N-CSR/A

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: 12/31/19

Item 1. Reports to Stockholders.

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

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

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

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

Franklin Templeton Variable Insurance

Products Trust Annual Report

Table of Contents

Important Notes to Performance Information	i
Fund Summaries
Franklin Allocation VIP Fund	FFA-1
*Prospectus Supplement	FFA-7
Franklin Flex Cap Growth VIP Fund	FFC-1
Franklin Income VIP Fund	FI-1
*Prospectus Supplement	FI-6
Franklin Mutual Global Discovery VIP Fund	MGD-1
Franklin Mutual Shares VIP Fund	MS-1
Franklin Rising Dividends VIP Fund	FRD-1
Franklin Small Cap Value VIP Fund	FSV-1
*Prospectus Supplement	FSV-6
Franklin Small-Mid Cap Growth VIP Fund	FSC-1
Franklin Strategic Income VIP Fund	FSI-1
Templeton Developing Markets VIP Fund	TD-1
Templeton Foreign VIP Fund	TF-1
Templeton Global Bond VIP Fund	TGB-1
Templeton Growth VIP Fund	TG-1
Index Descriptions	I-1
Board Members and Officers	BOD-1
Shareholder Information	SI-1

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

  Not FDIC Insured  | May Lose Value | No Bank Guarantee    

MASTER CLASS – 4

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Important Notes to

Performance Information

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

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

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

Annual Report         i

Franklin Allocation VIP Fund

(Formerly, Franklin Founding Funds Allocation VIP Fund)

This annual report for Franklin Allocation VIP Fund covers the period ended December 31, 2019. As previously communicated, effective May 1, 2019, the Fund changed its name to Franklin Allocation VIP Fund and changed from a fund of funds that invested fixed percentages in three underlying funds to an actively managed fund that invests in a variety of equity and fixed income investments.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+19.56%		+5.05%		+7.34%

*On May 1, 2019, the Fund’s investment strategies changed. Performance prior to May 1, 2019, is attributable to the Fund’s performance before the strategy change. The Fund has an expense reduction and a fee waiver associated with any investments in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/20. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

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

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

Annual Report         FFA-1

FRANKLIN ALLOCATION VIP FUND

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 MSCI World Index, the Bloomberg Barclays U.S. Aggregate Bond Index, MSCI World ex USA Index-NR and the Linked Allocation VIP Fund Benchmark (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 rebalanced monthly and was composed of 40% S&P 500, 40% Bloomberg Barclays U.S. Aggregate Bond Index and 20% MSCI World ex USA Index-NR. Net Returns (NR) include income net of tax withholding when dividends are paid. Please see Index Descriptions following the Fund Summaries.

FFA-2         Annual Report

FRANKLIN ALLOCATION VIP FUND

Fund Goal and Main Investments

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

Fund Risks

All investments involve risks, including possible loss of principal. Because the Fund invests in underlying funds, and the Fund’s performance is directly related to the performance of the underlying funds held by it, the ability of the Fund to achieve its investment goals is directly related to the ability of the underlying funds to meet their investment goals. Additionally, because these underlying funds may engage in a variety of investment strategies involving certain risks, the Fund may be subject to these same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bonds are affected by changes in interest rates and the creditworthiness of their issuers. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds adjust to a rise in interest rates, the Fund’s share price may decline. Higher yielding, lower rated corporate bonds entail a greater degree of credit risk compared to investment-grade securities. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. Value securities may not increase in price as anticipated or may decline further in value. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, one of the Fund’s benchmarks, the S&P 500 posted a +31.49% total return. The Fund’s new benchmarks, the Bloomberg Barclays U.S. Aggregate Bond Index posted a +8.72% total return; the MSCI World ex USA Index-NR posted a +23.16% total return; and the Linked Allocation VIP Fund Benchmark

Asset Allocation*

Based on Total Net Assets as of 12/31/19

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

(Blended Benchmark) posted a +20.45% total return.^1,2 One of the Fund’s old benchmarks, the MSCI World Index posted a +28.40% total return for the same period.¹ The Fund changed from a fund that invested fixed percentages in three underlying funds to an actively managed fund that invests in a variety of equity and fixed income investments; its benchmarks also changed.

Economic and Market Overview

Global developed and emerging market stocks, as measured by the MSCI All Country World Index, posted strong returns during the reporting period. Although global economic growth slowed from 2018, interest-rate cuts from many central banks and the easing of trade tensions near

1. Source: Morningstar.

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

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. 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).

Annual Report         FFA-3

FRANKLIN ALLOCATION VIP FUND

period-end contributed to the generally positive environment for equities worldwide. Reflecting investor optimism and slowing but resilient economic growth, stocks advanced in every major region of the globe.

In the U.S., solid economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.³ Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

The U.S. Federal Reserve (Fed) provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Growth slowed overall in the eurozone, particularly in Germany and Italy. Germany, which is heavily reliant on exports, was adversely affected by the trade conflict between the U.S. and China and the resulting slowdown in global trade. In Italy, political uncertainty and budget concerns caused the country’s annual gross domestic product (GDP) growth to stall in 2019’s first quarter before accelerating in the second quarter. Despite sluggish economic conditions, European developed market equities, as measured by the MSCI Europe Index, posted strong returns overall, as easing trade tensions buoyed investor optimism and an electoral victory by the Conservative Party in the U.K. alleviated uncertainty surrounding Brexit. Although the European Central Bank left its headline refinancing rate unchanged, it lowered the deposit rate and restarted its bond-buying stimulus program, further supporting stocks.

Economic growth in Asia was relatively solid overall, despite slowdowns in several large emerging market countries, such as China and India. Japan’s economy grew amid the Bank of Japan’s sizable stimulus program. The trade war between

Geographic Composition

Based on Total Net Assets as of 12/31/19

the U.S. and China provided the backdrop for Asian stocks, which rose and fell in sync with investor sentiment regarding a trade deal. A phase one agreement reached in December 2019 propelled Asian developed and emerging market stocks, which ultimately ended with strong returns over the 12-month period, as measured by the MSCI All Country Asia Index.

Emerging market stocks overall experienced several sharp selloffs and subsequent rebounds throughout the reporting period before ending with gains. In aggregate, economic growth slowed somewhat from 2018 but remained solid, although there was some variation among individual countries. Many central banks in emerging markets cut interest rates throughout the reporting period which, along with resilient GDP growth, provided a supportive environment for equities. Russian stocks posted the highest returns among emerging markets as the threat of further sanctions receded and a solid fiscal environment reassured investors. Overall, global emerging markets, as measured by the MSCI Emerging Markets Index, posted robust returns for the period.

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

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

FFA-4         Annual Report

FRANKLIN ALLOCATION VIP FUND

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

Top 10 Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
Templeton Global Bond VIP Fund Diversified Financials	4.1%
Microsoft Corp. Software & Services	1.2%
Apple Inc. Technology Hardware & Equipment	0.9%
Texas Instruments Inc. Semiconductors & Semiconductor Equipment	0.6%
Mastercard Inc. Software & Services	0.5%
Amazon.com Inc. Retailing	0.5%
NIKE Inc. Consumer Durables & Apparel	0.5%
Accenture PLC Software & Services	0.5%
Johnson & Johnson Pharmaceuticals, Biotechnology & Life Sciences	0.5%
Union Pacific Corp. Transportation	0.5%

Manager’s Discussion

From January 1, 2019, through the date of the investment strategy change on May 1, 2019, the Fund’s performance can be attributed largely to its allocation among the underlying funds and their investments in domestic and foreign equities, fixed income securities, and short-term investments and other net assets. For the period after the investment strategy change through December 31, 2019, the Fund’s performance can be attributed largely to its allocation

among the underlying sleeves and their investments in domestic and foreign equities, fixed income securities, and short-term investments and other net assets. The allocation to the sleeves did not change over the period.

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

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

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Annual Report         FFA-5

FRANKLIN ALLOCATION VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual     (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,059.30	$4.62	$1,020.72	$4.53	0.89%

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

FFA-6         Annual Report

FFA P1 P2 P4 09/19

SUPPLEMENT DATED SEPTEMBER 12, 2019

TO THE PROSPECTUSES

DATED MAY 1, 2019 OF

FRANKLIN ALLOCATION VIP FUND

(A series of Franklin Templeton Variable Insurance Products Trust)

The prospectus is amended as follows:

I. The “Fund Summary – Average Annual Total Returns” table on page FFA-S8 in the Fund’s Class 1 prospectus is replaced with the following:

Average Annual Total Returns

For the periods ended December 31, 2018

	1 Year	5 Years	10 Years
Franklin Allocation VIP Fund – Class 1	-9.34%	2.26%	8.62%
S&P 500® Index (index reflects no deduction for fees, expenses or taxes)	-4.38%	8.50%	13.12%
Bloomberg Barclays U.S. Aggregate Index (index reflects no deduction for fees, expenses or taxes)	0.01%	2.52%	3.48%
MSCI World ex-US (Net Dividends) Index (index reflects no deduction for fees, expenses or taxes)	-14.09%	0.34%	6.24%
Linked Allocation VIP Fund Benchmark (index reflects no deduction for fees, expenses or taxes)	-4.41%	4.62%	8.11%

II. The “Fund Summary – Average Annual Total Returns” table on page FFA-S8 in the Fund’s Class 2 prospectus is replaced with the following:

Average Annual Total Returns

For the periods ended December 31, 2018

	1 Year	5 Years	10 Years
Franklin Allocation VIP Fund – Class 2	-9.65%	2.01%	8.35%
S&P 500® Index (index reflects no deduction for fees, expenses or taxes)	-4.38%	8.50%	13.12%
Bloomberg Barclays U.S. Aggregate Index (index reflects no deduction for fees, expenses or taxes)	0.01%	2.52%	3.48%
MSCI World ex-US (Net Dividends) Index (index reflects no deduction for fees, expenses or taxes)	-14.09%	0.34%	6.24%
Linked Allocation VIP Fund Benchmark (index reflects no deduction for fees, expenses or taxes)	-4.41%	4.62%	8.11%

FFA-7

III. The “Fund Summary – Average Annual Total Returns” table on page FFA-S8 in the Fund’s Class 4 prospectus is replaced with the following:

Average Annual Total Returns

For the periods ended December 31, 2018

	1 Year	5 Years	10 Years
Franklin Allocation VIP Fund – Class 4	-9.58%	1.92%	8.24%
S&P 500® Index (index reflects no deduction for fees, expenses or taxes)	-4.38%	8.50%	13.12%
Bloomberg Barclays U.S. Aggregate Index (index reflects no deduction for fees, expenses or taxes)	0.01%	2.52%	3.48%
MSCI World ex-US (Net Dividends) Index (index reflects no deduction for fees, expenses or taxes)	-14.09%	0.34%	6.24%
Linked Allocation VIP Fund Benchmark (index reflects no deduction for fees, expenses or taxes)	-4.41%	4.62%	8.11%

Please keep this supplement with your prospectus for future reference.

FFA-8

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Allocation VIP Fund

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

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         FFA-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Allocation VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Allocation VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Allocation VIP Fund

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests 57.4%
Automobiles & Components 0.7%
Aptiv PLC	United States	23,000	$	2,184,310
BorgWarner Inc.	United States	7,564		328,126
Cie Generale des Etablissements Michelin SCA	France	8,174		1,000,091
General Motors Co.	United States	17,439		638,267
Gentex Corp.	United States	7,901		228,971
Isuzu Motors Ltd.	Japan	61,700		737,504
Lear Corp.	United States	1,768		242,570
				5,359,839
Banks 2.1%
Bank of Ireland Group PLC	Ireland	144,599		791,668
BNP Paribas SA	France	34,750		2,058,806
FinecoBank Banca Fineco SpA	Italy	197,000		2,361,695
Hana Financial Group Inc.	South Korea	29,472		940,767
ING Groep NV	Netherlands	169,040		2,026,123
Kasikornbank PCL, fgn	Thailand	82,200		415,556
KB Financial Group Inc.	South Korea	52,538		2,165,621
KBC Groep NV	Belgium	30,000		2,256,133
Shinhan Financial Group Co. Ltd.	South Korea	19,766		741,231
Standard Chartered PLC	United Kingdom	197,696		1,865,337
Sumitomo Mitsui Financial Group Inc., ADR	Japan	193,000		1,430,130
				17,053,067
Capital Goods 6.6%
3M Co.	United States	8,277		1,460,228
Allegion PLC	United States	5,221		650,223
Allison Transmission Holdings Inc.	United States	2,065		99,781
AMETEK Inc.	United States	4,418		440,651
BAE Systems PLC	United Kingdom	98,353		735,729
The Boeing Co.	United States	9,354		3,047,159
BWX Technologies Inc.	United States	10,901		676,734
CAE Inc.	Canada	71,000		1,879,701
Carlisle Cos. Inc.	United States	3,000		485,520
Caterpillar Inc.	United States	3,646		538,441
CK Hutchison Holdings Ltd.	Hong Kong	197,000		1,878,406
Compagnie de Saint-Gobain	France	18,180		744,161
Cummins Inc.	United States	4,300		769,528
Deere & Co.	United States	3,386		586,658
Donaldson Co. Inc.	United States	8,200		472,484
Dover Corp.	United States	9,300		1,071,918
Emerson Electric Co.	United States	23,967		1,827,723
Fastenal Co.	United States	17,478		645,812
Ferguson PLC	United Kingdom	27,000		2,449,570
Fortive Corp.	United States	3,417		261,025
General Dynamics Corp.	United States	12,687		2,237,352
Graco Inc.	United States	4,502		234,104
GrafTech International Ltd.	United States	769		8,936
Honeywell International Inc.	United States	20,870		3,693,990

FFA-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Capital Goods (continued)
Huntington Ingalls Industries Inc.	United States	3,138	$	787,261
Illinois Tool Works Inc.	United States	10,967		1,970,002
Ingersoll-Rand PLC	United States	7,056		937,884
Johnson Controls International PLC	United States	22,700		924,117
Lennox International Inc.	United States	477		116,374
Lockheed Martin Corp.	United States	6,856		2,669,589
Masco Corp.	United States	2,097		100,635
MSC Industrial Direct Co. Inc., A	United States	1,157		90,790
MTU Aero Engines AG	Germany	8,500		2,426,930
Northrop Grumman Corp.	United States	8,205		2,822,274
nVent Electric PLC	United States	15,000		383,700
PACCAR Inc.	United States	4,676		369,872
Pentair PLC	United States	13,800		633,006
Raytheon Co.	United States	13,917		3,058,122
Rockwell Automation Inc.	United States	3,421		693,334
Roper Technologies Inc.	United States	10,100		3,577,723
Sinopec Engineering Group Co. Ltd.	China	843,500		504,435
Snap-on Inc.	United States	966		163,640
Stanley Black & Decker Inc.	United States	4,952		820,745
Toro Co.	United States	3,372		268,647
United Technologies Corp.	United States	15,175		2,272,608
W.W. Grainger Inc.	United States	3,014		1,020,299
a WABCO Holdings Inc.	United States	819		110,975
Watsco Inc.	United States	784		141,238
				53,760,034
Commercial & Professional Services 1.2%
Cintas Corp.	United States	6,559		1,764,896
a Copart Inc.	United States	5,678		516,357
Equifax Inc.	United States	3,490		489,019
Experian PLC	United Kingdom	80,000		2,703,997
a IAA Inc.	United States	1,064		50,072
a IHS Markit Ltd.	United States	23,109		1,741,263
KAR Auction Services Inc.	United States	942		20,526
Matthews International Corp., A	United States	7,500		286,275
Republic Services Inc.	United States	1,000		89,630
Robert Half International Inc.	United States	3,964		250,326
Rollins Inc.	United States	4,380		145,241
Verisk Analytics Inc.	United States	9,761		1,457,708
				9,515,310
Consumer Durables & Apparel 1.1%
a Capri Holdings Ltd.	United States	4,344		165,723
Carter’s Inc.	United States	1,286		140,611
D.R. Horton Inc.	United States	2,493		131,506
Garmin Ltd.	United States	4,046		394,728
Hanesbrands Inc.	United States	4,752		70,567
Hasbro Inc.	United States	3,251		343,338

