.34

MXN,

Expires

5/31/22

.......

1

43,701,000

570,586

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

May

Strike

Price

22.69

MXN,

Expires

5/24/22

.......

1

118,329,000

1,160,578

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

16,875,000

480,919

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

9,033,000

257,431

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

Annual

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)

Calls

-

Over-the-Counter

(continued)

Currency

Options

(continued)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

26.30

MXN,

Expires

10/19/23

.

1

5,472,000

$

155,946

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

29.19

MXN,

Expires

8/29/24

..

1

20,304,000

622,406

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

29.71

MXN,

Expires

8/09/24

..

1

20,304,000

552,778

4,375,780

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

February

Strike

Price

19.37

MXN,

Expires

2/24/22

..

1

8,281,000

5,559

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

19.41

MXN,

Expires

8/11/22

..

1

9,700,000

45,068

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

2,736,000

27,253

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

8,437,000

84,039

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

19.85

MXN,

Expires

10/19/23

.

1

4,517,000

44,993

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

20.64

MXN,

Expires

2/08/22

..

1

13,274,000

192,551

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

21.27

MXN,

Expires

2/28/22

..

1

7,284,000

263,333

662,796

Total

Options

Purchased

(Cost

$12,177,211)

....................................

5,038,576

Short

Term

Investments

26.3%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

18.0%

Argentina

0.3%

a,e

Letras

de

la

Nacion

Argentina

con

Ajuste

por

CER

,

Index

Linked,

2/28/22

............

319,208,969

ARS

1,552,429

Index

Linked,

4/18/22

............

709,205,238

ARS

3,469,336

Index

Linked,

5/23/22

............

289,421,591

ARS

1,409,882

Index

Linked,

6/30/22

............

145,592,583

ARS

710,302

7,141,949

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

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

5.9%

e

Brazil

Letras

do

Tesouro

Nacional

,

1/01/24

......................

71,110,000

BRL

$

10,351,900

7/01/24

......................

308,450,000

BRL

42,850,547

1/01/25

......................

549,700,000

BRL

72,898,659

126,101,106

Japan

4.6%

e

Japan

Treasury

Bills

,

2/07/22

......................

4,068,300,000

JPY

35,349,440

2/10/22

......................

1,467,900,000

JPY

12,754,697

2/21/22

......................

905,000,000

JPY

7,863,892

3/28/22

......................

4,835,400,000

JPY

42,021,486

97,989,515

Singapore

4.7%

e

Singapore

Treasury

Bills

,

1/14/22

......................

45,410,000

SGD

33,664,384

2/11/22

......................

6,460,000

SGD

4,787,101

2/18/22

......................

83,640,000

SGD

61,974,116

100,425,601

Thailand

2.5%

e

Thailand

Treasury

Bills

,

3/24/22

......................

1,039,700,000

THB

31,274,611

5/11/22

......................

30,260,000

THB

909,657

6/22/22

......................

715,680,000

THB

21,501,969

53,686,237

Total

Foreign

Government

and

Agency

Securities

(Cost

$400,829,036)

............

385,344,408

U.S.

Government

and

Agency

Securities

3.9%

United

States

3.9%

e

U.S.

Treasury

Bills

,

1/27/22

......................

64,460,000

64,459,033

3/17/22

......................

19,265,000

19,263,037

83,722,070

Total

U.S.

Government

and

Agency

Securities

(Cost

$83,721,733)

.................

83,722,070

Industry

Shares

Money

Market

Funds

4.4%

United

States

4.4%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

94,380,135

94,380,135

Total

Money

Market

Funds

(Cost

$94,380,135)

..................................

94,380,135

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$578,930,904

)

...............................

563,446,613

a

a

a

Total

Investments

(Cost

$2,360,717,381)

99.1%

..................................

$2,118,741,231

Options

Written

(0.1)%

.......................................................

(3,196,932)

Other

Assets,

less

Liabilities

1.0%

.............................................

19,847,037

Net

Assets

100.0%

...........................................................

$2,135,391,336

a

a

a

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

Annual

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

h

Options

Written

(0.1)%

a

Calls

-

Over-the-Counter

a

Currency

Options

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

20.64

MXN,

Expires

2/08/22

..

1

13,274,000

$

(190,151)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

20.86

MXN,

Expires

2/03/22

..

1

14,168,000

(132,123)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

February

Strike

Price

21.71

MXN,

Expires

2/24/22

..

1

9,523,000

(49,080)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

22.06

MXN,

Expires

8/11/22

..

1

9,700,000

(249,769)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

22.73

MXN,

Expires

2/03/22

..

1

28,336,000

(17,717)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

23.05

MXN,

Expires

2/24/22

..

1

54,938,000

(66,777)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

23.79

MXN,

Expires

2/28/22

..

1

14,567,000

(10,507)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

May

Strike

Price

23.80

MXN,

Expires

5/31/22

.......

1

21,851,000

(119,817)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

May

Strike

Price

25.65

MXN,

Expires

5/24/22

.......

1

46,486,000

(93,435)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

34.95

MXN,

Expires

10/19/23

.

1

4,517,000

(27,322)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

34.95

MXN,

Expires

10/19/23

.

1

3,596,000

(21,751)

(978,449)

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

20.50

MXN,

Expires

8/11/22

..

1

9,700,000

(160,314)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

February

Strike

Price

20.72

MXN,

Expires

2/28/22

..

1

7,284,000

(132,121)

Foreign

Exchange

USD/MXN,

Counterparty

MSCO,

August

Strike

Price

21.35

MXN,

Expires

8/29/22

..

1

16,562,000

(579,021)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

16,875,000

(724,381)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

9,033,000

(387,753)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TGB-17

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

a

h

Options

Written

(continued)

a

Puts

-

Over-the-Counter

(continued)

a

Currency

Options

(continued)

Foreign

Exchange

USD/MXN,

Counterparty

CITI,

October

Strike

Price

22.32

MXN,

Expires

10/19/23

.

1

5,472,000

$

(234,893)

(2,218,483)

Total

Options

Written

(Premiums

received

$5,690,671)

...........................

$

(3,196,932)

#

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(g)

.

b

The

coupon

rate

shown

represents

the

rate

at

period

end.

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

December

31,

2021,

the

aggregate

value

of

these

securities

was

$83,495,298,

representing

3.9%

of

net

assets.

d

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

e

The

security

was

issued

on

a

discount

basis

with

no

stated

coupon

rate.

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

written

options.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-18

At

December

31,

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

3,325,454,736

4,063,808

1/07/22

$

—

$

(162,338)

Chilean

Peso

......

GSCO

Buy

2,535,965,199

3,089,589

1/10/22

—

(115,614)

Chinese

Yuan

......

CITI

Buy

125,329,450

19,093,457

1/12/22

582,269

—

Chilean

Peso

......

JPHQ

Buy

5,487,100,000

6,910,705

1/13/22

—

(478,600)

Mexican

Peso

......

MSCO

Sell

294,485,591

13,996,097

1/13/22

—

(331,525)

Chilean

Peso

......

GSCO

Buy

1,757,352,262

2,174,941

1/14/22

—

(115,222)

Chinese

Yuan

......

HSBK

Buy

135,702,480

20,849,911

1/18/22

445,891

—

Euro

.............

DBAB

Sell

8,522,048

86,680,310

SEK

1/18/22

—

(113,699)

South

Korean

Won

..

JPHQ

Buy

8,539,200,000

7,434,442

1/19/22

—

(255,630)

Chilean

Peso

......

JPHQ

Buy

6,390,810,000

7,831,875

1/21/22

—

(348,856)

Euro

.............

JPHQ

Sell

19,918,309

202,667,400

NOK

1/21/22

323,351

—

South

Korean

Won

..

CITI

Buy

8,470,100,000

7,374,924

1/21/22

—

(254,721)

Singapore

Dollar

....

MSCO

Buy

4,660,000

3,430,304

1/24/22

24,414

—

South

Korean

Won

..

JPHQ

Buy

8,365,800,000

7,265,763

1/24/22

—

(234,007)

Singapore

Dollar

....

CITI

Buy

4,670,000

3,464,572

1/26/22

—

(2,486)

Indian

Rupee

......

JPHQ

Buy

205,330,400

2,660,065

1/27/22

89,524

—

Euro

.............

CITI

Sell

4,743,210

7,054,790

CAD

2/03/22

179,764

—

Euro

.............

HSBK

Sell

17,629,932

26,134,788

CAD

2/03/22

599,357

—

Chilean

Peso

......

JPHQ

Buy

3,325,445,264

4,051,666

2/07/22

—

(167,589)

Euro

.............

CITI

Sell

20,106,927

2,605,214,355

JPY

2/07/22

—

(248,982)

Japanese

Yen

......

CITI

Sell

2,587,569,996

20,106,927

EUR

2/07/22

402,320

—

Australian

Dollar

....

CITI

Sell

2,393,000

1,766,285

2/10/22

27,219

—

Chilean

Peso

......

GSCO

Buy

1,956,400,000

2,408,855

2/10/22

—

(124,936)

Indian

Rupee

......

CITI

Buy

149,657,200

1,977,500

2/10/22

23,568

—

Japanese

Yen

......

CITI

Buy

194,150,000

1,765,880

2/10/22

—

(78,594)

Japanese

Yen

......

CITI

Sell

194,150,000

1,708,075

2/10/22

20,789

—

Chilean

Peso

......

GSCO

Buy

3,439,478,985

4,355,976

2/11/22

—

(341,361)

Chinese

Yuan

......

JPHQ

Buy

188,842,190

29,648,162

2/14/22

—

(63,102)

Euro

.............

CITI

Buy

3,400,000

3,843,836

2/16/22

27,342

—

Euro

.............

CITI

Sell

3,400,000

3,900,410

2/16/22

29,232

—

Australian

Dollar

....

MSCO

Sell

34,166,000

25,087,137

2/17/22

257,453

—

Chinese

Yuan

......

JPHQ

Buy

94,285,000

14,656,687

2/22/22

107,709

—

Euro

.............

JPHQ

Buy

3,420,000

3,865,928

2/23/22

28,540

—

Euro

.............

JPHQ

Sell

6,229,845

7,306,032

2/23/22

211,900

—

Euro

.............

CITI

Sell

15,587,141

2,003,275,010

JPY

2/24/22

—

(338,520)

Japanese

Yen

......

CITI

Sell

1,999,923,774

15,587,141

EUR

2/24/22

367,647

—

Euro

.............

BOFA

Sell

1,336,000

1,572,321

2/25/22

50,916

—

Euro

.............

MSCO

Sell

30,744,500

36,277,434

2/28/22

1,264,318

—

Chinese

Yuan

......

BOFA

Buy

184,017,140

28,136,317

3/09/22

653,578

—

Chilean

Peso

......

GSCO

Buy

4,454,280,000

5,249,407

3/10/22

—

(73,265)

Chinese

Yuan

......

HSBK

Buy

136,590,880

21,333,325

3/15/22

28,088

—

Euro

.............

DBAB

Sell

6,514,861

66,742,600

NOK

3/15/22

141,869

—

Chilean

Peso

......

GSCO

Buy

13,397,426,068

15,976,910

3/16/22

—

(423,090)

Euro

.............

DBAB

Sell

35,535,012

364,056,421

SEK

3/16/22

—

(208,940)

Euro

.............

JPHQ

Sell

19,374,354

198,445,700

NOK

3/16/22

416,577

—

Indian

Rupee

......

HSBK

Buy

242,055,750

3,170,655

3/16/22

51,729

—

Australian

Dollar

....

CITI

Sell

11,476,000

8,208,668

3/21/22

—

(132,004)

New

Zealand

Dollar

.

CITI

Buy

12,470,000

8,419,120

3/21/22

102,320

—

New

Zealand

Dollar

.

JPHQ

Buy

47,380,000

31,935,380

3/21/22

441,995

—

Australian

Dollar

....

CITI

Sell

16,628,000

12,031,189

3/28/22

—

(54,229)

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Global

Bond

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

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)

Euro

.............

HSBK

Sell

25,254,215

3,254,384,443

JPY

3/28/22

$

—

$

(484,065)

Japanese

Yen

......

CITI

Buy

1,395,020,320

12,719,583

3/28/22

—

(590,518)

Japanese

Yen

......

CITI

Sell

1,395,020,320

12,278,055

3/28/22

148,989

—

Japanese

Yen

......

HSBK

Sell

3,291,181,301

25,254,215

EUR

3/28/22

325,892

(161,759)

Euro

.............

CITI

Sell

67,857,227

8,860,050,290

JPY

3/31/22

—

(298,078)

Euro

.............

JPHQ

Sell

2,453,477

25,140,000

SEK

3/31/22

—

(14,500)

Japanese

Yen

......

CITI

Sell

4,794,395,400

37,350,000

EUR

3/31/22

880,150

—

Euro

.............

GSCO

Sell

1,230,811

1,402,140

4/01/22

—

(617)

Euro

.............

JPHQ

Sell

22,498,409

230,077,650

NOK

4/01/22

423,645

—

Indian

Rupee

......

JPHQ

Buy

205,911,800

2,712,221

4/07/22

18,418

—

Indian

Rupee

......

CITI

Buy

200,059,600

2,641,051

4/08/22

11,654

—

Indian

Rupee

......

JPHQ

Buy

266,347,200

3,510,573

4/08/22

21,077

—

Indian

Rupee

......

CITI

Buy

241,153,200

3,163,080

4/12/22

32,933

—

Indian

Rupee

......

HSBK

Buy

241,380,400

3,160,670

4/12/22

38,353

—

Mexican

Peso

......

CITI

Buy

15,601,040

714,137

4/13/22

32,526

—

Mexican

Peso

......

CITI

Sell

492,586,500

23,546,200

4/13/22

—

(28,895)

Euro

.............

DBAB

Sell

13,683,124

138,688,215

SEK

4/14/22

—

(252,156)

Euro

.............

DBAB

Sell

10,365,961

104,016,200

SEK

4/19/22

—

(308,197)

Singapore

Dollar

....

MSCO

Buy

5,880,000

4,364,122

4/21/22

—

(6,172)

Euro

.............

HSBK

Sell

25,253,939

3,354,468,074

JPY

4/25/22

377,348

—

Euro

.............

HSBK

Sell

11,000,000

12,868,900

4/27/22

323,184

—

Euro

.............

JPHQ

Sell

13,349,846

15,095,071

4/27/22

—

(130,690)

Euro

.............

HSBK

Sell

17,594,593

26,135,009

CAD

5/03/22

588,685

—

Euro

.............

CITI

Sell

69,644,069

78,901,158

5/09/22

—

(555,966)

Chilean

Peso

......

GSCO

Buy

3,292,433,571

4,150,929

5/11/22

—

(364,870)

Euro

.............

DBAB

Sell

55,702,798

567,099,454

SEK

5/18/22

—

(782,828)

Euro

.............

HSBK

Sell

14,254,000

16,150,138

5/18/22

—

(116,390)

Mexican

Peso

......

CITI

Sell

446,586,500

20,174,215

5/31/22

—

(993,774)

Australian

Dollar

....

CITI

Sell

48,124,000

35,974,571

6/07/22

987,879

—

Japanese

Yen

......

CITI

Buy

4,061,448,000

35,974,567

6/07/22

—

(621,373)

Japanese

Yen

......

CITI

Sell

4,061,448,000

35,628,299

6/07/22

275,105

—

Chinese

Yuan

......

BOFA

Buy

220,626,460

34,155,241

6/08/22

157,917

—

Chinese

Yuan

......

CITI

Buy

284,452,570

44,037,677

6/09/22

199,234

—

Chinese

Yuan

......

JPHQ

Buy

109,163,880

16,907,539

6/10/22

68,085

—

Euro

.............

DBAB

Sell

5,386,204

54,462,600

SEK

6/15/22

—

(119,771)

Euro

.............

DBAB

Sell

6,540,211

66,595,700

NOK

6/15/22

64,353

—

Euro

.............

DBAB

Sell

2,971,000

30,252,800

NOK

6/16/22

29,141

—

New

Zealand

Dollar

.

BOFA

Buy

10,600,000

7,106,240

6/17/22

120,246

—

Euro

.............

DBAB

Sell

9,278,905

95,003,000

NOK

6/20/22

147,695

—

Euro

.............

CITI

Sell

32,632,111

335,990,000

NOK

6/21/22

730,639

—

Indian

Rupee

......

JPHQ

Buy

1,020,100,000

13,121,017

6/21/22

281,725

—

Euro

.............

DBAB

Sell

10,346,782

104,016,200

SEK

7/19/22

—

(303,493)

Euro

.............

JPHQ

Sell

20,129,401

198,445,700

NOK

7/19/22

—

(577,142)

Japanese

Yen

......

CITI

Buy

1,948,164,000

17,208,988

7/20/22

—

(236,728)

Japanese

Yen

......

CITI

Sell

1,948,164,000

17,103,576

7/20/22

131,315

—

Euro

.............

BOFA

Sell

6,176,410

8,949,000

CAD

8/02/22

3,790

—

Euro

.............

HSBK

Sell

45,226,203

65,353,672

CAD

8/03/22

—

(112,471)

Total

Forward

Exchange

Contracts

...................................................

$13,319,657

$(11,727,763)

Net

unrealized

appreciation

(depreciation)

............................................

$1,591,894

*

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

A

bbreviations

on

page

TGB-

36

.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-20

Templeton

Global

Bond

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,266,337,246

Cost

-

Non-controlled

affiliates

(Note

3e)

........................................................

94,380,135

Value

-

Unaffiliated

issuers

..................................................................

$2,024,361,096

Value

-

Non-controlled

affiliates

(Note

3e)

.......................................................

94,380,135

Cash

....................................................................................

198,945

Restricted

cash

for

OTC

derivative

contracts

(Note

1d)

...............................................

5,760,000

Restricted

currency,

at

value

(cost

$9,620)

(Note

1

e

)

.................................................

9,531

Foreign

currency,

at

value

(cost

$3,456,424)

......................................................

3,492,420

Receivables:

Investment

securities

sold

...................................................................

2,084

Capital

shares

sold

........................................................................

515,950

Interest

.................................................................................

15,598,591

Deposits

with

brokers

for:

OTC

derivative

contracts

..................................................................

2,430,006

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

13,319,657

Total

assets

..........................................................................

2,160,068,415

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

513,981

Management

fees

.........................................................................

827,465

Distribution

fees

..........................................................................

415,713

Due

to

brokers

.............................................................................

5,760,000

Options

written,

at

value

(premiums

received

$5,690,671)

............................................

3,196,932

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

11,727,763

Deferred

tax

...............................................................................

1,354,589

Accrued

expenses

and

other

liabilities

...........................................................

880,636

Total

liabilities

.........................................................................

24,677,079

Net

assets,

at

value

.................................................................

$2,135,391,336

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,588,328,309

Total

distributable

earnings

(losses)

.............................................................

(452,936,973)

Net

assets,

at

value

.................................................................

$2,135,391,336

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TGB-21

Templeton

Global

Bond

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$204,318,289

Shares

outstanding

........................................................................

14,789,423

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.82

Class

2:

Net

assets,

at

value

.......................................................................

$1,859,619,312

Shares

outstanding

........................................................................

141,580,297

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.13

Class

4:

Net

assets,

at

value

.......................................................................

$71,453,735

Shares

outstanding

........................................................................

5,310,500

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$13.46

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TGB-22

Templeton

Global

Bond

VIP

Fund

Investment

income:

Dividends:

Non-controlled

affiliates

(Note

3e)

.............................................................

$15,792

Interest:

(net

of

foreign

taxes

of

$3,028,687)

Unaffiliated

issuers:

Inflation

principal

adjustments

..............................................................

16,413,732

Paid

in

cash

a

...........................................................................

71,605,472

Total

investment

income

...................................................................

88,034,996

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,345,572

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

4,872,782

    Class

4

................................................................................

265,985

Custodian

fees

(Note

4

)

......................................................................

452,018

Reports

to

shareholders

fees

..................................................................

400,732

Professional

fees

...........................................................................

125,106

Trustees'

fees

and

expen

ses

..................................................................

20,830

Other

....................................................................................

112,681

Total

expenses

.........................................................................

16,595,706

Expense

reductions

(Note

4

)

...............................................................

(17,176)

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(139,823)

Net

expenses

.........................................................................

16,438,707

Net

investment

income

................................................................

71,596,289

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

(119,483,049)

Written

options

...........................................................................

3,082,453

Foreign

currency

transactions

................................................................

167,242

Forward

exchange

contracts

.................................................................

(69,375,413)

Net

realized

gain

(loss)

..................................................................

(185,608,767)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(65,777,559)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(165,198)

Written

options

...........................................................................

4,169,649

Forward

exchange

contracts

.................................................................

62,079,757

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

(68,360)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

238,289

Net

realized

and

unrealized

gain

(loss)

............................................................

(185,370,478)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(113,774,189)

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.

Annual

Report

TGB-23

Templeton

Global

Bond

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$71,596,289

$78,553,753

Net

realized

gain

(loss)

.................................................

(185,608,767)

(255,348,476)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

238,289

42,872,770

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(113,774,189)

(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

.............................................................

(9,857,158)

(61,786,697)

Class

2

.............................................................

(63,558,697)

(74,631,398)

Class

4

.............................................................

(1,380,150)

(2,661,086)

Total

capital

share

transactions

............................................

(74,796,005)

(139,079,181)

Net

increase

(decrease)

in

net

assets

...................................

(188,570,194)

(478,714,976)

Net

assets:

Beginning

of

year

.......................................................

2,323,961,530

2,802,676,506

End

of

year

...........................................................

$2,135,391,336

$2,323,961,530

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Templeton

Global

Bond

VIP

Fund

TGB-24

Annual

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

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

TGB-25

Annual

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

TGB-26

Annual

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

Cash

At

December

31,

2021, the

Fund

held

restricted

cash

in

connection

with

investments

in

certain

derivative

securities.

Restricted

cash

is

held

in

a

segregated

account

with

the

Fund’s

counterparty

broker

and

is

reflected

in

the

Statement

of

Assets

and

Liabilities.

e.

Restricted

Currency

At

December

31,

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.

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

December

31,

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.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-27

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

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

inflation

principal

adjustments

in

the

Statement

of

Operations.

h.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

i.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

December

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

2,973,164

$41,967,080

4,250,493

$64,180,339

Shares

issued

in

reinvestment

of

distributions

..........

—

—

1,520,923

22,007,754

Shares

redeemed

...............................

(3,685,956)

(51,824,238)

(9,677,321)

(147,974,790)

Net

increase

(decrease)

..........................

(712,792)

$(9,857,158)

(3,905,905)

$(61,786,697)

Class

2

Shares:

Shares

sold

...................................

10,826,597

$145,827,853

10,329,028

$147,468,530

Shares

issued

in

reinvestment

of

distributions

..........

—

—

12,843,378

177,367,048

Shares

redeemed

...............................

(15,636,949)

(209,386,550)

(26,982,602)

(399,466,976)

Net

increase

(decrease)

..........................

(4,810,352)

$(63,558,697)

(3,810,196)

$(74,631,398)

Class

4

Shares:

Shares

sold

...................................

824,461

$11,404,659

867,773

$12,730,613

Shares

issued

in

reinvestment

of

distributions

..........

—

—

447,356

6,339,040

Shares

redeemed

...............................

(933,077)

(12,784,809)

(1,443,142)

(21,730,739)

Net

increase

(decrease)

..........................

(108,616)

$(1,380,150)

(128,013)

$(2,661,086)

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

TGB-28

Annual

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

year

ended

December

31,

2021,

the

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

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)

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

TGB-29

Annual

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

year

ended

December

31,

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

year

ended

December

31,

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,

2021,

the

capital

loss

carryforwards

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

1,013,520,528

$

(1,140,355,647)

$

—

$

—

$

94,380,135

94,380,135

$

15,792

Total

Affiliated

Securities

...

$221,215,254

$1,013,520,528

$(1,140,355,647)

$—

$—

$94,380,135

$15,792

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$11,031,492

Long

term

................................................................................

190,967,605

Total

capital

loss

carryforwards

...............................................................

$201,999,097

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

—

$205,698,317

Return

of

capital

...........................................................

—

15,525

—

$205,713,842

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-30

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

At

December

3

1

,

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,

foreign

capital

gains

tax,

bond

discounts

and

premiums,

tax

straddles

and

inflation

related

adjustments

on

foreign

securities.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$622,633,278

and

$468,101,409,

respectively.

7.

Credit

Risk

At

December

31,

2021,

the

Fund

had

12.9%

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

December

31,

2021,

the

Fund

had

2.5%

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.

Cost

of

investments

..........................................................................

$2,367,285,607

Unrealized

appreciation

........................................................................

$49,186,204

Unrealized

depreciation

........................................................................

(299,335,618)

Net

unrealized

appreciation

(depreciation)

..........................................................

$(250,149,414)

5.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-31

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

10.

Other

Derivative

Information

At

December

31,

2021,

the

Fund's

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

For

the

year

ended

December

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

year

ended

December

31,

2021,

the

average

month

end

notional

amount

of

options

represented

$1,435,690,578.

The

average

month

end

contract

value

of

forward

exchange

contracts

was

$1,936,100,836.

See

Note

1(c)

regarding

derivative

financial

instruments.

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

$

5,038,576

a

Options

written,

at

value

$

3,196,932

Unrealized

appreciation

on

OTC

forward

exchange

contracts

13,319,657

Unrealized

depreciation

on

OTC

forward

exchange

contracts

11,727,763

Total

....................

$18,358,233

$14,924,695

a

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Templeton

Global

Bond

VIP

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Investments

$(24,594,396)

Investments

$6,288,969

a

Written

options

3,082,453

Written

options

4,169,649

Forward

exchange

contracts

(69,375,413)

Forward

exchange

contracts

62,079,757

Total

.......................

$(90,887,356)

$72,538,375

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.

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-32

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

At

December

31,

2021,

OTC

derivative

assets

and

liabilities

are

as

follows:

At

December

3

1

,

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

Templeton

Global

Bond

VIP

Fund

Derivatives

Forward

exchange

contracts

.............................

$

13,319,657

$

11,727,763

Options

purchased

.....................................

5,038,576

—

Options

written

........................................

—

3,196,932

Total

.............................................

$18,358,233

$14,924,695

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

a,b

Cash

Collateral

Received

b

Net

Amount

(Not

less

than

zero)

Templeton

Global

Bond

VIP

Fund

Counterparty

BOFA

....................

$986,447

$—

$—

$(820,000)

$166,447

CITI

.....................

8,595,984

(6,593,615)

—

(2,002,369)

—

DBAB

...................

383,058

(383,058)

—

—

—

GSCO

...................

—

—

—

—

—

HSBK

...................

2,778,527

(874,685)

(1,205,705)

—

698,137

JPHQ

...................

2,432,546

(2,432,454)

(92)

—

—

MSCO

...................

3,181,671

(1,375,882)

—

(1,805,789)

—

Total

...................

$18,358,233

$(11,659,694)

$

(1,205,797)

$(4,628,158)

$864,584

$

1

10.

Other

Derivative

Information

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-33

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

At

December

31,

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-36.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

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

Cash

Collateral

Pledged

b

Net

Amount

(Not

less

than

zero)

Templeton

Global

Bond

VIP

Fund

Counterparty

BOFA

....................

$—

$—

$—

$—

$—

CITI

.....................

6,593,615

(6,593,615)

—

—

—

DBAB

...................

2,089,084

(383,058)

—

(910,006)

796,020

GSCO

...................

1,558,975

—

—

(1,520,000)

38,975

HSBK

...................

874,685

(874,685)

—

—

—

JPHQ

...................

2,432,454

(2,432,454)

—

—

—

MSCO

...................

1,375,882

(1,375,882)

—

—

—

Total

...................

$14,924,695

$(11,659,694)

$—

$(2,430,006)

$834,995

a

At

December

31,

2021,

the

Fund

received

U.S.

Treasury

Bills

and

U.K

Treasury

Inflation-Linked

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

TGB-34

Annual

Report

Templeton

Global

Bond

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

December

31,

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

....

$

—

$

1,109,755,795

$

—

$

1,109,755,795

U.S.

Government

and

Agency

Securities

.......

—

440,500,247

—

440,500,247

Options

purchased

.......................

—

5,038,576

—

5,038,576

Short

Term

Investments

...................

178,102,205

385,344,408

—

563,446,613

Total

Investments

in

Securities

...........

$178,102,205

$1,940,639,026

$—

$2,118,741,231

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

13,319,657

$

—

$

13,319,657

Restricted

Currency

(ARS)

.................

—

9,531

—

9,531

Total

Other

Financial

Instruments

.........

$—

$13,329,188

$—

$13,329,188

Receivables:

Interest

(ARS)

...........................

$—

$609,166

$—

$609,166

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

3,196,932

$

—

$

3,196,932

Forward

exchange

contracts

................

$

—

$

11,727,763

$

—

$

11,727,763

Total

Other

Financial

Instruments

.........

$—

$14,924,695

$—

$14,924,695

Payables:

Deferred

Tax

(ARS)

.......................

$—

$1,498

$—

$1,498

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-35

Annual

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 year.

At

December

31,

2021,

the

reconciliation is

as follows:

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

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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. 

Balance

at

Beginning

of

Year

Purchases

Sales

Transfer

Into

Level

3

Transfer

Out

of

Level

3

a

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciation

(Depreciation)

Balance

at

End

of

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

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

$

—

$

—

$

—

$

(43,034,720)

$

—

$

—

$

—

$

—

$

—

Short

Term

Investments

..

3,010,391

—

—

—

(3,010,391)

—

—

—

—

—

Total

Investments

in

Securities

.......

$46,045,111

$—

$—

$—

$(46,045,111)

$—

$—

$—

$—

$—

Other

Financial

Instruments:

Restricted

Currency

(ARS)

......

$3,151

$—

$—

$—

$(3,151)

$—

$—

$—

$—

$—

Receivables:

Interest

(ARS)

.

$947,439

$—

$—

$—

$(947,439)

$—

$—

$—

$—

$—

Liabilities:

Payables:

Investment

Securities

Purchased

(ARS)

$463,749

$—

$—

$—

$(463,749)

$—

$—

$—

$—

$—

Deferred

Tax

(ARS)

$2,124

$—

$—

$—

$(2,124)

$—

$—

$—

$—

$—

a

Transfers

out

of

Level

3

were

as

a

result

of

changes

in

the

levels

of

observable

liquidity

and

the

improved

reliability

of

a

significant

input.

12.

Fair

Value

Measurements

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TGB-36

Annual

Report

Templeton

Global

Bond

VIP

Fund

(continued)

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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Counterparty

BOFA

Bank

of

America

Corp.

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

BRL

Brazilian

Real

COP

Colombian

Peso

EUR

Euro

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

THB

Thai

Baht

USD

United

States

Dollar

Franklin

Templeton

Variable

Insurance

Products

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

TGB-37

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Templeton

Global

Bond

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Templeton

Global

Bond

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TGB-38

Annual

Report

Templeton

Global

Bond

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amount,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amount,

for

the

fiscal

year

ended

December

31

,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Under

Section

853

of

the

Internal

Revenue

Code,

the

Fund

intends

to

elect

to

pass

through

to

its

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

source

income

earned

by

the

Fund

during

the

fiscal

year

ended

December

31,

2021:

Pursuant

to:

Amount

Reported

Interest

Earned

from

Federal

Obligations

Note

(1)

$9,028,124

Amount

Reported

Foreign

Taxes

Paid

$3,257,973

Foreign

Source

Income

Earned

$93,880,185

TG-1

Annual

Report

Templeton

Growth

VIP

Fund

This

annual

report

for

Templeton

Growth

VIP

Fund

covers

the

fiscal

year

ended

December

31,

2021

.

Class

2

Performance

Summary

as

of

December

31,

2021

Average

annual

total

return

of

Class

2

shares

represents

the

average

annual

change

in

value,

assuming

reinvestment

of

dividends

and

capital

gains.

Average

returns

smooth

out

variations

in

returns,

which

can

be

significant;

they

are

not

the

same

as

year-by-year

results.

Performance

reflects

the

Fund’s

Class

2

operating

expenses,

but

does

not

include

any

contract

fees,

expenses

or

sales

charges.

If

they

had

been

included,

performance

would

be

lower.

These

charges

and

deductions,

particularly

for

variable

life

policies,

can

have

a

significant

effect

on

contract

values

and

insurance

benefits.

See

the

contract

prospectus

for

a

complete

description

of

these

expenses,

including

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

Share

Class

Average

Annual

Total

Return

2

1-Year

+4.87%

5-Year

+5.21%

10-Year

+7.36%

TG-2

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

(1/1/12–

12/31/21

)

The

graph

below

shows

the

change

in

value

of

a

hypothetical

$10,000

investment

in

the

Fund

over

the

indicated

period

and

includes

reinvestment

of

any

income

or

distributions.

The

Fund’s

performance

is

compared

to

the

performance

of

the

Fund’s

new

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

and

the

Fund’s

former

benchmark,

the

MSCI

ACWI.

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.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Important

Notes

to

Performance

Information

preceding

the

Fund

Summaries.

*Source:

Morningstar.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

TG-3

Annual

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

the

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

one-year

total

return

in

the

Performance

Summary.

For

comparison,

the

Fund’s

new

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

posted

a

+18.54%

total

return

for

the

period

under

review.

1

The

Fund’s

former

benchmark,

the

MSCI

ACWI,

posted

a

+19.04%

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

All

Country

World

Index-NR,

posted

a

+18.54%

total

return

for

the

12

months

ended

December

31,

2021.

1

Global

equities

benefited

from

monetary

and

fiscal

stimulus

measures,

easing

COVID-19

pandemic

restrictions

in

certain

regions

and

the

development

of

treatments

and

vaccines.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

In

the

U.S.,

the

economy

continued

to

recover

and

equities

rallied

amid

monetary

and

fiscal

stimulus

measures

and

the

continued

progress

of

vaccination

programs.

Gross

domestic

product

(GDP)

growth

was

generally

robust,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

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%.

While

the

Fed

also

maintained

quantitative

easing

measures

with

U.S.

Treasury

and

mortgage

bond

purchasing,

it

began

to

reduce

the

rate

of

purchases

beginning

in

November

2021

and

accelerated

the

pace

of

tapering

in

December.

The

Fed

also

noted

that

it

expected

easing

supply

constraints

to

help

reduce

inflationary

pressures

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

Geographic

Composition

12/31/21

%

of

Total

Net

Assets

North

America

46.3%

Europe

29.5%

Asia

14.9%

Latin

America

&

Caribbean

1.1%

Short-Term

Investments

&

Other

Net

Assets

8.2%

1.

Source:

Morningstar.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Please

see

Index

Descriptions

following

the

Fund

Summaries.

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-4

Annual

Report

The

economic

recovery

in

the

eurozone

was

slow,

as

quarter-over-quarter

GDP

growth

contracted

in

2021’s

first

quarter

before

returning

to

growth

in

2021’s

second

and

third

quarters.

GDP

growth

rates

were

initially

sluggish

among

the

region’s

largest

economies,

although

most

showed

signs

of

improvement

later

in

the

12-month

period.

Business

activity

growth

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+16.30%

total

return

for

the

12

months

under

review.

1

However,

in

November

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

since

the

introduction

of

the

euro,

and

the

prospect

of

energy

shortages

during

the

winter

months

tempered

investor

optimism.

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-2.49%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarter-over-quarter

GDP

contracted

in

2021’s

third

quarter.

China’s

economic

recovery

continued,

although

the

country’s

quarter-over-quarter

GDP

growth

in

2021’s

first

three

quarters

was

slower

than

in

2020’s

second

half,

pressured

by

higher

commodity

prices.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

Chinese

large

property

developer’s

solvency

pressured

Asian

stocks

during

2021’s

fourth

quarter.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.54%

total

return

for

the

12

months

under

review.

1

Higher

inflation

led

many

central

banks

in

emerging

market

countries

to

raise

interest

rates,

which

dampened

economic

growth.

The

Omicron

variant

of

COVID-19

also

negatively

impacted

global

emerging

markets,

as

some

countries

reimplemented

restrictions

in

an

effort

to

counter

rising

infections.

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

annual

review

period,

key

contributors

to

the

Fund’s

performance

relative

to

the

MSCI

ACWI-NR

included

stock

selection

in

materials,

energy

and

utilities.

Materials

and

energy

were

the

Fund’s

top

two

performing

sectors

in

2021.

From

materials,

U.S.-based

lithium

producer

Albemarle

finished

the

period

as

the

biggest

individual

contributor.

Its

shares

rallied

following

strong

earnings

results

and

surging

lithium

prices

as

demand

for

the

key

battery

materials

component

outstripped

supply.

The

stock

also

benefited

from

the

announcement

that

the

Big

Three

U.S.

automakers

are

targeting

a

sizable

percentage

of

car

sales

from

electric

vehicles

by

2030.

We

believe

that

as

one

of

the

world’s

lowest-cost

lithium

producers

with

an

ambitious

expansion

plan,

Albemarle

remains

fundamentally

well

placed

to

enjoy

substantial

revenue

and

earnings

growth

over

our

forecast

period.

The

energy

sector

was

led

by

U.S.

oil

refiner

Marathon

Petroleum.

Its

shares

rallied

after

company

management

successfully

closed

the

sale

of

its

Speedway

fueling

station

business

and

announced

the

company

would

use

the

proceeds

to

buy

back

shares

and

pay

down

long-term

debt.

The

firm

also

benefited

from

higher

oil

prices

and

beat

earnings

estimates

at

the

end

of

2021,

leading

to

a

raft

of

upgrades

from

Wall

Street

analysts.

The

company

committed

to

a

large

buyback

plan

during

the

period

and

has

seen

strong

fundamental

improvements

in

operating

margins

and

free

cash

flow

generation.

We

remain

constructive

on

the

energy

sector

more

broadly.

COVID-19-related

production

disruptions

and

reduced

investment

due

to

environmental

pressures

have

curbed

output,

yet

energy

demand

has

remained

healthy

due

to

the

economic

recovery

and

reopening.

The

market

capitalization

of

the

energy

sector

relative

to

the

rest

of

the

world

fell

to

an

all-time

low

recently,

and

we

increased

our

exposure

in

2021

given

what

we

considered

compelling

opportunities

among

extremely

well-

managed

and

financially

savvy

oil

producers.

Many

of

these

companies

are

generating

double-digit

percentage

free

cash

flow

yields

and

creating

immense

value

for

shareholders

through

buybacks

and

dividends.

Templeton

Growth

VIP

Fund

TG-5

Annual

Report

Utilities

also

outperformed,

buoyed

by

stock

selection.

German

power

provider

E.ON

finished

among

the

Fund’s

key

contributors,

benefiting

from

strong

earnings

results

that

highlighted

improvements

across

numerous

business

lines.

We

continue

to

see

numerous

value

catalysts

for

E.ON

over

time,

including

continued

balance-sheet

improvements,

lower

financing

costs

and

the

green

energy

transition,

which,

in

our

view,

will

spur

grid

investment

and

upgrades

in

Germany

that

should

ultimately

help

expand

E.ON’s

regulated-asset

base.

Relative

weakness

during

the

year

was

attributable

to

an

overweight

in

consumer

discretionary

and

stock

selection

in

information

technology

and

communication

services.

Netherlands-based

food

delivery

service

provider

Just

Eat

Takeaway.com

(JET),

which

has

operations

in

Germany,

was

the

biggest

consumer

discretionary

detractor.

Its

shares

slumped

due

to

continued

investor

concerns

about

competition

and

profitability

in

the

high-stakes

food

delivery

business.

Given

the

dynamics

of

this

marketplace

and

the

winner-take-all/most

nature

of

the

business,

we

are

not

surprised

by

near-term

stock

volatility.

However,

we

continue

to

believe

JET

has

significant

upside

potential

given

its

cheap

valuation,

re-based

expectations,

competitive

positioning

and

large

potential

market

opportunities.

Although

it

was

largely

ignored

by

the

market,

we

are

encouraged

by

a

wave

of

recent

good

news

surrounding

JET,

including

key

partnerships

in

the

U.S.,

the

U.K.

and

Canada,

the

recent

exit

of

a

major

competitor

from

the

firm’s

primary

German

market

and

industry

consolidation

leading

to

a

more

rational

competitive

landscape.

Our

IT

holdings

posted

double-digit

percentage

gains

on

average

but

lagged

the

benchmark’s

higher-

weighted,

higher-returning

sector

position.

South

Korean

semiconductor

and

consumer

electronics

manufacturer

Samsung

Electronics

was

the

sector’s

biggest

detractor,

pressured

by

concerns

about

falling

dynamic

random-

access

memory

chip

prices

and

smartphone

sales.

In

our

view,

most

of

these

concerns

are

short-term

and

seasonal,

and

we

believe

Samsung

remains

well

positioned

as

a

major

beneficiary

of

the

sustained

uptrend

in

memory

chip

demand

over

time.

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

continue

to

believe

that

Samsung

remains

significantly

undervalued

for

a

well-run

global

technology

leader

with

a

strong

balance

sheet

and

generous

shareholder

return

program.

More

generally,

our

tech

holdings

also

underperformed

due

to

lack

of

exposure

to

expensive

“FAANG”

(Facebook-parent

Meta

Platforms,

Amazon.com,

Apple,

Netflix

and

Google-parent

Alphabet)

and

FAANG-

adjacent

stocks

such

as

Apple,

Microsoft

and

NVIDIA,

the

MSCI

ACWI-NR’s

three

top-performing

IT

components.

Finally,

stock-specific

weakness

in

the

communication

services

sector

pressured

performance.

U.S.

media

conglomerate

and

theme

park

operator

Walt

Disney

was

the

sector’s

biggest

detractor,

its

shares

declining

toward

the

end

of

2021

after

the

firm

reported

higher-than-expected

content

costs

and

analysts

again

raised

concerns

about

the

impact

of

COVID-19

and

inflationary

wage

pressures

on

theme

park

economics.

We

are

not

bothered

by

the

increasing

content

spend

because

we

view

it

as

an

investment

in

an

attractive

long-term

growth

opportunity.

In

our

analysis,

Disney

can

afford

to

make

these

investments

and

has

a

strong

track

record

of

execution

as

evidenced

by

its

high

historical

returns

on

invested

capital.

We

also

believe

that

investors

are

too

negative

on

the

parks

business,

which

has

significant

scope

for

recovery

as

conditions

normalize.

Like

IT,

communication

services

holdings

were

also

pressured

by

what

we

did

not

own,

namely

the

component

of

FAANG

that

resides

in

the

sector.

In

this

case,

Google-parent

Alphabet,

Facebook-parent

Meta

Platforms

and

Netflix

were

the

three

top

communication

services

contributors

in

the

MSCI

ACWI-NR

in

2021;

however,

we

had

no

exposure

to

these

companies

due

to

our

assessment

of

their

prohibitively

expensive

valuations.

From

a

regional

standpoint,

the

U.S.

was

the

biggest

relative

detractor,

pressured

by

stock-specific

issues

(including

near-term

COVID-19-related

pressures

at

medical

device

Top

10

Holdings

12/31/21

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)

2.5%

Entertainment,

United

States

Dollar

Tree,

Inc.

2.4%

Multiline

Retail,

United

States

Anheuser-Busch

InBev

SA/NV

2.2%

Beverages,

Belgium

Booking

Holdings,

Inc.

2.2%

Hotels,

Restaurants

&

Leisure,

United

States

E.ON

SE

2.2%

Multi-Utilities,

Germany

Sony

Group

Corp.

2.2%

Household

Durables,

Japan

AbbVie,

Inc.

2.1%

Biotechnology,

United

States

DuPont

de

Nemours,

Inc.

2.1%

Chemicals,

United

States

Marathon

Petroleum

Corp.

2.0%

Oil,

Gas

&

Consumable

Fuels,

United

States

Templeton

Growth

VIP

Fund

TG-6

Annual

Report

companies,

such

as

Zimmer

Biomet

Holdings

and

Medtronic)

and

a

lack

of

exposure

to

the

aforementioned

expensive

FAANG

stocks.

Europe

also

detracted,

pressured

by

overweight

allocations

to

Germany

and

Belgium.

In

Asia,

the

positive

contribution

of

stock

selection

and

an

underweight

in

China

(we

reduced

exposure

during

2021

as

regulatory

risks

rose)

was

offset

by

the

negative

effect

of

overweights

in

Japan

and

Hong

Kong.

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

12

months

ended

December

31,

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

December

31,

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

2

Fund

Expenses

Templeton

Growth

VIP

Fund

TG-7

Annual

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

184/365

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

7/1/21

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

Ending

Account

Value

12/31/21

Fund-Level

Expenses

Paid

During

Period

7/1/21–12/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

2

$1,000

$978.90

$6.20

$1,018.94

$6.33

1.24%

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Growth

VIP

Fund

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-8

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.42

$11.15

$12.44

$16.24

$13.93

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.09

0.24

c

0.30

0.28

0.29

Net

realized

and

unrealized

gains

(losses)

...........

0.52

0.36

1.30

(2.42)

2.30

Total

from

investment

operations

....................

0.61

0.60

1.60

(2.14)

2.59

Less

distributions

from:

Net

investment

income

..........................

(0.16)

(0.33)

(0.40)

(0.35)

(0.28)

Net

realized

gains

.............................

—

—

(2.49)

(1.31)

—

Total

distributions

...............................

(0.16)

(0.33)

(2.89)

(1.66)

(0.28)

Net

asset

value,

end

of

year

.......................

$11.87

$11.42

$11.15

$12.44

$16.24

Total

return

d

...................................

5.26%

5.99%

15.43%

(14.61)%

18.77%

Ratios

to

average

net

assets

Expenses

e

....................................

0.91%

0.91%

0.86%

0.83%

0.82%

f

Net

investment

income

...........................

0.71%

2.42%

c

2.52%

1.90%

1.94%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$39,373

$92,653

$97,988

$354,164

$466,207

Portfolio

turnover

rate

............................

45.59%

g

63.65%

19.69%

29.25%

26.46%

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.

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

activity

as

a

result

of

in-kind

transactions.

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.

Annual

Report

TG-9

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

2

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.17

$10.90

$12.21

$15.97

$13.70

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.05

0.21

c

0.26

0.24

0.25

Net

realized

and

unrealized

gains

(losses)

...........

0.50

0.36

1.28

(2.38)

2.26

Total

from

investment

operations

....................

0.55

0.57

1.54

(2.14)

2.51

Less

distributions

from:

Net

investment

income

..........................

(0.13)

(0.30)

(0.36)

(0.31)

(0.24)

Net

realized

gains

.............................

—

—

(2.49)

(1.31)

—

Total

distributions

...............................

(0.13)

(0.30)

(2.85)

(1.62)

(0.24)

Net

asset

value,

end

of

year

.......................

$11.59

$11.17

$10.90

$12.21

$15.97

Total

return

d

...................................

4.87%

5.80%

15.15%

(14.85)%

18.50%

Ratios

to

average

net

assets

Expenses

e

....................................

1.18%

1.16%

1.11%

1.08%

1.07%

f

Net

investment

income

...........................

0.39%

2.17%

c

2.27%

1.65%

1.69%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$405,365

$603,996

$659,412

$625,311

$879,521

Portfolio

turnover

rate

............................

45.59%

g

63.65%

19.69%

29.25%

26.46%

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.

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

activity

as

a

result

of

in-kind

transactions.

See

Note

9.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Highlights

Templeton

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-10

a

Year

Ended

December

31,

2021

2020

2019

2018

2017

Class

4

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$11.35

$11.07

$12.36

$16.13

$13.83

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.03

0.20

c

0.26

0.23

0.24

Net

realized

and

unrealized

gains

(losses)

...........

0.53

0.36

1.29

(2.40)

2.28

Total

from

investment

operations

....................

0.56

0.56

1.55

(2.17)

2.52

Less

distributions

from:

Net

investment

income

..........................

(0.12)

(0.28)

(0.35)

(0.29)

(0.22)

Net

realized

gains

.............................

—

—

(2.49)

(1.31)

—

Total

distributions

...............................

(0.12)

(0.28)

(2.84)

(1.60)

(0.22)

Net

asset

value,

end

of

year

.......................

$11.79

$11.35

$11.07

$12.36

$16.13

Total

return

d

...................................

4.85%

5.65%

14.97%

(14.88)%

18.38%

Ratios

to

average

net

assets

Expenses

e

....................................

1.29%

1.26%

1.21%

1.18%

1.17%

f

Net

investment

income

...........................

0.24%

2.04%

c

2.17%

1.55%

1.59%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$21,559

$23,213

$27,330

$28,238

$38,798

Portfolio

turnover

rate

............................

45.59%

g

63.65%

19.69%

29.25%

26.46%

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.

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

activity

as

a

result

of

in-kind

transactions.

See

Note

9.

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments,

December

31,

2021

Templeton

Growth

VIP

Fund

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TG-11

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

91.8%

Aerospace

&

Defense

2.3%

BAE

Systems

plc

.....................................

United

Kingdom

691,283

$

5,150,846

a

Rolls-Royce

Holdings

plc

...............................

United

Kingdom

3,290,386

5,487,643

10,638,489

Airlines

1.9%

a

International

Consolidated

Airlines

Group

SA

.................

United

Kingdom

2,020,764

3,929,684

a

Southwest

Airlines

Co.

.................................

United

States

116,795

5,003,498

8,933,182

Auto

Components

2.2%

a

Continental

AG

.......................................

Germany

52,238

5,484,071

Lear

Corp.

..........................................

United

States

26,540

4,855,493

10,339,564

Automobiles

1.6%

Honda

Motor

Co.

Ltd.

..................................

Japan

166,396

4,731,211

Isuzu

Motors

Ltd.

.....................................

Japan

212,400

2,642,027

7,373,238

Banks

1.4%

Bank

of

America

Corp.

.................................

United

States

149,903

6,669,185

Beverages

3.5%

Anheuser-Busch

InBev

SA/NV

...........................

Belgium

174,062

10,485,897

Pernod

Ricard

SA

.....................................

France

24,491

5,887,334

16,373,231

Biotechnology

2.1%

AbbVie,

Inc.

.........................................

United

States

73,517

9,954,202

Chemicals

4.3%

Albemarle

Corp.

......................................

United

States

28,640

6,695,173

DuPont

de

Nemours,

Inc.

...............................

United

States

118,411

9,565,240

Umicore

SA

.........................................

Belgium

94,680

3,859,365

20,119,778

Consumer

Finance

1.5%

American

Express

Co.

.................................

United

States

43,700

7,149,320

Electric

Utilities

1.5%

Southern

Co.

(The)

....................................

United

States

103,243

7,080,405

Entertainment

2.5%

a

Walt

Disney

Co.

(The)

..................................

United

States

75,018

11,619,538

Food

Products

1.4%

Danone

SA

..........................................

France

107,762

6,693,134

Health

Care

Equipment

&

Supplies

3.7%

Medtronic

plc

........................................

United

States

82,843

8,570,109

Zimmer

Biomet

Holdings,

Inc.

............................

United

States

67,580

8,585,363

17,155,472

Health

Care

Providers

&

Services

4.7%

Fresenius

Medical

Care

AG

&

Co.

KGaA

....................

Germany

92,557

5,995,562

HCA

Healthcare,

Inc.

...................................

United

States

31,590

8,116,103

UnitedHealth

Group,

Inc.

................................

United

States

15,618

7,842,422

21,954,087

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-12

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Hotels,

Restaurants

&

Leisure

5.8%

a

Booking

Holdings,

Inc.

.................................

United

States

4,350

$

10,436,651

a

Compass

Group

plc

...................................

United

Kingdom

307,619

6,920,010

a

Hyatt

Hotels

Corp.,

A

...................................

United

States

48,595

4,660,260

Starbucks

Corp.

......................................

United

States

43,634

5,103,869

a

Whitbread

plc

........................................

United

Kingdom

3,041

123,600

27,244,390

Household

Durables

3.7%

Panasonic

Corp.

......................................

Japan

616,375

6,771,562

Sony

Group

Corp.

.....................................

Japan

81,299

10,260,053

17,031,615

Industrial

Conglomerates

2.0%

Honeywell

International,

Inc.

.............................

United

States

22,084

4,604,735

Siemens

AG

.........................................

Germany

26,474

4,581,748

9,186,483

Insurance

1.6%

AIA

Group

Ltd.

.......................................

Hong

Kong

726,931

7,337,839

Internet

&

Direct

Marketing

Retail

1.9%

a

Farfetch

Ltd.,

A

.......................................

United

Kingdom

72,782

2,433,102

a,b

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...................

United

Kingdom

117,182

6,361,572

8,794,674

IT

Services

4.8%

a

DXC

Technology

Co.

...................................

United

States

275,112

8,855,855

Fujitsu

Ltd.

..........................................

Japan

39,314

6,751,082

Visa,

Inc.,

A

..........................................

United

States

30,748

6,663,399

22,270,336

Machinery

4.2%

Komatsu

Ltd.

........................................

Japan

307,700

7,191,495

Stanley

Black

&

Decker,

Inc.

.............................

United

States

19,713

3,718,266

Westinghouse

Air

Brake

Technologies

Corp.

.................

United

States

92,690

8,537,676

19,447,437

Media

1.2%

Comcast

Corp.,

A

.....................................

United

States

110,876

5,580,389

Metals

&

Mining

2.1%

Freeport-McMoRan,

Inc.

................................

United

States

107,883

4,501,958

Wheaton

Precious

Metals

Corp.

..........................

Brazil

120,754

5,183,493

9,685,451

Multiline

Retail

2.4%

a

Dollar

Tree,

Inc.

......................................