Annual Report         FFA-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Consumer Durables & Apparel (continued)
Leggett & Platt Inc.	United States	3,602	$	183,090
a Lululemon Athletica Inc.	United States	3,282		760,341
NIKE Inc., B	United States	40,458		4,098,800
a NVR Inc.	United States	87		331,332
Panasonic Corp., ADR	Japan	105,900		996,519
PulteGroup Inc.	United States	3,695		143,366
Tapestry Inc.	United States	8,755		236,122
VF Corp.	United States	9,005		897,438
Whirlpool Corp.	United States	475		70,077
				8,963,558
Consumer Services 1.2%
Carnival Corp.	United States	10,218		519,381
Choice Hotels International Inc.	United States	959		99,189
Darden Restaurants Inc.	United States	3,945		430,044
Domino’s Pizza Inc.	United States	1,252		367,813
Graham Holdings Co., B	United States	358		228,758
H&R Block Inc.	United States	6,807		159,828
Las Vegas Sands Corp.	United States	13,479		930,590
McDonald’s Corp.	United States	12,726		2,514,785
Six Flags Entertainment Corp.	United States	1,589		71,680
Starbucks Corp.	United States	9,490		834,361
a TAL Education Group, ADR	China	54,000		2,602,800
Wyndham Destinations Inc.	United States	1,762		91,078
Yum! Brands Inc.	United States	10,475		1,055,147
				9,905,454
Diversified Financials 1.6%
American Express Co.	United States	3,890		484,266
a Berkshire Hathaway Inc., B	United States	6,144		1,391,616
BlackRock Inc.	United States	1,465		736,456
The Charles Schwab Corp.	United States	19,431		924,138
Deutsche Boerse AG	Germany	17,000		2,671,911
FactSet Research Systems Inc.	United States	1,064		285,471
Flow Traders	Netherlands	26,411		637,985
Intercontinental Exchange Inc.	United States	9,055		838,040
Intermediate Capital Group PLC	United Kingdom	20,000		426,473
Invesco Ltd.	United States	6,531		117,427
Lazard Ltd., A	United States	3,263		130,390
MarketAxess Holdings Inc.	United States	1,055		399,961
MFA Financial Inc.	United States	3,230		24,710
Moody’s Corp.	United States	2,263		537,259
Morningstar Inc.	United States	520		78,681
MSCI Inc.	United States	2,278		588,134
S&P Global Inc.	United States	1,999		545,827
Santander Consumer USA Holdings Inc.	United States	2,925		68,357
SEI Investments Co.	United States	2,830		185,308
State Street Corp.	United States	2,600		205,660

FFA-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Diversified Financials (continued)
T. Rowe Price Group Inc.	United States	7,539	$	918,552
UBS Group AG	Switzerland	28,367		358,380
				12,555,002
Energy 2.3%
a Apergy Corp.	United States	7,800		263,484
BP PLC	United Kingdom	284,973		1,779,972
Cabot Oil & Gas Corp., A	United States	27,616		480,795
Chevron Corp.	United States	7,400		891,774
Cimarex Energy Co.	United States	1,676		87,973
Concho Resources Inc.	United States	4,018		351,856
ConocoPhillips	United States	14,455		940,009
Eni SpA	Italy	91,864		1,426,427
EOG Resources Inc.	United States	6,400		536,064
Equinor ASA	Norway	66,776		1,335,140
Exxon Mobil Corp.	United States	27,226		1,899,830
Galp Energia SGPS SA, B	Portugal	48,999		818,754
HollyFrontier Corp.	United States	1,991		100,964
Husky Energy Inc.	Canada	103,200		828,079
Occidental Petroleum Corp.	United States	11,400		469,794
ONEOK Inc.	United States	2,943		222,697
Phillips 66	United States	9,569		1,066,082
Royal Dutch Shell PLC, B	United Kingdom	42,569		1,262,642
SBM Offshore NV	Netherlands	40,838		759,785
Schlumberger Ltd.	United States	14,300		574,860
Tenaris SA	Italy	54,609		615,475
Total SA	France	12,943		714,134
Valero Energy Corp.	United States	11,045		1,034,364
				18,460,954
Food & Staples Retailing 1.1%
Casey’s General Stores Inc.	United States	922		146,589
Costco Wholesale Corp.	United States	4,687		1,377,603
The Kroger Co.	United States	14,245		412,962
Matsumotokiyoshi Holdings Co. Ltd.	Japan	20,200		787,182
Seven & I Holdings Co. Ltd., ADR	Japan	35,900		657,508
a Sprouts Farmers Market Inc.	United States	2,414		46,711
Sundrug Co. Ltd.	Japan	22,200		807,923
Sysco Corp.	United States	14,000		1,197,560
Walgreens Boots Alliance Inc.	United States	17,351		1,023,015
Walmart Inc.	United States	20,000		2,376,800
				8,833,853
Food, Beverage & Tobacco 2.5%
Altria Group Inc.	United States	28,276		1,411,255
Brown-Forman Corp., A	United States	1,486		93,276
Brown-Forman Corp., B	United States	11,799		797,612
Bunge Ltd.	United States	10,300		592,765

Annual Report         FFA-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Food, Beverage & Tobacco (continued)
The Coca-Cola Co.	United States	26,317	$	1,456,646
Constellation Brands Inc., A	United States	3,504		664,884
Fevertree Drinks PLC	United Kingdom	70,000		1,940,452
Flowers Foods Inc.	United States	5,137		111,678
General Mills Inc.	United States	17,306		926,909
The Hershey Co.	United States	5,001		735,047
Hormel Foods Corp.	United States	8,367		377,435
Ingredion Inc.	United States	1,745		162,198
The J. M. Smucker Co.	United States	2,227		231,898
Kellogg Co.	United States	4,136		286,046
Kirin Holdings Co. Ltd.	Japan	50,100		1,101,808
Lamb Weston Holdings Inc.	United States	3,432		295,255
McCormick & Co. Inc.	United States	6,200		1,052,326
Mondelez International Inc., A	United States	9,469		521,553
a Monster Beverage Corp.	United States	26,249		1,668,124
PepsiCo Inc.	United States	22,238		3,039,268
Philip Morris International Inc.	United States	16,946		1,441,935
Suntory Beverage & Food Ltd.	Japan	11,300		472,588
Tyson Foods Inc.	United States	8,049		732,781
				20,113,739
Health Care Equipment & Services 3.7%
Abbott Laboratories	United States	22,460		1,950,875
a ABIOMED Inc.	United States	1,312		223,814
Baxter International Inc.	United States	2,515		210,304
Becton, Dickinson and Co.	United States	8,843		2,405,031
Cerner Corp.	United States	7,272		533,692
Chemed Corp.	United States	346		151,984
Cochlear Ltd.	Australia	17,000		2,680,591
CVS Health Corp.	United States	6,800		505,172
Danaher Corp.	United States	6,687		1,026,321
Dentsply Sirona Inc.	United States	4,800		271,632
a Edwards Lifesciences Corp.	United States	2,707		631,516
GN Store Nord AS	Denmark	55,000		2,586,070
a Haemonetics Corp.	United States	6,324		726,628
HCA Holdings Inc.	United States	5,114		755,900
a IDEXX Laboratories Inc.	United States	620		161,901
a Intuitive Surgical Inc.	United States	2,922		1,727,340
a Laboratory Corp. of America Holdings	United States	3,410		576,870
a LivaNova PLC	United Kingdom	36,000		2,715,480
Medtronic PLC	United States	17,800		2,019,410
a Premier Inc., A	United States	586		22,198
Quest Diagnostics Inc.	United States	5,773		616,499
ResMed Inc.	United States	3,815		591,210
Sinopharm Group Co. Ltd., H	China	157,200		573,943
Stryker Corp.	United States	14,592		3,063,444
Teleflex Inc.	United States	3,384		1,273,873

FFA-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Health Care Equipment & Services (continued)
Universal Health Services Inc., B	United States	1,289	$	184,920
a Varian Medical Systems Inc.	United States	2,004		284,588
West Pharmaceutical Services Inc.	United States	9,000		1,352,970
				29,824,176
Household & Personal Products 1.0%
Church & Dwight Co. Inc.	United States	6,941		488,230
Clorox Co.	United States	4,242		651,316
Colgate-Palmolive Co.	United States	30,504		2,099,895
Estee Lauder Cos. Inc., A	United States	6,568		1,356,555
Kimberly-Clark Corp.	United States	6,764		930,388
Nu Skin Enterprises Inc., A	United States	1,414		57,946
The Procter & Gamble Co.	United States	20,713		2,587,054
				8,171,384
Insurance 0.2%
Aflac Inc.	United States	10,400		550,160
American National Insurance Co.	United States	233		27,419
Assured Guaranty Ltd.	United States	1,766		86,569
Erie Indemnity Co., A	United States	3,000		498,000
Fidelity National Financial Inc.	United States	1,930		87,526
RenaissanceRe Holdings Ltd.	United States	540		105,851
				1,355,525
Materials 3.5%
Air Products and Chemicals Inc.	United States	15,822		3,718,012
Alamos Gold Inc., A	Canada	83,100		500,262
Albemarle Corp.	United States	21,500		1,570,360
a Axalta Coating Systems Ltd.	United States	21,685		659,224
Celanese Corp.	United States	9,616		1,183,922
Eastman Chemical Co.	United States	2,680		212,417
Ecolab Inc.	United States	10,021		1,933,953
International Flavors & Fragrances Inc.	United States	2,716		350,418
Johnson Matthey PLC	United Kingdom	29,607		1,174,821
Koninklijke DSM NV	Netherlands	20,000		2,604,007
Linde PLC	United Kingdom	14,985		3,190,307
Lotte Chemical Corp.	South Korea	4,020		778,969
LyondellBasell Industries NV, A	United States	10,246		968,042
Martin Marietta Materials Inc.	United States	2,563		716,717
NewMarket Corp.	United States	218		106,061
Nucor Corp.	United States	9,120		513,274
Packaging Corp. of America	United States	2,106		235,851
Reliance Steel & Aluminum Co.	United States	486		58,203
Royal Gold Inc.	United States	468		57,213
Sonoco Products Co.	United States	2,793		172,384
Steel Dynamics Inc.	United States	3,807		129,590
Sumitomo Metal Mining Co. Ltd.	Japan	31,000		1,010,941
Symrise AG	Germany	22,500		2,366,820

Annual Report         FFA-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Materials (continued)
Umicore SA	Belgium	57,000	$	2,771,686
Valvoline Inc.	United States	2,506		53,654
Wheaton Precious Metals Corp.	Canada	46,900		1,395,515
				28,432,623
Media & Entertainment 2.1%
a Alphabet Inc., A	United States	2,146		2,874,331
a AMC Networks Inc., A	United States	1,033		40,803
Ascential PLC	United Kingdom	467,885		2,427,947
a Baidu Inc., ADR	China	7,800		985,920
Cable One Inc.	United States	430		640,042
Cinemark Holdings Inc.	United States	1,767		59,813
Comcast Corp., A	United States	36,932		1,660,832
CyberAgent Inc.	Japan	65,000		2,281,804
a Facebook Inc., A	United States	11,928		2,448,222
a IAC/InterActiveCorp.	United States	2,007		499,964
The Interpublic Group of Cos. Inc.	United States	7,664		177,038
John Wiley & Sons Inc., A	United States	1,300		63,076
a Match Group Inc.	United States	1,273		104,526
Omnicom Group Inc.	United States	6,087		493,169
SES SA, IDR	Luxembourg	64,135		899,052
The Walt Disney Co.	United States	11,212		1,621,592
				17,278,131
Pharmaceuticals, Biotechnology & Life Sciences 5.3%
AbbVie Inc.	United States	24,677		2,184,902
Agilent Technologies Inc.	United States	8,185		698,262
Amgen Inc.	United States	12,459		3,003,491
Astellas Pharma Inc., ADR	Japan	30,200		514,306
AstraZeneca PLC, ADR	United Kingdom	13,014		648,878
Bayer AG	Germany	22,776		1,859,724
a Biogen Inc.	United States	4,687		1,390,774
Bristol-Myers Squibb Co.	United States	24,680		1,584,209
a Bristol-Myers Squibb Co., rts., 2/01/49	United States	5,348		16,098
a Catalent Inc.	United States	21,889		1,232,351
CSL Ltd.	Australia	15,000		2,902,305
a Elanco Animal Health Inc.	United States	9,587		282,337
Eli Lilly & Co.	United States	7,962		1,046,446
a Exelixis Inc.	United States	6,973		122,864
Gilead Sciences Inc.	United States	25,158		1,634,767
a GW Pharmaceuticals PLC, ADR	United Kingdom	1,426		149,103
Hikma Pharmaceuticals PLC	United Kingdom	100,000		2,636,980
a Illumina Inc.	United States	3,446		1,143,176
Johnson & Johnson	United States	26,805		3,910,045
Merck & Co. Inc.	United States	22,588		2,054,379
Merck KGaA	Germany	7,936		937,597
a Mettler-Toledo International Inc.	United States	3,555		2,820,110
a Neurocrine Biosciences Inc.	United States	3,209		344,935

FFA-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Pharmaceuticals, Biotechnology & Life Sciences (continued)
Pfizer Inc.	United States	63,147	$	2,474,099
a PTC Therapeutics Inc.	United States	2,600		124,878
a Reata Pharmaceuticals Inc.	United States	700		143,101
a Regeneron Pharmaceuticals Inc.	United States	588		220,782
Roche Holding AG	Switzerland	3,897		1,264,567
Sanofi	France	10,624		1,067,758
Santen Pharmaceutical Co. Ltd.	Japan	115,000		2,207,407
Takeda Pharmaceutical Co. Ltd., ADR	Japan	84,900		1,675,077
a Waters Corp.	United States	3,896		910,300
				43,206,008
Real Estate 1.4%
American Tower Corp.	United States	5,854		1,345,366
CK Asset Holdings Ltd.	Hong Kong	186,630		1,347,219
Crown Castle International Corp.	United States	7,085		1,007,133
EPR Properties	United States	2,075		146,578
Equinix Inc.	United States	1,198		699,273
Gaming and Leisure Properties Inc.	United States	4,956		213,356
Kimco Realty Corp.	United States	9,753		201,985
Mitsui Fudosan Co. Ltd.	Japan	41,700		1,025,281
National Retail Properties Inc.	United States	4,982		267,135
OMEGA Healthcare Investors Inc.	United States	6,174		261,469
Public Storage	United States	4,964		1,057,133
Realty Income Corp.	United States	9,040		665,615
Simon Property Group Inc.	United States	6,987		1,040,783
Spirit Realty Capital Inc.	United States	2,899		142,573
STORE Capital Corp.	United States	5,345		199,048
Swire Pacific Ltd., A	Hong Kong	45,600		423,680
Ventas Inc.	United States	5,956		343,899
VEREIT Inc.	United States	28,432		262,712
WP Carey Inc.	United States	3,655		292,546
				10,942,784
Retailing 3.3%
a Alibaba Group Holding Ltd., ADR	China	3,245		688,264
a Amazon.com Inc.	United States	2,238		4,135,466
a AutoZone Inc.	United States	544		648,073
Best Buy Co. Inc.	United States	7,259		637,340
a boohoo Group PLC	United Kingdom	690,000		2,722,420
a Booking Holdings Inc.	United States	307		630,495
a Burlington Stores Inc.	United States	506		115,383
Dick’s Sporting Goods Inc.	United States	2,306		114,124
Dollar General Corp.	United States	6,350		990,473
Expedia Group Inc.	United States	2,351		254,237
Foot Locker Inc.	United States	4,007		156,233
The Gap Inc.	United States	7,717		136,437
Genuine Parts Co.	United States	4,077		433,100
The Home Depot Inc.	United States	6,374		1,391,954

Annual Report         FFA-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Retailing (continued)
Kingfisher PLC	United Kingdom	219,553	$	631,008
Kohl’s Corp.	United States	5,312		270,646
L Brands Inc.	United States	7,263		131,606
Lowe’s Cos. Inc.	United States	4,200		502,992
Macy’s Inc.	United States	9,207		156,519
a MercadoLibre Inc.	Argentina	3,900		2,230,566
Nordstrom Inc.	United States	3,423		140,103
a O’Reilly Automotive Inc.	United States	2,303		1,009,313
Penske Automotive Group Inc.	United States	707		35,506
Pool Corp.	United States	1,044		221,725
Ross Stores Inc.	United States	24,299		2,828,890
Seria Co. Ltd.	Japan	7,600		207,702
Target Corp.	United States	16,841		2,159,185
Tiffany & Co.	United States	4,900		654,885
The TJX Cos. Inc.	United States	22,989		1,403,708
Tractor Supply Co.	United States	3,601		336,477
a Ulta Beauty Inc.	United States	1,743		441,223
a Urban Outfitters Inc.	United States	2,199		61,066
Williams-Sonoma Inc.	United States	2,642		194,028
				26,671,147
Semiconductors & Semiconductor Equipment 2.9%
Analog Devices Inc.	United States	17,200		2,044,048
Applied Materials Inc.	United States	24,271		1,481,502
ASML Holding NV, N.Y. shs	Netherlands	4,222		1,249,459
Infineon Technologies AG	Germany	135,000		3,074,848
Intel Corp.	United States	24,208		1,448,849
KLA Corp.	United States	4,277		762,033
Lam Research Corp.	United States	3,869		1,131,295
Maxim Integrated Products Inc.	United States	7,553		464,585
Monolithic Power Systems	United States	2,900		516,258
NVIDIA Corp.	United States	3,387		796,961
NXP Semiconductors NV	Netherlands	14,297		1,819,436
QUALCOMM Inc.	United States	9,599		846,920
Skyworks Solutions Inc.	United States	5,654		683,455
Taiwan Semiconductor Manufacturing Co. Ltd.	Taiwan	153,000		1,693,123
Texas Instruments Inc.	United States	36,445		4,675,529
Xilinx Inc.	United States	7,178		701,793
				23,390,094
Software & Services 6.8%
Accenture PLC, A	United States	18,687		3,934,922
a Adobe Inc.	United States	877		289,243
a Adyen NV	Netherlands	3,501		2,870,050
Amdocs Ltd.	United States	4,013		289,698
a Aspen Technology Inc.	United States	1,261		152,493
a Atlassian Corp. PLC	United States	900		108,306
a Autodesk Inc.	United States	5,142		943,351