United

States

79,403

11,157,710

Multi-Utilities

2.2%

E.ON

SE

............................................

Germany

742,259

10,307,351

Oil,

Gas

&

Consumable

Fuels

4.9%

BP

plc

..............................................

United

Kingdom

1,729,453

7,742,731

Equinor

ASA

.........................................

Norway

224,285

5,934,835

Marathon

Petroleum

Corp.

..............................

United

States

144,714

9,260,249

22,937,815

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Growth

VIP

Fund

(continued)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TG-13

ft

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Personal

Products

1.7%

Unilever

plc

..........................................

United

Kingdom

144,198

$

7,723,806

Pharmaceuticals

5.6%

AstraZeneca

plc

......................................

United

Kingdom

73,563

8,582,930

Johnson

&

Johnson

...................................

United

States

49,285

8,431,185

Roche

Holding

AG

....................................

Switzerland

22,318

9,248,216

26,262,331

Semiconductors

&

Semiconductor

Equipment

2.7%

Infineon

Technologies

AG

...............................

Germany

132,824

6,110,180

NXP

Semiconductors

NV

...............................

China

28,177

6,418,157

12,528,337

Specialty

Retail

4.5%

Nitori

Holdings

Co.

Ltd.

.................................

Japan

31,218

4,666,485

Ross

Stores,

Inc.

.....................................

United

States

66,763

7,629,676

TJX

Cos.,

Inc.

(The)

...................................

United

States

114,833

8,718,121

21,014,282

Technology

Hardware,

Storage

&

Peripherals

2.8%

Samsung

Electronics

Co.

Ltd.

............................

South

Korea

195,785

12,857,093

Textiles,

Apparel

&

Luxury

Goods

1.8%

adidas

AG

...........................................

Germany

15,645

4,501,344

Burberry

Group

plc

....................................

United

Kingdom

157,479

3,883,777

8,385,121

Wireless

Telecommunication

Services

1.3%

a

T-Mobile

US,

Inc.

.....................................

United

States

53,811

6,241,000

Total

Common

Stocks

(Cost

$340,947,106)

.....................................

428,046,285

Short

Term

Investments

3.2%

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

3.2%

Royal

Bank

of

Canada,

0.04%,

1/03/22

.....................

Canada

15,000,000

15,000,000

Total

Time

Deposits

(Cost

$15,000,000)

........................................

15,000,000

Total

Short

Term

Investments

(Cost

$15,000,000

)

................................

15,000,000

a

Total

Investments

(Cost

$355,947,106)

95.0%

...................................

$443,046,285

Other

Assets,

less

Liabilities

5.0%

.............................................

23,250,790

Net

Assets

100.0%

...........................................................

$466,297,075

Franklin

Templeton

Variable

Insurance

Products

Trust

Statement

of

Investments

Templeton

Growth

VIP

Fund

(continued)

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-14

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

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

December

31,

2021,

the

value

of

this

security

was

$6,361,572,

representing

1.4%

of

net

assets.

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Assets

and

Liabilities

December

31,

2021

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

TG-15

Templeton

Growth

VIP

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$355,947,106

Value

-

Unaffiliated

issuers

..................................................................

$443,046,285

Cash

....................................................................................

14,503,613

Receivables:

Investment

securities

sold

...................................................................

97,301

Capital

shares

sold

........................................................................

17,234

Dividends

and

interest

.....................................................................

702,852

European

Union

tax

reclaims

(Note

1

d

)

.........................................................

8,820,447

Total

assets

..........................................................................

467,187,732

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

176

Capital

shares

redeemed

...................................................................

67,744

Management

fees

.........................................................................

351,166

Distribution

fees

..........................................................................

90,929

Reports

to

shareholders

fees

................................................................

167,621

Contingent

fees

for

European

Union

tax

reclaims

(Note

1d)

...........................................

53,141

Accrued

expenses

and

other

liabilities

...........................................................

159,880

Total

liabilities

.........................................................................

890,657

Net

assets,

at

value

.................................................................

$466,297,075

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$393,578,050

Total

distributable

earnings

(losses)

.............................................................

72,719,025

Net

assets,

at

value

.................................................................

$466,297,075

Templeton

Growth

VIP

Fund

Class

1:

Net

assets,

at

value

.......................................................................

$39,373,184

Shares

outstanding

........................................................................

3,318,195

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.87

Class

2:

Net

assets,

at

value

.......................................................................

$405,364,622

Shares

outstanding

........................................................................

34,971,524

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.59

Class

4:

Net

assets,

at

value

.......................................................................

$21,559,269

Shares

outstanding

........................................................................

1,829,285

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$11.79

Franklin

Templeton

Variable

Insurance

Products

Trust

Financial

Statements

Statement

of

Operations

for

the

year

ended

December

31,

2021

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

TG-16

Templeton

Growth

VIP

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$646,426)

Unaffiliated

issuers

........................................................................

$9,215,122

Interest:

Unaffiliated

issuers

........................................................................

7,604

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

83,057

Non-controlled

affiliates

(Note

3

e

)

.............................................................

119

Other

income

(Note

1

d

)

......................................................................

165,125

Total

investment

income

...................................................................

9,471,027

Expenses:

Management

fees

(Note

3

a

)

...................................................................

5,109,338

Distribution

fees:

(Note

3c

)

    Class

2

................................................................................

1,281,857

    Class

4

................................................................................

79,598

Custodian

fees

.............................................................................

41,891

Reports

to

shareholders

fees

..................................................................

140,669

Professional

fees

...........................................................................

96,162

Trustees'

fees

and

expenses

..................................................................

6,776

Other

....................................................................................

183,453

Total

expenses

.........................................................................

6,939,744

Expenses

waived/paid

by

affiliates

(Note

3e)

...................................................

(556)

Net

expenses

.........................................................................

6,939,188

Net

investment

income

................................................................

2,531,839

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

+

Unaffiliated

issuers

......................................................................

103,052,389

Foreign

currency

transactions

................................................................

(33,104)

Net

realized

gain

(loss)

..................................................................

103,019,285

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(66,424,180)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(1,761,950)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(68,186,130)

Net

realized

and

unrealized

gain

(loss)

............................................................

34,833,155

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$37,364,994

+

Includes

gains

from

redemption

in-kind

(Note

9).

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.

Annual

Report

TG-17

Templeton

Growth

VIP

Fund

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$2,531,839

$14,481,288

Net

realized

gain

(loss)

.................................................

103,019,285

(64,187,228)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(68,186,130)

79,512,856

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

37,364,994

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

.............................................................

(57,275,687)

(7,082,982)

Class

2

.............................................................

(223,087,833)

(63,376,754)

Class

4

.............................................................

(2,556,253)

(4,382,946)

Total

capital

share

transactions

............................................

(282,919,773)

(74,842,682)

Net

increase

(decrease)

in

net

assets

...................................

(253,564,535)

(64,868,062)

Net

assets:

Beginning

of

year

.......................................................

719,861,610

784,729,672

End

of

year

...........................................................

$466,297,075

$719,861,610

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

Templeton

Growth

VIP

Fund

TG-18

Annual

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

December

31,

2021,

42.1%

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

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 time

deposits

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

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

December

31,

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

TG-19

Annual

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.,

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

December

31,

2021,

the Fund

had

no

securities

on

loan.

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

TG-20

Annual

Report

Templeton

Growth

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

December

31,

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

TG-21

Annual

Report

Templeton

Growth

VIP

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

December

31,

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:

Year

Ended

December

31,

2021

Year

Ended

December

31,

2020

Shares

Amount

Shares

Amount

Class

1

Shares:

Shares

sold

...................................

93,336

$1,113,724

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

...............................

(550,857)

(6,597,153)

(1,072,276)

(10,862,714)

Net

increase

(decrease)

..........................

(4,792,715)

$(57,275,687)

(673,622)

$(7,082,982)

Class

2

Shares:

Shares

sold

...................................

1,548,646

$18,105,277

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

...............................

(7,320,737)

(85,248,883)

(12,576,995)

(121,277,126)

Net

increase

(decrease)

..........................

(19,124,981)

$(223,087,833)

(6,376,933)

$(63,376,754)

Class

4

Shares:

Shares

sold

...................................

73,213

$870,473

102,362

$966,885

Shares

issued

in

reinvestment

of

distributions

..........

17,642

217,527

71,003

659,619

Shares

redeemed

...............................

(307,061)

(3,644,253)

(596,081)

(6,009,450)

Net

increase

(decrease)

..........................

(216,206)

$(2,556,253)

(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)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TG-22

Annual

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

year

ended

December

31,

2021,

the

gross

effective

investment

management

fee

rate

was

0.849%

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

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

year

ended

December

31,

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

TG-23

Annual

Report

Templeton

Growth

VIP

Fund

(continued)

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

During

the

year

ended

December

31,

2021,

the

Fund

utilized

$59,990,795

of

capital

loss

carryforwards.

At

December

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

December

31,

2021

and

2020,

was

as

follows:

At

December

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

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

and

gains

realized

on

in-kind

shareholder

redemptions.

    aa

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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%

.

$—

$63,169,089

$(63,169,089)

$—

$—

$—

—

$119

Total

Affiliated

Securities

...

$—

$63,169,089

$(63,169,089)

$—

$—

$—

$119

Capital

loss

carryforwards

not

subject

to

expiration:

Long

term

................................................................................

$23,594,627

2021

2020

Distributions

paid

from:

Ordinary

income

..........................................................

$8,009,756

$19,832,296

Cost

of

investments

..........................................................................

$356,203,817

Unrealized

appreciation

........................................................................

$100,624,096

Unrealized

depreciation

........................................................................

(13,781,628)

Net

unrealized

appreciation

(depreciation)

..........................................................

$86,842,468

Distributable

earnings:

Undistributed

ordinary

income

...................................................................

$678,440

3.

Transactions

with

Affiliates

(continued)

e.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TG-24

Annual

Report

Templeton

Growth

VIP

Fund

(continued)

In

accordance

with

U.S.

GAAP

permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

At

the

year

ended

December

31,

2021,

such

reclassifications

were

as

follows:

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

December

31,

2021,

aggregated

$250,431,983

and

$326,023,613,

respectively.

Sales

of

investments

excludes

in-kind

transactions

of

$193,310,984.

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

matured

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.

Effective

February

4,

2022,

the

Borrowers

renewed

the

Global

Credit

Facility

for

a

one-year

term,

maturing

February

3,

2023,

for

a

total

of

$2.675

billion.

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

year

ended

December

31,

2021,

the Fund

did

not

use

the

Global

Credit

Facility.

9.

Redemption

In-Kind

During

the

year

ended

December

31,

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.

Paid-in

Capital

..............................................................................

$43,414,335

Total

distributable

earnings

(loss)

................................................................

$(43,414,335)

4.

Income

Taxes

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TG-25

Annual

Report

Templeton

Growth

VIP

Fund

(continued)

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

December

31,

2021,

in

valuing

the

Fund's assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

Growth

VIP

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

$

—

$

10,638,489

$

—

$

10,638,489

Airlines

..............................

5,003,498

3,929,684

—

8,933,182

Auto

Components

......................

4,855,493

5,484,071

—

10,339,564

Automobiles

..........................

—

7,373,238

—

7,373,238

Banks

...............................

6,669,185

—

—

6,669,185

Beverages

...........................

—

16,373,231

—

16,373,231

Biotechnology

.........................

9,954,202

—

—

9,954,202

Chemicals

...........................

16,260,413

3,859,365

—

20,119,778

Consumer

Finance

.....................

7,149,320

—

—

7,149,320

Electric

Utilities

........................

7,080,405

—

—

7,080,405

Entertainment

.........................

11,619,538

—

—

11,619,538

Food

Products

........................

—

6,693,134

—

6,693,134

Health

Care

Equipment

&

Supplies

.........

17,155,472

—

—

17,155,472

Health

Care

Providers

&

Services

..........

15,958,525

5,995,562

—

21,954,087

Hotels,

Restaurants

&

Leisure

.............

20,200,780

7,043,610

—

27,244,390

Household

Durables

....................

—

17,031,615

—

17,031,615

Industrial

Conglomerates

................

4,604,735

4,581,748

—

9,186,483

Insurance

............................

—

7,337,839

—

7,337,839

Internet

&

Direct

Marketing

Retail

..........

2,433,102

6,361,572

—

8,794,674

IT

Services

...........................

15,519,254

6,751,082

—

22,270,336

Machinery

............................

12,255,942

7,191,495

—

19,447,437

Media

...............................

5,580,389

—

—

5,580,389

Metals

&

Mining

.......................

9,685,451

—

—

9,685,451

Multiline

Retail

........................

11,157,710

—

—

11,157,710

Multi-Utilities

..........................

—

10,307,351

—

10,307,351

Oil,

Gas

&

Consumable

Fuels

.............

9,260,249

13,677,566

—

22,937,815

Personal

Products

.....................

—

7,723,806

—

7,723,806

Pharmaceuticals

.......................

8,431,185

17,831,146

—

26,262,331

Semiconductors

&

Semiconductor

Equipment

.

6,418,157

6,110,180

—

12,528,337

Specialty

Retail

........................

16,347,797

4,666,485

—

21,014,282

Technology

Hardware,

Storage

&

Peripherals

.

—

12,857,093

—

12,857,093

Textiles,

Apparel

&

Luxury

Goods

..........

—

8,385,121

—

8,385,121

Wireless

Telecommunication

Services

.......

6,241,000

—

—

6,241,000

Short

Term

Investments

...................

—

15,000,000

—

15,000,000

Total

Investments

in

Securities

...........

$229,841,802

$213,204,483

a

$—

$443,046,285

Franklin

Templeton

Variable

Insurance

Products

Trust

Notes

to

Financial

Statements

TG-26

Annual

Report

Templeton

Growth

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

rates

as

of

the

end

of

2021

for

certain

LIBOR

settings

and

2023

for

the

remainder. 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,

other

than

those

already

disclosed

in

the

financial

statements.

a

Includes

foreign

securities

valued

at

$198,204,483,

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

Report

of

Independent

Registered

Public

Accounting

Firm

TG-27

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Templeton

Variable

Insurance

Products

Trust

and

Shareholders

of

Templeton

Growth

VIP

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

statement

of

investments,

of

Templeton

Growth

VIP

Fund

(one

of

the

funds

constituting

Franklin

Templeton

Variable

Insurance

Products

Trust,

referred

to

hereafter

as

the

“Fund”)

as

of

December

31,

2021,

the

related

statement

of

operations

for

the

year

ended

December

31,

2021,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2021,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2021

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2021

by

correspondence

with

the

custodian

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

PricewaterhouseCoopers

LLP

San

Francisco,

California

February

17,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Templeton

Variable

Insurance

Products

Trust

Tax

Information

(unaudited)

TG-28

Annual

Report

Templeton

Growth

VIP

Fund

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Fund

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

its

fiscal

year.

The

Fund

hereby

reports

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

December

31,

2021:

Note

(1)

-

The

Law

varies

in

each

state

as

to

whether

and

what

percentage

of

dividend

income

attributable

to

Federal

obligations

is

exempt

from

state

income

tax.

Shareholders

are

advised

to

consult

with

their

tax

advisors

to

determine

if

any

portion

of

the

dividends

received

is

exempt

from

state

income

taxes.

Pursuant

to:

Amount

Reported

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$3,431,103

Interest

Earned

from

Federal

Obligations

Note

(1)

$167

Franklin

Templeton

Variable

Insurance

Products

Trust

Index

Descriptions

I-1

Annual

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

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.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

Bloomberg

U.S.

Aggregate

Bond

Index

measures

the

performance

of

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

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

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

Bloomberg

EM

country

definition,

are

excluded.

Bloomberg

U.S.

Government

-

Intermediate

Index

is

the

intermediate

component

of

the

Bloomberg

U.S.

Government

Index,

which

includes

U.S.

dollar-denominated,

fixed-rate,

nominal

U.S.

Treasuries

and

U.S.

agency

debentures

(securities

issued

by

U.S.

government-owned

or

government-sponsored

entities,

and

debt

explicitly

guaranteed

by

the

U.S.

government).

Bloomberg

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

U.S.

Mortgage-Backed

Securities

(MBS)

Index

tracks

the

performance

of

fixed-rate

agency

mortgage-

backed

pass-through

securities

guaranteed

by

Ginnie

Mae

(GNMA),

Fannie

Mae

(FNMA)

and

Freddie

Mac

(FHLMC).

Effective

June

1,

2017,

hybrid

adjustable-rate

mortgages

were

removed

from

the

index.

Bloomberg

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.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

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

12-month

period

ended

12/31/21,

Franklin

Templeton

Variable

Insurance

Products

Trust

Index

Descriptions

I-2

Annual

Report

there

were

365

funds

in

this

category.

Lipper

calculations

do

not

include

sales

charges,

but

include

reinvestment

of

any

income

or

distributions.

Fund

performance

relative

to

the

average

may

have

differed

if

these

and

other

factors

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

12-month

period

ended

12/31/21,

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.

MSCI

All

Country

Asia

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

developed

and

emerging

markets

in

Asia.

MSCI

All

Country

World

Index

(ACWI)

is

a

free

float-

adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

and

emerging

markets.

MSCI

All

Country

World

Index

(ACWI)-NR

is

a

free

float-

adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

and

emerging

markets.

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

and

emerging

markets,

excluding

the

U.S.

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

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

the

equity

market

performance

of

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

the

equity

market

performance

of

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

the

equity

market

performance

of

global

developed

markets.

MSCI

World

Value

Index-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

performance

of

stocks

exhibiting

overall

value

style

characteristics

in

global

developed

markets.

Russell

1000

®

Growth

Index

is

market

capitalization

weighted

and

measures

the

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

the

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

the

performance

of

those

Russell

2000

®

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

rates.

Franklin

Templeton

Variable

Insurance

Products

Trust

Index

Descriptions

I-3

Annual

Report

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

the

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

the

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

Board

Members

and

Officers

BOD-1

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton/Legg

Mason

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1988

120

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

101

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018-present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

121

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987-2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Templeton

Variable

Insurance

Products

Trust

BOD-2

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

2005

and

Lead

Independent

Trustee

since

2019

121

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

Canadian

National

Railway

(railroad)

(2001-2021),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-

2021),

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

121

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Counselor

and

Special

Advisor

to

the

CEO

and

Board

of

Directors

of

the

Coca-Cola

Company

(beverage

company)

(2021-present);

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-

2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

121

Graham

Holdings

Company

(education

and

media

organization)

(2011-2021);

The

Southern

Company

(energy

company)

(2014-2020;

previously

2010-

2012)

and

Cbeyond,

Inc.

(business

communications

provider)

(2010-

2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017-2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

BOD-3

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Valerie

M.

Williams

(1956)

Trustee

Since

May

2021

101

Omnicom

Group,

Inc.

(advertising

and

marketing

communications

services)

(2016-present),

DTE

Energy

Co.

(gas

and

electric

utility)

(2018-present),

Devon

Energy

Corporation

(exploration

and

production

of

oil

and

gas)

(January

2021-present);

and

formerly

,

WPX

Energy,

Inc.

(exploration

and

production

of

oil

and

gas)

(2018-January

2021).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Regional

Assurance

Managing

Partner,

Ernst

&

Young

LLP

(public

accounting)

(2005-2016),

various

roles

of

increasing

responsibility

at

Ernst

&

Young

(1981-2005).

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2013

132

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015)

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board

and

Trustee

Chairman

of

the

Board

since

2013

and

Trustee

since

1988

121

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

October

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Independent

Board

Members

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

BOD-4

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

FASA,

LLC;

Assistant

Secretary,

Franklin

Distributors,

LLC;

and

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

-

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Susan

Kerr

(1949)

Vice

President

-

AML

Compliance

Since

July

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Compliance

Analyst,

Franklin

Templeton;

Chief

Anti-Money

Laundering

Compliance

Officer,

Legg

Mason

&

Co.,

or

its

affiliates;

Anti

Money

Laundering

Compliance

Officer;

Senior

Compliance

Officer,

LMIS;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Christopher

Kings

(1974)

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

January

2022

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Edward

D.

Perks

(1970)

President

and

Chief

Executive

Officer

-

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

BOD-5

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton/Legg

Mason

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007-2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-1

Annual

Report

Board

Approval

of

Investment

Management

Agreements

FRANKLIN

TEMPLETON

VARIABLE

INSURANCE

PRODUCTS

TRUST

Franklin

Allocation

VIP

Fund

(Fund)

At

a

meeting

held

on

September

8,

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

a

new

investment

sub-advisory

agreement

between

Franklin

Advisers,

Inc.

(Manager),

the

Fund’s

investment

manager,

and

each

of

Brandywine

Global

Investment

Management,

LLC,

ClearBridge

Investments,

LLC,

Western

Asset

Management

Company,

LLC,

and

Western

Asset

Management

Company

Limited

(each

a

Sub-Adviser

and

collectively,

the

Sub-Advisers),

on

behalf

of

the

Fund

(each

a

Sub-Advisory

Agreement)

for

an

initial

two-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

each

Sub-Advisory

Agreement.

The

Board

reviewed

and

considered

information

provided

by

the

Manager

and

the

Sub-Advisers

at

the

Meeting

with

respect

to

each

Sub-Advisory

Agreement.

The

Board

also

reviewed

and

considered

the

factors

it

deemed

relevant

in

approving

each

Sub-Advisory

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent,

and

quality

of

the

services

to

be

provided

by

each

Sub-Adviser;

and

(ii)

the

costs

of

the

services

to

be

provided

by

each

Sub-Adviser.

The

Board

further

reviewed

and

considered

information

provided

by

management

showing

the

expected

impact

of

hiring

each

Sub-Adviser

on

the

Manager’s

profitability

consistent

with

the

Order

(as

defined

below).

The

Board

also

considered

that

management

proposed

that

the

Board

approve

each

Sub-Advisory

Agreement

in

order

to

provide

the

Fund’s

portfolio

management

team

with

access

to

additional

investment

strategies

that

could

be

accessed

to

attain

desired

exposures

across

asset

allocation

portfolios

and

to

diversify

holdings

in

the

Fund.

The

Board

reviewed

and

further

considered

the

form

of

Sub-Advisory

Agreement

and

the

terms

of

each

Sub-Advisory

Agreement

which

were

discussed

at

the

Meeting,

noting

that

the

terms

and

conditions

of

each

Sub-Advisory

Agreement

were

substantially

similar

to

the

terms

and

conditions

of

the

Fund’s

other

sub-advisory

agreements

and

substantially

similar

to

the

terms

and

conditions

of

sub-advisory

agreements

for

other

Franklin

Templeton

(FT)

mutual

funds.

In

approving

each

Sub-Advisory

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

hiring

of

each

Sub-Adviser

is

in

the

best

interests

of

the

Fund

and

its

shareholders

and

does

not

involve

a

conflict

of

interest

from

which

the

Manager

or

Sub-Adviser

derives

an

inappropriate

advantage.

The

Board

also

determined

that

the

terms

of

each

Sub-Advisory

Agreement

are

fair

and

reasonable

and

that

the

approval

of

such

Sub-Advisory

Agreement

is

in

the

best

interests

of

the

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

to

be

provided

by

each

Sub-Adviser

and

currently

being

provided

by

the

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

In

doing

so,

the

Board

noted

that

the

Fund

employs

a

"manager

of

managers"

structure

pursuant

to

an

exemptive

order

(Order)

granted

to

the

Manager

by

the

U.S.

Securities

and

Exchange

Commission,

whereby

the

Manager

and

the

Fund

may,

without

shareholder

approval,

enter

into

sub-advisory

agreements

with

sub-advisers

that

are

indirect

or

direct

wholly

owned

subsidiaries

of

Franklin

Resources,

Inc.

(FRI).

In

particular,

with

respect

to

each

Sub-Adviser,

the

Board

took

into

account

that

each

Sub-

Advisory

Agreement

would

not

affect

how

the

Fund

is

managed

or

the

Fund's

investment

goal,

principal

investment

strategies

or

principal

risks

associated

with

an

investment

in

the

Fund.

The

Board

reviewed

and

considered

information

regarding

the

nature,

quality

and

extent

of

investment

sub-

advisory

services

to

be

provided

by

each

Sub-Adviser

to

the

Fund

and

its

shareholders

under

each

Sub-Advisory

Agreement;

each

Sub-Adviser's

experience

as

manager

of

other

funds

and

accounts,

including

those

within

the

FT

organization;

the

personnel,

operations,

financial

condition,

and

investment

management

capabilities,

methodologies

and

resources

of

each

Sub-Adviser

and

each

Sub-Adviser's

capabilities,

as

demonstrated

by,

among

other

things,

its

policies

and

procedures

reasonably

designed

to

prevent

violations

of

the

federal

securities

laws.

Franklin

Templeton

Variable

Insurance

Products

Trust

Shareholder

Information

SI-2

Annual

Report

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

FRI,

the

parent

of

the

Manager

and

each

Sub-Adviser,

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

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

to

be

provided

by

each

Sub-Adviser

and

its

affiliates

to

the

Fund

and

its

shareholders.

Fund

Performance

The

Board

noted

its

review

and

consideration

of

the

performance

results

of

the

Fund

in

connection

with

the

April

2021

annual

contract

renewal

(Annual

Contract

Renewal)

of

the

Fund’s

investment

management

agreement.

The

Board

recalled

its

conclusion

at

that

time

that

the

Fund’s

performance

was

satisfactory.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

the

investment

sub-advisory

fee

to

be

charged

by

each

Sub-Adviser.

The

Board

noted

that

the

addition

of

each

Sub-

Adviser

will

have

no

impact

on

the

amount

of

management

fees

that

are

currently

paid

by

the

Fund

as

each

Sub-Adviser

will

be

paid

by

the

Manager

out

of

the

management

fee

that

the

Manager

receives

from

the

Fund.

The

Board

further

noted

that

the

allocation

of

the

fee

between

the

Manager

and

each

Sub-Adviser

reflected

the

services

to

be

provided

by

each.

The

Board

concluded

that

each

proposed

investment

sub-advisory

fee

is

reasonable.

Management

Profitability

and

Economies

of

Scale

The

Board

noted

that

it

reviewed

and

considered

information

showing

the

expected

impact

of

retaining

each

Sub-

Adviser

on

the

profitability

of

the

Manager

consistent

with

the

conditions

of

the

Order.

The

Board

determined

that

its

conclusions

regarding

profitability

and

economies

of

scale

reached

in

connection

with

the

Annual

Contract

Renewal

of

the

investment

management

agreement

with

the

Manager

had

not

changed

as

a

result

of

the

proposal

to

approve

each

Sub-Advisory

Agreement.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

each

Sub-Advisory

Agreement

for

an

initial

two-year

period.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

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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.

(a)      Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $782,449 for the fiscal year ended

December 31, 2021

and $929,368 for the fiscal year ended December 31, 2020

.

(b)      Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements. 

(c)      Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $100,125 for the fiscal year ended December 31, 2021 and $202,570 for the fiscal year ended December 31, 2020.  The services for which these fees were paid included tax compliance services related to year-end.

(d)      All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $8,122 for the fiscal year ended December 31, 2021 and $0 for the fiscal year ended December 31, 2020.  The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $90,743 for the fiscal year ended December 31, 2021 and $55,772 for the fiscal year ended December 31, 2020.  The services for which these fees were paid included benchmarking services in connection with the ICI TA survey, assets under management certification,

professional fees in connection with determining the feasibility of a U.S. direct lending structure, compliance examination for Investment Advisor Act rule 204-2 and 206-4 (2), the issuance of an Auditors’ Certificate for South Korean regulatory shareholder disclosures, professional services relating to the readiness assessment over Greenhouse Gas Emissions and Energy, and professional fees in connection with SOC 1 Reports. 

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

      (i)   pre-approval of all audit and audit related services;

      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;

      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $198,990 for the fiscal year ended December 31, 2021 and $258,342 for the fiscal year ended December 31, 2020.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee

of Listed Registrants.             

N/A

Item 6. Schedule of Investments.                           

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2021

Franklin Strategic Income VIP Fund

	Country	Shares		Value
Common Stocks 0.3%
Energy Equipment & Services 0.1%
aWeatherford International plc	United States		13,794	$	382,370
Machinery 0.1%
aBirch Permian Holdings, Inc.	United States		4,478		67,170
aBirch Permian Holdings, Inc.	United States		34,907		519,242
					586,412
Media 0.1%
aClear Channel Outdoor Holdings, Inc.	United States		20,804		68,861
aiHeartMedia, Inc., A	United States		8,384		176,399
a,biHeartMedia, Inc., B	United States		142		2,779
					248,039
Multiline Retail 0.0%
a,b,cK2016470219 South Africa Ltd., A	South Africa		14,792,309		—
a,b,cK2016470219 South Africa Ltd., B	South Africa		1,472,041		—
					—
Oil, Gas & Consumable Fuels 0.0%†
aAmplify Energy Corp.	United States		431		1,340
a,b,cRiviera Resources, Inc.	United States		6,620		—
					1,340
Specialty Retail 0.0%†
aParty City Holdco, Inc.	United States		1		4
Total Common Stocks (Cost $2,063,659)					1,218,165
Management Investment Companies 7.9%
Capital Markets 7.9%
dFranklin Floating Rate Income Fund	United States		3,420,372		27,739,219
SPDR Blackstone Senior Loan ETF	United States		65,000		2,965,950
					30,705,169
Total Management Investment Companies (Cost $34,601,922)					30,705,169

Warrants 0.0%†		Warrants
Oil, Gas & Consumable Fuels 0.0%†
a,bBattalion Oil Corp., A, 10/08/22	United States	879	2
a,bBattalion Oil Corp., B, 10/08/22	United States	1,098	1
a,bBattalion Oil Corp., C, 10/08/22	United States	1,412	—
			3
Paper & Forest Products 0.0%†
aVerso Corp., 7/25/23	United States	592	6,689
Total Warrants (Cost $—)			6,692

		Principal
Convertible Bonds 0.0%†		Amount*
Wireless Telecommunication Services 0.0%†
e,f,gDigicel Group Holdings Ltd., Sub. Bond, 144A, PIK, 7%, Perpetual	Bermuda	28,116	23,986
Total Convertible Bonds (Cost $6,871)			23,986
Corporate Bonds 50.8%
Aerospace & Defense 0.6%
Boeing Co. (The), Senior Note, 5.15%, 5/01/30	United States	700,000	816,238
gTransDigm, Inc., Senior Secured Note, 144A, 6.25%, 3/15/26	United States	1,400,000	1,456,896
			2,273,134
Air Freight & Logistics 0.3%
gDAE Funding LLC, Senior Note, 144A, 1.55%, 8/01/24	United Arab Emirates	300,000	298,114
FedEx Corp., Senior Bond, 4.05%, 2/15/48	United States	650,000	731,616
			1,029,730
Airlines 1.2%
gAmerican Airlines Inc/AAdvantage Loyalty IP Ltd., Senior Secured Note, 144A, 5.75%, 4/20/29	United States	600,000	642,453
gAzul Investments LLP, Senior Note, 144A, 7.25%, 6/15/26	Brazil	700,000	642,110
gDelta Air Lines, Inc. / SkyMiles IP Ltd., Senior Secured Note, 144A, 4.5%, 10/20/25	United States	1,100,000	1,156,795
gHawaiian Brand Intellectual Property Ltd. / HawaiianMiles Loyalty Ltd., Senior Secured Note, 144A, 5.75%, 1/20/26	United States	900,000	942,835
gInternational Consolidated Airlines Group SA, Senior Note, Reg S, 3.75%, 3/25/29	United Kingdom	1,000,000 EUR	1,115,267
gUnited Airlines, Inc., Senior Secured Note, 144A, 4.375%, 4/15/26	United States	100,000	104,405
			4,603,865
Auto Components 1.5%
gAllison Transmission, Inc.,
Senior Bond, 144A, 5.875%, 6/01/29	United States	800,000	871,104
Senior Bond, 144A, 3.75%, 1/30/31	United States	500,000	488,387
Dana, Inc., Senior Note, 5.625%, 6/15/28	United States	1,200,000	1,276,656
gDornoch Debt Merger Sub, Inc., Senior Note, 144A, 6.625%, 10/15/29	United States	900,000	889,875
Goodyear Tire & Rubber Co. (The), g Senior Note, 144A, 5%, 7/15/29.	United States	800,000	860,880
Senior Note, 4.875%, 3/15/27	United States	500,000	529,945
gReal Hero Merger Sub 2, Inc., Senior Note, 144A, 6.25%, 2/01/29	United States	1,000,000	999,845
			5,916,692
Automobiles 0.3%
gJaguar Land Rover Automotive plc, Senior Note, 144A, 5.5%, 7/15/29	United Kingdom	1,200,000	1,202,976
Banks 1.8%
Banco Santander SA, Sub. Note, 2.749%, 12/03/30	Spain	300,000	293,921
gBNP Paribas SA, Senior Note, 144A, 2.219% to 6/09/25, FRN thereafter, 6/09/26	France	500,000	505,061
gChina Construction Bank Corp., Sub. Note, Reg S, 4.25% to 2/27/24, FRN thereafter, 2/27/29	China	800,000	842,368
HSBC Holdings plc,
Senior Bond, 2.848% to 6/04/30, FRN thereafter, 6/04/31	United Kingdom	800,000	810,105
Senior Bond, 2.357% to 8/18/30, FRN thereafter, 8/18/31	United Kingdom	300,000	293,424
JPMorgan Chase & Co.,
f R, Junior Sub. Bond, 6% to 8/01/23, FRN thereafter, Perpetual	United States	213,000	222,345
Senior Bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31	United States	1,000,000	1,011,815
Senior Note, 3.2%, 6/15/26	United States	1,213,000	1,287,579
gSociete Generale SA, Senior Bond, 144A, 2.889% to 6/09/31, FRN thereafter, 6/09/32	France	800,000	798,665
SVB Financial Group, Senior Note, 3.125%, 6/05/30	United States	300,000	315,203
gUniCredit SpA, Senior Bond, 144A, 3.127% to 6/03/31, FRN thereafter, 6/03/32	Italy	500,000	494,639
			6,875,125
Beverages 0.7%
Anheuser-Busch InBev Worldwide, Inc., Senior Bond, 3.5%, 6/01/30	Belgium	1,700,000	1,865,325
gPrimo Water Holdings, Inc., Senior Note, 144A, 4.375%, 4/30/29	Canada	1,000,000	991,640
			2,856,965
Biotechnology 0.2%
AbbVie, Inc., Senior Note, 3.2%, 11/21/29	United States	700,000	749,210
Building Products 0.4%
Owens Corning, Senior Bond, 4.3%, 7/15/47	United States	700,000	803,165
gStandard Industries, Inc.,
Senior Bond, 144A, 4.75%, 1/15/28	United States	500,000	517,158
Senior Bond, 144A, 4.375%, 7/15/30	United States	200,000	204,456
Senior Bond, 144A, 3.375%, 1/15/31	United States	200,000	193,000
			1,717,779

Capital Markets 0.6%
Goldman Sachs Group, Inc. (The), Senior Bond, 3.21% to 4/22/41, FRN thereafter, 4/22/42	United States	400,000	415,604
Morgan Stanley, Senior Bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28	United States	809,000	872,835
gMSCI, Inc., Senior Bond, 144A, 3.25%, 8/15/33	United States	1,200,000	1,215,366
			2,503,805
Chemicals 4.0%
gAlpek SAB de CV, Senior Note, 144A, 4.25%, 9/18/29	Mexico	800,000	852,148
e,gAnagram International, Inc. / Anagram Holdings LLC, Secured Note, 144A, PIK, 10%, 8/15/26	United States	134,384	137,811
gBraskem Idesa SAPI, Senior Secured Bond, 144A, 6.99%, 2/20/32	Mexico	900,000	904,860
gBraskem Netherlands Finance BV, Senior Bond, 144A, 4.5%, 1/31/30	Brazil	1,600,000	1,704,368
CF Industries, Inc., Senior Bond, 5.15%, 3/15/34	United States	400,000	484,442
gCNAC HK Finbridge Co. Ltd., Senior Note, Reg S, 4.875%, 3/14/25	China	800,000	869,461
gConsolidated Energy Finance SA, Senior Note, 144A, 5.625%, 10/15/28	Switzerland	700,000	685,234
gCVR Partners LP / CVR Nitrogen Finance Corp., Senior Secured Note, 144A, 6.125%, 6/15/28	United States	300,000	316,942
gDiamond BC BV, Senior Note, 144A, 4.625%, 10/01/29	United States	300,000	298,046
gElement Solutions, Inc., Senior Note, 144A, 3.875%, 9/01/28	United States	1,100,000	1,107,078
gGates Global LLC / Gates Corp., Senior Note, 144A, 6.25%, 1/15/26	United States	1,200,000	1,240,314
gINEOS Quattro Finance 1 plc, Senior Note, 144A, 3.75%, 7/15/26 . United Kingdom		800,000 EUR	917,201
gIngevity Corp., Senior Note, 144A, 3.875%, 11/01/28	United States	400,000	390,106
e,gKobe US Midco 2, Inc., Senior Note, 144A, PIK, 9.25%, 11/01/26	United States	300,000	308,218
gLSF11 A5 HoldCo LLC, Senior Note, 144A, 6.625%, 10/15/29	United States	600,000	591,843
Methanex Corp., Senior Note, 5.125%, 10/15/27	Canada	500,000	525,500
gSABIC Capital II BV, Senior Note, 144A, 4.5%, 10/10/28	Saudi Arabia	600,000	678,279
Sasol Financing USA LLC, Senior Bond, 6.5%, 9/27/28	South Africa	900,000	976,464
gSCIH Salt Holdings, Inc.,
Senior Note, 144A, 6.625%, 5/01/29	United States	500,000	468,202
Senior Secured Note, 144A, 4.875%, 5/01/28	United States	300,000	288,470
gSyngenta Finance NV, Senior Note, 144A, 4.892%, 4/24/25	Switzerland	800,000	859,820
gUnifrax Escrow Issuer Corp.,
Senior Note, 144A, 7.5%, 9/30/29	United States	200,000	202,284
Senior Secured Note, 144A, 5.25%, 9/30/28	United States	300,000	303,810
Westlake Chemical Corp., Senior Note, 3.375%, 6/15/30	United States	200,000	212,201
gYara International ASA, Senior Note, 144A, 3.148%, 6/04/30	Brazil	100,000	103,280
			15,426,382
Commercial Services & Supplies 0.9%
gAllied Universal Holdco LLC / Allied Universal Finance Corp. / Atlas LuxCo 4 SARL, Senior Secured Note, 144A, 4.625%, 6/01/28	United States	200,000	196,600
gAPCOA Parking Holdings GmbH, Senior Secured Note, 144A, 4.625%, 1/15/27	Germany	200,000 EUR	226,143
gAPX Group, Inc., Senior Note, 144A, 5.75%, 7/15/29	United States	700,000	690,487
gPrime Security Services Borrower LLC / Prime Finance, Inc., Senior Secured Note, 144A, 3.375%, 8/31/27	United States	1,300,000	1,256,678
gStericycle, Inc., Senior Note, 144A, 3.875%, 1/15/29	United States	1,000,000	986,475
			3,356,383
Communications Equipment 0.3%
gCommScope Technologies LLC, Senior Note, 144A, 5%, 3/15/27	United States	1,374,000	1,286,064
Construction & Engineering 0.2% gArcosa, Inc., Senior Note, 144A, 4.375%, 4/15/29	United States	300,000	304,569
gGreat Lakes Dredge & Dock Corp., Senior Note, 144A, 5.25%, 6/01/29	United States	500,000	515,753
gRutas 2 and 7 Finance Ltd., Senior Secured Bond, 144A, Zero Cpn., 9/30/36	United States	200,000	147,768
			968,090
Construction Materials 0.2%
gCemex SAB de CV, Senior Bond, 144A, 3.875%, 7/11/31	Mexico	700,000	698,541
Consumer Finance 0.5%
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, Senior Bond, 3.4%, 10/29/33	Ireland	500,000	509,681
gPRA Group, Inc., Senior Note, 144A, 5%, 10/01/29	United States	300,000	301,203
gPROG Holdings, Inc., Senior Note, 144A, 6%, 11/15/29	United States	1,000,000	1,030,380
			1,841,264
Containers & Packaging 1.4%
gArdagh Metal Packaging Finance USA LLC / Ardagh Metal Packaging Finance plc, Senior Note, 144A, 4%, 9/01/29	United States	800,000	793,868
gArdagh Packaging Finance plc / Ardagh Holdings USA, Inc., Senior Note, 144A, 5.25%, 8/15/27	United States	300,000	302,213
gMauser Packaging Solutions Holding Co., Senior Note, 144A, 7.25%, 4/15/25	United States	1,278,000	1,282,665
gOwens-Brockway Glass Container, Inc.,
Senior Note, 144A, 5.875%, 8/15/23	United States	566,000	593,459
Senior Note, 144A, 6.625%, 5/13/27	United States	100,000	105,600
gPactiv Evergreen Group Issuer, LLC / Pactiv Evergreen Group Issuer Inc., Senior Secured Note, 144A, 4.375%, 10/15/28	United States	500,000	497,008
gPactiv Evergreen Group Issuer, Inc./Pactiv Evergreen Group Issuer LLC/Reynolds Group Holdings Ltd., Senior Secured Note, 144A, 4%, 10/15/27	United States	600,000	584,292
gSealed Air Corp.,
Senior Bond, 144A, 5.5%, 9/15/25	United States	124,000	137,299
Senior Note, 144A, 5.125%, 12/01/24	United States	709,000	760,154
WRKCo, Inc., Senior Bond, 3%, 6/15/33	United States	400,000	411,940
			5,468,498
Diversified Consumer Services 0.2%
Grand Canyon University, 5.125%, 10/01/28	United States	800,000	823,444
Diversified Financial Services 0.6%
gJefferson Capital Holdings LLC, Senior Note, 144A, 6%, 8/15/26	United States	700,000	709,471
gMPH Acquisition Holdings LLC, Senior Note, 144A, 5.75%, 11/01/28	United States	1,500,000	1,428,772
			2,138,243
Diversified Telecommunication Services 1.3%
gAltice France Holding SA, Senior Note, 144A, 6%, 2/15/28	Luxembourg	900,000	861,120
gAltice France SA, Senior Secured Note, 144A, 5.5%, 1/15/28	France	200,000	198,785
AT&T, Inc., Senior Bond, 3.65%, 9/15/59	United States	800,000	809,484
CCO Holdings LLC / CCO Holdings Capital Corp.,
g Senior Bond, 144A, 4.5%, 8/15/30	United States	300,000	307,570
Senior Bond, 4.5%, 5/01/32	United States	1,000,000	1,030,415
gIliad Holding SASU,
Senior Secured Note, 144A, 6.5%, 10/15/26	France	300,000	315,627
Senior Secured Note, 144A, 7%, 10/15/28	France	600,000	631,968
Telefonica Emisiones SA, Senior Bond, 4.895%, 3/06/48	Spain	150,000	180,857
gVirgin Media Secured Finance plc, Senior Secured Bond, 144A, 4.5%, 8/15/30	United Kingdom	900,000	907,137
			5,242,963
Electric Utilities 1.6%
gCGNPC International Ltd., Senior Note, Reg S, 3.75%, 12/11/27	China	300,000	318,125
Duke Energy Corp., Senior Bond, 2.45%, 6/01/30	United States	400,000	397,593
Exelon Corp., Senior Bond, 4.05%, 4/15/30	United States	1,300,000	1,445,909
Southern Co. (The), Senior Bond, 4.4%, 7/01/46	United States	400,000	469,747
gState Grid Overseas Investment BVI Ltd., Senior Note, 144A, 3.5%, 5/04/27	China	1,651,000	1,784,223
Virginia Electric and Power Co., Senior Bond, 6.35%, 11/30/37	United States	85,000	121,164
gVistra Operations Co. LLC,
Senior Note, 144A, 4.375%, 5/01/29	United States	1,100,000	1,104,010
Senior Secured Bond, 144A, 4.3%, 7/15/29	United States	500,000	535,218
			6,175,989
Electrical Equipment 0.5%
gSensata Technologies BV, Senior Note, 144A, 4%, 4/15/29	United States	1,000,000	1,022,980
gVertiv Group Corp., Senior Secured Note, 144A, 4.125%, 11/15/28	United States	900,000	910,543
			1,933,523
Electronic Equipment, Instruments & Components 0.5%
CDW LLC / CDW Finance Corp., Senior Note, 3.25%, 2/15/29	United States	900,000	909,328
Flex Ltd., Senior Note, 4.875%, 5/12/30	United States	800,000	913,250
			1,822,578

Energy Equipment & Services 0.7%
gNabors Industries Ltd., Senior Note, 144A, 7.25%, 1/15/26	United States	800,000	740,832
gNabors Industries, Inc., Senior Note, 144A, 7.375%, 5/15/27	United States	200,000	207,238
gSchlumberger Holdings Corp., Senior Note, 144A, 3.9%, 5/17/28	United States	400,000	432,423
gWeatherford International Ltd.,
Senior Note, 144A, 11%, 12/01/24	United States	51,000	52,583
Senior Note, 144A, 8.625%, 4/30/30	United States	1,200,000	1,247,766
			2,680,842
Entertainment 0.5%
gLive Nation Entertainment, Inc., Senior Secured Note, 144A, 3.75%, 1/15/28	United States	600,000	597,000
Netflix, Inc.,
Senior Bond, 4.375%, 11/15/26	United States	300,000	332,644
Senior Bond, 5.875%, 11/15/28	United States	1,000,000	1,204,180
			2,133,824
Equity Real Estate Investment Trusts (REITs) 1.2%
gAmerican Finance Trust, Inc. / American Finance Operating Partner LP, Senior Note, 144A, 4.5%, 9/30/28	United States	500,000	504,438
AvalonBay Communities, Inc., Senior Bond, 2.45%, 1/15/31	United States	500,000	513,062
gGlobal Net Lease, Inc. / Global Net Lease Operating Partnership LP, Senior Note, 144A, 3.75%, 12/15/27	United States	400,000	390,970
gMGM Growth Properties Operating Partnership LP / MGP Finance Co-Issuer, Inc., Senior Note, 144A, 3.875%, 2/15/29	United States	300,000	315,431
MPT Operating Partnership LP / MPT Finance Corp., Senior Bond, 3.5%, 3/15/31	United States	300,000	303,837
Simon Property Group LP, Senior Bond, 4.25%, 11/30/46	United States	800,000	950,233
gVICI Properties LP / VICI Note Co., Inc., Senior Note, 144A, 3.75%, 2/15/27	United States	1,400,000	1,447,628
gXHR LP, Senior Secured Note, 144A, 4.875%, 6/01/29	United States	400,000	407,684
			4,833,283
Food & Staples Retailing 0.2%
gCencosud SA, Senior Note, 144A, 4.375%, 7/17/27	Chile	700,000	750,582
Food Products 1.2%
gBimbo Bakeries USA, Inc., Senior Bond, 144A, 4%, 5/17/51	Mexico	200,000	216,954
gChobani LLC / Chobani Finance Corp., Inc., Senior Secured Note, 144A, 4.625%, 11/15/28	United States	1,200,000	1,234,680
gJBS Finance Luxembourg SARL,
Senior Bond, 144A, 3.625%, 1/15/32	United States	400,000	402,196
Senior Note, 144A, 2.5%, 1/15/27	United States	700,000	693,007
gLamb Weston Holdings, Inc., Senior Note, 144A, 4.125%, 1/31/30	United States	1,200,000	1,233,504
gPost Holdings, Inc., Senior Bond, 144A, 4.5%, 9/15/31	United States	800,000	795,296
			4,575,637
Gas Utilities 0.1%
Piedmont Natural Gas Co., Inc., Senior Bond, 3.35%, 6/01/50	United States	300,000	308,928
Health Care Equipment & Supplies 0.2%
gMozart Debt Merger Sub, Inc.,
Senior Note, 144A, 5.25%, 10/01/29	United States	500,000	507,860
Senior Secured Note, 144A, 3.875%, 4/01/29	United States	400,000	399,388
			907,248
Health Care Providers & Services 1.5%
Anthem, Inc., Senior Bond, 3.7%, 9/15/49	United States	150,000	167,345
Centene Corp.,
Senior Note, 4.25%, 12/15/27	United States	300,000	313,269
Senior Note, 2.45%, 7/15/28	United States	100,000	98,654
Senior Note, 4.625%, 12/15/29	United States	200,000	216,038
Senior Note, 3.375%, 2/15/30	United States	600,000	612,033
Senior Note, 2.625%, 8/01/31	United States	200,000	196,333
gCHS/Community Health Systems, Inc.,
Secured Note, 144A, 6.875%, 4/15/29	United States	800,000	816,224
Senior Secured Note, 144A, 5.625%, 3/15/27	United States	700,000	741,685
CVS Health Corp., Senior Bond, 1.75%, 8/21/30	United States	400,000	381,645
gDaVita, Inc., Senior Note, 144A, 4.625%, 6/01/30	United States	1,200,000	1,230,672
HCA, Inc., Senior Bond, 3.5%, 9/01/30	United States	100,000	105,887
gModivCare Escrow Issuer, Inc., Senior Note, 144A, 5%, 10/01/29	United States	500,000	511,390
Orlando Health Obligated Group, 3.777%, 10/01/28	United States	330,000	360,607
Quest Diagnostics, Inc., Senior Bond, 2.8%, 6/30/31	United States	200,000	206,755
			5,958,537
Hotels, Restaurants & Leisure 2.6%
gCarnival Corp., Senior Note, 144A, 5.75%, 3/01/27	United States	720,000	721,080
gEveri Holdings, Inc., Senior Note, 144A, 5%, 7/15/29	United States	700,000	708,151
gGolden Nugget, Inc., Senior Note, 144A, 6.75%, 10/15/24	United States	632,000	632,822
Las Vegas Sands Corp., Senior Bond, 3.9%, 8/08/29	United States	800,000	806,380
gMelco Resorts Finance Ltd., Senior Note, 144A, 5.75%, 7/21/28	Hong Kong	600,000	604,164
gMotion Bondco DAC, Senior Note, 144A, 6.625%, 11/15/27 United Kingdom		200,000	202,283
gNCL Corp. Ltd., Senior Note, 144A, 5.875%, 3/15/26	United States	1,800,000	1,794,375
gPapa John's International, Inc., Senior Note, 144A, 3.875%, 9/15/29	United States	300,000	298,943
gPenn National Gaming, Inc., Senior Note, 144A, 4.125%, 7/01/29	United States	300,000	291,454
gPremier Entertainment Sub LLC / Premier Entertainment Finance
Corp.,
Senior Bond, 144A, 5.875%, 9/01/31	United States	400,000	402,000
Senior Note, 144A, 5.625%, 9/01/29	United States	500,000	496,797
gRoyal Caribbean Cruises Ltd., Senior Note, 144A, 5.5%, 8/31/26	United States	1,400,000	1,425,088
gStudio City Finance Ltd., Senior Note, 144A, 5%, 1/15/29	Macau	1,200,000	1,075,878
gWynn Macau Ltd., Senior Note, 144A, 5.625%, 8/26/28	Macau	700,000	649,250
			10,108,665
Household Durables 0.7%
M/I Homes, Inc., Senior Note, 3.95%, 2/15/30	United States	600,000	591,909
Mohawk Industries, Inc., Senior Note, 3.625%, 5/15/30	United States	1,300,000	1,395,576
gWilliams Scotsman International, Inc., Senior Secured Note, 144A, 4.625%, 8/15/28	United States	700,000	723,761
			2,711,246
Household Products 0.7%
gCentral Garden & Pet Co., Senior Bond, 144A, 4.125%, 4/30/31	United States	700,000	704,532
gEnergizer Holdings, Inc., Senior Note, 144A, 4.375%, 3/31/29	United States	1,300,000	1,270,705
gKimberly-Clark de Mexico SAB de CV, Senior Bond, 144A, 2.431%, 7/01/31	Mexico	300,000	296,894
gSpectrum Brands, Inc., Senior Bond, 144A, 3.875%, 3/15/31	United States	500,000	494,487
			2,766,618
Independent Power and Renewable Electricity Producers 1.8%
gAtlantica Sustainable Infrastructure plc, Senior Note, 144A, 4.125%, 6/15/28	Spain	400,000	403,574
gCalpine Corp.,
Senior Bond, 144A, 5%, 2/01/31	United States	600,000	600,927
Senior Note, 144A, 5.125%, 3/15/28	United States	200,000	203,356
Senior Note, 144A, 4.625%, 2/01/29	United States	700,000	691,436
gClearway Energy Operating LLC, Senior Note, 144A, 3.75%, 2/15/31	United States	700,000	699,328
gColbun SA,
Senior Note, 144A, 3.95%, 10/11/27	Chile	800,000	846,420
Senior Note, 144A, 3.15%, 3/06/30	Chile	300,000	300,487
gInterGen NV, Senior Secured Bond, 144A, 7%, 6/30/23	Netherlands	1,100,000	1,093,427
gLeeward Renewable Energy Operations LLC, Senior Note, 144A, 4.25%, 7/01/29	United States	1,000,000	1,011,480
gTalen Energy Supply LLC, Senior Secured Note, 144A, 7.25%, 5/15/27	United States	1,300,000	1,151,800
			7,002,235
Insurance 0.3%
Arch Capital Group Ltd., Senior Bond, 3.635%, 6/30/50	United States	1,000,000	1,072,783
Interactive Media & Services 0.5%
gTencent Holdings Ltd., Senior Note, 144A, 2.39%, 6/03/30	China	2,100,000	2,059,704
Internet & Direct Marketing Retail 0.6%
Alibaba Group Holding Ltd., Senior Bond, 4%, 12/06/37	China	400,000	434,334