FFA-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Software & Services (continued)
Automatic Data Processing Inc.	United States	12,815	$	2,184,958
AVEVA Group PLC	United Kingdom	21,000		1,294,994
Booz Allen Hamilton Holding Corp.	United States	1,799		127,963
Broadridge Financial Solutions Inc.	United States	3,465		428,066
a Cadence Design Systems Inc.	United States	3,830		265,649
Citrix Systems Inc.	United States	1,818		201,616
Cognizant Technology Solutions Corp., A	United States	11,134		690,531
a CyberArk Software Ltd.	Israel	15,000		1,748,700
International Business Machines Corp.	United States	10,451		1,400,852
a InterXion Holding NV	Netherlands	26,000		2,179,122
Intuit Inc.	United States	11,913		3,120,372
Jack Henry & Associates Inc.	United States	2,222		323,679
Keywords Studios PLC	Ireland	127,000		2,519,713
Mastercard Inc., A	United States	13,875		4,142,936
Microsoft Corp.	United States	61,073		9,631,212
Paychex Inc.	United States	10,204		867,952
a PTC Inc.	United States	8,021		600,693
The Sage Group PLC	United Kingdom	280,000		2,777,636
a salesforce.com Inc.	United States	3,653		594,124
SAP SE	Germany	19,000		2,563,724
a ServiceNow Inc.	United States	6,455		1,822,376
a Shopify Inc., A	Canada	7,000		2,783,060
a Twilio Inc., A	United States	2,562		251,793
a Tyler Technologies Inc.	United States	1,096		328,822
a VeriSign Inc.	United States	2,859		550,872
Visa Inc., A	United States	13,484		2,533,644
a Workday Inc., A	United States	3,620		595,309
				55,118,431
Technology Hardware & Equipment 2.2%
Amphenol Corp., A	United States	5,833		631,306
Apple Inc.	United States	25,462		7,476,916
Cisco Systems Inc.	United States	50,098		2,402,700
Cognex Corp.	United States	2,687		150,580
a F5 Networks Inc.	United States	1,900		265,335
HP Inc.	United States	47,342		972,878
a Keysight Technologies Inc.	United States	4,162		427,146
Motorola Solutions Inc.	United States	4,272		688,390
NetApp Inc.	United States	6,367		396,346
Samsung Electronics Co. Ltd.	South Korea	52,005		2,510,298
TE Connectivity Ltd.	United States	12,149		1,164,360
a Trimble Inc.	United States	17,458		727,824
Ubiquiti Inc.	United States	298		56,316
a ViaSat Inc.	United States	4,447		325,498
				18,195,893

Annual Report         FFA-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Shares/ Rights	Value
Common Stocks and Other Equity Interests (continued)
Telecommunication Services 0.8%
AT&T Inc.	United States	37,596	$	1,469,252
China Mobile Ltd.	China	166,320		1,398,042
Singapore Telecommunications Ltd.	Singapore	260,600		652,856
Telefonica Deutschland Holding AG	Germany	99,448		288,183
Verizon Communications Inc.	United States	23,329		1,432,401
Vodafone Group PLC	United Kingdom	824,215		1,602,078
				6,842,812
Transportation 2.0%
A.P. Moeller-Maersk AS, B	Denmark	515		742,604
Alaska Air Group Inc.	United States	24,235		1,641,921
C.H. Robinson Worldwide Inc.	United States	4,222		330,160
Canadian National Railway Co.	Canada	6,314		571,101
Canadian Pacific Railway Ltd.	Canada	3,272		834,196
Delta Air Lines Inc.	United States	16,077		940,183
DSV Panalpina A/S	Denmark	21,500		2,477,443
Expeditors International of Washington Inc.	United States	4,782		373,092
J.B. Hunt Transport Services Inc.	United States	5,801		677,441
Kansas City Southern	United States	4,795		734,402
Landstar System Inc.	United States	1,060		120,702
a Lyft Inc., A	United States	1,925		82,814
Norfolk Southern Corp.	United States	1,800		349,434
Old Dominion Freight Line Inc.	United States	501		95,080
Southwest Airlines Co.	United States	14,008		756,152
a Uber Technologies Inc.	United States	4,538		134,960
Union Pacific Corp.	United States	21,021		3,800,387
United Parcel Service Inc., B	United States	16,177		1,893,680
				16,555,752
Utilities 1.8%
Alliant Energy Corp.	United States	5,988		327,663
Ameren Corp.	United States	4,173		320,486
American Electric Power Co. Inc.	United States	3,548		335,321
American Water Works Co. Inc.	United States	4,619		567,444
Atmos Energy Corp.	United States	2,942		329,092
Consolidated Edison Inc.	United States	8,367		756,963
Dominion Energy Inc.	United States	10,618		879,383
DTE Energy Co.	United States	5,118		664,675
E.ON SE	Germany	89,716		958,229
Evergy Inc.	United States	4,028		262,183
Eversource Energy	United States	7,424		631,560
Exelon Corp.	United States	24,694		1,125,799
Hawaiian Electric Industries Inc.	United States	2,856		133,832
a Korea Electric Power Corp.	South Korea	26,869		646,163
NextEra Energy Inc.	United States	9,408		2,278,241
OGE Energy Corp.	United States	5,155		229,243
PPL Corp.	United States	13,039		467,839
Public Service Enterprise Group Inc.	United States	14,881		878,723

FFA-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Shares/ Rights			Value
Common Stocks and Other Equity Interests (continued)
Utilities (continued)
Sempra Energy		United States		2,018		$	305,687
The Southern Co.		United States		18,720			1,192,464
Veolia Environnement SA		France		34,604			920,106
Xcel Energy Inc.		United States		3,771			239,421
							14,450,517
Total Common Stocks and Other Equity Interests (Cost $427,888,694)							464,956,087
Management Investment Companies (Cost $35,760,635) 4.1%
Diversified Financials 4.1%
b Templeton Global Bond VIP Fund, Class 1		United States		1,978,021			33,013,162
			Principal            Amount*
Corporate Bonds 12.3%
Banks 2.4%
c Akbank T.A.S., senior note, 144A, 5.125%, 3/31/25		Turkey		200,000			196,185
Bank of America Corp., sub. bond, 4.183%, 11/25/27		United States		2,240,000			2,428,111
Barclays PLC, senior note, 3.932% to 5/07/24, FRN thereafter, 5/07/25		United Kingdom		800,000			840,876
d BDO Unibank Inc., senior note, Reg S, 2.95%, 3/06/23		Philippines		200,000			202,152
c BPCE SA,
sub. note, 144A, 5.15%, 7/21/24		France		1,000,000			1,097,665
sub. note, 144A, 4.875%, 4/01/26		France		500,000			550,845
Citigroup Inc., senior note, 3.352% to 4/24/24, FRN thereafter, 4/24/25		United States		2,300,000			2,393,559
Credit Suisse Group Funding Guernsey Ltd., senior note, 3.80%, 9/15/22		Switzerland		2,300,000			2,394,165
JPMorgan Chase & Co., senior bond, 3.54% to 5/01/27, FRN thereafter, 5/01/28		United States		1,350,000			1,433,852
d Realkredit Danmark A/S,
secured bond, Reg S, 1.00%, 4/01/27		Denmark		2,530,000	DKK		402,838
senior bond, 10F, Reg S, 1.00%, 4/01/29		Denmark		2,000,000	DKK		318,700
Regions Financial Corp., senior note, 3.80%, 8/14/23		United States		1,310,000			1,386,719
c Standard Chartered PLC, senior note, 144A, 4.05%, 4/12/26		United Kingdom		1,500,000			1,598,136
Truist Financial Corp., sub. bond, 3.875%, 3/19/29		United States		2,000,000			2,169,201
e Wells Fargo Bank NA, senior note, FRN, 2.082%, (3-month USD LIBOR + 0.65%), 9/09/22		United States		1,700,000			1,702,953
							19,115,957
Capital Goods 0.5%
c Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		200,000			201,417
Caterpillar Financial Services Corp., senior note, I, 2.65%, 5/17/21		United States		1,500,000			1,517,303
General Electric Co.,
senior bond, 3.10%, 1/09/23		United States		500,000			510,872
senior bond, 4.125%, 10/09/42		United States		103,000			106,041

Annual Report         FFA-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*			Value
Corporate Bonds (continued)
Capital Goods (continued)
c Harsco Corp., senior note, 144A, 5.75%, 7/31/27		United States		200,000		$	213,759
Lockheed Martin Corp., senior bond, 3.55%, 1/15/26		United States		500,000			536,321
United Technologies Corp., senior bond, 4.50%, 6/01/42		United States		800,000			958,167
c Vertiv Group Corp., senior note, 144A, 9.25%, 10/15/24		United States		200,000			215,417
							4,259,297
Commercial & Professional Services 0.1%
c Ashtead Capital Inc., secured note, second lien, 144A, 4.125%, 8/15/25		United Kingdom		850,000			875,500
c Intrado Corp., senior note, 144A, 8.50%, 10/15/25		United States		300,000			240,750
							1,116,250
Consumer Services 0.2%
Marriott International Inc., senior note, 3.60%, 4/15/24		United States		1,100,000			1,158,420
c Stars Group Holdings BV/Stars Group U.S. Co-Borrower LLC, senior note, 144A, 7.00%, 7/15/26		Canada		100,000			108,560
c Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.25%, 5/15/27		United States		200,000			212,750
							1,479,730
Diversified Financials 1.1%
Capital One Financial Corp, senior note, 3.20%, 1/30/23		United States		200,000			205,635
Capital One Financial Corp., senior note, 3.75%, 3/09/27		United States		1,100,000			1,173,063
DY9 Leasing LLC, secured bond, 2.372%, 3/19/27		United States		722,826			732,922
c FirstCash Inc., senior note, 144A, 5.375%, 6/01/24		United States		200,000			207,583
The Goldman Sachs Group Inc., senior note, 3.50%, 1/23/25		United States		1,900,000			1,993,254
Jyske Realkredit A/S, secured note, 1.00%, 4/01/26		Denmark		2,220,000	DKK		353,378
Morgan Stanley, senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28		United States		1,800,000			1,913,162
Private Export Funding Corp., secured bond, 2.80%, 5/15/22		United States		1,600,000			1,637,462
d TNB Global Ventures Capital Bhd., senior note, Reg S, 3.244%, 10/19/26		Malaysia		300,000			301,824
c UBS Group AG, senior note, 144A, 4.125%, 9/24/25		Switzerland		700,000			761,388
							9,279,671
Energy 1.7%
c Aker BP ASA, senior note, 144A, 4.75%, 6/15/24		Norway		200,000			207,998
Baker Hughes a GE Co. LLC/Baker Hughes Co-obligator Inc., senior bond, 4.08%, 12/15/47		United States		900,000			921,677
c California Resources Corp., secured note, second lien, 144A, 8.00%, 12/15/22		United States		100,000			44,500
Canadian Natural Resources Ltd., senior bond, 3.90%, 2/01/25		Canada		1,350,000			1,439,352
Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25		United States		200,000			225,309
Cheniere Energy Partners LP, senior secured note, first lien, 5.25%, 10/01/25		United States		200,000			208,916
Enable Midstream Partners LP, senior bond, 4.95%, 5/15/28		United States		300,000			303,777
Energy Transfer Operating LP, senior bond, 6.05%, 6/01/41		United States		700,000			789,969
Enterprise Products Operating LLC, senior bond, 6.125%, 10/15/39		United States		700,000			915,125
Kinder Morgan Inc., senior bond, 5.55%, 6/01/45		United States		800,000			957,705
MPLX LP, senior bond, 5.50%, 2/15/49		United States		425,000			482,152
Murphy Oil USA Inc., senior bond, 4.75%, 9/15/29		United States		100,000			105,792
Occidental Petroleum Corp., senior note, 2.60%, 8/13/21		United States		700,000			705,276

FFA-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Corporate Bonds (continued)
Energy (continued)
Oceaneering International Inc., senior note, 4.65%, 11/15/24		United States		200,000	$	196,500
Reliance Industries Ltd., senior note, 2.06%, 1/15/26		United States		812,500		816,776
c Schlumberger Holdings Corp., senior note, 144A, 3.75%, 5/01/24		United States		1,800,000		1,896,605
Total Capital International SA, senior note, 3.455%, 2/19/29		France		670,000		726,019
TransCanada PipeLines Ltd., senior bond, 4.875%, 5/15/48		Canada		200,000		236,062
Valero Energy Corp., senior bond, 4.00%, 4/01/29		United States		1,000,000		1,079,149
The Williams Cos. Inc.,
senior bond, 4.125%, 11/15/20		United States		1,350,000		1,366,221
senior bond, 4.85%, 3/01/48		United States		320,000		349,845
						13,974,725
Food & Staples Retailing 0.3%
c Cencosud SA, senior note, 144A, 4.375%, 7/17/27		Chile		300,000		296,308
c CK Hutchison International 19 Ltd., senior note, 144A, 3.25%, 4/11/24		Hong Kong		1,275,000		1,308,840
The Kroger Co., senior bond, 5.40%, 1/15/49		United States		550,000		670,912
Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24		United States		500,000		520,073
						2,796,133
Food, Beverage & Tobacco 0.7%
Anheuser-Busch InBev Worldwide Inc., senior bond, 5.80%, 1/23/59		Belgium		335,000		456,616
Bunge Ltd. Finance Corp., senior note, 4.35%, 3/15/24		United States		700,000		735,266
Coca-Cola Femsa SAB de CV, senior note, 3.875%, 11/26/23		Mexico		1,100,000		1,163,451
c Imperial Brands Finance PLC,
senior note, 144A, 4.25%, 7/21/25		United Kingdom		585,000		617,248
senior note, 144A, 3.50%, 7/26/26		United Kingdom		300,000		301,554
Kraft Heinz Foods Co., senior bond, 3.00%, 6/01/26		United States		850,000		850,031
Reynolds American Inc., senior bond, 5.85%, 8/15/45		United Kingdom		650,000		745,190
Tyson Foods Inc., senior bond, 5.10%, 9/28/48		United States		690,000		867,494
						5,736,850
Health Care Equipment & Services 0.6%
Abbott Laboratories, senior bond, 3.75%, 11/30/26		United States		450,000		491,749
Anthem Inc., senior bond, 5.10%, 1/15/44		United States		600,000		717,161
c Centene Corp., senior note, 144A, 4.25%, 12/15/27		United States		200,000		206,120
CHS/Community Health Systems Inc., senior secured note, first lien, 6.25%, 3/31/23		United States		100,000		101,750
c Cigna Corp., senior note, 144A, 3.05%, 10/15/27		United States		850,000		862,453
CVS Health Corp., senior bond, 5.30%, 12/05/43		United States		1,050,000		1,252,572
HCA Inc., senior secured bond, first lien, 4.50%, 2/15/27		United States		583,000		629,019
c MEDNAX Inc., senior note, 144A, 6.25%, 1/15/27		United States		200,000		205,505
						4,466,329
Household & Personal Products 0.0%†
Avon Products Inc., senior bond, 7.00%, 3/15/23		United Kingdom		260,000		283,481
Insurance 0.7%
Aflac Inc., senior bond, 4.75%, 1/15/49		United States		700,000		851,333
The Allstate Corp., senior bond, 4.20%, 12/15/46		United States		700,000		805,358
Marsh & McLennan Cos. Inc., senior note, 3.875%, 3/15/24		United States		2,000,000		2,133,164
MetLife Inc., junior sub. bond, 6.40%, 12/15/66		United States		700,000		858,617