JD.com, Inc., Senior Note, 3.375%, 1/14/30	China	1,200,000	1,253,067
gMatch Group Holdings II LLC, Senior Note, 144A, 3.625%, 10/01/31	United States	600,000	583,635
			2,271,036
IT Services 1.1%
gCablevision Lightpath LLC, Senior Secured Note, 144A, 3.875%, 9/15/27	United States	900,000	873,936
gGartner, Inc.,
Senior Note, 144A, 4.5%, 7/01/28	United States	700,000	732,207
Senior Note, 144A, 3.625%, 6/15/29	United States	200,000	202,535
gNorthwest Fiber LLC / Northwest Fiber Finance Sub, Inc., Senior
Note, 144A, 6%, 2/15/28	United States	1,100,000	1,079,760
gPresidio Holdings, Inc., Senior Secured Note, 144A, 4.875%, 2/01/27	United States	1,200,000	1,237,272
			4,125,710
Machinery 0.7%
gATS Automation Tooling Systems, Inc., Senior Note, 144A, 4.125%, 12/15/28	Canada	1,400,000	1,412,586
gTK Elevator U.S. Newco, Inc., Senior Secured Note, 144A, 5.25%, 7/15/27	Germany	1,100,000	1,157,783
			2,570,369
Marine 0.3%
gICTSI Treasury BV, Senior Note, Reg S, 4.625%, 1/16/23	Philippines	1,200,000	1,249,980
Media 2.4%
Charter Communications Operating LLC / Charter Communications
Operating Capital, Senior Secured Bond, 2.8%, 4/01/31	United States	1,300,000	1,287,937
gClear Channel Outdoor Holdings, Inc.,
Senior Note, 144A, 7.75%, 4/15/28	United States	400,000	428,612
Senior Note, 144A, 7.5%, 6/01/29	United States	300,000	320,766
gClear Channel Worldwide Holdings, Inc., Senior Secured Note, 144A, 5.125%, 8/15/27	United States	300,000	310,800
gDiamond Sports Group LLC / Diamond Sports Finance Co., Senior Secured Note, 144A, 5.375%, 8/15/26	United States	600,000	300,690
gDirectv Financing LLC / Directv Financing Co-Obligor, Inc., Senior Secured Note, 144A, 5.875%, 8/15/27	United States	200,000	205,040
gDISH DBS Corp., Senior Secured Note, 144A, 5.75%, 12/01/28	United States	1,400,000	1,416,625
gNexstar Media, Inc., Senior Note, 144A, 4.75%, 11/01/28	United States	800,000	816,460
gOutfront Media Capital LLC / Outfront Media Capital Corp., Senior Note, 144A, 4.25%, 1/15/29	United States	1,100,000	1,103,669
gSinclair Television Group, Inc.,
Senior Bond, 144A, 5.5%, 3/01/30	United States	300,000	291,421
Senior Secured Note, 144A, 4.125%, 12/01/30	United States	800,000	759,212
gSirius XM Radio, Inc., Senior Note, 144A, 4%, 7/15/28	United States	600,000	604,392
gUnivision Communications, Inc.,
Senior Secured Note, 144A, 5.125%, 2/15/25	United States	1,321,000	1,335,855
Senior Secured Note, 144A, 4.5%, 5/01/29	United States	100,000	101,178
			9,282,657
Metals & Mining 1.2%
Commercial Metals Co., Senior Bond, 3.875%, 2/15/31	United States	1,200,000	1,192,770
gConstellium SE, Senior Note, 144A, 3.75%, 4/15/29	United States	1,000,000	985,370
gCSN Inova Ventures, Senior Note, 144A, 6.75%, 1/28/28	Brazil	800,000	843,364
gFMG Resources August 2006 Pty. Ltd., Senior Bond, 144A, 4.375%, 4/01/31	Australia	700,000	736,211
gNovelis Corp., Senior Bond, 144A, 3.875%, 8/15/31	United States	200,000	199,061
gSunCoke Energy, Inc., Senior Secured Note, 144A, 4.875%, 6/30/29	United States	600,000	597,903
			4,554,679
Mortgage Real Estate Investment Trusts (REITs) 0.0%†
gApollo Commercial Real Estate Finance, Inc., Senior Secured Note, 144A, 4.625%, 6/15/29	United States	100,000	96,896
Multiline Retail 0.0%
b,e,gK2016470219 South Africa Ltd., Senior Secured Note, 144A, PIK, 3%, 12/31/22	South Africa	1,005,954	—
b,e,gK2016470260 South Africa Ltd., Senior Secured Note, 144A, PIK, 25%, 12/31/22	South Africa	446,180	—
			—
Oil, Gas & Consumable Fuels 5.0%
gAntero Resources Corp.,
Senior Note, 144A, 8.375%, 7/15/26	United States	130,000	148,179
Senior Note, 144A, 7.625%, 2/01/29	United States	166,000	184,523
Apache Corp.,
Senior Note, 4.625%, 11/15/25	United States	600,000	644,994
Senior Note, 4.875%, 11/15/27	United States	500,000	545,713
Canadian Natural Resources Ltd., Senior Bond, 2.95%, 7/15/30	Canada	450,000	456,241
Cenovus Energy, Inc., Senior Note, 5.375%, 7/15/25	Canada	277,000	305,928
gCrestwood Midstream Partners LP / Crestwood Midstream Finance Corp., Senior Note, 144A, 6%, 2/01/29	United States	1,500,000	1,560,225
gCrownRock LP / CrownRock Finance, Inc., Senior Note, 144A, 5%, 5/01/29	United States	300,000	311,706
gCVR Energy, Inc., Senior Note, 144A, 5.25%, 2/15/25	United States	500,000	483,038
gDT Midstream, Inc., Senior Bond, 144A, 4.375%, 6/15/31	United States	500,000	520,770
Energy Transfer LP, Senior Bond, 3.75%, 5/15/30	United States	200,000	212,158
EnLink Midstream LLC,
Senior Bond, 5.375%, 6/01/29	United States	1,100,000	1,126,598
g Senior Note, 144A, 5.625%, 1/15/28	United States	100,000	104,146
e,gEnQuest plc, Senior Note, 144A, Reg S, PIK, 7%, 10/15/23	United Kingdom	909,763	846,462
gHilcorp Energy I LP / Hilcorp Finance Co.,
Senior Bond, 144A, 6%, 2/01/31	United States	700,000	725,375
Senior Note, 144A, 5.75%, 2/01/29	United States	200,000	206,425
gMartin Midstream Partners LP / Martin Midstream Finance Corp.,
Secured Note, 144A, 10%, 2/29/24	United States	307,101	316,079
Secured Note, 144A, 11.5%, 2/28/25	United States	1,394,630	1,468,943
MPLX LP, Senior Note, 2.65%, 8/15/30	United States	1,500,000	1,494,896
Occidental Petroleum Corp.,
Senior Bond, 6.125%, 1/01/31	United States	600,000	730,008
Senior Bond, 6.45%, 9/15/36	United States	500,000	638,500
Senior Note, 8.875%, 7/15/30	United States	700,000	945,266
gRattler Midstream LP, Senior Note, 144A, 5.625%, 7/15/25	United States	1,400,000	1,457,400
Sabine Pass Liquefaction LLC, Senior Secured Note, 4.5%, 5/15/30	United States	1,600,000	1,806,386
Sunoco LP / Sunoco Finance Corp.,
Senior Note, 6%, 4/15/27	United States	500,000	521,950
Senior Note, 4.5%, 5/15/29	United States	1,200,000	1,220,664
gVenture Global Calcasieu Pass LLC,
Senior Secured Bond, 144A, 4.125%, 8/15/31	United States	300,000	318,519
Senior Secured Note, 144A, 3.875%, 8/15/29	United States	300,000	311,749
			19,612,841
Paper & Forest Products 0.4%
gGlatfelter Corp., Senior Note, 144A, 4.75%, 11/15/29	United States	400,000	413,092
Suzano Austria GmbH,
Senior Bond, 3.75%, 1/15/31	Brazil	700,000	712,593
Senior Bond, 3.125%, 1/15/32	Brazil	400,000	387,696
			1,513,381
Personal Products 0.3%
gOriflame Investment Holding plc, Senior Secured Note, 144A, 5.125%, 5/04/26	Switzerland	800,000	741,576
gPrestige Brands, Inc., Senior Bond, 144A, 3.75%, 4/01/31	United States	600,000	582,909
			1,324,485
Pharmaceuticals 1.6%
gBausch Health Cos., Inc.,
Senior Bond, 144A, 5.25%, 2/15/31	United States	300,000	264,090
Senior Secured Note, 144A, 4.875%, 6/01/28	United States	1,000,000	1,021,810
gBayer US Finance II LLC, Senior Bond, 144A, 4.375%, 12/15/28	Germany	889,000	993,847
gJazz Securities DAC, Senior Secured Note, 144A, 4.375%, 1/15/29	United States	1,200,000	1,244,604
gOrganon & Co. / Organon Foreign Debt Co-Issuer BV,
Senior Bond, 144A, 5.125%, 4/30/31	United States	600,000	627,885
Senior Secured Note, 144A, 4.125%, 4/30/28	United States	700,000	712,586
Royalty Pharma plc, Senior Bond, 3.3%, 9/02/40	United States	500,000	499,474

Teva Pharmaceutical Finance Netherlands III BV, Senior Note, 5.125%, 5/09/29	Israel	900,000	883,845
			6,248,141
Real Estate Management & Development 1.1%
gChina Overseas Finance Cayman VI Ltd., Senior Note, Reg S, 5.95%, 5/08/24	China	700,000	760,901
gCountry Garden Holdings Co. Ltd., Senior Secured Note, Reg S, 7.25%, 4/08/26	China	800,000	791,113
gFive Point Operating Co. LP / Five Point Capital Corp., Senior Note, 144A, 7.875%, 11/15/25	United States	800,000	835,312
gForestar Group, Inc., Senior Note, 144A, 3.85%, 5/15/26	United States	500,000	501,785
gHoward Hughes Corp. (The), Senior Note, 144A, 5.375%, 8/01/28	United States	1,000,000	1,066,460
gVivion Investments SARL, Senior Note, Reg S, 3%, 8/08/24	Luxembourg	200,000 EUR	223,425
			4,178,996
Road & Rail 1.0%
CSX Corp., Senior Bond, 4.1%, 3/15/44	United States	550,000	637,949
gFirst Student Bidco, Inc. / First Transit Parent, Inc., Senior Secured Note, 144A, 4%, 7/31/29	United States	800,000	778,812
gKazakhstan Temir Zholy Finance BV, Senior Bond, 144A, 6.95%, 7/10/42	Kazakhstan	1,500,000	2,005,050
gNESCO Holdings II, Inc., Secured Note, 144A, 5.5%, 4/15/29	United States	500,000	517,137
			3,938,948
Software 0.3%
gRocket Software, Inc., Senior Note, 144A, 6.5%, 2/15/29	United States	1,100,000	1,074,706
Specialty Retail 1.0%
AutoNation, Inc., Senior Bond, 4.75%, 6/01/30	United States	200,000	228,704
gLithia Motors, Inc.,
Senior Bond, 144A, 4.375%, 1/15/31	United States	500,000	534,468
Senior Note, 144A, 3.875%, 6/01/29	United States	700,000	715,767
gMichaels Cos., Inc. (The), Senior Note, 144A, 7.875%, 5/01/29	United States	600,000	592,023
gPark River Holdings, Inc., Senior Note, 144A, 6.75%, 8/01/29	United States	1,200,000	1,177,314
hParty City Holdings, Inc., Senior Secured Note, FRN, 5.75%,
(6-month USD LIBOR + 5%), 7/15/25	United States	236,150	222,825
gVictoria's Secret & Co., Senior Note, 144A, 4.625%, 7/15/29	United States	400,000	409,612
			3,880,713
Technology Hardware, Storage & Peripherals 0.1%
Teledyne FLIR LLC, Senior Note, 2.5%, 8/01/30	United States	200,000	200,670
Textiles, Apparel & Luxury Goods 0.1%
gKontoor Brands, Inc., Senior Note, 144A, 4.125%, 11/15/29	United States	300,000	300,501
Thrifts & Mortgage Finance 0.1%
gLadder Capital Finance Holdings LLLP / Ladder Capital Finance
Corp., Senior Note, 144A, 4.75%, 6/15/29	United States	300,000	308,012
Tobacco 0.3%
Altria Group, Inc., Senior Note, 3.4%, 5/06/30	United States	1,200,000	1,242,855
Trading Companies & Distributors 0.6%
gH&E Equipment Services, Inc., Senior Note, 144A, 3.875%, 12/15/28	United States	1,200,000	1,193,130
gHerc Holdings, Inc., Senior Note, 144A, 5.5%, 7/15/27	United States	1,000,000	1,041,205
			2,234,335
Wireless Telecommunication Services 0.6%
e,gDigicel Group Holdings Ltd., Senior Note, 144A, PIK, 8%, 4/01/25	Bermuda	20,381	18,744
Hughes Satellite Systems Corp., Senior Note, 6.625%, 8/01/26	United States	500,000	560,125
T-Mobile USA, Inc.,
Senior Secured Bond, 3.3%, 2/15/51	United States	500,000	489,488
Senior Secured Note, 3.875%, 4/15/30	United States	1,300,000	1,423,144
			2,491,501
Total Corporate Bonds (Cost $196,559,037)			197,482,787
h,iSenior Floating Rate Interests 1.6%
Aerospace & Defense 0.2%
Dynasty Acquisition Co., Inc.,
2020 Term Loan, B1, 3.724%, (3-month USD LIBOR + 3.5%), 4/06/26	United States	446,430	435,590
2020 Term Loan, B2, 3.724%, (3-month USD LIBOR + 3.5%), 4/06/26	United States	240,016	234,189
			669,779
Airlines 0.3%
Air Canada, Term Loan, 4.25%, (3-month USD LIBOR + 3.5%), 8/11/28	Canada	1,000,000	1,000,535
Kestrel Bidco, Inc., Term Loan, 4%, (3-month USD LIBOR + 3%), 12/11/26	Canada	280,186	272,816
			1,273,351
Diversified Consumer Services 0.2%
KUEHG Corp., Term Loan, B3, 4.75%, (3-month USD LIBOR + 3.75%), 2/21/25	United States	724,712	711,580
Entertainment 0.2%
Diamond Sports Group LLC, Term Loan, 3.36%, (1-month USD LIBOR + 3.25%), 8/24/26	United States	444,874	208,966
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	544,078	533,672
			742,638
Leisure Products 0.3%
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	784,310	771,075
Motion Acquisition Ltd.,
Term Loan, B1, 3.474%, (3-month USD LIBOR + 3.25%), 11/12/26	United Kingdom	348,342	341,531
Term Loan, B2, 3.474%, (3-month USD LIBOR + 3.25%), 11/12/26	United Kingdom	49,660	48,689
			1,161,295
Media 0.3%
Cengage Learning, Inc., First Lien, Term Loan, B, 5.75%, (3-month USD LIBOR + 4.75%), 7/14/26	United States	745,545	748,535
Clear Channel Outdoor Holdings, Inc., Term Loan, B, 3.629%, (3-month USD LIBOR + 3.5%), 8/21/26	United States	298,473	294,774
			1,043,309
Personal Products 0.1%
Coty, Inc., USD Term Loan, B, 2.353%, (1-month USD LIBOR +
2.25%), 4/07/25	United States	579,300	572,783
Total Senior Floating Rate Interests (Cost $6,307,134)			6,174,735

Marketplace Loans 1.5%
Platform	Principal Amount*		Value		Days past due
bUpstart Network, Inc., FW1738592, 28.44%, 09/20/26		5,857		5,823		-
bUpstart Network, Inc., FW1738604, 22.34%, 09/20/24		3,255		3,222		-
bUpstart Network, Inc., FW1738971, 27.63%, 09/20/26		4,488		4,461		-
bUpstart Network, Inc., FW1739051, 32.64%, 09/20/26		4,405		4,380		-
bUpstart Network, Inc., FW1739127, 25.16%, 09/20/24		29,031		28,727		-
bUpstart Network, Inc., FW1739144, 30.91%, 09/20/26		3,844		3,662		13
bUpstart Network, Inc., FW1739398, 20.17%, 09/20/24		3,750		3,712		-
bUpstart Network, Inc., FW1739399, 28.19%, 09/20/26		5,856		5,821		-
bUpstart Network, Inc., FW1739404, 26.55%, 09/20/26		3,047		3,024		-
bUpstart Network, Inc., FW1739462, 27.3%, 09/20/26		4,877		4,848		-
bUpstart Network, Inc., FW1739495, 32.86%, 09/20/26		5,900		5,852		-
bUpstart Network, Inc., FW1739500, 30.99%, 09/20/26		14,000		4,440		43
bUpstart Network, Inc., FW1739526, 17.22%, 09/20/26		7,740		7,682		-
bUpstart Network, Inc., FW1902968, 31.58%, 10/25/26		4,000		1,204		38
bUpstart Network, Inc., FW1907740, 31.19%, 10/25/26		986		984		-
bUpstart Network, Inc., FW1908593, 28.41%, 10/25/26		19,706		19,668		-
bUpstart Network, Inc., FW1914238, 29.34%, 10/25/26		6,471		6,442		-
bUpstart Network, Inc., FW1914247, 29.67%, 10/25/26		4,898		4,883		-
bUpstart Network, Inc., FW1914310, 30.01%, 10/25/26		41,142		41,005		-
bUpstart Network, Inc., FW1914469, 17.25%, 10/25/24		4,200		1,235		38
bUpstart Network, Inc., FW1914675, 26.25%, 10/25/26		9,835		9,814		-
bUpstart Network, Inc., FW1914760, 27.19%, 10/25/24		1,926		1,919		-

bUpstart Network, Inc., FW1914911, 31.1%, 10/25/26	2,859	2,853	-
bUpstart Network, Inc., FW1915025, 31.16%, 10/25/26	4,329	4,316	-
bUpstart Network, Inc., FW1915043, 27.43%, 10/25/26	4,920	4,910	-
bUpstart Network, Inc., FW1915175, 23.46%, 10/25/26	2,946	2,939	-
bUpstart Network, Inc., FW1915211, 19.28%, 10/25/26	6,117	6,152	-
bUpstart Network, Inc., FW1915225, 30.8%, 10/25/26	3,546	3,535	-
bUpstart Network, Inc., FW1915226, 13.65%, 10/25/24	1,432	1,429	-
bUpstart Network, Inc., FW1915250, 12.04%, 10/25/24	47,671	47,576	-
bUpstart Network, Inc., FW1915262, 19.99%, 10/25/26	9,470	9,422	-
bUpstart Network, Inc., FW1915272, 30.7%, 10/25/26	1,858	1,851	-
bUpstart Network, Inc., FW1915312, 31.22%, 10/25/26	4,042	4,034	-
bUpstart Network, Inc., FW1915384, 30.97%, 10/25/26	1,183	1,181	-
bUpstart Network, Inc., FW1915438, 31.07%, 10/25/26	14,786	14,759	-
bUpstart Network, Inc., FW1915567, 19.17%, 10/25/26	980	975	-
bUpstart Network, Inc., FW2046105, 29.67%, 11/16/26	4,465	4,442	-
bUpstart Network, Inc., FW2051020, 15.91%, 11/16/26	13,849	13,812	-
bUpstart Network, Inc., FW2052456, 23.32%, 11/16/26	19,726	19,613	-
bUpstart Network, Inc., FW2053330, 28.78%, 11/16/24	1,276	1,267	-
bUpstart Network, Inc., FW2053471, 27.97%, 11/16/26	1,984	1,973	-
bUpstart Network, Inc., FW2053649, 23.67%, 11/16/26	21,898	21,797	-
bUpstart Network, Inc., FW2053732, 16.83%, 11/16/26	989	984	-
bUpstart Network, Inc., FW2054089, 26.17%, 11/16/26	1,983	1,972	-
bUpstart Network, Inc., FW2054200, 17.46%, 11/16/26	13,652	13,566	-
bUpstart Network, Inc., FW2054534, 31.22%, 11/16/26	1,191	1,185	-
bUpstart Network, Inc., FW2054616, 28.56%, 11/16/26	3,472	3,454	-
bUpstart Network, Inc., FW2054947, 21.35%, 11/16/24	1,763	1,750	-
bUpstart Network, Inc., FW2055081, 29.29%, 11/16/24	5,892	5,850	-
bUpstart Network, Inc., FW2055175, 19.05%, 11/16/26	17,814	17,704	-
bUpstart Network, Inc., FW2055257, 11.51%, 11/16/26	9,875	9,844	-
bUpstart Network, Inc., FW2055282, 29.32%, 11/16/26	4,948	4,922	-
bUpstart Network, Inc., FW2055364, 30.66%, 11/16/26	7,940	7,899	-
bUpstart Network, Inc., FW2055613, 28.42%, 11/16/26	2,482	2,475	-
bUpstart Network, Inc., FW2055692, 31.07%, 11/16/26	1,687	1,679	-
bUpstart Network, Inc., FW2055739, 27.25%, 11/16/26	15,000	14,289	17
bUpstart Network, Inc., FW2055789, 15.22%, 11/16/26	14,823	14,779	-
bUpstart Network, Inc., FW2055828, 30.82%, 11/16/26	3,077	3,061	-
bUpstart Network, Inc., FW2055936, 17.39%, 11/16/26	1,484	1,477	-
bUpstart Network, Inc., FW2055944, 24.96%, 11/16/26	1,982	1,971	-
bUpstart Network, Inc., FW2056001, 30.17%, 11/16/26	1,290	1,283	-
bUpstart Network, Inc., FW2056040, 31.11%, 11/16/26	5,530	5,499	-
bUpstart Network, Inc., FW2056081, 30.81%, 11/16/26	1,687	1,679	-
bUpstart Network, Inc., FW2056098, 23.67%, 11/16/26	6,936	6,899	-
bUpstart Network, Inc., FW2056110, 26.13%, 11/16/26	15,863	15,779	-
bUpstart Network, Inc., FW2056157, 15.18%, 11/16/26	8,897	8,853	-
bUpstart Network, Inc., FW2056229, 31.92%, 11/16/26	7,147	7,111	-
bUpstart Network, Inc., FW2056482, 26.96%, 11/16/26	4,958	4,932	-
bUpstart Network, Inc., FW2056543, 29.23%, 11/16/24	1,375	1,365	-
bUpstart Network, Inc., FW2056560, 31.71%, 11/16/26	1,985	1,975	-
bUpstart Network, Inc., FW2056667, 24.73%, 11/16/26	4,956	4,929	-
bUpstart Network, Inc., FW2056764, 31.04%, 11/16/26	993	987	-
bUpstart Network, Inc., FW2056882, 26.32%, 11/16/26	4,958	4,931	-
bUpstart Network, Inc., FW2056960, 31.19%, 11/16/26	1,687	1,679	-
bUpstart Network, Inc., FW2056962, 9.24%, 11/16/24	9,757	9,729	-
bUpstart Network, Inc., FW2057162, 32.15%, 11/16/26	9,232	9,186	-
bUpstart Network, Inc., FW2057201, 22.39%, 11/16/26	3,930	3,911	-
bUpstart Network, Inc., FW2057264, 27.1%, 11/16/26	5,950	5,919	-
bUpstart Network, Inc., FW2057500, 30.64%, 11/16/26	9,924	9,873	-
bUpstart Network, Inc., FW2211495, 29.38%, 12/13/26	20,000	20,123	-
bUpstart Network, Inc., FW2231506, 30.63%, 12/13/26	44,600	44,408	-
bUpstart Network, Inc., FW2239073, 24.34%, 12/13/26	8,000	8,047	-
bUpstart Network, Inc., FW2239509, 31.82%, 12/13/26	5,800	5,836	-
bUpstart Network, Inc., FW2240660, 30.84%, 12/13/26	4,600	4,580	-
bUpstart Network, Inc., FW2240706, 30.86%, 12/13/26	13,100	13,182	-
bUpstart Network, Inc., FW2241145, 30.66%, 12/13/26	3,100	3,087	-
bUpstart Network, Inc., FW2241302, 31.08%, 12/13/26	3,200	3,220	-
bUpstart Network, Inc., FW2241307, 13.77%, 12/13/26	3,000	2,995	-
bUpstart Network, Inc., FW2241443, 29.46%, 12/13/26	2,905	2,889	-
bUpstart Network, Inc., FW2241542, 28.48%, 12/13/26	3,000	3,018	-
bUpstart Network, Inc., FW2241616, 29.08%, 12/13/26	5,600	5,575	-
bUpstart Network, Inc., FW2241624, 31.84%, 12/13/26	4,600	4,629	-
bUpstart Network, Inc., FW2241683, 29.38%, 12/13/26	3,000	3,018	-
bUpstart Network, Inc., FW2241711, 21.36%, 12/13/26	13,000	13,075	-
bUpstart Network, Inc., FW2241745, 31.13%, 12/13/26	5,281	5,255	-
bUpstart Network, Inc., FW2241764, 27.11%, 12/13/26	4,700	4,728	-
bUpstart Network, Inc., FW2241794, 28.26%, 12/13/24	3,000	3,020	-
bUpstart Network, Inc., FW2241799, 24.1%, 12/13/26	5,000	4,977	-
bUpstart Network, Inc., FW2241807, 16.84%, 12/13/26	10,000	9,969	-
bUpstart Network, Inc., FW2241828, 29.64%, 12/13/26	10,000	9,956	-
bUpstart Network, Inc., FW2241855, 26.58%, 12/13/26	2,700	2,688	-
bUpstart Network, Inc., FW2241860, 23.21%, 12/13/26	6,000	6,035	-
bUpstart Network, Inc., FW2241887, 28.39%, 12/13/24	3,000	2,985	-
bUpstart Network, Inc., FW2241952, 25.3%, 12/13/26	12,000	12,072	-
bUpstart Network, Inc., FW2241988, 31.24%, 12/13/26	2,200	2,191	-
bUpstart Network, Inc., FW2241999, 29.1%, 12/13/26	2,500	2,489	-
bUpstart Network, Inc., FW2242021, 29.12%, 12/13/24	1,623	1,611	-
bUpstart Network, Inc., FW2242024, 21.89%, 12/13/26	2,000	2,012	-
bUpstart Network, Inc., FW2242045, 30.98%, 12/13/26	2,400	2,415	-
bUpstart Network, Inc., FW2242085, 31.21%, 12/13/26	5,200	5,232	-
bUpstart Network, Inc., FW2242189, 31.76%, 12/13/26	4,800	4,780	-
bUpstart Network, Inc., FW2242232, 27.33%, 12/13/26	3,500	3,484	-
bUpstart Network, Inc., FW2242239, 24.53%, 12/13/24	1,000	1,006	-
bUpstart Network, Inc., FW2242256, 31.07%, 12/13/26	1,100	1,107	-
bUpstart Network, Inc., FW2242278, 21.84%, 12/13/24	1,000	995	-
bUpstart Network, Inc., FW2242379, 28.85%, 12/13/26	5,000	5,031	-
bUpstart Network, Inc., FW2242390, 30.76%, 12/13/26	10,500	10,455	-
bUpstart Network, Inc., FW2242424, 20.03%, 12/13/24	1,000	996	-
bUpstart Network, Inc., FW2242493, 26.46%, 12/13/26	2,000	2,012	-
bUpstart Network, Inc., FW2242510, 7.1%, 12/13/24	9,000	8,990	-
bUpstart Network, Inc., FW2242580, 31.01%, 12/13/26	1,100	1,095	-
bUpstart Network, Inc., FW2242593, 30.22%, 12/13/26	4,600	4,580	-
bUpstart Network, Inc., FW2242624, 29.36%, 12/13/26	9,200	9,160	-
bUpstart Network, Inc., FW2242691, 30.2%, 12/13/26	25,000	25,155	-
bUpstart Network, Inc., FW2242705, 27.05%, 12/13/26	1,500	1,493	-
bUpstart Network, Inc., FW2242714, 26.37%, 12/13/24	5,500	5,471	-
bUpstart Network, Inc., FW2242733, 30.97%, 12/13/26	1,500	1,508	-
bUpstart Network, Inc., L1723172, 18.88%, 09/20/26	2,305	2,282	-
bUpstart Network, Inc., L1736636, 14.78%, 09/20/26	13,516	13,451	-
bUpstart Network, Inc., L1738899, 19.15%, 09/20/26	14,538	14,401	-
bUpstart Network, Inc., L1738904, 24.36%, 09/20/26	6,813	6,750	-
bUpstart Network, Inc., L1738918, 27.72%, 09/20/26	4,583	4,528	-
bUpstart Network, Inc., L1738924, 15.39%, 09/20/24	933	926	-
bUpstart Network, Inc., L1739019, 13.76%, 09/20/26	5,594	5,567	-
bUpstart Network, Inc., L1739131, 17.22%, 09/20/26	14,513	14,375	-
bUpstart Network, Inc., L1739140, 21.45%, 09/20/26	2,931	2,805	-
bUpstart Network, Inc., L1739307, 13.36%, 09/20/26	32,780	32,621	-
bUpstart Network, Inc., L1739433, 8.57%, 09/20/24	6,297	6,269	-
bUpstart Network, Inc., L1739499, 25.07%, 09/20/26	5,064	5,033	-
bUpstart Network, Inc., L1739562, 22.68%, 09/20/26	6,804	6,763	-
bUpstart Network, Inc., L1739584, 25.42%, 09/20/26	3,529	3,485	-
bUpstart Network, Inc., L1739680, 16.6%, 09/20/26	14,505	14,396	-
bUpstart Network, Inc., L1739694, 22.68%, 09/20/26	10,692	10,627	-
bUpstart Network, Inc., L1739715, 9.65%, 09/20/26	24,013	23,959	-
bUpstart Network, Inc., L1897015, 23.49%, 10/25/26	11,786	11,758	-
bUpstart Network, Inc., L1898888, 25.15%, 10/25/26	1,278	1,274	-
bUpstart Network, Inc., L1901600, 16.72%, 10/25/26	2,745	2,729	-
bUpstart Network, Inc., L1910370, 14.66%, 10/25/26	4,188	4,175	-

bUpstart Network, Inc., L1912265, 23.3%, 10/25/26	3,928	3,919	-
bUpstart Network, Inc., L1914184, 25.37%, 10/25/26	2,206	2,193	-
bUpstart Network, Inc., L1914567, 16.17%, 10/25/24	3,141	3,125	-
bUpstart Network, Inc., L1914615, 19.05%, 10/25/26	9,797	9,762	-
bUpstart Network, Inc., L1914682, 21.49%, 10/25/26	19,430	19,311	-
bUpstart Network, Inc., L1914712, 24.22%, 10/25/26	7,860	7,842	-
bUpstart Network, Inc., L1914714, 24.73%, 10/25/26	3,931	3,922	-
bUpstart Network, Inc., L1914732, 17.66%, 10/25/24	9,572	9,539	-
bUpstart Network, Inc., L1914761, 23.31%, 10/25/26	982	980	-
bUpstart Network, Inc., L1914801, 12.09%, 10/25/24	4,767	4,753	-
bUpstart Network, Inc., L1914923, 23.8%, 10/25/26	1,965	1,960	-
bUpstart Network, Inc., L1915014, 19.01%, 10/25/26	4,849	4,818	-
bUpstart Network, Inc., L1915064, 20.48%, 10/25/26	4,749	4,726	-
bUpstart Network, Inc., L1915081, 25.35%, 10/25/26	2,753	2,744	-
bUpstart Network, Inc., L1915085, 14.46%, 10/25/26	1,802	1,792	-
bUpstart Network, Inc., L1915199, 6.41%, 10/25/24	15,676	15,654	-
bUpstart Network, Inc., L1915220, 18.87%, 10/25/24	4,719	4,693	-
bUpstart Network, Inc., L1915269, 23.56%, 10/25/26	6,963	6,957	8
bUpstart Network, Inc., L1915447, 20.32%, 10/25/26	5,778	5,739	-
bUpstart Network, Inc., L1915468, 23.09%, 10/25/26	5,401	5,383	-
bUpstart Network, Inc., L1915560, 20.46%, 10/25/26	4,903	4,890	-
bUpstart Network, Inc., L1915604, 24.04%, 10/25/26	1,081	1,078	-
bUpstart Network, Inc., L2016017, 13.19%, 11/16/26	2,483	2,479	-
bUpstart Network, Inc., L2019975, 23.69%, 11/16/26	1,982	1,971	-
bUpstart Network, Inc., L2024110, 7.78%, 11/16/26	17,737	17,704	-
bUpstart Network, Inc., L2043903, 9.82%, 11/16/26	18,119	18,086	-
bUpstart Network, Inc., L2046165, 25.35%, 11/16/26	2,577	2,564	-
bUpstart Network, Inc., L2047823, 23.05%, 11/16/26	4,999	4,957	-
bUpstart Network, Inc., L2049616, 25.29%, 11/16/26	1,189	1,183	-
bUpstart Network, Inc., L2051843, 20.82%, 11/16/26	13,862	13,796	-
bUpstart Network, Inc., L2052051, 15.75%, 11/16/26	4,449	4,427	-
bUpstart Network, Inc., L2052082, 25.42%, 11/16/26	1,487	1,479	-
bUpstart Network, Inc., L2052101, 20.05%, 11/16/26	24,749	24,597	-
bUpstart Network, Inc., L2052105, 24.58%, 11/16/26	5,247	5,265	-
bUpstart Network, Inc., L2052126, 12.52%, 11/16/26	15,804	15,756	-
bUpstart Network, Inc., L2052376, 25.81%, 11/16/26	4,957	4,931	-
bUpstart Network, Inc., L2052461, 22.33%, 11/16/26	49,344	49,062	-
bUpstart Network, Inc., L2052610, 11.6%, 11/16/24	2,929	2,919	-
bUpstart Network, Inc., L2052631, 8.92%, 11/16/24	4,878	4,864	-
bUpstart Network, Inc., L2052804, 9.15%, 11/16/26	39,317	39,245	-
bUpstart Network, Inc., L2052838, 16.45%, 11/16/24	1,467	1,459	-
bUpstart Network, Inc., L2053269, 18.64%, 11/16/24	1,957	1,945	-
bUpstart Network, Inc., L2053478, 24.22%, 11/16/26	2,577	2,563	-
bUpstart Network, Inc., L2053787, 10.61%, 11/16/26	4,936	4,920	-
bUpstart Network, Inc., L2053900, 23.81%, 11/16/26	991	986	-
bUpstart Network, Inc., L2054559, 14.24%, 11/16/26	8,895	8,868	-
bUpstart Network, Inc., L2054750, 10.22%, 11/16/24	4,872	4,858	-
bUpstart Network, Inc., L2054937, 25.38%, 11/16/26	2,974	2,958	-
bUpstart Network, Inc., L2055116, 13.82%, 11/16/26	9,882	9,852	-
bUpstart Network, Inc., L2055155, 20.16%, 11/16/24	4,897	4,860	-
bUpstart Network, Inc., L2055269, 19.56%, 11/16/26	22,519	22,378	-
bUpstart Network, Inc., L2055275, 19%, 11/16/26	14,845	14,773	-
bUpstart Network, Inc., L2055412, 14.29%, 11/16/26	2,965	2,956	-
bUpstart Network, Inc., L2055423, 8.44%, 11/16/24	5,267	5,252	-
bUpstart Network, Inc., L2055652, 25.25%, 11/16/26	1,189	1,183	-
bUpstart Network, Inc., L2055669, 25.48%, 11/16/26	2,463	2,448	-
bUpstart Network, Inc., L2055689, 25.98%, 11/16/26	1,086	1,081	-
bUpstart Network, Inc., L2055803, 24.96%, 11/16/26	1,498	1,493	-
bUpstart Network, Inc., L2055855, 25.11%, 11/16/26	1,982	1,972	-
bUpstart Network, Inc., L2055857, 12.9%, 11/16/26	11,854	11,819	-
bUpstart Network, Inc., L2056184, 17.11%, 11/16/26	11,568	11,531	-
bUpstart Network, Inc., L2056364, 25.24%, 11/16/26	1,388	1,380	-
bUpstart Network, Inc., L2056373, 17.2%, 11/16/26	8,903	8,859	-
bUpstart Network, Inc., L2056403, 18.49%, 11/16/26	2,361	2,355	-
bUpstart Network, Inc., L2056440, 25.49%, 11/16/26	31,920	31,732	-
bUpstart Network, Inc., L2056491, 7.95%, 11/16/24	1,461	1,457	-
bUpstart Network, Inc., L2056569, 22.59%, 11/16/26	13,520	13,436	-
bUpstart Network, Inc., L2056878, 9.83%, 11/16/26	4,827	4,817	-
bUpstart Network, Inc., L2057046, 15.77%, 11/16/24	2,933	2,917	-
bUpstart Network, Inc., L2057058, 17.23%, 11/16/26	7,419	7,382	-
bUpstart Network, Inc., L2057081, 23.41%, 11/16/24	2,255	2,238	-
bUpstart Network, Inc., L2057137, 15.78%, 11/16/24	3,912	3,889	-
bUpstart Network, Inc., L2057159, 22.2%, 11/16/24	9,800	9,727	-
bUpstart Network, Inc., L2057218, 19.51%, 11/16/26	22,964	22,901	-
bUpstart Network, Inc., L2057372, 23.63%, 11/16/26	6,837	6,800	-
bUpstart Network, Inc., L2057377, 13.89%, 11/16/24	1,955	1,948	-
bUpstart Network, Inc., L2057382, 22.46%, 11/16/26	2,774	2,757	-
bUpstart Network, Inc., L2057604, 24.15%, 11/16/26	6,993	6,968	-
bUpstart Network, Inc., L2228456, 22.2%, 12/13/24	5,500	5,470	-
bUpstart Network, Inc., L2230478, 21.97%, 12/13/26	7,500	7,472	-
bUpstart Network, Inc., L2232043, 23.76%, 12/13/26	5,500	5,532	-
bUpstart Network, Inc., L2233875, 22.25%, 12/13/26	27,000	26,871	-
bUpstart Network, Inc., L2233888, 7.98%, 12/13/24	6,000	6,013	-
bUpstart Network, Inc., L2234521, 21.55%, 12/13/26	9,000	9,052	-
bUpstart Network, Inc., L2238725, 21.75%, 12/13/26	5,000	4,981	-
bUpstart Network, Inc., L2239758, 14.15%, 12/13/26	11,500	11,481	-
bUpstart Network, Inc., L2239771, 15.55%, 12/13/26	27,000	27,109	-
bUpstart Network, Inc., L2239830, 11.79%, 12/13/26	10,600	10,628	-
bUpstart Network, Inc., L2240058, 26.7%, 12/13/26	8,200	8,163	-
bUpstart Network, Inc., L2241045, 17.22%, 12/13/26	8,500	8,535	-
bUpstart Network, Inc., L2241096, 22.49%, 12/13/26	6,506	9,953	-
bUpstart Network, Inc., L2241420, 25.73%, 12/13/26	5,400	5,375	-
bUpstart Network, Inc., L2241503, 24.24%, 12/13/26	3,000	2,986	-
bUpstart Network, Inc., L2241531, 11.26%, 12/13/24	7,000	7,023	-
bUpstart Network, Inc., L2241600, 24.51%, 12/13/26	3,500	3,487	-
bUpstart Network, Inc., L2241610, 15.37%, 12/13/26	7,500	7,530	-
bUpstart Network, Inc., L2241640, 22.44%, 12/13/26	3,000	2,986	-
bUpstart Network, Inc., L2241647, 25.19%, 12/13/26	1,700	1,692	-
bUpstart Network, Inc., L2241657, 24.98%, 12/13/26	4,000	4,024	-
bUpstart Network, Inc., L2241739, 23.45%, 12/13/24	1,500	1,492	-
bUpstart Network, Inc., L2241741, 14.61%, 12/13/24	4,300	4,320	-
bUpstart Network, Inc., L2241756, 12.69%, 12/13/26	5,500	5,515	-
bUpstart Network, Inc., L2241803, 9.3%, 12/13/24	20,000	20,047	-
bUpstart Network, Inc., L2241809, 25.24%, 12/13/26	6,992	6,960	-
bUpstart Network, Inc., L2241823, 20.32%, 12/13/26	4,200	4,188	-
bUpstart Network, Inc., L2241825, 13.8%, 12/13/26	30,000	30,084	-
bUpstart Network, Inc., L2241856, 13.04%, 12/13/26	15,000	14,974	-
bUpstart Network, Inc., L2241857, 11.98%, 12/13/26	12,000	12,032	-
bUpstart Network, Inc., L2241897, 17.92%, 12/13/26	4,500	4,486	-
bUpstart Network, Inc., L2241910, 20.19%, 12/13/26	20,000	19,923	-
bUpstart Network, Inc., L2241947, 25.52%, 12/13/26	1,400	1,395	-
bUpstart Network, Inc., L2241949, 22.97%, 12/13/26	5,000	4,976	-
bUpstart Network, Inc., L2241958, 24.65%, 12/13/26	1,000	1,006	-

bUpstart Network, Inc., L2241963, 18.55%, 12/13/24	3,300	3,316	-
bUpstart Network, Inc., L2241965, 20.43%, 12/13/24	2,000	1,992	-
bUpstart Network, Inc., L2241971, 20.32%, 12/13/26	3,000	2,991	-
bUpstart Network, Inc., L2241989, 17.5%, 12/13/26	2,600	2,611	-
bUpstart Network, Inc., L2241994, 25.4%, 12/13/26	1,800	1,810	-
bUpstart Network, Inc., L2242027, 25.21%, 12/13/24	7,700	7,659	-
bUpstart Network, Inc., L2242043, 6.01%, 12/13/24	1,000	999	-
bUpstart Network, Inc., L2242066, 17.12%, 12/13/26	10,000	10,048	-
bUpstart Network, Inc., L2242098, 12.31%, 12/13/26	7,000	7,019	-
bUpstart Network, Inc., L2242119, 18.59%, 12/13/26	4,500	4,487	-
bUpstart Network, Inc., L2242159, 16.13%, 12/13/24	1,500	1,507	-
bUpstart Network, Inc., L2242162, 25.7%, 12/13/26	1,700	1,710	-
bUpstart Network, Inc., L2242191, 25.04%, 12/13/26	1,000	1,006	-
bUpstart Network, Inc., L2242200, 24.08%, 12/13/26	5,800	5,834	-
bUpstart Network, Inc., L2242202, 14.09%, 12/13/26	16,600	16,573	-
bUpstart Network, Inc., L2242212, 19.99%, 12/13/26	3,422	3,403	-
bUpstart Network, Inc., L2242235, 6.04%, 12/13/24	3,500	3,505	-
bUpstart Network, Inc., L2242250, 22.23%, 12/13/24	3,400	3,421	-
bUpstart Network, Inc., L2242252, 14.05%, 12/13/26	10,000	10,028	-
bUpstart Network, Inc., L2242254, 7.13%, 12/13/26	10,000	10,016	-
bUpstart Network, Inc., L2242317, 18.48%, 12/13/24	6,000	6,030	-
bUpstart Network, Inc., L2242322, 25.22%, 12/13/26	1,000	1,006	-
bUpstart Network, Inc., L2242354, 13.2%, 12/13/24	3,000	3,008	-
bUpstart Network, Inc., L2242361, 9.11%, 12/13/26	25,000	25,044	-
bUpstart Network, Inc., L2242383, 25.22%, 12/13/26	9,000	8,968	-
bUpstart Network, Inc., L2242418, 25.33%, 12/13/26	10,000	10,060	-
bUpstart Network, Inc., L2242430, 18.29%, 12/13/26	18,000	18,088	-
bUpstart Network, Inc., L2242447, 16.94%, 12/13/26	5,500	5,526	-
bUpstart Network, Inc., L2242450, 20.97%, 12/13/26	6,200	6,236	-
bUpstart Network, Inc., L2242451, 10.48%, 12/13/24	1,000	1,002	-
bUpstart Network, Inc., L2242471, 15.28%, 12/13/24	1,000	1,005	-
bUpstart Network, Inc., L2242478, 25.01%, 12/13/26	2,200	2,190	-
bUpstart Network, Inc., L2242486, 13.76%, 12/13/26	3,800	3,794	-
bUpstart Network, Inc., L2242489, 22.19%, 12/13/26	21,700	21,596	-
bUpstart Network, Inc., L2242547, 18.45%, 12/13/26	5,000	4,985	-
bUpstart Network, Inc., L2242559, 19.89%, 12/13/26	16,800	16,853	-
bUpstart Network, Inc., L2242575, 18.06%, 12/13/26	7,500	7,531	-
bUpstart Network, Inc., L2242587, 22.84%, 12/13/26	6,800	6,768	-
bUpstart Network, Inc., L2242595, 11.8%, 12/13/24	2,500	2,496	-
bUpstart Network, Inc., L2242638, 19.38%, 12/13/26	10,900	10,857	-
bUpstart Network, Inc., L2242651, 11.78%, 12/13/26	15,000	14,973	-
bUpstart Network, Inc., L2242668, 12.46%, 12/13/26	22,000	21,962	-
bUpstart Network, Inc., L2242679, 16.66%, 12/13/24	4,000	4,019	-
bUpstart Network, Inc., L2242685, 9%, 12/13/26	15,000	14,986	-
bUpstart Network, Inc., L2242692, 25.15%, 12/13/24	15,000	14,921	-
bUpstart Network, Inc., L2242742, 23.45%, 12/13/26	2,000	1,993	-
bUpstart Network, Inc., L2242784, 25.23%, 12/13/26	5,800	5,835	-
bUpstart Network, Inc., L2242791, 17.38%, 12/13/26	15,000	15,072	-
	2,323,564	2,305,116
bProsper Funding LLC, 1605953, 14.7%, 08/17/26	23,844	23,254	-
bProsper Funding LLC, 1605959, 18.73%, 08/17/26	19,170	18,696	-
bProsper Funding LLC, 1605968, 14.29%, 08/17/26	7,150	6,973	-
bProsper Funding LLC, 1606280, 14.7%, 08/17/24	1,819	1,765	-
bProsper Funding LLC, 1608710, 15.5%, 08/23/26	5,728	5,599	-
bProsper Funding LLC, 1610432, 14.03%, 08/25/26	6,194	6,107	-
bProsper Funding LLC, 1611508, 15.4%, 08/20/24	4,552	4,446	-
bProsper Funding LLC, 1611667, 12.6%, 08/20/26	6,183	6,088	-
bProsper Funding LLC, 1612567, 24.6%, 08/23/24	1,843	1,790	-
bProsper Funding LLC, 1613827, 12.5%, 08/25/26	5,524	5,428	-
bProsper Funding LLC, 1618044, 15.1%, 08/19/26	13,360	13,038	-
bProsper Funding LLC, 1620345, 13.2%, 08/24/26	10,947	10,790	-
bProsper Funding LLC, 1620408, 12.5%, 08/24/24	31,728	31,253	-
bProsper Funding LLC, 1620426, 20%, 08/24/26	20,158	19,569	-
bProsper Funding LLC, 1622637, 12.7%, 08/27/26	6,659	6,568	-
bProsper Funding LLC, 1622940, 13.7%, 08/30/26	11,430	11,559	-
bProsper Funding LLC, 1623671, 25.71%, 09/21/24	9,425	9,141	-
bProsper Funding LLC, 1624202, 11.79%, 09/21/26	18,290	18,008	-
bProsper Funding LLC, 1625048, 16.18%, 09/22/26	27,646	27,004	-
bProsper Funding LLC, 1627811, 13.05%, 09/28/24	18,613	18,340	-
bProsper Funding LLC, 1627820, 12.15%, 09/28/24	4,649	4,580	-
bProsper Funding LLC, 1628458, 18.5%, 09/22/24	4,680	4,552	-
bProsper Funding LLC, 1628909, 17.96%, 09/29/24	7,016	7,035	-
bProsper Funding LLC, 1629401, 13.5%, 09/30/24	5,587	5,711	-
bProsper Funding LLC, 1631458, 14.19%, 09/28/24	3,261	3,249	-
bProsper Funding LLC, 1632445, 15.18%, 09/29/26	14,390	14,366	-
bProsper Funding LLC, 1636455, 16%, 09/24/24	9,335	9,128	-
bProsper Funding LLC, 1638201, 13.3%, 09/28/24	9,309	9,172	-
bProsper Funding LLC, 1638657, 16.1%, 09/28/24	1,867	1,829	-
bProsper Funding LLC, 1639785, 13.1%, 09/30/24	9,307	9,512	-
bProsper Funding LLC, 1644821, 16.18%, 10/26/26	13,693	13,573	-
bProsper Funding LLC, 1644830, 10.5%, 10/26/26	11,693	11,574	-
bProsper Funding LLC, 1644836, 18.5%, 10/26/26	6,366	6,289	-
bProsper Funding LLC, 1645184, 16.9%, 10/27/26	1,964	1,962	-
bProsper Funding LLC, 1645598, 16.2%, 10/27/24	9,085	8,986	-
bProsper Funding LLC, 1645601, 26.13%, 10/27/26	4,917	4,859	-
bProsper Funding LLC, 1645643, 18.5%, 10/27/26	10,774	10,648	-
bProsper Funding LLC, 1646399, 10.5%, 10/28/26	10,719	10,614	-
bProsper Funding LLC, 1646444, 13%, 10/29/24	803	809	-
bProsper Funding LLC, 1646459, 11.89%, 10/29/26	9,754	9,785	-
bProsper Funding LLC, 1646507, 16%, 10/29/26	15,647	15,706	-
bProsper Funding LLC, 1647191, 16.32%, 10/29/26	11,836	11,879	-
bProsper Funding LLC, 1647438, 19.71%, 10/13/24	19,172	18,667	-
bProsper Funding LLC, 1648285, 12.62%, 10/26/26	7,807	7,765	-
bProsper Funding LLC, 1648558, 14.63%, 10/27/24	14,328	14,106	-
bProsper Funding LLC, 1648942, 11.89%, 10/27/26	6,340	6,277	-
bProsper Funding LLC, 1650962, 13.81%, 11/05/24	9,773	9,660	-
bProsper Funding LLC, 1650965, 18.41%, 11/05/24	9,698	9,532	-
bProsper Funding LLC, 1651234, 13.7%, 11/01/24	3,894	3,821	-
bProsper Funding LLC, 1651610, 10.8%, 11/08/26	10,366	10,265	-
bProsper Funding LLC, 1652036, 10.4%, 11/08/26	14,807	14,662	-
bProsper Funding LLC, 1653314, 13.2%, 11/09/24	2,931	2,900	-
bProsper Funding LLC, 1653386, 24.93%, 11/09/26	8,425	8,232	-
bProsper Funding LLC, 1654273, 11.4%, 11/05/26	14,811	14,657	-
bProsper Funding LLC, 1654279, 12.4%, 11/05/24	8,791	8,689	-
bProsper Funding LLC, 1654288, 15.29%, 11/05/26	9,795	9,636	-
bProsper Funding LLC, 1654507, 18.6%, 11/05/26	11,669	11,400	-
bProsper Funding LLC, 1655937, 12%, 10/28/26	19,509	19,212	-
bProsper Funding LLC, 1656696, 11.7%, 10/29/24	12,391	12,569	-
bProsper Funding LLC, 1657122, 10.8%, 10/29/24	6,668	6,765	-
bProsper Funding LLC, 1657248, 10.5%, 10/29/26	24,361	24,449	-
bProsper Funding LLC, 1660294, 15.2%, 11/15/26	11,858	11,686	-
bProsper Funding LLC, 1660821, 12.5%, 11/05/26	14,817	14,662	-
bProsper Funding LLC, 1660953, 14.09%, 11/05/24	14,660	14,408	-
bProsper Funding LLC, 1660956, 18.25%, 11/05/26	6,926	6,768	-
bProsper Funding LLC, 1660959, 14%, 11/05/24	1,893	1,942	-
bProsper Funding LLC, 1661067, 12.3%, 11/05/26	9,877	9,774	-
bProsper Funding LLC, 1661070, 13.36%, 11/05/24	3,908	3,863	-
bProsper Funding LLC, 1661382, 16.7%, 11/05/26	4,945	4,832	-
bProsper Funding LLC, 1664083, 11.6%, 11/17/26	7,900	7,839	-
bProsper Funding LLC, 1664763, 13.8%, 11/08/26	5,929	5,839	-
bProsper Funding LLC, 1666497, 13.8%, 11/09/26	14,823	14,602	-
bProsper Funding LLC, 1666848, 10.8%, 11/10/24	11,300	11,192	-
bProsper Funding LLC, 1666914, 11.89%, 11/10/26	9,876	9,784	-
bProsper Funding LLC, 1673687, 25.6%, 12/16/26	10,000	9,917	-
bProsper Funding LLC, 1673693, 12.5%, 12/16/26	16,500	16,452	-
bProsper Funding LLC, 1673696, 24.3%, 12/16/24	7,000	6,940	-
bProsper Funding LLC, 1674092, 16.2%, 12/16/24	7,500	7,446	-
bProsper Funding LLC, 1674281, 21%, 12/17/26	3,000	2,977	-
bProsper Funding LLC, 1674302, 18.33%, 12/17/26	23,000	22,854	-
bProsper Funding LLC, 1675325, 14%, 12/20/26	20,000	19,936	-
bProsper Funding LLC, 1677551, 18.09%, 12/22/24	2,000	1,992	-
bProsper Funding LLC, 1679833, 17.54%, 12/16/24	8,000	7,943	-
bProsper Funding LLC, 1679839, 12.76%, 12/16/24	5,000	4,984	-
bProsper Funding LLC, 1679851, 10.9%, 12/16/26	18,000	17,947	-
bProsper Funding LLC, 1680232, 15.5%, 12/16/24	20,000	19,899	-
bProsper Funding LLC, 1681375, 16.02%, 12/20/24	2,000	1,990	-
bProsper Funding LLC, 1686723, 18.4%, 12/16/24	2,000	1,986	-
bProsper Funding LLC, 1686732, 12.62%, 12/16/26	5,000	4,986	-