Annual Report         FFA-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Corporate Bonds (continued)
Insurance (continued)
c Metropolitan Life Global Funding I, secured note, 144A, 3.60%, 1/11/24		United States		1,220,000	$	1,290,691
						5,939,163
Materials 0.4%
c Braskem Netherlands Finance BV, senior bond, 144A, 4.50%, 1/31/30		Brazil		300,000		298,170
c Glencore Funding LLC, senior note, 144A, 4.625%, 4/29/24		Switzerland		1,350,000		1,434,915
International Paper Co., senior bond, 3.80%, 1/15/26		United States		300,000		320,119
c Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		200,000		197,998
c New Gold Inc., senior note, 144A, 6.375%, 5/15/25		Canada		100,000		92,773
c OI European Group BV, senior note, 144A, 4.00%, 3/15/23		United States		150,000		151,562
c Plastipak Holdings Inc., senior note, 144A, 6.25%, 10/15/25		United States		200,000		172,992
c SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25		United States		200,000		192,832
						2,861,361
Media & Entertainment 0.5%
c CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 144A, 5.00%, 2/01/28		United States		100,000		105,117
Charter Communications Operating LLC/Charter Communications Operating Capital, senior secured note, first lien, 4.50%, 2/01/24		United States		700,000		753,242
Comcast Corp., senior bond, 4.049%, 11/01/52		United States		1,350,000		1,515,644
c CSC Holdings LLC, senior bond, 144A, 5.375%, 2/01/28		United States		300,000		320,572
c Diamond Sports Group LLC/Diamond Sports Finance Co., first lien, 144A, 5.375%, 8/15/26		United States		200,000		202,685
c Fox Corp., senior bond, 144A, 5.476%, 1/25/39		United States		420,000		513,573
c Tencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28		China		900,000		939,966
						4,350,799
Pharmaceuticals, Biotechnology & Life Sciences 0.6%
c AbbVie Inc.,
senior bond, 144A, 4.25%, 11/21/49		United States		370,000		391,068
senior note, 144A, 2.95%, 11/21/26		United States		200,000		203,299
Allergan Funding SCS, senior bond, 4.85%, 6/15/44		United States		550,000		598,716
AstraZeneca PLC, senior bond, 4.375%, 11/16/45		United Kingdom		1,000,000		1,179,675
c Bausch Health Cos. Inc., senior bond, 144A, 6.125%, 4/15/25		United States		200,000		207,063
Biogen Inc., senior bond, 5.20%, 9/15/45		United States		700,000		844,242
c Bristol-Myers Squibb Co., senior bond, 144A, 4.625%, 5/15/44		United States		600,000		727,012
Gilead Sciences Inc., senior bond, 4.80%, 4/01/44		United States		700,000		840,108
						4,991,183
Real Estate 0.1%
Simon Property Group LP, senior note, 3.375%, 12/01/27		United States		780,000		828,926
Retailing 0.3%
Alibaba Group Holding Ltd., senior bond, 4.20%, 12/06/47		China		800,000		887,435
AutoZone Inc., senior note, 3.75%, 4/18/29		United States		500,000		529,429
Dollar Tree Inc., senior note, 4.00%, 5/15/25		United States		450,000		481,340
c Party City Holdings Inc., senior note, 144A, 6.625%, 8/01/26		United States		200,000		141,465
						2,039,669

FFA-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Corporate Bonds (continued)
Software & Services 0.4%
Fiserv Inc., senior bond, 3.50%, 7/01/29		United States		630,000	$	662,555
Microsoft Corp., senior note, 2.65%, 11/03/22		United States		2,100,000		2,150,982
						2,813,537
Telecommunication Services 0.2%
AT&T Inc.,
senior bond, 4.85%, 7/15/45		United States		100,000		114,323
senior note, 3.80%, 2/15/27		United States		700,000		746,547
Telefonica Emisiones SA, senior bond, 5.52%, 3/01/49		Spain		800,000		1,002,176
						1,863,046
Transportation 0.3%
CSX Corp., senior bond, 4.75%, 11/15/48		United States		800,000		969,147
Fedex Corp., senior bond, 5.10%, 1/15/44		United States		550,000		602,964
c Kazakhstan Temir Zholy Finance BV, senior bond, 144A, 6.95%, 7/10/42		Kazakhstan		250,000		336,283
c Mexico City Airport Trust, senior secured bond, first lien, 144A, 5.50%, 7/31/47		Mexico		200,000		206,939
d,f RZD Capital PLC, (Russian Railways), loan participation, senior bond, Reg S, 5.70%, 4/05/22		Russia		200,000		215,203
						2,330,536
Utilities 1.2%
Dominion Energy Inc., senior note, 4.25%, 6/01/28		United States		1,750,000		1,935,472
Duke Energy Corp.,
senior bond, 3.75%, 4/15/24		United States		350,000		370,897
senior bond, 3.75%, 9/01/46		United States		100,000		103,292
c Electricite de France SA, senior note, 144A, 4.50%, 9/21/28		France		1,600,000		1,778,964
c Enel Finance International NV, senior note, 144A, 4.25%, 9/14/23		Italy		1,400,000		1,483,692
Georgia Power Co., senior bond, 4.30%, 3/15/42		United States		1,400,000		1,534,831
Public Service Enterprise Group Inc., senior note, 2.875%, 6/15/24		United States		1,000,000		1,022,543
c State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27		China		400,000		418,920
c Talen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27		United States		200,000		210,810
c Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24		United States		510,000		516,728
						9,376,149
Total Corporate Bonds (Cost $95,226,481)						99,902,792
e,g Senior Floating Rate Interests 0.7%
Capital Goods 0.1%
Delos Finance S.A.R.L. (AerCap), New Loans, 3.695%, (3-month USD LIBOR + 1.75%), 10/06/23		Luxembourg		140,000		140,712
Flying Fortress Holdings LLC (ILFC), New Loan, 3.695%, (3-month USD LIBOR + 1.75%), 10/30/22		United States		93,334		93,807
Navistar Inc., Tranche B Term Loan, 5.24%, (1-month USD LIBOR + 3.50%), 11/06/24		United States		298,481		298,108
Resideo Funding Inc., Tranche B Term Loan, 4.20%, (3-month USD LIBOR + 2.25%), 10/25/25		United States		198,496		197,628
						730,255

Annual Report         FFA-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
e,g Senior Floating Rate Interests (continued)
Commercial & Professional Services 0.1%
Nielsen Finance LLC, Class B-4 Term Loans, 3.71%, (1-month USD LIBOR + 2.00%), 10/04/23		United States		198,980	$	199,947
h,i Pitney Bowes Inc., Term Loan B, TBD, 1/15/25		United States		100,000		99,094
h Prime Security Services Borrower LLC, Term B-1, 4.944%, (1-month USD LIBOR + 3.25%), 9/12/26		United States		625,000		627,430
United Rentals North America Inc., Initial Term Loans, 3.549%, (1-month USD LIBOR + 1.75%), 10/31/25		United States		198,492		200,017
						1,126,488
Consumer Services 0.1%
Avis Budget Car Rental LLC, Tranche B Term Loans, 3.80%, (1-month USD LIBOR + 2.00%), 2/13/25.		United States		198,481		199,877
Equinox Holdings Inc., Term B-1 Loans, 4.799%, (1-month USD LIBOR + 3.00%), 3/08/24		United States		199,490		200,694
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC (Yum Brands), Term Loan B, 3.495%, (1-month USD LIBOR + 1.75%), 4/03/25		United States		198,485		199,415
NASCAR Holdings Inc., Initial Term Loans, 4.495%, (1-month USD LIBOR + 2.75%), 10/18/26		United States		260,453		263,587
						863,573
Energy 0.0%†
Buckeye Partners LP, Initial Term Loans, 4.441%, (1-month USD LIBOR + 2.75%), 11/01/26		United States		300,000		302,937
Food & Staples Retailing 0.1%
Aramark Corp.,
U.S. Term B-3 Loan, 3.549%, (1-month USD LIBOR + 1.75%), 3/11/25		United States		200,000		201,094
h,i U.S. Term B-4 Loan, TBD, 12/31/26		United States		460,000		463,018
US Foods Inc., Term Loan B, 3.549%, (1-month USD LIBOR + 1.75%), 6/27/23		United States		198,972		199,896
						864,008
Food, Beverage & Tobacco 0.0%†
h JBS USA Lux SA, New Term Loans, 3.799%, (1-month USD LIBOR + 2.00%), 5/01/26		United States		44,119		44,485
Health Care Equipment & Services 0.0%†
h HCA Inc., Term Loan B13, 3.549%, (1-month USD LIBOR + 1.75%), 3/18/26		United States		198,492		199,857
Media & Entertainment 0.1%
Charter Communications Operating LLC (CCO Safari), Term B-2 Loan, 3.55%, (1-month USD LIBOR + 1.75%), 2/01/27		United States		198,987		200,495
Diamond Sports Group LLC, Term Loan, 5.03%, (1-month USD LIBOR + 3.25%), 8/24/26		United States		68,096		68,096
Gray Television Inc., Term C Loan, 4.197%, (1-month USD LIBOR + 2.50%), 1/02/26		United States		255,532		257,161
						525,752

FFA-28         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization			Principal   Amount*			Value
e,g Senior Floating Rate Interests (continued)
Retailing 0.1%
h Bass Pro Group LLC, Initial Term Loans, 6.799%, (1-month USD LIBOR + 5.00%), 9/25/24		United States			150,000		$	149,663
h Harbor Freight Tools USA Inc., Refinancing Loans, 4.299%, (1-month USD LIBOR + 2.50%), 8/19/23		United States			100,000			99,656
Michaels Stores Inc., 2018 New Replacement Term B Loan, 4.292% - 4.305%, (1-month USD LIBOR + 2.50%), 1/28/23		United States			300,000			291,000
								540,319
Software & Services 0.0%†
h,i Infor (US) Inc. (Lawson), First Lien Term Loan, TBD, 2/01/22		United States			99,744			100,305
Telecommunication Services 0.0%†
Global Tel*Link Corp., First Lien Term Loan, 6.049%, (1-month USD LIBOR + 4.25%), 11/29/25		United States			39,699			36,275
Securus Technologies Holdings Inc., Initial Term Loan, 6.299%, (1-month USD LIBOR + 4.50%), 11/01/24		United States			29,771			22,180
								58,455
Transportation 0.1%
Air Canada, New Term Loans, 3.514%, (1-month USD LIBOR + 1.75%), 10/06/23		Canada			198,658			200,145
XPO Logistics Inc., Refinanced Term Loan, 3.799%, (1-month USD LIBOR + 2.00%), 2/24/25		United States			200,000			201,084
								401,229
Total Senior Floating Rate Interests (Cost $5,730,039)								5,757,663
Foreign Government and Agency Securities 1.1%
c Angolan Government International Bond, senior note, 144A, 8.25%, 5/09/28		Angola			550,000			595,489
d Banque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24		Tunisia			550,000	EUR		614,901
c Banque Ouest Africaine de Developpement, senior note, 144A, 5.00%, 7/27/27		Supranational	j		300,000			318,750
c Dominican Republic, senior note, 144A, 8.90%, 2/15/23		Dominican Republic			23,800,000	DOP		452,204
c Government of Belarus International Bond, senior note, 144A, 7.625%, 6/29/27		Belarus			400,000			455,974
Government of Colombia,
senior bond, 9.85%, 6/28/27		Colombia			1,000,000,000	COP		382,487
senior bond, 5.00%, 6/15/45		Colombia			300,000			349,481
c Government of Gabon, 144A, 6.375%, 12/12/24		Gabon			600,000			628,143
c Government of Indonesia, senior bond, 144A, 4.35%, 1/08/27		Indonesia			300,000			328,286
c Government of Iraq, 144A, 5.80%, 1/15/28		Iraq			650,000			637,891
c Government of Kazakhstan, senior bond, 144A, 4.875%, 10/14/44		Kazakhstan			300,000			371,427
Government of Mexico, senior note, 4.15%, 3/28/27		Mexico			600,000			643,206
Government of Peru, senior bond, 6.55%, 3/14/37		Peru			100,000			146,340
Government of South Africa, senior bond, 7.00%, 2/28/31		South Africa			8,500,000	ZAR		514,212
c,d Government of Spain, senior bond, 144A, Reg S, 2.70%, 10/31/48		Spain			1,065,000	EUR		1,587,654
c Government of Ukraine, senior bond, 144A, 7.375%, 9/25/32		Ukraine			600,000			641,530

Annual Report         FFA-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Foreign Government and Agency Securities (continued)
k Government of Uruguay, senior bond, Index Linked, 3.70%, 6/26/37		Uruguay	17,102,564	UYU	$	448,690
Total Foreign Government and Agency Securities (Cost $9,010,585)						9,116,665
U.S. Government and Agency Securities 4.1%
Federal Agricultural Mortgage Corp., 2.90%, 1/03/22		United States	800,000			820,212
FFCB,
3.17%, 3/07/28		United States	800,000			866,407
senior bond, 2.86%, 7/11/28		United States	800,000			848,344
FHLB, 2.625%, 9/12/25		United States	1,600,000			1,667,451
Hashemite Kingdom of Jordan Government AID Bond, senior note, 2.578%, 6/30/22		United States	800,000			812,824
Israel Government Agency for International Development Bond, 5.50%, 9/18/23		United States	1,110,000			1,254,599
Overseas Private Investment Corp., senior note, 2.12%, 3/20/24		United States	400,000			401,734
TVA, 5.88%, 4/01/36		United States	630,000			889,181
U.S. Treasury Bond,
3.75%, 8/15/41		United States	1,090,000			1,352,240
3.125%, 2/15/42		United States	2,220,000			2,516,285
2.50%, 2/15/46		United States	840,000			856,876
3.00%, 2/15/49		United States	2,060,000			2,321,968
k Index Linked, 2.00%, 1/15/26		United States	518,602			576,574
k Index Linked, 1.75%, 1/15/28		United States	798,403			897,160
k Index Linked, 3.625%, 4/15/28		United States	715,946			916,081
U.S. Treasury Note,
2.375%, 8/15/24		United States	1,680,000			1,730,303
2.25%, 8/15/27		United States	2,920,000			3,000,267
2.625%, 2/15/29		United States	3,525,000			3,733,840
k Index Linked, 0.125%, 7/15/24		United States	1,733,967			1,744,580
k,l Index Linked, 0.375%, 7/15/25		United States	4,448,953			4,540,499
k Index Linked, 0.375%, 7/15/27		United States	1,472,734			1,502,656
Total U.S. Government and Agency Securities (Cost $32,144,955)						33,250,081
Asset-Backed Securities and Commercial Mortgage-Backed Securities 6.5%
Diversified Financials 6.5%
c,m Adagio CLO VIII DAC, VIII-A, B1, 144A, FRN, 1.65%, 4/15/32		Ireland	250,000	EUR		279,598
American Express Credit Account Master Trust,
m 2018-3, A, FRN, 2.06%, 10/15/25		United States	1,040,000			1,040,361
2019-1, A, 2.87%, 10/15/24		United States	1,160,000			1,186,238
2019-3, A, 2.00%, 4/15/25		United States	410,000			411,316
c,m Ares European CLO VIII BV,
8A, AR, 144A, FRN, 0.92%, 4/17/32		Netherlands	600,000	EUR		670,051
8A, BR, 144A, FRN, 1.60%, 4/17/32		Netherlands	250,000	EUR		279,285

FFA-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
c,n Atrium XII, 12A, CR, 144A, FRN, 3.603%, (3-month USD LIBOR + 1.65%), 4/22/27		United States	1,240,000		$	1,218,312
c,m Atrium XIII, 2017-13A, A1, 144A, FRN, 3.114%, 11/21/30		United States	1,410,000			1,409,605
c,m Avoca CLO XVII Designated Activity Co., 17A, B1R, 144A, FRN, 1.70%, 10/15/32		Ireland	250,000	EUR		279,567
c,m Blackrock European CLO IX DAC,
9A, A, 144A, FRN, 0.90%, 12/15/32		Ireland	500,000	EUR		558,413
9A, B, 144A, FRN, 1.55%, 12/15/32		Ireland	250,000	EUR		279,200
c,m BlueMountain CLO XXII Ltd., 2018-1A, B, 144A, FRN, 3.636%, 7/30/30		United States	900,000			892,737
c,m BlueMountain EUR CLO,
5A, A, 144A, FRN, 0.91%, 1/15/33		Ireland	600,000	EUR		672,368
5A, B, 144A, FRN, 1.55%, 1/15/33		Ireland	250,000	EUR		280,197
c,n BlueMountain Fuji U.S. CLO III Ltd., 2017-3A, A2, 144A, FRN, 3.151%, (3-month USD LIBOR + 1.15%), 1/15/30		United States	650,000			635,863
c BRAVO Residential Funding Trust, 2019-1, A1C, 144A, 3.50%, 3/25/58		United States	847,965			860,073
c BWAY Mortgage Trust, 2013-1515, C, 144A, 3.454%, 3/10/33		United States	750,000			781,677
Capital One Multi-Asset Execution Trust,
2015-A4, A4, 2.75%, 5/15/25		United States	380,000			388,334
2016-A5, A5, 1.66%, 6/17/24		United States	330,000			329,003
2019-A1, A1, 2.84%, 12/15/24		United States	750,000			765,299
c,m Carlyle Euro CLO DAC, 2019-2A, A1A, 144A, FRN, 1.11%, 8/15/32		Ireland	350,000	EUR		395,658
c,n Carlyle Global Market Strategies CLO Ltd.,
2014-4RA, C, 144A, FRN, 4.901%, (3-month USD LIBOR + 2.90%), 7/15/30		United States	250,000			223,925
2015-2A, A1R, 144A, FRN, 2.716%, (3-month USD LIBOR + 0.78%), 4/27/27		United States	897,232			895,474
c,m Cent CLO, 2018-28A, C, 144A, FRN, 5.314%, 11/07/30		United States	750,000			723,758
c,m CIM Trust, 2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49		United States	583,917			598,397
m Citibank Credit Card Issuance Trust,
2017-A7, A7, FRN, 2.08%, 8/08/24		United States	130,000			130,497
2018-A2, A2, FRN, 2.095%, 1/20/25		United States	1,280,000			1,281,124
c,m COMM Mortgage Trust, 2014-277P, A, 144A, FRN, 3.611%, 8/10/49		United States	1,000,000			1,053,960
Discover Card Execution Note Trust,
2019-A1, A1, 3.04%, 7/15/24		United States	920,000			942,058
2019-A3, A, 1.89%, 10/15/24		United States	680,000			679,251
c,n Dryden 41 Senior Loan Fund, 2015-41A, AR, 144A, FRN, 2.956%, (3-month USD LIBOR + 0.97%), 4/15/31		United States	1,000,000			992,450
c,n Dryden 42 Senior Loan Fund, 2016-42A, CR, 144A, FRN, 4.051%, (3-month USD LIBOR + 2.05%), 7/15/30		United States	900,000			874,413
c,m Euro-Galaxy III CLO BV, 2013-3A, B2ER, 144A, FRN, 1.50%, 1/17/31		Netherlands	250,000	EUR		280,382
FHLMC Structured Agency Credit Risk Debt Notes,
n 2016-DNA2, M3, FRN, 6.442%, (1-month USD LIBOR + 4.65%), 10/25/28		United States	933,071			1,005,687
n 2016-HQA2, M3, FRN, 6.942%, (1-month USD LIBOR + 5.15%), 11/25/28		United States	750,000			820,881
m 2017-DNA2, M2, FRN, 5.242%, 10/25/29		United States	1,000,000			1,066,228

Annual Report         FFA-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization		Principal   Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
FHLMC Structured Agency Credit Risk Debt Notes, (continued)
n 2017-DNA3, M2, FRN, 4.292%, (1-month USD LIBOR + 2.50%), 3/25/30		United States	1,000,000		$	1,024,427
FNMA Connecticut Avenue Securities,
n 2013-C01, M2, FRN, 7.042%, (1-month USD LIBOR + 5.25%), 10/25/23		United States	786,889			869,083
n 2014-C01, M2, FRN, 6.192%, (1-month USD LIBOR + 4.40%), 1/25/24		United States	950,412			1,033,584
n 2014-C03, 1M2, FRN, 4.792%, (1-month USD LIBOR + 3.00%), 7/25/24		United States	1,325,629			1,395,444
n 2014-C04, 2M2, FRN, 6.792%, (1-month USD LIBOR + 5.00%), 11/25/24		United States	1,062,934			1,149,298
m 2016-C02, 1M2, FRN, 7.792%, 9/25/28		United States	817,462			900,251
m 2016-C04, 1M2, FRN, 6.042%, 1/25/29		United States	1,000,000			1,064,105
m 2016-C05, 2M2, FRN, 6.242%, 1/25/29		United States	350,003			370,055
m 2016-C06, 1M2, FRN, 6.042%, 4/25/29		United States	180,000			193,499
n 2017-C01, 1M2, FRN, 5.342%, (1-month USD LIBOR + 3.55%), 7/25/29		United States	1,000,000			1,059,120
m 2017-C03, 1M2, FRN, 4.792%, 10/25/29		United States	1,000,000			1,045,587
m 2017-C05, 1M2, FRN, 3.992%, 1/25/30		United States	1,000,000			1,018,011
c,m Holland Park CLO DAC, 1A, A1RR, 144A, FRN, 0.92%, 11/14/32		Ireland	1,300,000	EUR		1,451,838
c,n LCM XXV Ltd., 25A, B2, 144A, FRN, 3.616%, (3-month USD LIBOR + 1.65%), 7/20/30		United States	1,200,000			1,189,452
c,m Madison Park Euro Funding VIII DAC,
8A, ARN, 144A, FRN, 0.95%, 4/15/32		Ireland	1,100,000	EUR		1,232,498
8A, BRN, 144A, FRN, 1.70%, 4/15/32		Ireland	300,000	EUR		336,148
c,m Madison Park Euro Funding XIV DAC, 2014A, A1N, 144A, FRN, 1.12%, 7/15/32		Ireland	250,000	EUR		281,522
c,n Madison Park Funding XI Ltd., 2013-11, CR, 144A, FRN, 4.134%, (3-month USD LIBOR + 2.20%), 7/23/29		United States	1,000,000			978,990
c,n Madison Park Funding XXVI Ltd., 2017-26A, AR, 144A, FRN, 3.128%, (3-month USD LIBOR + 1.20%), 7/29/30		United States	2,350,000			2,351,081
c,m Mill City Mortgage Loan Trust, 2018-2, A1, 144A, FRN, 3.50%, 5/25/58		United States	1,085,169			1,110,089
c,m Neuberger Berman CLO XVIII Ltd., 2014-18A, CR2, 144A, FRN, 4.966%, 10/21/30		United States	800,000			775,056
c,m Octagon Investment Partners 18-R Ltd., 2018-18A, A1A, 144A, FRN, 2.961%, 4/16/31		United States	1,000,000			991,520
c,m Octagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 3.736%, 10/24/30		United States	1,200,000			1,202,676
c,n Octagon Investment Partners XVI Ltd., 2013-1A, CR, 144A, FRN, 3.852%, (3-month USD LIBOR + 1.85%), 7/17/30		United States	850,000			812,634
c,m Provident Funding Mortgage Trust, 2019-1, A2, 144A, FRN, 3.00%, 12/25/49		United States	319,498			321,981

FFA-32         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Principal   Amount*	Value
Asset-Backed Securities and Commercial Mortgage- Backed Securities (continued)
Diversified Financials (continued)
c,m Towd Point Mortgage Trust,
2015-5, A1B, 144A, FRN, 2.75%, 5/25/55	United States	617,337	$	618,380
2018-1, A1, 144A, FRN, 3.00%, 1/25/58	United States	1,299,226		1,315,788
2018-3, A1, 144A, FRN, 3.75%, 5/25/58	United States	980,580		1,019,423
Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $52,451,707)				52,293,180
Mortgage-Backed Securities 11.0%
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 2.5%
o FHLMC 15 Year, 2.50%, 12/01/34	United States	200,000		201,706
FHLMC 30 Year, 2.50%, 10/01/49	United States	1,299,871		1,285,190
o FHLMC 30 Year, 2.50%, 12/01/49	United States	1,050,000		1,037,685
FHLMC 30 Year, 3.00%, 12/01/49	United States	568,164		576,345
o FHLMC 30 Year, 3.00%, 12/01/49	United States	10,150,000		10,288,346
FHLMC 30 Year, 4.00%, 7/01/49	United States	2,520,279		2,620,674
FHLMC 30 Year, 4.00%, 8/01/49	United States	2,580,628		2,683,550
FHLMC Gold 30 Year, 3.50%, 5/01/49	United States	1,633,607		1,679,875
				20,373,371
Federal National Mortgage Association (FNMA) Fixed Rate 1.4%
FNMA 15 Year, 2.50%, 12/01/34	United States	1,490,144		1,503,248
FNMA 30 Year, 3.00%, 5/01/49	United States	5,448,329		5,530,308
FNMA 30 Year, 3.00%, 10/01/49 - 12/01/49	United States	1,319,097		1,337,852
FNMA 30 Year, 3.50%, 6/01/49	United States	2,204,490		2,265,474
FNMA 30 Year, 4.00%, 1/01/50	United States	1,128,000		1,179,743
				11,816,625
Government National Mortgage Association (GNMA) Fixed Rate 7.1%
GNMA II SF 30 Year, 3.00%, 9/20/47	United States	2,676,218		2,758,072
GNMA II SF 30 Year, 3.00%, 11/20/47 - 4/20/49	United States	1,366,960		1,405,740
GNMA II SF 30 Year, 3.50%, 5/20/49	United States	12,598,092		12,991,760
GNMA II SF 30 Year, 3.50%, 10/20/49	United States	12,744,821		13,180,047
GNMA II SF 30 Year, 3.50%, 11/20/49	United States	5,608,149		5,811,006
o GNMA II SF 30 Year, 3.50%, 12/01/49	United States	2,350,000		2,421,709
GNMA II SF 30 Year, 3.50%, 12/20/49	United States	5,780,000		5,989,074
GNMA II SF 30 Year, 4.00%, 11/20/49	United States	4,929,855		5,143,730
GNMA II SF 30 Year, 4.00%, 12/20/49	United States	2,860,000		2,988,439
GNMA II SF 30 Year, 4.50%, 5/20/49	United States	2,235,371		2,336,484
GNMA II SF 30 Year, 5.00%, 3/20/49	United States	2,176,907		2,292,368
				57,318,429
Total Mortgage-Backed Securities (Cost $89,128,660)				89,508,425

Annual Report         FFA-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Municipal Bonds 1.0%
Birmingham Water Works Board Water Revenue, Senior, Refunding, 3.573%, 1/01/45	United States	530,000		$      536,826
Board of Regents of the Texas A & M University System Revenue, Permanent University Fund, Refunding, 3.10%, 7/01/49	United States	355,000		346,313
Broward County Airport System Revenue, Refunding, Series C, 3.477%, 10/01/43	United States	140,000		140,738
California Health Facilities Financing Authority Revenue,
Senior, 2.934%, 6/01/32	United States	135,000		134,679
Senior, 2.984%, 6/01/33	United States	115,000		114,205
Senior, 3.034%, 6/01/34	United States	90,000		89,334
City of Austin Electric Utility System Revenue, Travis and Williamson Counties, Refunding, 6.262%, 11/15/32.	United States	270,000		333,814
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, Refunding, Series A, 4.094%, 1/15/49	United States	70,000		70,000
Gilroy USD, GO, Santa Clara County, Refunding, 3.364%, 8/01/47	United States	290,000		284,719
Greenville City School District GO, County of Darke, School Improvement, Refunding, 3.541%, 1/01/51	United States	330,000		323,750
Honolulu City and County Wastewater System Revenue, Second Bond Resolution, Refunding, Junior, Series B, 2.585%, 7/01/28	United States	50,000		50,777
Kaiser Foundation Hospitals, 3.266%, 11/01/49	United States	445,000		447,904
Massachusetts State College Building Authority Revenue, Refunding, Series C, 3.373%, 5/01/43	United States	230,000		226,900
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Subordinated, Refunding, Series B, 3.395%, 10/15/40	United States	265,000		265,170
Metro Wastewater Reclamation District Sewer Revenue, Refunding, Series B, 3.158%, 4/01/41	United States	220,000		218,409
Metropolitan St. Louis Sewer District Wastewater System Revenue, Refunding, Series C, 3.259%, 5/01/45	United States	635,000		635,730
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Series B, 4.131%, 6/15/42	United States	160,000		158,928
New York State Dormitory Authority Revenues, Non State Supported Debt, State University of New York Dormitory Facilities, Series B, 3.142%, 7/01/43	United States	140,000		138,988
New York State GO, Refunding, Series B, 3.20%, 2/15/39	United States	530,000		530,583
New York State Urban Development Corp. Sales Tax Revenue, Bidding Group 2, Series B, 2.97%, 3/15/34	United States	865,000		863,642
Ohio State Hospital Facility Revenue, Cleveland Clinic Health System Obligated Group, Refunding, Series G, 3.276%, 1/01/42	United States	90,000		90,584
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Refunding, Series B, 3.168%, 11/15/38	United States	175,000		174,494
Pennsylvania State Turnpike Commission Turnpike Revenue, Motor License Fund-Enhanced, Subordinate, Refunding, First Series, 3.579%, 12/01/43	United States	440,000		439,472
Regional Transportation District Sales Tax Revenue, Fastracks Project, Refunding, Series A, 3.258%, 11/01/38	United States	140,000		140,223
RWJ Barnabas Health Inc., 3.477%, 7/01/49	United States	120,000		118,515
Salt Lake City Sales and Excise Tax Revenue, Refunding, Series B, 3.102%, 4/01/38	United States	125,000		122,386
San Bernardino Community College District GO, Election of 2018, Series A-1, 3.271%, 8/01/39	United States	100,000		98,989
San Diego County Regional Transportation Commission Revenue, Refunding, 3.248%, 4/01/48	United States	105,000		105,140

FFA-34         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

	Country/ Organization	Principal    Amount*	Value
Municipal Bonds (continued)
p San Francisco City and County Public Utilities Commission Water Revenue, Refunding, 3.473%, 11/01/43	United States	105,000	$	104,971
Texas State GO, Transportation Commission, Highway Improvement, Refunding, 3.211%, 4/01/44	United States	265,000		267,859
Texas State University System Financing Revenue,
Refunding, Series B, 2.938%, 3/15/33	United States	105,000		105,548
Refunding, Serise B, 3.289%, 3/15/40	United States	90,000		89,138
University of Pittsburgh of the Commonwealth System of Higher Education Revenue, Refunding, Series C, 3.005%, 9/15/41	United States	250,000		245,163
Utah Transit Authority Sales Tax Revenue, Refunding, Series B, 3.443%, 12/15/42	United States	175,000		177,819
Total Municipal Bonds (Cost $8,201,359)				8,191,710
Total Investments before Short Term Investments (Cost $755,543,115)				795,989,765
		Shares
Short Term Investments (Cost $21,473,752) 2.6%
Money Market Funds 2.6%
b,q Institutional Fiduciary Trust Money Market Portfolio, 1.26%	United States	21,473,752		21,473,752
Total Investments (Cost $777,016,867) 100.8%				817,463,517
Other Assets, less Liabilities (0.8)%				(6,888,490	)
Net Assets 100.0%			$	810,575,027

Annual Report         FFA-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

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

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

^aNon-income producing.

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

^cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At December 31, 2019, the aggregate value of these securities was $62,104,962, representing 7.7% of net assets.

^dSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At December 31, 2019, the aggregate value of these securities was $3,643,272, representing 0.4% of net assets.

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

^fSee Note 1(e) regarding loan participation notes.

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

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

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

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

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

^lA portion or all of the security has been segregated as collateral for open swap contracts. At December 31, 2019, the value of this security and/or cash pledged amounted to $370,041, representing less than 0.1% of net assets.

^mAdjustable 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.

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

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

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

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

At December 31, 2019, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts

Description	Type		Number of Contracts		Notional   Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Equity Contracts
S&P 500 E-Mini		Long		17		$  2,746,435		3/20/20		$  46,722
Interest Rate Contracts
Australian 3 Yr. Bond		Long		45		3,631,470		3/16/20		(19,077	)
Australian 10 Yr. Bond		Long		27		2,708,278		3/16/20		(38,480	)
Canada 10 Yr. Bond		Long		33		3,493,639		3/20/20		(64,847	)
CME Ultra Long Term U.S. Treasury Bond		Long		22		3,996,438		3/20/20		(145,954	)
Euro-BTP.		Long		15		2,396,427		3/06/20		8,932
Euro-Bund		Long		3		573,588		3/06/20		(4,847	)
Euro-OAT.		Short		11		2,007,923		3/06/20		14,054
U.S. Treasury 2 Yr. Note		Long		8		1,724,000		3/31/20		(135	)
U.S. Treasury 5 Yr. Note		Long		83		9,844,578		3/31/20		(31,231	)
U.S. Treasury 10 Yr. Note		Long		15		1,926,328		3/20/20		(24,868	)
U.S. Treasury 10 Yr. Note		Long		12		1,541,063		3/20/20		12,674
Ultra 10 Yr. U.S. Treasury Note		Short		21		2,954,766		3/20/20		36,721
						$26,873,120				$(257,058	)
Total Futures Contracts.						$29,619,555				$(210,336	)

FFA-36         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

Futures Contracts (continued)

*As of period end.