bProsper Funding LLC, 1686756, 20.08%, 12/16/26	7,500	7,449	-
bProsper Funding LLC, 1686771, 12%, 12/16/24	6,500	6,478	-
bProsper Funding LLC, 1687101, 17.28%, 12/16/24	25,000	24,821	-
bProsper Funding LLC, 1688400, 15.4%, 12/20/24	2,000	1,993	-
bProsper Funding LLC, 1689429, 11.7%, 12/21/24	3,000	2,994	-
bProsper Funding LLC, 1690251, 13.66%, 12/22/24	9,000	8,984	-
	963,163	952,657
bFreedom Financial Asset Management LLC, 10145326, 17.49%, 08/12/26	5,065	5,044	-
bFreedom Financial Asset Management LLC, 10551290, 5.99%, 10/22/23	7,228	7,345	-
bFreedom Financial Asset Management LLC, 10855951, 14.49%, 10/17/26	7,256	7,369	-
bFreedom Financial Asset Management LLC, 10866610, 18.99%, 10/18/26	7,299	7,372	-
bFreedom Financial Asset Management LLC, 10803494, 22.49%, 11/20/26	7,372	7,449	-
bFreedom Financial Asset Management LLC, 11113415, 26.49%, 12/18/25	7,479	7,605	-
bFreedom Financial Asset Management LLC, 11694275, 17.99%, 02/07/27	7,515	7,689	-
bFreedom Financial Asset Management LLC, 10692679, 17.99%, 10/08/26	7,865	7,939	-
bFreedom Financial Asset Management LLC, 11122940, 22.49%, 12/20/26	8,087	8,130	-
bFreedom Financial Asset Management LLC, 10551484, 16.99%, 10/23/23	8,110	8,228	-
bFreedom Financial Asset Management LLC, 10084293, 5.99%, 09/17/23	9,040	9,174	-
bFreedom Financial Asset Management LLC, 10561209, 5.99%, 09/16/23	9,261	9,400	-
bFreedom Financial Asset Management LLC, 11693689, 5.99%, 12/15/23	9,278	9,439	-
bFreedom Financial Asset Management LLC, 10531559, 25.49%, 10/19/24	9,408	9,412	-
bFreedom Financial Asset Management LLC, 10573174, 5.99%, 11/04/23	9,418	9,571	-
bFreedom Financial Asset Management LLC, 11021613, 5.99%, 11/01/23	9,600	9,750	-
bFreedom Financial Asset Management LLC, 10842987, 5.99%, 11/29/23	9,713	9,891	-
bFreedom Financial Asset Management LLC, 10142715, 25.49%, 09/24/26	9,745	9,846	-
bFreedom Financial Asset Management LLC, 10801091, 17.49%, 11/28/25	9,757	9,962	-
bFreedom Financial Asset Management LLC, 10793460, 25.49%, 10/11/26	9,782	9,771	-
bFreedom Financial Asset Management LLC, 10844146, 23.99%, 10/18/24	9,811	9,930	12
bFreedom Financial Asset Management LLC, 10551180, 5.99%, 11/04/23	9,854	10,008	-
bFreedom Financial Asset Management LLC, 11084655, 22.49%, 11/03/26	9,894	9,923	-
bFreedom Financial Asset Management LLC, 10114471, 13.99%, 08/12/24	9,996	10,139	-
bFreedom Financial Asset Management LLC, 11021830, 5.99%, 11/01/23	10,056	10,202	-
bFreedom Financial Asset Management LLC, 11008033, 5.99%, 12/20/23	11,364	11,582	-
bFreedom Financial Asset Management LLC, 11765697, 16.99%, 12/24/24	11,400	11,592	-
bFreedom Financial Asset Management LLC, 10141296, 18.99%, 08/11/24	11,807	11,779	-
bFreedom Financial Asset Management LLC, 10829129, 19.99%, 11/01/26	11,853	11,877	-
bFreedom Financial Asset Management LLC, 10849232, 20.99%, 11/28/26	11,937	12,113	-
bFreedom Financial Asset Management LLC, 11746986, 18.99%, 12/19/24	12,000	12,352	-
bFreedom Financial Asset Management LLC, 11765263, 19.49%, 12/24/25	12,000	12,196	-
bFreedom Financial Asset Management LLC, 10091178, 16.99%, 08/03/24	12,078	12,014	-
bFreedom Financial Asset Management LLC, 10835087, 11.74%, 10/15/26	12,179	12,357	-
bFreedom Financial Asset Management LLC, 10840320, 10.49%, 11/29/24	12,382	12,628	-
bFreedom Financial Asset Management LLC, 10760305, 13.74%, 10/13/26	12,613	12,783	-
bFreedom Financial Asset Management LLC, 10746159, 10.99%, 10/12/25	13,276	13,476	-
bFreedom Financial Asset Management LLC, 11082813, 15.49%, 12/06/26	13,411	13,577	-
bFreedom Financial Asset Management LLC, 10559881, 19.49%, 10/22/24	14,061	14,164	-
bFreedom Financial Asset Management LLC, 11764848, 16.49%, 02/05/27	14,259	14,573	-
bFreedom Financial Asset Management LLC, 11007932, 17.99%, 12/18/26	14,414	14,655	-
bFreedom Financial Asset Management LLC, 10571729, 19.99%, 11/03/26	14,500	4,691	57
bFreedom Financial Asset Management LLC, 11103382, 12.74%, 11/02/24	14,638	14,842	-
bFreedom Financial Asset Management LLC, 10144000, 19.99%, 09/12/26	15,221	15,263	-
bFreedom Financial Asset Management LLC, 10670518, 10.49%, 11/27/24	15,386	15,682	-
bFreedom Financial Asset Management LLC, 11657858, 17.49%, 12/16/25	15,800	16,002	-
bFreedom Financial Asset Management LLC, 11115814, 10.99%, 12/20/25	15,803	16,142	-
bFreedom Financial Asset Management LLC, 11733551, 9.74%, 12/20/24	15,892	16,219	-
bFreedom Financial Asset Management LLC, 11115677, 19.99%, 12/20/26	15,956	16,252	-
bFreedom Financial Asset Management LLC, 10147734, 19.99%, 08/12/23	16,000	1,585	109
bFreedom Financial Asset Management LLC, 10111075, 11.99%, 09/25/26	16,079	16,383	-
bFreedom Financial Asset Management LLC, 10561392, 16.49%, 10/28/24	16,215	16,462	-
bFreedom Financial Asset Management LLC, 11765858, 19.49%, 02/06/25	16,500	16,874	-
bFreedom Financial Asset Management LLC, 11106190, 12.74%, 12/20/24	16,929	17,266	-
bFreedom Financial Asset Management LLC, 11695285, 9.74%, 02/07/25	17,100	17,532	-
bFreedom Financial Asset Management LLC, 10762535, 16.99%, 12/01/26	17,818	18,141	-
bFreedom Financial Asset Management LLC, 10481966, 19.99%, 11/30/26	17,911	18,226	-
bFreedom Financial Asset Management LLC, 10830772, 19.49%, 10/29/25	18,397	18,661	-
bFreedom Financial Asset Management LLC, 11756687, 19.49%, 02/06/27	18,399	18,816	-
bFreedom Financial Asset Management LLC, 11693771, 9.74%, 02/06/25	18,506	18,969	-
bFreedom Financial Asset Management LLC, 10129305, 15.49%, 09/15/25	18,662	18,935	-
bFreedom Financial Asset Management LLC, 10565939, 17.99%, 11/03/24	19,269	19,249	-
bFreedom Financial Asset Management LLC, 10857421, 16.49%, 10/17/25	19,394	19,598	-
bFreedom Financial Asset Management LLC, 11757515, 17.49%, 12/24/26	19,602	19,930	-
bFreedom Financial Asset Management LLC, 10830131, 15.49%, 11/30/26	19,656	20,007	-
bFreedom Financial Asset Management LLC, 10854367, 20.49%, 10/17/26	19,970	20,243	13
bFreedom Financial Asset Management LLC, 11749109, 17.49%, 02/06/27	20,000	20,449	-
bFreedom Financial Asset Management LLC, 10540954, 18.99%, 10/21/26	20,496	20,655	-
bFreedom Financial Asset Management LLC, 11104671, 16.49%, 12/17/24	20,705	21,049	-
bFreedom Financial Asset Management LLC, 10745738, 10.49%, 10/15/24	21,774	22,107	-
bFreedom Financial Asset Management LLC, 10568950, 12.24%, 09/20/26	22,149	22,475	-
bFreedom Financial Asset Management LLC, 10054712, 14.99%, 08/06/26	22,838	23,047	-
bFreedom Financial Asset Management LLC, 10084167, 16.49%, 08/05/24	23,513	23,553	-
bFreedom Financial Asset Management LLC, 10140689, 20.49%, 09/25/26	24,057	24,305	-
bFreedom Financial Asset Management LLC, 11112132, 23.99%, 12/19/24	24,245	24,590	-
bFreedom Financial Asset Management LLC, 10845076, 11.99%, 11/25/26	24,444	24,913	-
bFreedom Financial Asset Management LLC, 11720742, 18.99%, 12/21/26	25,000	25,645	-
bFreedom Financial Asset Management LLC, 11766036, 23.74%, 12/18/24	25,000	25,287	-
bFreedom Financial Asset Management LLC, 11751433, 23.74%, 12/24/24	25,300	26,198	-
bFreedom Financial Asset Management LLC, 10882091, 10.99%, 12/10/25	25,910	26,387	-
bFreedom Financial Asset Management LLC, 10940745, 10.49%, 12/20/24	26,094	26,634	-
bFreedom Financial Asset Management LLC, 10847014, 11.99%, 10/05/26	26,220	26,533	-
bFreedom Financial Asset Management LLC, 11763348, 10.24%, 12/20/24	27,000	27,572	-
bFreedom Financial Asset Management LLC, 10143388, 10.99%, 08/12/25	27,974	28,405	-
bFreedom Financial Asset Management LLC, 10567981, 9.99%, 10/30/26	28,406	28,964	-
bFreedom Financial Asset Management LLC, 10352836, 10.99%, 09/21/24	31,432	31,922	-
bFreedom Financial Asset Management LLC, 10762332, 12.49%, 11/29/26	33,831	34,529	-
bFreedom Financial Asset Management LLC, 11049788, 14.74%, 11/01/26	35,982	36,466	-
bFreedom Financial Asset Management LLC, 11046646, 20.99%, 12/06/26	37,650	38,040	-
bFreedom Financial Asset Management LLC, 10129666, 18.49%, 09/25/26	38,604	39,106	-
bFreedom Financial Asset Management LLC, 10822586, 18.49%, 10/05/26	38,910	39,041	-
bFreedom Financial Asset Management LLC, 09979067, 12.74%, 11/03/26	38,912	39,569	-
bFreedom Financial Asset Management LLC, 11124654, 19.49%, 12/18/26	40,000	40,726	12
bFreedom Financial Asset Management LLC, 11752447, 9.99%, 02/05/26	40,000	40,851	-
bFreedom Financial Asset Management LLC, 11605924, 11.74%, 12/20/26	46,434	47,206	-
bFreedom Financial Asset Management LLC, 10141797, 16.99%, 09/15/26	47,898	48,263	-
bFreedom Financial Asset Management LLC, 08813385, 15.49%, 09/17/26	48,215	48,852	-
bFreedom Financial Asset Management LLC, 11442537, 5.99%, 12/17/23	7,740	7,895	-
bFreedom Financial Asset Management LLC, 11744311, 13.74%, 12/23/24	35,000	35,700	-
bFreedom Financial Asset Management LLC, 11764235, 11.74%, 12/29/26	50,000	51,000	-
bFreedom Financial Asset Management LLC, 11795510, 12.49%, 02/11/26	18,950	19,329	-
bFreedom Financial Asset Management LLC, 11798383, 19.99%, 02/01/25	10,338	10,544	-
bFreedom Financial Asset Management LLC, 11798689, 16.99%, 02/12/27	19,700	20,094	-
bFreedom Financial Asset Management LLC, 11801122, 16.49%, 02/10/27	20,000	20,400	-
bFreedom Financial Asset Management LLC, 11803939, 10.99%, 02/10/27	35,000	35,700	-
bFreedom Financial Asset Management LLC, 11804417, 18.49%, 02/12/26	9,243	9,428	-
bFreedom Financial Asset Management LLC, 11806622, 18.99%, 02/11/27	10,000	10,200	-
bFreedom Financial Asset Management LLC, 11813151, 20.99%, 12/30/26	12,630	12,883	-
bFreedom Financial Asset Management LLC, 11814690, 5.99%, 02/03/24	10,000	10,200	-
bFreedom Financial Asset Management LLC, 11817363, 25.49%, 02/11/25	10,000	10,200	-
bFreedom Financial Asset Management LLC, 11818700, 17.74%, 02/08/25	21,000	21,420	-
bFreedom Financial Asset Management LLC, 11819292, 18.99%, 02/12/26	12,999	13,259	-
bFreedom Financial Asset Management LLC, 11819470, 15.74%, 02/12/25	22,000	22,440	-
bFreedom Financial Asset Management LLC, 11822354, 9.49%, 12/18/24	21,873	22,310	-
bFreedom Financial Asset Management LLC, 11822469, 22.49%, 12/30/26	11,000	11,220	-
bFreedom Financial Asset Management LLC, 11823715, 14.99%, 02/05/26	20,000	20,400	-
	2,144,992	2,154,237

bLendingClub Corp. - LCX, 165759291, 15.24%, 01/28/23	626	615	-
bLendingClub Corp. - LCX, 166957411, 15.24%, 02/19/23	638	581	-
bLendingClub Corp. - LCX, 161719240, 13.08%, 11/12/22	690	684	-
bLendingClub Corp. - LCX, 165475303, 8.19%, 01/24/23	2,065	2,032	-
bLendingClub Corp. - LCX, 165690410, 15.24%, 01/28/23	2,072	2,014	-
bLendingClub Corp. - LCX, 166302044, 23.05%, 02/10/23	2,147	2,083	-
bLendingClub Corp. - LCX, 166043155, 14.3%, 02/03/23	2,157	2,077	-
bLendingClub Corp. - LCX, 159222008, 14.3%, 09/26/22	2,330	2,330	-
bLendingClub Corp. - LCX, 167225770, 25.65%, 02/28/23	2,404	2,340	-
bLendingClub Corp. - LCX, 166662631, 20.55%, 02/21/23	2,775	2,703	-
bLendingClub Corp. - LCX, 165951879, 16.12%, 02/03/23	2,936	2,864	-
bLendingClub Corp. - LCX, 166308005, 20.55%, 02/10/23	3,375	3,226	-
bLendingClub Corp. - LCX, 161884359, 16.12%, 11/14/22	3,673	3,609	-
bLendingClub Corp. - LCX, 159930422, 16.12%, 11/14/22	3,724	3,647	-
bLendingClub Corp. - LCX, 168221172, 8.81%, 03/12/23	3,820	3,624	-
bLendingClub Corp. - LCX, 162701954, 10.33%, 12/03/22	4,460	4,291	-
bLendingClub Corp. - LCX, 165696133, 17.74%, 01/28/23	4,572	4,381	-
bLendingClub Corp. - LCX, 162579504, 12.4%, 12/02/22	4,819	797	58
bLendingClub Corp. - LCX, 165983963, 16.95%, 02/03/23	4,858	4,663	-
bLendingClub Corp. - LCX, 168570207, 14.3%, 04/14/23	4,917	4,473	-
bLendingClub Corp. - LCX, 167431383, 13.08%, 02/27/25	5,537	4,951	-
bLendingClub Corp. - LCX, 165581669, 7.56%, 01/27/23	5,706	5,444	-
bLendingClub Corp. - LCX, 166294895, 20.55%, 02/10/23	5,808	5,622	-
bLendingClub Corp. - LCX, 167701933, 10.33%, 03/03/23	5,907	5,686	-
bLendingClub Corp. - LCX, 165206225, 11.02%, 02/03/25	6,003	5,747	-
bLendingClub Corp. - LCX, 165393871, 11.02%, 01/24/23	6,393	6,218	-
bLendingClub Corp. - LCX, 165960294, 25.65%, 02/03/23	6,583	6,367	-
bLendingClub Corp. - LCX, 167106425, 18.62%, 02/28/25	6,684	6,247	-
bLendingClub Corp. - LCX, 166186603, 8.81%, 02/07/23	6,875	6,688	-
bLendingClub Corp. - LCX, 165954960, 16.12%, 02/03/23	7,255	7,049	-
bLendingClub Corp. - LCX, 166918483, 15.24%, 02/18/23	7,457	6,839	-
bLendingClub Corp. - LCX, 167497337, 10.33%, 03/03/23	7,795	7,505	-
bLendingClub Corp. - LCX, 166049294, 14.3%, 02/03/25	8,322	7,821	-
bLendingClub Corp. - LCX, 167087907, 18.62%, 02/28/23	8,735	8,352	-
bLendingClub Corp. - LCX, 165662049, 18.62%, 01/28/23	8,952	8,762	-
bLendingClub Corp. - LCX, 163949124, 15.24%, 12/27/24	8,975	7,885	-
bLendingClub Corp. - LCX, 165954765, 20.55%, 02/03/25	9,490	9,005	-
bLendingClub Corp. - LCX, 167028247, 17.74%, 02/28/23	10,558	680	91
bLendingClub Corp. - LCX, 166979816, 15.24%, 02/24/25	10,976	10,275	-
bLendingClub Corp. - LCX, 166275848, 14.3%, 02/07/23	13,205	12,750	-
bLendingClub Corp. - LCX, 166998785, 20.55%, 02/28/25	13,394	12,512	-
bLendingClub Corp. - LCX, 165633933, 11.02%, 01/28/25	13,595	12,835	-
bLendingClub Corp. - LCX, 158759739, 16.12%, 09/17/24	14,837	14,152	-
bLendingClub Corp. - LCX, 165816008, 13.08%, 01/31/23	15,241	14,769	-
bLendingClub Corp. - LCX, 161777786, 8.19%, 11/21/24	17,529	13,994	-
bLendingClub Corp. - LCX, 163168705, 17.74%, 12/13/22	17,607	16,912	-
bLendingClub Corp. - LCX, 165313131, 11.02%, 02/03/25	22,174	20,898	-
bLendingClub Corp. - LCX, 165199936, 18.62%, 02/03/25	23,772	21,893	-
bLendingClub Corp. - LCX, 164287317, 15.24%, 02/04/25	25,595	23,891	-
bLendingClub Corp. - LCX, 166405649, 0%, 02/11/23	-	408	-
	380,018	345,191
bLendingClub Corp. - LCX PM, 170194060, 10.81%, 10/08/23	6,122	4,437	8
bLendingClub Corp. - LCX PM, 170676409, 17.3%, 10/13/25	10,043	9,561	-
bLendingClub Corp. - LCX PM, 170715926, 16.08%, 10/13/25	12,486	12,107	-
bLendingClub Corp. - LCX PM, 171017381, 15.4%, 10/08/23	6,213	5,779	-
bLendingClub Corp. - LCX PM, 171023265, 17.3%, 10/08/23	3,800	3,597	-
bLendingClub Corp. - LCX PM, 171026131, 14.02%, 10/08/23	14,517	14,043	-
bLendingClub Corp. - LCX PM, 171077226, 10.19%, 10/13/23	1,609	1,513	-
bLendingClub Corp. - LCX PM, 171104281, 15.4%, 10/13/23	4,296	232	100
bLendingClub Corp. - LCX PM, 171176757, 18.24%, 10/13/25	8,494	8,122	-
bLendingClub Corp. - LCX PM, 172371391, 15.4%, 12/24/25	21,311	20,280	-
bLendingClub Corp. - LCX PM, 172927033, 10.81%, 12/24/23	5,615	5,442	-
bLendingClub Corp. - LCX PM, 173276655, 18.24%, 12/24/23	3,624	3,503	-
bLendingClub Corp. - LCX PM, 173602157, 16.99%, 02/03/24	6,167	6,036	-
bLendingClub Corp. - LCX PM, 174285582, 15.99%, 02/03/26	17,666	16,692	-
bLendingClub Corp. - LCX PM, 174324177, 14.99%, 02/03/24	3,827	3,757	-
bLendingClub Corp. - LCX PM, 174329530, 20.49%, 02/03/26	8,953	8,711	-
bLendingClub Corp. - LCX PM, 174350163, 18.44%, 02/03/26	11,661	11,394	-
	146,404	135,206
Total Marketplace Loans (Cost $5,997,498)	5,958,141	5,892,407

kLoan Participations and Assignments 0.4%
gRussian Railways Via RZD Capital plc, Senior Note, Reg S, 5.7%, 4/05/22	Russia	1,500,000	1,516,568
Total Loan Participations and Assignments (Cost $1,508,535)			1,516,568
Foreign Government and Agency Securities 12.7%
gAfrican Export-Import Bank (The), Senior Note, 144A, 3.994%, 9/21/29	Supranational l	2,000,000	2,069,032
gAngola Government Bond, Senior Note, 144A, 8.25%, 5/09/28	Angola	2,500,000	2,518,312
gBanque Centrale de Tunisie, Senior Note, Reg S, 5.625%, 2/17/24	Tunisia	2,300,000 EUR	2,084,811
gBanque Ouest Africaine de Developpement, Senior Note, 144A, 5%, 7/27/27	Supranational l	1,200,000	1,328,736
gBelarus Government Bond,
Senior Bond, 144A, 6.2%, 2/28/30	Belarus	1,200,000	956,280
Senior Note, 144A, 7.625%, 6/29/27	Belarus	1,200,000	1,108,488
Brazil Notas do Tesouro Nacional, Senior Bond, 3.875%, 6/12/30	Brazil	1,000,000	971,750
Colombia Government Bond,
Senior Bond, 3.875%, 4/25/27	Colombia	1,400,000	1,413,300
Senior Bond, 9.85%, 6/28/27	Colombia	5,315,000,000 COP	1,489,093
Senior Bond, 4.5%, 3/15/29	Colombia	500,000	513,035
Senior Bond, 5%, 6/15/45	Colombia	1,900,000	1,721,875
gComision Federal de Electricidad, Senior Bond, 144A, 3.348%, 2/09/31	Mexico	1,000,000	982,270
gDominican Republic Government Bond,
Senior Bond, 144A, 6.85%, 1/27/45	Dominican
	Republic	700,000	773,500
Senior Note, 144A, 8.9%, 2/15/23	Dominican
	Republic	81,500,000 DOP	1,469,592
Ecopetrol SA,
Senior Bond, 4.125%, 1/16/25	Colombia	400,000	407,030
Senior Bond, 4.625%, 11/02/31	Colombia	400,000	389,604
gEgypt Government Bond, Senior Bond, 144A, 7.625%, 5/29/32	Egypt	600,000	570,057
f,gElectricite de France SA, Junior Sub. Bond, 144A, 5.25% to 1/29/23, FRN thereafter, Perpetual	France	2,425,000	2,518,508
gExport-Import Bank of India, Senior Note, 144A, 3.875%, 2/01/28	India	1,655,000	1,773,627
gGabon Government Bond, Senior Bond, 144A, 6.625%, 2/06/31	Gabon	1,600,000	1,558,120
gIndonesia Asahan Aluminium Persero PT, Senior Note, 144A, 5.45%, 5/15/30	Indonesia	1,400,000	1,598,268
Indonesia Government Bond,
g Senior Bond, 144A, 4.35%, 1/08/27	Indonesia	900,000	1,003,724
g Senior Bond, 144A, 4.625%, 4/15/43	Indonesia	300,000	353,616
g Senior Note, 144A, 3.85%, 7/18/27	Indonesia	1,200,000	1,315,944
FR64, 6.125%, 5/15/28	Indonesia	9,500,000,000 IDR	679,208
gIraq Government Bond, Senior Bond, 144A, 5.8%, 1/15/28	Iraq	1,625,000	1,559,285
gIsrael Electric Corp. Ltd., Senior Secured Bond, 144A, Reg S, 4.25%, 8/14/28	Israel	1,000,000	1,100,650
gKazakhstan Government Bond, Senior Bond, 144A, 4.875%,
10/14/44	Kazakhstan	1,500,000	1,845,525
Mexico Government Bond,
Senior Bond, 4.75%, 4/27/32	Mexico	600,000	679,800
Senior Note, 3.75%, 1/11/28	Mexico	500,000	537,888