At December 31, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts

Currency	Counterpartya	Type	Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Australian Dollar	JPHQ	Sell		1,100,000	$	742,263		1/09/20	$	—	$	(29,732	)
Australian Dollar	JPHQ	Sell		390,000		265,883		1/28/20		—		(7,960	)
Japanese Yen	JPHQ	Buy		239,900,000		2,271,551		1/29/20		—		(60,424	)
Canadian Dollar	JPHQ	Sell		430,000		323,998		1/30/20		—		(7,181	)
Danish Krone	JPHQ	Sell		7,518,245		1,133,196		1/30/20		2,497		—
Euro	JPHQ	Buy		2,000,000		2,226,114		1/30/20		21,108		—
Euro	JPHQ	Sell		1,933,997		2,150,919		1/30/20		—		(22,141	)
Euro	JPHQ	Sell		2,180,769		2,465,161		1/30/20		14,825		—
Mexican Peso	JPHQ	Buy		6,950,000		344,426		1/30/20		21,144		—
Norwegian Krone	JPHQ	Buy		6,740,000		748,609		1/30/20		19,370		—
Chinese Yuan Renminbi	JPHQ	Sell		5,095,000		717,687		2/24/20		—		(13,261	)
Japanese Yen	JPHQ	Buy		70,500,000		663,320		3/13/20		—		(11,889	)
Canadian Dollar	JPHQ	Sell		1,450,000		1,101,825		3/16/20		—		(15,059	)
Euro	JPHQ	Sell		1,504,009		1,682,043		3/16/20		—		(12,704	)
Norwegian Krone	JPHQ	Buy		7,680,000		857,622		3/16/20		17,541		—
Swedish Krona	JPHQ	Buy		5,530,000		564,202		3/16/20		28,384		—
Swedish Krona	JPHQ	Sell		5,530,000		581,408		3/16/20		—		(11,178	)
South Korean Won	JPHQ	Sell		467,500,000		392,956		3/25/20		—		(12,549	)
Turkish Lira	JPHQ	Buy		1,380,000		218,822		4/15/20		6,934		—
Indonesian Rupiah	JPHQ	Buy		4,950,000,000		345,598		6/15/20		6,240		—
Total Forward Exchange Contracts									$	138,043	$	(204,078	)
Net unrealized appreciation (depreciation)											$	(66,035	)

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

At December 31, 2019, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts

Description	Periodic Payment Rate Received (Paid)		Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name
Avon Products Inc.		(5.00)%		Quarterly		CITI		3/20/23	$	260,000	$	(35,871	)	$	(24,349	)	$	(11,522	)
Contracts to Sell Protectionc,d
Single Name
Government of Argentina		5.00%		Quarterly		CITI		12/20/21		550,000		(298,724	)		(284,938	)		(13,786	)		CC

Annual Report          FFA-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

Credit Default Swap Contracts (continued)

Description	Periodic Payment Rate Received (Paid)		Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Sell Protectionc,d (continued)
Single Name (continued)
Government of Russia		1.00%		Quarterly		CITI		12/20/24	$	300,000	$	6,442		$	2,958		$	3,484			BBB-
Traded Index
eCitibank Bespoke Phoenix Index, Mezzanine Tranche 5-7%		2.90%		Quarterly		CITI		12/20/21		250,000		8,235			—			8,235			Non- Investment Grade
Total Credit Default Swap Contracts											$	(319,918	)	$	(306,329	)	$	(13,589	)

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

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

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

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

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

At December 31, 2019, the Fund had the following cross-currency swap contracts outstanding. See Note 1(d).

Cross-Currency Swap Contracts

Description

Payment Frequency

Coun- terparty

Maturity Date

Notional Amount

Value/ Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Receive Floating 3-month USD LIBOR + 1.334%

Quarterly

280,000

USD

Pay Floating 3-month EUR LIBOR + 1.12%

Quarterly

CITI

7/10/21

250,000

EUR

$

1,078

Receive Floating 3-month USD LIBOR + 1.305%

Quarterly

387,450

USD

Pay Floating 3-month EUR LIBOR + 1.11%

Quarterly

JPHQ

8/20/21

350,000

EUR

(3,950

)

Receive Floating 3-month USD LIBOR + 1.23%

Quarterly

277,500

USD

Pay Floating 3-month EUR LIBOR + 1.07%

Quarterly

CITI

9/17/21

250,000

EUR

(2,704

)

Receive Floating 3-month USD LIBOR + 1.87%

Quarterly

275,000

USD

Pay Floating 3-month EUR LIBOR + 1.70%

Quarterly

CITI

10/15/21

250,000

EUR

(4,333

)

Receive Floating 3-month USD LIBOR + 1.25%

Quarterly

1,221,000

USD

Pay Floating 3-month EUR LIBOR + 1.10%

Quarterly

CITI

10/30/21

1,100,000

EUR

(8,836

)

Receive Floating 3-month USD LIBOR + 1.175%

Quarterly

1,436,500

USD

Pay Floating 3-month EUR LIBOR + 1.05%

Quarterly

CITI

11/22/21

1,300,000

EUR

(19,885

)

Receive Floating 3-month USD LIBOR + 1.17%

Quarterly

832,500

USD

Pay Floating 3-month EUR LIBOR + 1.05%

Quarterly

CITI

11/29/21

750,000

EUR

(8,004

)

Receive Floating 3-month USD LIBOR + 1.174%

Quarterly

1,554,000

USD

Pay Floating 3-month EUR LIBOR + 1.05%

Quarterly

CITI

12/10/21

1,400,000

EUR

(15,818

)

FFA-38         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

Cross-Currency Swap Contracts (continued)

Description

Payment Frequency

Coun- terparty

Maturity Date

Notional Amount

Value/ Unrealized Appreciation (Depreciation)

OTC Swap Contracts (continued)

Receive Floating 3-month USD LIBOR + 1.318%

Quarterly

943,500

USD

Pay Floating 3-month EUR LIBOR + 1.20%

Quarterly

CITI

12/12/21

850,000

EUR

$  (9,986

)

Total Cross Currency Swap Contracts

$(72,438

)

At December 31, 2019, the Fund had the following interest rate swap contracts outstanding. See Note 1(d).

Interest Rate Swap Contracts

Description	Payment Frequency		Maturity Date		Notional  Amount*			Value/ Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts
Receive Fixed 2.773%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/23/24		6,300,000	CNY		$  (6,881	)
Receive Fixed 2.765%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/26/24		5,100,000	CNY		(5,075	)
Receive Fixed 2.79%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/30/24		8,000,000	CNY		(6,643	)
Receive Fixed 2.745%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		9/06/24		5,350,000	CNY		(5,995	)
Total Interest Rate Swap Contracts									$(24,594	)

*In U.S. dollars unless otherwise indicated.

At December 31, 2019, the Fund had the following inflation index swap contracts outstanding. See Note 1(d).

Inflation Index Swap Contracts

Description	Payment Frequency		Maturity Date		Notional Amount		Value/ Unrealized Appreciaton (Depreciation)
Centrally Cleared Swap Contracts
Receive variable change in USA-CPI-U		At maturity
Pay Fixed 1.719%		At maturity		8/14/26	$	1,950,000		$23,779
Total Inflation Index Swap Contracts								$23,779

Annual Report          FFA-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Allocation VIP Fund (continued)

At December 31, 2019, the Fund had the following total return swap contracts outstanding. See Note 1(d).

Total Return Swap Contracts

Underlying Instruments

Financing Rate

Payment Frequency

Counter- party

Maturity Date

Notional Value

Value/ Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Longa

Markit iBoxx USD Liquid Leveraged Loan Index

3-month USD LIBOR

Quarterly

GSCO

3/20/20

$

1,400,000

$5,772

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

See Note 7 regarding other derivative information.

See Abbreviations on page FFA-59.

FFA-40         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Allocation VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$719,782,480
Cost - Non-controlled affiliates (Note 3e)		57,234,387
Value - Unaffiliated issuers		$762,976,603
Value - Non-controlled affiliates (Note 3e)		54,486,914
Cash		9,666
Foreign currency, at value (cost $1,484,347)		1,486,973
Receivables:
Investment securities sold		5,407,669
Capital shares sold		859,027
Dividends and interest		2,468,752
Deposits with brokers for:
OTC derivative contracts		120,000
Futures contracts		427,393
Centrally cleared swap contracts		97,491
Variation margin on centrally cleared swap contracts		2,878
OTC swap contracts (upfront payments $3,122)		2,958
Unrealized appreciation on OTC forward exchange contracts		138,043
Unrealized appreciation on OTC swap contracts		18,569
Other assets		1,020
Total assets		828,503,956
Liabilities:
Payables:
Investment securities purchased		16,401,222
Capital shares redeemed		238,429
Management fees		309,567
Distribution fees		205,290
Variation margin on futures contracts		50,648
OTC swap contracts (upfront receipts $341,889)		309,287
Unrealized depreciation on OTC forward exchange contracts		204,078
Unrealized depreciation on OTC swap contracts		98,824
Deferred tax		232
Accrued expenses and other liabilities		111,352
Total liabilities		17,928,929
Net assets, at value		$810,575,027
Net assets consist of:
Paid-in capital		$559,631,135
Total distributable earnings (losses)		250,943,892
Net assets, at value		$810,575,027

The accompanying notes are an integral part of these financial statements.   |  Annual Report            FFA-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

December 31, 2019

	Franklin Allocation VIP Fund
Class 1:
Net assets, at value	$	842,031
Shares outstanding		122,683
Net asset value and maximum offering price per share		$6.86
Class 2:
Net assets, at value	$	403,039,888
Shares outstanding		59,195,689
Net asset value and maximum offering price per share		$6.81
Class 4:
Net assets, at value	$	406,693,108
Shares outstanding		58,326,520
Net asset value and maximum offering price per share		$6.97

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Allocation VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$	6,596,821
Non-controlled affiliates (Note 3e)		2,820,935
Interest:
Unaffiliated issuers		6,376,180
Total investment income		15,793,936
Expenses:
Management fees (Note 3a)		2,982,491
Administrative fees (Note 3b)		272,591
Distribution fees: (Note 3c)
Class 2		1,018,907
Class 4		1,420,999
Custodian fees (Note 4)		2,841
Reports to shareholders		80,442
Registration and filing fees		3,539
Professional fees		137,856
Trustees’ fees and expenses		4,931
Other		68,609
Total expenses		5,993,206
Expenses waived/paid by affiliates (Note 3e and 3f)		(396,447	)
Net expenses		5,596,759
Net investment income		10,197,177
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		2,825,588
Controlled affiliates (Note 3e)		82,811,056
Non-controlled affiliates (Note 3e)		153,778,207
Foreign currency transactions		(107,008	)
Forward exchange contracts		85,073
Futures contracts		647,582
Swap contracts		(200,300	)
Net realized gain (loss)		239,840,198
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		43,194,123
Controlled affiliates (Note 3e)		(56,876,879	)
Non-controlled affiliates (Note 3e)		(89,868,100	)
Translation of other assets and liabilities denominated in foreign currencies		10,471
Forward exchange contracts		(66,035	)
Futures contracts		(210,336	)
Swap contracts		(81,070	)
Change in deferred taxes on unrealized appreciation		(232	)

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations (continued)

for the year ended December 31, 2019

	Franklin Allocation VIP Fund
Net change in unrealized appreciation (depreciation)	$	(103,898,058	)
Net realized and unrealized gain (loss)		135,942,140
Net increase (decrease) in net assets resulting from operations	$	146,139,317
* Foreign taxes withheld on dividends	$	272,330

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Allocation VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	10,197,177		$	26,188,755
Net realized gain (loss)		239,840,198			57,368,194
Net change in unrealized appreciation (depreciation)		(103,898,058	)		(166,306,372	)
Net increase (decrease) in net assets resulting from operations		146,139,317			(82,749,423	)
Distributions to shareholders:
Class 1		(114,944	)		(60,348	)
Class 2		(41,503,915	)		(24,442,861	)
Class 4		(39,405,922	)		(24,951,975	)
Total distributions to shareholders		(81,024,781	)		(49,455,184	)
Capital share transactions: (Note 2)
Class 1		(205,346	)		99,087
Class 2		(18,907,288	)		(25,472,556	)
Class 4		(20,095,745	)		(68,063,868	)
Total capital share transactions		(39,208,379	)		(93,437,337	)
Net increase (decrease) in net assets		25,906,157			(225,641,944	)
Net assets:
Beginning of year		784,668,870			1,010,310,814
End of year	$	810,575,027		$	784,668,870

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

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. The Fund invests in other funds of the Trust (Underlying Funds). Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers three classes of shares: Class 1, Class 2, and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

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

Effective May 1, 2019, the Fund repositioned to a direct investment fund with an actively managed dynamic allocation strategy, which involved entering into an investment management arrangement with Franklin Advisers, Inc. (Advisers) and sub-advisory arrangements with various Franklin Templeton affiliated advisers, modifying the Fund’s principal investment strategies and changing the name of the Fund from Franklin Founding Funds Allocation VIP Fund to Franklin Allocation VIP Fund.

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for

oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Investments in the Underlying Funds are valued at their closing NAV each trading day. Exchange traded funds listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively.

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

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

FFA-46         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.   Foreign Currency Translation

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

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

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

Annual Report         FFA-47

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

1.   Organization and Significant Accounting Policies (continued)

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

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

d.   Derivative Financial Instruments

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

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party

the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to interest rate and equity price. 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.

FFA-48         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation 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 Statement of Operations.

The Fund entered into OTC cross currency swap contracts primarily to manage and/or gain exposure to certain foreign currencies. A cross currency swap is an agreement between the Fund and a counterparty to exchange cash flows (determined using either a fixed or floating rate) based on the notional amounts of two different currencies. The notional

amounts are typically determined based on the spot exchange rates at the opening of the contract. Cross currency swaps may require the exchange of notional amounts at the opening and/or closing of the contract. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statement of Assets and Liabilities and represent compensating factors between stated terms of the cross currency swap contract and prevailing market conditions (interest rate spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statement of Operations.

The Fund entered into inflation index swap contracts primarily to manage and/or gain exposure to inflation risk. An inflation index swap is an agreement between the Fund and a counterparty to exchange cash flows whereby one party makes payments based on the percentage change in an index that serves as a measure of inflation and the other party makes a regular payment based on a compounded fixed rate, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC inflation index swap) or may be executed on a registered exchange (centrally cleared inflation index swap). For centrally cleared inflation index swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Typically, an inflation index swap has payment obligations netted and exchanged upon maturity.

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

Annual Report         FFA-49

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

1.   Organization and Significant Accounting Policies (continued)

d.   Derivative Financial Instruments (continued)

term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

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

See Note 7 regarding other derivative information.

e.   Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund has the right to receive from the Lender any payments of principal, interest and fees which the Lender received from the borrower. The Fund generally has no rights to either enforce compliance by the borrower with the terms of the loan agreement or to any collateral relating to the original loan. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. The Participations may also involve interest rate risk and liquidity risk, including the potential default or insolvency of the borrower and/or the Lender.

f.   Mortgage Dollar Rolls

The Fund enters into mortgage dollar rolls, typically on a TBA basis. Mortgage dollar rolls are agreements between the Fund and a financial institution where the Fund sells (or buys) mortgage-backed securities for delivery on a specified date and simultaneously contracts to repurchase (or sell)

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

g.   Senior Floating Rate Interests

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

h.   Income and Deferred Taxes

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

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are

FFA-50         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

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, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.   Security Transactions, Investment Income, Expenses and Distributions

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

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of

number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

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

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

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Statement of Operations.

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.

Annual Report         FFA-51

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

2.   Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		12,786		$	87,589			17,451		$	125,360
Shares issued in reinvestment of distributions		18,101			114,944			8,536			60,348
Shares redeemed		(62,639	)		(407,879	)		(12,205	)		(86,621	)
Net increase (decrease)		(31,752	)	$	(205,346	)		13,782		$	99,087
Class 2 Shares:
Shares sold		2,057,930		$	13,832,099			4,193,705		$	28,329,864
Shares issued in reinvestment of distributions		6,577,483			41,503,915			3,476,936			24,442,861
Shares redeemed		(11,168,839	)		(74,243,302	)		(10,985,773	)		(78,245,281	)
Net increase (decrease)		(2,533,426	)	$	(18,907,288	)		(3,315,132	)	$	(25,472,556	)
Class 4 Shares:
Shares sold		973,482		$	6,631,528			1,130,901		$	8,277,821
Shares issued in reinvestment of distributions		6,099,988			39,405,922			3,475,205			24,951,975
Shares redeemed		(9,669,394	)		(66,133,195	)		(13,897,304	)		(101,293,664	)
Net increase (decrease)		(2,595,924	)	$	(20,095,745	)		(9,291,198	)	$	(68,063,868	)

3.   Transactions with Affiliates

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

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

a.   Management Fees

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

Effective May 1, 2019, under a subadvisory agreement, Global Advisors and FT Institutional, affiliates of Advisers, provide subadvisory services to the Fund. The subadvisory fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

FFA-52         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

b.   Administrative Fees

Effective May 1, 2019, under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

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

c.   Distribution Fees

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

d.   Transfer Agent Fees

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

e.   Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Controlled Affiliates
Templeton Growth VIP Fund, Class 1	$	259,507,605	$	—	$	(285,441,782	)	$	82,811,056	$	(56,876,879	)	$	—	a		—	$	—
Non-Controlled Affiliates
Franklin Income VIP Fund, Class 1		260,563,549		700,000		(290,767,442	)		62,950,179		(33,446,286	)		—	a		—		—
Franklin LibertyQ U.S. Equity ETF		—		16,856,847		(17,299,761	)		442,914		—			—	a		—		61,961
Franklin Mutual Shares VIP Fund, Class 1		262,865,813		600,000		(300,176,586	)		90,385,114		(53,674,341	)		—	a		—		—
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		—		390,683,117		(369,209,365	)		—		—			21,473,752			21,473,752		442,372
Templeton Global Bond VIP Fund, Class 1		—		35,760,635		—			—		(2,747,473	)		33,013,162			1,978,021		2,316,602
Total Non-Controlled Affiliates	$	523,429,362	$	444,600,599	$	(977,453,154	)	$	153,778,207	$	(89,868,100	)	$	54,486,914				$	2,820,935
Total Affiliated Securities	$	782,936,967	$	444,600,599	$	(1,262,894,936	)	$	236,589,263	$	(146,744,979	)	$	54,486,914				$	2,820,935

^aAs of December 31, 2019, no longer held by the fund.

Annual Report         FFA-53

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

3.   Transactions with Affiliates (continued)

f.   Waiver and Expense Reimbursements

Effective May 1, 2019, Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (including acquired fund fees and expenses but excluding distribution fees, and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) for each class of the Fund do not exceed 0.57%, based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

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

4.   Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended December 31, 2019, there were no credits earned.

5.   Income Taxes

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	28,495,590	$	29,280,715
Long term capital gain		52,529,191		20,174,469
	$	81,024,781	$	49,455,184

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	777,547,657
Unrealized appreciation	$	52,899,795
Unrealized depreciation		(13,671,684	)
Net unrealized appreciation (depreciation)	$	39,228,111
Distributable earnings:
Undistributed ordinary income	$	13,443,075
Undistributed long term capital gains		198,271,415
Total distributable earnings	$	211,714,490

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

FFA-54         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $1,374,649,700 and $1,499,095,016, respectively.

7.   Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on futures contracts	$	72,381	a	Variation margin on futures contracts		$329,439	a
	Variation margin on centrally cleared swap contracts		—		Variation margin on centrally cleared swap contracts		24,594	a
	Unrealized appreciation on OTC swap contracts		6,850		Unrealized depreciation on OTC swap contracts		73,516
Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts		138,043		Unrealized depreciation on OTC forward exchange contracts		204,078
Credit contracts	OTC swap contracts (upfront payments)		2,958		OTC swap contracts (upfront receipts)		309,287
	Unrealized appreciation on OTC swap contracts		11,719		Unrealized depreciation on OTC swap contracts		25,308
Equity contracts	Variation margin on futures contracts		46,722	a	Variation margin on futures contracts		—
Inflation contracts	Variation margin on centrally cleared swap contracts		23,779	a	Variation margin on centrally cleared swap contracts		—
Totals			$302,452				$966,222

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

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Futures contracts		$  730,677		Futures contracts		$(257,058	)
	Swap contracts		(36,832	)	Swap contracts		(91,260	)
Foreign exchange contracts	Forward exchange contracts		85,073		Forward exchange contracts		(66,035	)
Credit contracts	Swap contracts		(163,457	)	Swap contracts		(13,589	)
Equity contracts	Futures contracts		(83,095	)	Futures contracts		46,722
Inflation contracts	Swap contracts		(11	)	Swap contracts		23,779
Totals			$  532,355				$(357,441	)

Annual Report         FFA-55

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

7.   Other Derivative Information (continued)

For the year ended December 31, 2019, the average month end notional amount of futures contracts and swap contracts represented $34,669,291 and 10,936,893, respectively. The average month end contract value of forward exchange contracts was $7,943,334.

At December 31, 2019, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented       in the  Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward exchange contracts		$138,043		$204,078
Swap contracts		21,527		408,111
Total		$159,570		$612,189

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

At December 31, 2019, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Received		Cash Collateral Received		Net Amount (Not less than zero)
Counterparty
CITI		$  15,755		$  (15,755	)		$    —		$    —		$      —
GSCO		5,772		—			—		—		5,772
JPHQ		138,043		(138,043	)		—		—		—
Total		$159,570		$(153,798	)		$    —		$    —		$5,772

FFA-56         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

At December 31, 2019, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledgeda			Cash Collateral Pledged			Net Amount (Not less than zero)
Counterparty
CITI		$404,161		$(15,755	)		$(250,041	)		$(120,000	)		$18,365
GSCO		—		—			—			—			—
JPHQ		208,028		(138,043	)		—			—			69,985
Total		$612,189		$(153,798	)		$(250,041	)		$(120,000	)		$88,350

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

See Note 1(d) regarding derivative financial instruments.

See Abbreviations on page FFA-59.

8.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which, matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

9.   Fair Value Measurements

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

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

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

Annual Report         FFA-57

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

9.   Fair Value Measurements (continued)

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

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

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investmentsb	$	497,969,249	$	—	$	—	$	497,969,249
Corporate Bonds		—		99,902,792		—		99,902,792
Senior Floating Rate Interests		—		5,757,663		—		5,757,663
Foreign Government and Agency Securities		—		9,116,665		—		9,116,665
U.S. Government and Agency Securities		—		33,250,081		—		33,250,081
Asset-Backed Securities and Commercial
Mortgage-Backed Securities		—		52,293,180		—		52,293,180
Mortgage-Backed Securities		—		89,508,425		—		89,508,425
Municipal Bonds		—		8,191,710		—		8,191,710
Short Term Investments		21,473,752		—		—		21,473,752
Total Investments in Securities	$	519,443,001	$	298,020,516	$	—	$	817,463,517
Other Financial Instruments:
Futures Contracts	$	119,103	$	—	$	—	$	119,103
Forward Exchange Contracts		—		138,043		—		138,043
Swap Contracts		—		42,348		—		42,348
Total Other Financial Instruments	$	119,103	$	180,391	$	—	$	299,494
Liabilities:
Other Financial Instruments:
Futures Contracts	$	329,439	$	—	$	—	$	329,439
Forward Exchange Contracts		—		204,078		—		204,078
Swap Contracts		—		123,418		—		123,418
Total Other Financial Instruments	$	329,439	$	327,496	$	—	$	656,935

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

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

10. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

FFA-58         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Allocation VIP Fund (continued)

Abbreviations

Counterparty		Currency		Selected Portfolio
CITI	Citigroup, Inc.	COP	Colombian Peso	ADR	American Depositary Receipt
GSCO	The Goldman Sachs Group, Inc.	CNY	Chinese Yuan	CLO	Collateralized Loan Obligations
JPHQ	JP Morgan Chase & Co.	DOP	Dominican Peso	CNRR	China Reverse Repo Rate
		DKK	Danish Krone	ETF	Exchange Traded Fund
		EUR	Euro	FFCB	Federal Farm Credit Bank
		USD	United States Dollar	FHLB	Federal Home Loan Bank
		UYU	Uruguayan Peso	FRN	Floating Rate Note
		ZAR	South African Rand	GO	General Obligation
				IDR	International Depository Receipt
				LIBOR	London InterBank Offered Rate
				SF	Single Family
				USD	United School District

Annual Report         FFA-59

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the ‘‘Fund’’) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

FFA-60         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Allocation VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $52,529,191 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 12.20% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

Annual Report         FFA-61

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Franklin Flex Cap Growth VIP Fund

This annual report for Franklin Flex Cap Growth VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year	5-Year	10-Year
Average Annual Total Return	+31.03%	+11.63%	+11.76%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 3000^® Growth Index, the Russell 1000^® Growth Index and the Standard & Poors^® 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.

Annual Report         FFC-1

FRANKLIN FLEX CAP GROWTH VIP FUND

Fund Goal and Main Investments

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

Fund Risks

All investments involve risks, including possible loss of principal. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risk of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Smaller, midsized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger-company stocks, especially over the short term. Foreign securities involve special risks, including currency fluctuations and economic and political uncertainties. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Russell 3000^® Growth Index posted a +35.85% total return, the Russell 1000^® Growth Index posted a +36.39% total return, and the S&P 500 posted a +31.49% total return for the same period.¹

Economic and Market Overview

U.S. equities, as measured by the S&P 500, posted strong returns during the reporting period, driven by the U.S. Federal Reserve’s (Fed’s) monetary policy easing, solid domestic economic growth and diminished concerns about the global economy and trade relations. Stocks gained sharply early in the year and experienced heightened volatility in May and September before reaching record price

Portfolio Composition

Based on Total Net Assets as of 12/31/19

highs near the end of 2019. The decline in market volatility reflected many market participants’ shift from growth concerns to a more optimistic outlook.

The Fed provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

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).

FFC-2         Annual Report

FRANKLIN FLEX CAP GROWTH VIP FUND

Solid U.S. economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

International and trade developments also impacted U.S. stocks during the period. Investors were concerned about slowing global growth and the impact it might have on U.S. equities, but some market participants’ predictions of a global recession did not materialize as growth proved resilient amid a series of interest-rate cuts by many central banks. The trade war between the U.S. and China was a dominant theme over the period, and stocks fluctuated as many investors responded to the latest developments, both positive and negative. However, by period-end, markets were reassured by a phase one trade agreement between the two countries, which lowered certain tariffs and addressed some of the principal areas of conflict.

Investment Strategy

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

Top 10 Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
Microsoft Corp. Software & Services		8.4%
Amazon.com Inc. Retailing		6.7%
Alphabet Inc. Media & Entertainment		6.1%
Mastercard Inc. Software & Services		5.7%
ServiceNow Inc. Software & Services		5.4%
salesforce.com Inc. Software & Services		4.6%
Visa Inc. Software & Services		3.8%
Costco Wholesale Corp. Food & Staples Retailing		3.4%
Estee Lauder Cos. Inc. Household & Personal Products		3.2%
Analog Devices Inc. Semiconductors & Semiconductor Equipment		2.8%

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 12 months ended December 31, 2019, all sectors in the Fund’s portfolio posted positive returns, with the exception of energy.³ Compared to the Russell 3000^® Growth Index, stock selection in consumer staples and real estate sectors contributed to relative returns.⁴ Relative detractors included stock selection in information technology (IT), industrials and health care.⁵

In consumer staples, beauty products manufacturer Estee Lauder contributed to relative returns. The company’s flagship brands and skin care products performed strongly during the period, and sales accelerated in Asia and elsewhere, though there was some softness in the U.S.

2. Source: Bureau of Labor Statistics.

3. The Fund had no energy holdings at period-end.

4. The consumer staples sector comprises food and staples retailing, food products, and household and personal products in the SOI. The real estate sector comprises real estate in the SOI.

5. The IT sector comprises semiconductors and semiconductor equipment, software and services, and technology hardware and equipment in the SOI. The industrials sector comprises commercial and professional services in the SOI. The health care sector comprises health care equipment and services and pharmaceuticals, biotechnology and life sciences in the SOI.

Annual Report         FFC-3

FRANKLIN FLEX CAP GROWTH VIP FUND

Plant-based meat products company Beyond Meat (not part of the Index, not held at period-end) also contributed.

In real estate, real estate investment trust and communications infrastructure operator American Tower helped relative results.

Elsewhere, financial technology company Mastercard and cloud-based enterprise workflow management provider ServiceNow contributed to relative performance. Mastercard reported solid quarterly earnings throughout 2019, with net revenues coming in slightly ahead of consensus, and modestly increased guidance late in the year. The company announced new partnerships with major companies throughout the period, including flipping a major outdoor retailer from competing payments company Visa (also a Fund holding). Growth accelerated or was steady in all regions. In a challenging macroeconomic environment for technology companies, ServiceNow reported solid quarterly earnings, better-than-expected earnings per share and raised guidance. The company unexpectedly changed CEOs late in the year, however, and we will reevaluate our position based on how the new executive adapts to an unfamiliar Silicon Valley business culture. Other contributors included telecommunications and media company Charter Communications and e-commerce platform Alibaba Group Holding (not part of the Index).

In IT, customer relations management software company salesforce.com posted a positive return that lagged the benchmark, which detracted from relative performance. Financial and human resource software company Workday also detracted.

In the industrials sector, Fortive hindered performance. Fortive is a diversified industrial conglomerate that designs, develops, manufactures and markets professional and engineered products, software and services. Shares declined after the company reported mixed second- and third-quarter 2019 results, with earnings exceeding expectations and revenues missing them. In September, the company announced its intention to separate into two independent companies in the second half of 2020 by spinning off its transportation-related businesses, which include retail and commercial fueling, fleet management, and automotive service and repair solutions. We believe this separation makes a lot of sense, as it could potentially isolate the cyclicality of the retail fueling business. Aerospace firm Boeing detracted as well.

In health care, veterinary health company Elanco Animal Health (not held at period-end) significantly detracted from relative results. Investors backed away from the company

due to tepid quarterly earnings, challenges related to disentangling itself from its prior parent company, and concerns over its acquisition of Bayer’s (not a Fund holding) animal health subsidiary. We believe these concerns are overblown. In our opinion, earnings reports were solid when considering the impact of the African Swine Flu outbreak, and the acquisition of the Bayer subsidiary—yet to be finalized—will substantially increase its exposure to the companion animal business. Furthermore, we believe the company is well-positioned to benefit from the long-term global trend of increasing protein consumption and industrial-scale livestock raising. Other contributors included life sciences software provider Veeva Systems and medical technology company Becton, Dickinson and Co.

Elsewhere, our underweighted position in Facebook also detracted from relative results. The social media company’s stock rose despite privacy violations that led to a multi-billion dollar fine from the U.S. government during the period. Healthy quarterly profits throughout 2019 boosted the company’s stock, which has rebounded from a steep drop in late-2018.

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

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FFC-4         Annual Report

FRANKLIN FLEX CAP GROWTH VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,049.00	$5.47	$1,019.86	$5.40	1.06%

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

Annual Report         FFC-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Flex Cap Growth VIP Fund

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

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

^bBased on average daily shares outstanding.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Flex Cap Growth VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Flex Cap Growth VIP Fund

	Shares		Value
Common Stocks 98.0%
Capital Goods 5.6%
The Boeing Co.		7,814	$	2,545,489
Fortive Corp.		20,000		1,527,800
Raytheon Co.		8,000		1,757,920
Roper Technologies Inc.		4,000		1,416,920
				7,248,129
Commercial & Professional Services 2.1%
a CoStar Group Inc.		2,000		1,196,600
Verisk Analytics Inc.		10,000		1,493,400
				2,690,000
Consumer Durables & Apparel 1.5%
NIKE Inc., B		19,800		2,005,938
Diversified Financials 2.4%
CME Group Inc.		7,677		1,540,927
Intercontinental Exchange Inc.		17,000		1,573,350
				3,114,277
Food & Staples Retailing 3.4%
Costco Wholesale Corp.		14,850		4,364,712
Health Care Equipment & Services 12.0%
Abbott Laboratories		30,000		2,605,800
a Alcon Inc. (Switzerland)		24,750		1,400,107
Becton, Dickinson and Co.		5,000		1,359,850
Danaher Corp.		19,790		3,037,369
a IDEXX Laboratories Inc.		9,890		2,582,576
a Intuitive Surgical Inc.		3,960		2,340,954
a Veeva Systems Inc.		16,000		2,250,560
				15,577,216
Household & Personal Products 3.2%
Estee Lauder Cos. Inc., A		19,800		4,089,492
Media & Entertainment 10.9%
a Alphabet Inc., C		5,940		7,941,899
a Charter Communications Inc., A		4,956		2,404,056
a Facebook Inc., A		10,000		2,052,500
a Netflix Inc.		5,500		1,779,635
				14,178,090
Pharmaceuticals, Biotechnology & Life Sciences 1.1%
a 10X Genomics Inc., A		500		38,125
a Illumina Inc.		4,000		1,326,960
				1,365,085

FFC-8         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Flex Cap Growth VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Real Estate 5.0%
American Tower Corp.		11,459	$	2,633,508
Crown Castle International Corp.		18,582		2,641,431
Equinix Inc.		2,000		1,167,400
				6,442,339
Retailing 8.8%
a Alibaba Group Holding Ltd., ADR (China)		9,890		2,097,669
a Amazon.com Inc.		4,726		8,732,892
a Booking Holdings Inc.		300		616,119
a Chewy Inc., A		590		17,110
				11,463,790
Semiconductors & Semiconductor Equipment 6.8%
Analog Devices Inc.		30,430		3,616,301
NVIDIA Corp.		9,890		2,327,117
Xilinx Inc.		29,724		2,906,116
				8,849,534
Software & Services 33.3%
a Adobe Inc.		9,890		3,261,821
a Bill.Com Holdings Inc.		1,000		38,050
Mastercard Inc., A		24,600		7,345,314
Microsoft Corp.		69,290		10,927,033
a PayPal Holdings Inc.		19,790		2,140,684
a salesforce.com Inc.		36,630		5,957,503
a ServiceNow Inc.		24,740		6,984,597
Visa Inc., A		26,200		4,922,980
a Workday Inc., A		9,900		1,628,055
				43,206,037
Technology Hardware & Equipment 0.9%
a Keysight Technologies Inc.		12,000		1,231,560
Utilities 1.0%
NextEra Energy Inc.		5,400		1,307,664
Total Common Stocks (Cost $66,198,743)				127,133,863
Short Term Investments 2.1%
Money Market Funds (Cost $2,694,405) 2.1%
b,c Institutional Fiduciary Trust Money Market Portfolio, 1.26%		2,694,405		2,694,405

Annual Report         FFC-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Flex Cap Growth VIP Fund (continued)

	Shares		Value
Short Term Investments (continued)
d Investments from Cash Collateral Received for Loaned Securities 0.0%†
Money Market Funds (Cost $23,100) 0.0%†
b,c Institutional Fiduciary Trust Money Market Portfolio, 1.26%		23,100	$	23,100
Total Investments (Cost $68,916,248) 100.1%				129,851,368
Other Assets, less Liabilities (0.1)%				(126,461	)
Net Assets 100.0%			$	129,724,907

See Abbreviations on page FFC-20.