Peru Government Bond, Senior Bond, 6.55%, 3/14/37	Peru	800,000	1,093,444
Petroleos Mexicanos, Senior Bond, 6.625%, 6/15/35	Mexico	700,000	673,750
gRomania Government Bond, Senior Bond, 144A, 6.125%, 1/22/44	Romania	500,000	657,498
gRussia Government Bond, Senior Note, Reg S, 4.75%, 5/27/26	Russia	1,200,000	1,314,173
South Africa Government Bond,
Senior Bond, 4.85%, 9/30/29	South Africa	600,000	621,180
Senior Bond, 5.875%, 6/22/30	South Africa	700,000	781,918
Turkey Government Bond,
Senior Bond, 4.875%, 10/09/26	Turkey	800,000	727,069
Senior Bond, 5.95%, 1/15/31	Turkey	1,600,000	1,435,824
gUkraine Government Bond,
Senior Bond, 144A, 7.375%, 9/25/32	Ukraine	500,000	447,565
Senior Note, 144A, 7.75%, 9/01/22	Ukraine	200,000	198,702
Senior Note, 144A, 7.75%, 9/01/23	Ukraine	369,000	361,850
Senior Note, 144A, 7.75%, 9/01/24	Ukraine	369,000	358,985
m VRI, GDP Linked Security, Senior Bond, 144A, Reg S, 5/31/40	Ukraine	978,000	893,868
nUruguay Government Bond,
Index Linked, Senior Bond, 4.375%, 12/15/28	Uruguay	5,581,686 UYU	148,957
Index Linked, Senior Bond, 3.7%, 6/26/37	Uruguay	93,155,571 UYU	2,348,910
Total Foreign Government and Agency Securities (Cost $50,995,661)			49,354,621
U.S. Government and Agency Securities 3.8%
U.S. Treasury Notes,
1.625%, 11/15/22	United States	2,700,000	2,729,016
1.75%, 1/31/23	United States	2,700,000	2,738,180
2.75%, 2/15/24	United States	3,700,000	3,854,070
1.125%, 2/28/27	United States	5,500,000	5,457,890
Total U.S. Government and Agency Securities (Cost $14,843,232)			14,779,156
Asset-Backed Securities 6.8%
Airlines 0.0%†
United Airlines Pass-Through Trust, 2020-1, B, 4.875%, 7/15/27	United States	89,800	93,621
Consumer Finance 0.4%
oCitibank Credit Card Issuance Trust, 2017-A7, A7, FRN, 0.473%, (1-month USD LIBOR + 0.37%), 8/08/24	United States	1,494,000	1,496,700
Diversified Financial Services 6.4%
g,oAntares CLO Ltd., 2018-1A, B, 144A, FRN, 1.781%, (3-month USD LIBOR + 1.65%), 4/20/31	United States	1,455,000	1,449,562
g,oBCC Middle Market CLO LLC, 2018-1A, A2, 144A, FRN, 2.282%, (3-month USD LIBOR + 2.15%), 10/20/30	United States	700,000	697,468
g,oBlueMountain CLO Ltd., 2018-1A, D, 144A, FRN, 3.182%, (3-month USD LIBOR + 3.05%), 7/30/30	United States	1,000,000	964,833
g,oBlueMountain Fuji EUR CLO V DAC, 5A, B, 144A, FRN, 1.55%, (3-month EURIBOR + 1.55%), 1/15/33	Ireland	600,000 EUR	683,004
g,oBurnham Park CLO Ltd., 2016-1A, BR, 144A, FRN, 1.631%, (3-month USD LIBOR + 1.5%), 10/20/29	United States	460,000	459,047
g,oButtermilk Park CLO Ltd., 2018-1A, C, 144A, FRN, 2.224%, (3-month USD LIBOR + 2.1%), 10/15/31	United States	1,408,860	1,408,854
g,oCarlyle Global Market Strategies CLO Ltd., 2014-4RA, C, 144A, FRN, 3.024%, (3-month USD LIBOR + 2.9%), 7/15/30	United States	300,000	286,984
g,oCarlyle GMS Finance MM CLO LLC, 2015-1A, A2R, 144A, FRN, 2.324%, (3-month USD LIBOR + 2.2%), 10/15/31	United States	1,213,000	1,207,133
g,oCarlyle US CLO Ltd., 2021-1A, A2, 144A, FRN, 1.574%, (3-month USD LIBOR + 1.45%), 4/15/34	United States	1,500,000	1,501,497
g,pConsumer Loan Underlying Bond Certificate Issuer Trust I,
2019-51, PT, 144A, FRN, 16.892%, 1/15/45	United States	333,666	331,828
2019-52, PT, 144A, FRN, 16.224%, 1/15/45	United States	366,907	366,934
2019-S8, PT, 144A, FRN, 10.684%, 1/15/45	United States	236,111	231,444
2020-2, PT, 144A, FRN, 16.149%, 3/15/45	United States	345,357	344,320
2020-7, PT, 144A, FRN, 16.127%, 4/17/45	United States	196,681	193,710
g,oDryden 38 Senior Loan Fund, 2015-38A, CR, 144A, FRN, 2.124%, (3-month USD LIBOR + 2%), 7/15/30	United States	863,000	857,839
g,oDryden 55 CLO Ltd., 2018-55A, D, 144A, FRN, 2.974%, (3-month USD LIBOR + 2.85%), 4/15/31	United States	300,000	288,512
g,oGalaxy XVIII CLO Ltd., 2018-28A, C, 144A, FRN, 2.074%, (3-month USD LIBOR + 1.95%), 7/15/31	United States	250,000	249,427
g,oGalaxy XXVII CLO Ltd., 2018-27A, C, 144A, FRN, 1.955%, (3-month USD LIBOR + 1.8%), 5/16/31	United States	400,000	399,835
gHome Partners of America Trust,
2021-2, B, 144A, 2.302%, 12/17/26	United States	1,269,255	1,255,235
2021-3, B, 144A, 2.649%, 1/17/41	United States	480,000	479,187
g,oLCM 26 Ltd., 26A, B, 144A, FRN, 1.532%, (3-month USD LIBOR + 1.4%), 1/20/31	United States	250,000	248,754
g,oLCM XVII LP,
17A, BRR, 144A, FRN, 1.724%, (3-month USD LIBOR + 1.6%), 10/15/31	United States	350,000	350,349
17A, CRR, 144A, FRN, 2.224%, (3-month USD LIBOR + 2.1%), 10/15/31	United States	320,000	319,320
g,oLCM XVIII LP, 18A, DR, 144A, FRN, 2.932%, (3-month USD LIBOR + 2.8%), 4/20/31	United States	770,000	738,865
g,oMadison Park Euro Funding VIII DAC, 8A, BRN, 144A, FRN, 1.7%, (3-month EURIBOR + 1.7%), 4/15/32	Ireland	400,000 EUR	455,694
g,oMagnetite XXIX Ltd., 2021-29A, B, 144A, FRN, 1.524%, (3-month USD LIBOR + 1.4%), 1/15/34	United States	1,500,000	1,499,134
g,pMill City Mortgage Loan Trust, 2018-4, A1B, 144A, FRN, 3.5%, 4/25/66	United States	902,246	926,299
g,oOctagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN,
1.924%, (3-month USD LIBOR + 1.8%), 10/24/30	United States	250,000	250,485
g,oOctagon Investment Partners 36 Ltd., 2018-1A, A1, 144A, FRN,
1.094%, (3-month USD LIBOR + 0.97%), 4/15/31	United States	500,000	499,629
g,oOctagon Investment Partners 37 Ltd., 2018-2A, C, 144A, FRN,
2.974%, (3-month USD LIBOR + 2.85%), 7/25/30	United States	400,000	392,742
g,oOctagon Investment Partners 38 Ltd., 2018-1A, C, 144A, FRN,
3.081%, (3-month USD LIBOR + 2.95%), 7/20/30	United States	1,000,000	959,776
g,pProsper Pass-Thru Trust III,
2020-PT1, A, 144A, FRN, 8.796%, 3/15/26	United States	209,893	213,405
2020-PT2, A, 144A, FRN, 9.444%, 4/15/26	United States	231,592	227,628
2020-PT3, A, 144A, FRN, 7.183%, 5/15/26	United States	63,950	64,525
g,oStrata CLO I Ltd., 2018-1A, B, 144A, FRN, 2.324%, (3-month USD LIBOR + 2.2%), 1/15/31	United States	1,300,000	1,298,613
g,pUpgrade Master Pass-Thru Trust, 2019-PT2, A, 144A, FRN, 13.266%, 2/15/26	United States	192,834	197,002
g,oVoya CLO Ltd.,
2013-2A, BR, 144A, FRN, 1.974%, (3-month USD LIBOR +
1.85%), 4/25/31	United States	780,000	771,186
2014-1A, CR2, 144A, FRN, 2.922%, (3-month USD LIBOR +
2.8%), 4/18/31	United States	1,000,000	948,199
2015-2A, BR, 144A, FRN, 1.624%, (3-month USD LIBOR + 1.5%),
7/23/27	United States	820,000	821,434
			24,839,692
Total Asset-Backed Securities (Cost $26,542,557)			26,430,013
Commercial Mortgage-Backed Securities 0.2%
Diversified Financial Services 0.2%
g,oBX Commercial Mortgage Trust,
2021-VOLT, A, 144A, FRN, 0.81%, (1-month USD LIBOR + 0.7%), 9/15/36	United States	250,000	249,493
2021-VOLT, B, 144A, FRN, 1.06%, (1-month USD LIBOR + 0.95%), 9/15/36	United States	400,000	398,171
pCommercial Mortgage Trust, 2006-GG7, AJ, FRN, 6.012%, 7/10/38	United States	186,216	156,732
			804,396
Total Commercial Mortgage-Backed Securities (Cost $829,606)			804,396

Mortgage-Backed Securities 1.3%
qFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 0.0%†
FHLMC, 2.348%, (1-year CMT T-Note +/- MBS Margin), 1/01/33	United States	4,835	4,855
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 0.1%
FHLMC Gold Pools, 30 Year, 5%, 4/01/34 - 8/01/35	United States	118,368	133,243
FHLMC Gold Pools, 30 Year, 5.5%, 3/01/33 - 1/01/35	United States	74,831	83,322
FHLMC Gold Pools, 30 Year, 6%, 4/01/33 - 2/01/36	United States	65,210	73,406
FHLMC Gold Pools, 30 Year, 6.5%, 11/01/27 - 7/01/32	United States	9,181	10,242
FHLMC Gold Pools, 30 Year, 7%, 4/01/30	United States	1,168	1,312
FHLMC Gold Pools, 30 Year, 7.5%, 8/01/30	United States	136	157
			301,682
qFederal National Mortgage Association (FNMA) Adjustable Rate 0.0% †
FNMA, 2.289%, (1-year CMT T-Note +/- MBS Margin), 12/01/34	United States	43,411	44,222
Federal National Mortgage Association (FNMA) Fixed Rate 1.1%
FNMA, 10 Year, 2.5%, 7/01/22	United States	509	526
FNMA, 20 Year, 5%, 4/01/30	United States	22,447	24,692
FNMA, 30 Year, 3%, 9/01/48 - 9/01/51	United States	2,331,768	2,437,000
FNMA, 30 Year, 4.5%, 5/01/48	United States	1,733,213	1,878,827
FNMA, 30 Year, 6.5%, 6/01/28 - 10/01/37	United States	66,908	75,517
			4,416,562
Government National Mortgage Association (GNMA) Fixed Rate 0.1%
GNMA I, Single-family, 30 Year, 5%, 11/15/33 - 7/15/34	United States	98,154	112,510
GNMA I, Single-family, 30 Year, 7%, 10/15/28 - 2/15/29	United States	10,626	10,702
GNMA I, Single-family, 30 Year, 7.5%, 9/15/30	United States	912	1,033
GNMA II, 30 Year, 6.5%, 2/20/34	United States	1,863	1,909
GNMA II, Single-family, 30 Year, 5%, 9/20/33 - 11/20/33	United States	27,776	30,986
GNMA II, Single-family, 30 Year, 6%, 11/20/34	United States	40,795	47,009
GNMA II, Single-family, 30 Year, 6.5%, 4/20/31 - 1/20/33	United States	17,732	20,360
GNMA II, Single-family, 30 Year, 7.5%, 1/20/28 - 4/20/32	United States	6,537	7,322
			231,831
Total Mortgage-Backed Securities (Cost $4,825,608)			4,999,152
Municipal Bonds 0.9%
California 0.1%
San Bernardino Community College District, GO, 2019 A-1, 3.271%, 8/01/39	United States	210,000	222,366
Illinois 0.2%
State of Illinois, GO, 2003, 5.1%, 6/01/33	United States	695,000	803,861
New Jersey 0.1%
New Jersey Transportation Trust Fund Authority, Revenue, 2019 B, Refunding, 4.131%, 6/15/42	United States	345,000	387,888
New York 0.2%
Metropolitan Transportation Authority, Revenue, 2020 E, Refunding, 4%, 11/15/45	United States	535,000	611,741
New York State Dormitory Authority, State University of New York, Revenue, 2019 B, Refunding, 3.142%, 7/01/43	United States	305,000	315,351
			927,092
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	202,497
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	571,024
Texas 0.1%
Texas State University System, Revenue, 2019 B, Refunding, 3.289%, 3/15/40	United States	190,000	198,751
Total Municipal Bonds (Cost $2,998,209)			3,313,479
Residential Mortgage-Backed Securities 8.1%
Diversified Financial Services 2.0%
gBRAVO Residential Funding Trust,
2019-1, A1C, 144A, 3.5%, 3/25/58	United States	257,291	261,220
p 2019-2, A3, 144A, FRN, 3.5%, 10/25/44	United States	514,649	529,779
g,pCIM Trust,
2019-INV1, A1, 144A, FRN, 4%, 2/25/49	United States	172,375	174,031
2019-INV2, A3, 144A, FRN, 4%, 5/25/49	United States	333,969	339,343
g,pJ.P. Morgan Mortgage Trust,
2021-13, A4, 144A, FRN, 2.5%, 4/25/52	United States	1,587,377	1,598,452
2021-15, A4, 144A, FRN, 2.5%, 6/25/52	United States	490,000	494,211
2021-6, A4, 144A, FRN, 2.5%, 10/25/51	United States	883,959	892,337
g,pOBX Trust, 2021-J3, A4, 144A, FRN, 2.5%, 10/25/51	United States	324,034	327,510
g,pProvident Funding Associates LLP, 2021-J1, A3, 144A, FRN, 2.5%, 2/20/49	United States	975,956	986,425
g,pProvident Funding Mortgage Trust, 2019-1, A2, 144A, FRN, 3%, 12/25/49	United States	192,036	192,161
g,pPSMC Trust, 2021-3, A3, 144A, FRN, 2.5%, 8/25/51	United States	1,930,190	1,948,482
			7,743,951
Thrifts & Mortgage Finance 6.1%
oFHLMC Structured Agency Credit Risk Debt Notes,
2013-DN2, M2, FRN, 4.353%, (1-month USD LIBOR + 4.25%), 11/25/23	United States	894,294	922,133
2014-DN2, M3, FRN, 3.703%, (1-month USD LIBOR + 3.6%), 4/25/24	United States	1,229,404	1,259,682
2014-DN3, M3, FRN, 4.103%, (1-month USD LIBOR + 4%), 8/25/24	United States	49,515	50,450
2014-DN4, M3, FRN, 4.653%, (1-month USD LIBOR + 4.55%), 10/25/24	United States	304,252	311,957
2014-HQ1, M3, FRN, 4.203%, (1-month USD LIBOR + 4.1%), 8/25/24	United States	24,110	24,224
2014-HQ3, M3, FRN, 4.853%, (1-month USD LIBOR + 4.75%), 10/25/24	United States	22,920	22,997
2015-DNA1, M3, FRN, 3.403%, (1-month USD LIBOR + 3.3%), 10/25/27	United States	81,441	82,740
2015-DNA3, M3, FRN, 4.803%, (1-month USD LIBOR + 4.7%), 4/25/28	United States	1,064,769	1,098,531
2016-DNA2, M3, FRN, 4.753%, (1-month USD LIBOR + 4.65%), 10/25/28	United States	899,061	932,123
2017-DNA2, M2, FRN, 3.553%, (1-month USD LIBOR + 3.45%), 10/25/29	United States	1,340,000	1,380,197
2017-DNA3, M2, FRN, 2.603%, (1-month USD LIBOR + 2.5%), 3/25/30	United States	2,901,345	2,960,196
2017-HQA2, M2, FRN, 2.753%, (1-month USD LIBOR + 2.65%), 12/25/29	United States	232,389	238,525
oFNMA Connecticut Avenue Securities,
2013-C01, M2, FRN, 5.353%, (1-month USD LIBOR + 5.25%), 10/25/23	United States	115,880	120,648
2014-C01, M2, FRN, 4.503%, (1-month USD LIBOR + 4.4%), 1/25/24	United States	196,873	204,051
2014-C02, 1M2, FRN, 2.703%, (1-month USD LIBOR + 2.6%), 5/25/24	United States	614,575	626,497
2014-C02, 2M2, FRN, 2.703%, (1-month USD LIBOR + 2.6%), 5/25/24	United States	219,099	222,392
2014-C03, 1M2, FRN, 3.103%, (1-month USD LIBOR + 3%), 7/25/24	United States	1,226,362	1,246,212
2014-C03, 2M2, FRN, 3.003%, (1-month USD LIBOR + 2.9%), 7/25/24	United States	38,842	39,440
2015-C01, 1M2, FRN, 4.403%, (1-month USD LIBOR + 4.3%), 2/25/25	United States	270,728	276,273
2015-C02, 1M2, FRN, 4.103%, (1-month USD LIBOR + 4%), 5/25/25	United States	663,908	676,272
2015-C02, 2M2, FRN, 4.103%, (1-month USD LIBOR + 4%), 5/25/25	United States	40,451	40,567
2015-C03, 1M2, FRN, 5.103%, (1-month USD LIBOR + 5%), 7/25/25	United States	942,559	969,871

2015-C03, 2M2, FRN, 5.103%, (1-month USD LIBOR + 5%), 7/25/25	United States	69,574	69,824
2016-C01, 1M2, FRN, 6.853%, (1-month USD LIBOR + 6.75%), 8/25/28	United States	182,382	191,639
2016-C02, 1M2, FRN, 6.103%, (1-month USD LIBOR + 6%), 9/25/28	United States	1,154,181	1,193,935
2016-C03, 1M2, FRN, 5.403%, (1-month USD LIBOR + 5.3%), 10/25/28	United States	907,913	941,538
2016-C05, 2M2, FRN, 4.553%, (1-month USD LIBOR + 4.45%), 1/25/29	United States	844,080	875,074
2016-C06, 1M2, FRN, 4.353%, (1-month USD LIBOR + 4.25%), 4/25/29	United States	296,959	306,877
2016-C07, 2M2, FRN, 4.453%, (1-month USD LIBOR + 4.35%), 5/25/29	United States	625,920	650,428
2017-C01, 1M2, FRN, 3.653%, (1-month USD LIBOR + 3.55%), 7/25/29	United States	1,245,150	1,276,223
2017-C03, 1M2, FRN, 3.103%, (1-month USD LIBOR + 3%), 10/25/29	United States	2,255,769	2,310,318
2017-C04, 2M2, FRN, 2.953%, (1-month USD LIBOR + 2.85%), 11/25/29	United States	525,434	539,173
2017-C05, 1M2, FRN, 2.303%, (1-month USD LIBOR + 2.2%), 1/25/30	United States	1,519,795	1,547,274
			23,608,281
Total Residential Mortgage-Backed Securities (Cost $32,425,652)			31,352,232

		Shares
Escrows and Litigation Trusts 0.0%†
a,bK2016470219 South Africa Ltd., Escrow Account	South Africa	72,822	—
Mesquite Energy, Inc., Escrow Account	United States	243,000	9,416
a,bMillennium Corporate Claim Trust, Escrow Account	United States	950,432	—
a,bMillennium Lender Claim Trust, Escrow Account	United States	950,432	—
Total Escrows and Litigation Trusts (Cost $243,000)			9,416
Total Long Term Investments (Cost $380,748,181)			374,062,974

	Number of Contracts	Notional Amount#
Options Purchased 0.0%†
Calls - Over-the-Counter
Interest Rate Swaptions 0.0%†
Receive Fixed 1.35%, Pay Floating 3-month USD LIBOR, Counterparty CITI, Expires 5/16/22	1	12,100,000	77,013
Puts - Over-the-Counter
Currency Options
Foreign Exchange EUR/RUB, Counterparty MSCO, October Strike Price 82.83 RUB, Expires 10/27/22	1	2,060,000 EUR	30,516
Total Options Purchased (Cost $126,007)			107,529
Short Term Investments 2.3%

	Country	Shares		Value
Money Market Funds 2.3%
d,rInstitutional Fiduciary Trust - Money Market Portfolio, 0.01%	United States	9,106,742		9,106,742
Total Money Market Funds (Cost $9,106,742)				9,106,742
Total Short Term Investments (Cost $9,106,742)				9,106,742
Total Investments (Cost $389,980,930) 98.6%			$	383,277,245
Options Written (0.0)%†				(56,093	)
Other Assets, less Liabilities 1.4%				5,245,117
Net Assets 100.0%			$	388,466,269

	Number of Contracts	Notional Amount#
sOptions Written (0.0)%†
Puts - Over-the-Counter
Interest Rate Swaptions (0.0)%†
Receive Floating 3-month USD LIBOR, Pay Fixed 1.75%, Counterparty CITI, Expires 5/16/22	1		(12,100,000	)		(56,093	)
						(56,093	)
Total Options Written (Premiums received $92,323)					$	(56,093	)

#	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 December 31, 2021, the aggregate value of these securities was $210,014,353, representing 54.1% of net assets.
h	The coupon rate shown represents the rate at period end.
i	See Note 1(h) regarding senior floating rate interests.
j	See Note 1(i) regarding Marketplace Lending.
k	See Note 1(e) regarding loan participations and assignments.
l	A supranational organization is an entity formed by two or more central governments through international treaties.
m	The principal represents the notional amount. See Note 1(d) regarding value recovery instruments.
n	Principal amount of security is adjusted for inflation. See Note 1(k) in Item 1 of this Form N-CSR.
o	The coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
p	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.
q	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).
r	The rate shown is the annualized seven-day effective yield at period end.
s	See Note 1(d) regarding written options.

At December 31, 2021, the Fund had the following futures contracts outstanding.

Futures Contracts

Description	Type	Number of Contracts	Notional Amount*		Expiration Date	Appreciation (Depreciation)
Interest rate contracts
U.S. Treasury 10 Year Notes	Short	96	$	12,525,000	3/22/22	$	(147,725	)
U.S. Treasury 10 Year Ultra Notes	Short	27		3,953,812	3/22/22		(12,415	)
U.S. Treasury 2 Year Notes	Long	26		5,672,469	3/31/22		(5,601	)
U.S. Treasury 5 Year Notes	Short	190		22,985,547	3/31/22		(127,898	)
U.S. Treasury Long Bonds	Short	12		1,925,250	3/22/22		(26,642	)
Total Futures Contracts						$	(320,281	)

* As of year end.

At December 31, 2021, the Fund had the following forward exchange contracts outstanding.

Forward Exchange Contracts
Currency	Counterparty a	Type	Quantity		Contract Amount*		Settlement Date	Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Euro	JPHQ	Sell		4,507,600		5,235,491	1/18/22	$	106,173	$	—
Indonesian Rupiah	JPHQ	Buy		8,900,000,000		621,726	1/18/22		2,351		—
Indonesian Rupiah	JPHQ	Sell		8,900,000,000		625,879	1/18/22		1,802		—
South Korean Won	JPHQ	Buy		1,050,000,000		885,635	1/27/22	$	—	$	(3,169	)
Australian Dollar	JPHQ	Buy		1,200,000		869,550	1/31/22		2,505		—
Australian Dollar	JPHQ	Sell		1,200,000		862,357	1/31/22		—		(9,698	)
Indonesian Rupiah	JPHQ	Buy		12,618,000,000		878,446	2/22/22		3,615		—
Indonesian Rupiah	JPHQ	Sell		23,000,000,000		1,598,332	2/22/22		—		(9,483	)
Euro	JPHQ	Sell		1,230,000		1,379,577	2/24/22		—		(21,091	)
Euro	JPHQ	Sell		1,040,034		1,189,381	3/18/22		4,804		(346	)
Columbian Peso	JPHQ	Sell		1,700,000,000		425,418	6/03/22		15,211		—
Total Forward Exchange Contracts								$	136,461	$	(43,787	)
Net unrealized appreciation (depreciation)								$	92,674

^* In U.S. dollars unless otherwise indicated.

^a May be comprised of multiple contracts with the same counterparty, currency and settlement date.

At December 31, 2021, the Fund had the following credit default swap contracts outstanding.

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 Buy Protection (c)
Traded Index
CDX.NA.HY.37 .		(5.00	)%	Quarterly		12/20/26		3,875,000	$	(363,086	)	$	(353,089	)	$	(9,997	)
Contracts to Sell Protection (c)(d)
Traded Index
CDX.NA.EM.36 .		1.00	%	Quarterly		12/20/26		2,150,000		(86,073	)		(71,244	)		(14,829	)	Investment Grade
Total Centrally Cleared Swap Contracts									$	(449,159	)	$	(424,333	)	$	(24,826	)
OTC Swap Contracts
Contracts to Sell Protection (c)(d)
Single Name
Air France-KLM		5.00	%	Quarterly	BOFA	6/20/26		20,000 EUR		486			360			126		NR
Air France-KLM		5.00	%	Quarterly	JPHQ	6/20/26		60,000 EUR		1,458			943			515		NR
Air France-KLM		5.00	%	Quarterly	MSCO	12/20/25		660,000 EUR		17,766			621			17,145		NR
American Airlines Group, Inc.		5.00	%	Quarterly	GSCO	6/20/22		200,000		483			(875	)		1,358		CCC
Carnival Corp.		1.00	%	Quarterly	CITI	12/20/26		1,080,000		(147,111	)		(135,060	)		(12,051	)	B-
Mexico Government Bond		1.00	%	Quarterly	GSCO	6/20/26		925,000		7,897			2,402			5,495		BBB
Nordstrom, Inc.		1.00	%	Quarterly	JPHQ	12/20/26		1,000,000		(106,932	)		(84,832	)		(22,100	)	BB+
United Airlines Holdings, Inc.		5.00	%	Quarterly	JPHQ	12/20/26		800,000		29,781			24,316			5,465		B
(e)BNP Paribas
Bespoke
Haverhill Index,
Mezzanine
Tranche 5-10%		4.10	%	Quarterly	BNDP	12/20/23		350,000 EUR	$	9,442		$	—		$	9,442		Non-Investment Grade
(e)Citibank
Bespoke Kenai
Index, Equity
Tranche 0-5%		—%		Quarterly	CITI	12/20/23		800,000		(297,267	)		(239,917	)		(57,350	)	Non-Investment Grade
(e)Citibank
Bespoke Kona
Index, Equity
Tranche 0-5%		—%		Quarterly	CITI	12/20/22		1,000,000		(176,411	)		(133,678	)		(42,733	)	Non-Investment Grade
(e)Citibank
Bespoke
Kona Index,
Mezzanine
Tranche 5-10%		2.42	%	Quarterly	CITI	12/20/22		800,000		6,164			—			6,164		Non-Investment Grade
(e)Citibank
Bespoke Palm
Beach Index,
Mezzanine
Tranche 5-10%		1.97	%	Quarterly	CITI	12/20/22		1,100,000		10,308			—			10,308		Non-Investment Grade
MCDX.
NA.MAIN.31 .		1.00	%	Quarterly	CITI	12/20/23		2,270,000		27,367			9,041			18,326		Investment Grade
Total OTC Swap Contracts									$	(616,569	)	$	(556,679	)	$	(59,890	)
Total Credit Default Swap Contracts									$	(1,065,728	)	$	(981,012	)	$	(84,716	)

(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.

Additional financial disclosures are included in the notes to financial statements of the Fund's annual report and should be read in conjunction with this report.

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Franklin Templeton Variable Insurance Products Trust and Shareholders of Franklin Strategic Income VIP Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the summary statement of investments, of Franklin Strategic Income VIP Fund (one of the funds constituting Franklin Templeton Variable Insurance Products Trust, referred to hereafter as the “Fund”) as of December 31, 2021, the related statement of operations for the year ended December 31, 2021, the statement of changes in net assets for each of the two years in the period ended December 31, 2021, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2021 (included in Item 1 of this Form N-CSR) and the statement of investments (included in Item 6 of this Form N-CSR) as of December 31, 2021 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2021 and the financial highlights for each of the five years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 17, 2022

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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 Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

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 Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

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 February 28, 2022

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 February 28, 2022

By S\Christopher Kings________________________

     Christopher Kings

     Chief Financial Officer, Chief Accounting Officer and Treasurer

Date February 28, 2022