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

^aNon-income producing.

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

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

^dSee Note 1(b) regarding securities on loan.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Flex
	Cap Growth
	VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	66,198,743
Cost - Non-controlled affiliates (Note 3e)		2,717,505
Value - Unaffiliated issuers	$	127,133,863
Value - Non-controlled affiliates (Note 3e)		2,717,505
Receivables:
Investment securities sold (includes securities loaned in the amount of $19,107)		19,107
Capital shares sold		67,540
Dividends		50,283
Other assets		13
Total assets		129,988,311
Liabilities:
Payables:
Capital shares redeemed		79,133
Management fees		60,634
Distribution fees		29,996
Reports to shareholders		35,645
Professional fees		33,018
Payable upon return of securities loaned		23,100
Accrued expenses and other liabilities		1,878
Total liabilities		263,404
Net assets, at value	$	129,724,907
Net assets consist of:
Paid-in capital	$	60,404,501
Total distributable earnings (losses)		69,320,406
Net assets, at value	$	129,724,907
Class 2:
Net assets, at value	$	97,964,104
Shares outstanding		12,152,762
Net asset value and maximum offering price per share		$8.06
Class 4:
Net assets, at value	$	31,760,803
Shares outstanding		4,120,259
Net asset value and maximum offering price per share		$7.71

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Flex
	Cap Growth
	VIP Fund
Investment income:
Dividends:
Unaffiliated issuers	$	810,522
Non-controlled affiliates (Note 3e)		71,907
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		52,368
Non-controlled affiliates (Note 3e)		10,796
Total investment income		945,593
Expenses:
Management fees (Note 3a)		1,211,211
Distribution fees: (Note 3c)
Class 2		229,669
Class 4		110,806
Custodian fees (Note 4)		1,666
Reports to shareholders		49,889
Professional fees		58,942
Trustees’ fees and expenses		755
Other		7,824
Total expenses		1,670,762
Expense reductions (Note 4)		(36	)
Expenses waived/paid by affiliates (Note 3e and 3f)		(453,633	)
Net expenses		1,217,093
Net investment income (loss)		(271,500	)
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		8,427,290
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		22,895,498
Net realized and unrealized gain (loss)		31,322,788
Net increase (decrease) in net assets resulting from operations	$	31,051,288

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Flex Cap
	Growth VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	(271,500	)	$	(278,068	)
Net realized gain (loss)		8,427,290			6,194,237
Net change in unrealized appreciation (depreciation)		22,895,498			(2,119,037	)
Net increase (decrease) in net assets resulting from operations		31,051,288			3,797,132
Distributions to shareholders:
Class 2		(4,527,605	)		(15,220,091	)
Class 4		(1,613,765	)		(5,742,189	)
Total distributions to shareholders		(6,141,370	)		(20,962,280	)
Capital share transactions: (Note 2)
Class 2		10,720,742			414,873
Class 4		(4,820,540	)		4,469,506
Total capital share transactions		5,900,202			4,884,379
Net increase (decrease) in net assets		30,810,120			(12,280,769	)
Net assets:
Beginning of year		98,914,787			111,195,556
End of year	$	129,724,907		$	98,914,787

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Franklin Flex Cap Growth VIP Fund

1.  Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

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

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

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

FFC-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex 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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2019, the Fund had no securities on loan.

c.  Income and Deferred Taxes

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

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

d.  Security Transactions, Investment Income, Expenses and Distributions

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

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

Annual Report         FFC-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex Cap Growth VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

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

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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 2 Shares:
Shares sold		3,678,687		$	27,630,014			2,321,138		$	17,811,401
Shares issued in reinvestment of distributions		606,105			4,527,605			2,079,248			15,220,091
Shares redeemed		(2,846,348	)		(21,436,877	)		(4,549,773	)		(32,616,619	)
Net increase (decrease)		1,438,444		$	10,720,742			(149,387	)	$	414,873
Class 4 Shares:
Shares sold		406,751		$	2,950,254			1,392,557		$	10,306,262
Shares issued in reinvestment of distributions		226,017			1,613,765			816,812			5,742,189
Shares redeemed		(1,300,636	)		(9,384,559	)		(1,595,007	)		(11,578,945	)
Net increase (decrease)		(667,868	)	$	(4,820,540	)		614,362		$	4,469,506

FFC-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex Cap Growth VIP Fund (continued)

3.  Transactions with Affiliates

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

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

a.  Management Fees

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

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

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.980% of the Fund’s average daily net assets.

b.  Administrative Fees

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

c.  Distribution Fees

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

d.  Transfer Agent Fees

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex Cap Growth VIP Fund (continued)

3.  Transactions with Affiliates (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	639	$	40,160,893	$	(37,467,127	)		$      —		$      —	$	2,694,405		2,694,405		$71,907
																Income from
																securities
																loaned
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		107,250		7,823,615		(7,907,765	)		—		—		23,100		23,100		10,796
Total Affiliated Securities	$	107,889	$	47,984,508	$	(45,374,892	)		$      —		$      —	$	2,717,505				$82,703

f.  Waiver and Expense Reimbursements

Advisers have contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (excluding distribution fees and acquired fund fees and expenses and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) for each class of the Fund does not exceed 0.71% based on the average net assets of each class until April 30, 2020. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

4.  Expense Offset Arrangement

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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Long term capital gain		6,141,370		20,962,280

FFC-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex Cap Growth VIP Fund (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	68,935,482
Unrealized appreciation	$	61,494,290
Unrealized depreciation		(578,404	)
Net unrealized appreciation (depreciation)	$	60,915,886
Distributable earnings:
Undistributed long term capital gains	$	8,404,520

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, 2019, aggregated $31,226,320 and $31,237,329, respectively.

At December 31, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $23,100 of cash collateral. The gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statement of Assets and Liabilities. The agreements can be terminated at any time.

7.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

8.  Fair Value Measurements

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Flex Cap Growth VIP Fund (continued)

8.  Fair Value Measurements (continued)

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

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

At December 31, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statement of Investments.

9.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Abbreviations

Selected Portfolio                              

ADR     American Depositary Receipt

FFC-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Franklin Templeton Variable Insurance Products Trust and Shareholders of Franklin Flex 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 Flex Cap Growth VIP Fund (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Flex Cap Growth VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $6,141,370 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

FFC-22         Annual Report

Franklin Income VIP Fund

This annual report for Franklin Income VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+16.05%		+5.14%		+7.08%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 Fund’s Blended Benchmark and the Bloomberg Barclays U.S. Aggregate Bond Index. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see 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 rebalanced monthly and was composed of 50% MSCI USA High Dividend Yield Index + 25% Bloomberg Barclays High Yield Very Liquid Index + 25% Bloomberg Barclays U.S. Aggregate Bond Index. Please see Index Descriptions following the Fund Summaries.

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FRANKLIN INCOME VIP FUND

Fund Goal and Main Investments

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

Fund Risks

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s portfolio includes a substantial portion of higher yielding, lower rated corporate bonds because of the relatively higher yields they offer. The Fund’s share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s primary benchmark, the S&P 500 posted a +31.49% total return.¹ The Fund’s new secondary benchmark, the Blended Benchmark, posted a +17.28% total return.² The Fund’s old secondary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index posted a +8.72% total return.¹ We believe the new second benchmark’s composition more accurately reflects the Fund’s holdings.

Economic and Market Overview

Bond prices rose sharply during the reporting period, as interest-rate cuts and many investors’ search for income

Portfolio Composition

12/31/19

	% of Total Net Assets
Equity	51.4%
Financials	9.7%
Information Technology	8.4%
Health Care	7.5%
Utilities	6.4%
Energy	5.7%
Consumer Staples	3.5%
Communication Services	3.1%
Consumer Discretionary	3.0%
Materials	2.0%
Industrials	1.5%
Real Estate	0.6%
Fixed Income*	46.4%
Health Care	14.1%
Financials	14.1%
Energy	5.9%
Communication Services	4.9%
Consumer Discretionary	2.3%
Materials	1.5%
Consumer Staples	1.1%
Industrials	0.8%
Utilities	0.8%
Real Estate	0.6%
Information Technology	0.3%
Short-Term Investments & Other Net Assets	2.2%

*Includes senior floating rate interests.

pushed down yields on most bond categories. Notably, U.S. bonds, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, performed well alongside high returns from U.S. equities, as measured by the S&P 500.

The primary driver of U.S. bond performance was a shift in the U.S. Federal Reserve’s (Fed’s) monetary policy. After a period of tightening in 2018, the Fed shifted course, announcing in January 2019 that it would not be raising interest rates in the near future. Three interest-rate cuts

1. Source: Morningstar.

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

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

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

FI-2         Annual Report

FRANKLIN INCOME VIP FUND

followed thereafter, with the Fed lowering the federal funds rate to a range of 1.50%–1.75. Falling interest rates typically increase the value of existing bonds, since their relatively higher yields become more attractive to investors.

Both long-term and short-term U.S. bonds, as measured by subindexes of the Bloomberg Barclays U.S. Aggregate Bond Index, gained during the period, with long-term bonds posting stronger returns due to their higher sensitivity to interest-rate changes. Interest rates on long-term U.S. Treasuries initially fell more than interest rates on short-term U.S. Treasuries, leading to a flattening of the yield curve, which charts the yields of U.S. Treasuries at varying maturity dates. In August 2019, the yield on 10-year U.S. Treasuries fell below the yield on two-year U.S. Treasuries. While some investors considered this inversion a sign that the economy was moving toward a recession, the two-year and 10-year U.S. Treasury yield curve steepened again shortly thereafter amid positive economic signals.

U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, gained during the period, which was characterized by high levels of Treasury issuance due to the government’s deficit spending. A strong U.S. dollar during most of the period and comparatively higher Treasury yields relative to sovereign debt issued by other developed market countries made Treasuries attractive to foreign investors.

Corporate bonds also posted noteworthy returns, driven by the combination of a relatively strong economy and lower interest rates. Both investment-grade and high-yield corporate bonds gained significantly, as measured by the Bloomberg Barclays U.S. Corporate Bond Index and Bloomberg Barclays U.S. Corporate High Yield Bond Index, respectively, as solid corporate profits and steady economic growth helped strengthen investors’ confidence in corporate creditworthiness. The positive environment for debt extended to mortgage-backed securities, as prepayments due to homeowner refinancing declined after hitting a three-year high in August 2019.

Investment Strategy

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

Top Five Equity Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
The Southern Co. Utilities	2.3%
JPMorgan Chase & Co. Financials	2.1%
Wells Fargo & Co. Financials	1.8%
Dominion Energy Inc. Utilities	1.7%
Verizon Communications Inc. Communication Services	1.5%

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

Manager’s Discussion

Following a volatile period of market performance at the end of 2018, the Federal Reserve’s policy pause and ultimate pivot to reducing the federal funds rate three times during 2019 helped reverse declines and fueled both the equity and fixed income markets during the reporting period. Supportive monetary policy, the strength of the U.S. consumer and a strong domestic labor market also helped support markets and offset concerns around a slowdown in global economic growth, trade tensions and weakening corporate earnings.

During the period under review, the Fund’s asset mix shifted toward modestly more defensive positioning as we have seen valuations rise and we positioned ourselves for an increased level of uncertainty going forward. Our movement toward more defensive positioning in equities and our increased exposure to higher credit quality positioning on the fixed income side has been undertaken with a keen focus on not sacrificing yield and positioning ourselves to be nimble to seek to take advantage of dislocations that could arise going forward.

The improvement in the equity markets during the period was broad-based, with every sector positively contributing to underlying Fund performance. Monetary policy accommodation led markets higher during the first half of the year and progress toward a trade deal between the U.S. and China further bolstered equity performance late in the year. At the sector level, leading contributors included information technology, financials and utilities. The Fund’s leading individual contributors included holdings in the utilities sector,

Annual Report         FI-3

FRANKLIN INCOME VIP FUND

such as the Southern Company and Sempra Energy, which benefited from declining interest rates. Additionally, Apple in information technology and Target in consumer discretionary were key positive contributors. Energy holdings were the only detractors on the equity side including Occidental Petroleum, Weatherford International and Chesapeake Energy. The Fund’s focus on volatility management was also a detractor during the period as equity index positions detracted from returns in a period of strong equity market performance.

Top Five Fixed Income Holdings

and Senior Floating Rate Interests

12/31/19

Company Sector/Industry	% of Total Net Assets
U.S. Treasury Note Financials	7.2%
CHS/Community Health Systems Inc. Health Care	5.5%
Tenet Healthcare Corp. Health Care	2.9%
GNMA II SF 30 Year Financials	2.3%
Chesapeake Energy Corp. Energy	2.3%

Declining credit spreads and lower interest rates throughout the year led to positive performance from fixed income markets during the period. The Fund’s overweight position in relatively short duration credit exposure and generally underweight position in higher quality, longer-duration fixed income assets were the primary detractors from performance relative to the benchmark. All sectors were positive contributors in fixed income, excluding energy, which struggled during the 12-month period due to rising credit spreads. Notable outperformers were health care, communication services and financials. Holdings of U.S. Treasury securities boosted returns during the period as did hospital management companies Community Health Systems and Tenet Healthcare amid improving fundamentals and modest deleveraging. Notable detractors included oil field service and equipment company Weatherford International, which struggled due to weakening demand for their services as well as oil and gas exploration and production company Chesapeake Energy, which struggled partly due to lower expectations for commodity oil and gas prices. Additionally, specialty pharmaceutical company Mallinckrodt was a key detractor partly due to concerns around potential liabilities related to opioid settlements.

Effective February 1, 2020, Matthew Quinlan and Richard Hsu will step off the Fund as portfolio managers. Ed Perks

will continue to lead the Fund and Brendan Circle and Todd Brighton will remain as portfolio managers.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FI-4         Annual Report

FRANKLIN INCOME VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual     (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,044.80	$4.07	$1,021.22	$4.02	0.79%

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.

Annual Report         FI-5

FI P1 P2 P4 01/20

SUPPLEMENT DATED JANUARY 27, 2020

TO THE PROSPECTUSES

DATED MAY 1, 2019

FRANKLIN INCOME VIP FUND

(a series of Franklin Templeton Variable Insurance Products Trust)

The prospectuses are amended as follows:

I. The following is added to the “Portfolio Managers” section in the “Fund Summaries – Franklin Income VIP Fund” section on page FI-S5 of the prospectus:

Effective on February 1, 2020, the portfolio managers of the Fund will be as follows:

Edward D. Perks, CFAPresident and Director of Advisers and portfolio manager of the Fund since 2002.

Brendan Circle, CFA Portfolio Manager of Advisers and portfolio manager of the Fund since February 2019.

Todd Brighton, CFAPortfolio Manager of Advisers and portfolio manager of the Fund since 2017.

II. The following is added to the portfolio manager line-up under the “Fund Details – Franklin Income VIP Fund – Management” section on page FI-D9 of the prospectus:

Effective on February 1, 2020, the portfolio managers of the Fund will be as follows:

Edward D. Perks, CFA

President and Director of Advisers

Mr. Perks has been the lead portfolio manager of the Fund since 2002. He has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund’s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. He joined Franklin Templeton in 1992.

Brendan Circle, CFA

Portfolio Manager of Advisers

Mr. Circle has been a portfolio manager of the Fund since February 2019, providing research and advice on the purchases and sales of individual securities, and portfolio risk assessment. He joined Franklin Templeton in 2014.

Todd Brighton, CFA

Portfolio Manager of Advisers

Mr. Brighton has been a portfolio manager of the Fund since 2017, providing research and advice on the purchases and sales of individual securities, and portfolio risk assessment. He joined Franklin Templeton in 2000.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Please keep this supplement with your prospectus for future reference.

FI-6

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Income VIP Fund

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Income VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         FI-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Income VIP Fund

	Country		Shares		Value
Common Stocks 38.2%
Communication Services 2.2%
a Alphabet Inc., A		United States		10,000	$	13,393,900
BCE Inc.		Canada		466,000		21,588,295
Verizon Communications Inc.		United States		1,200,000		73,680,000
						108,662,195
Consumer Discretionary 1.5%
Ford Motor Co.		United States		2,500,000		23,250,000
General Motors Co.		United States		1,425,000		52,155,000
						75,405,000
Consumer Staples 3.5%
Anheuser-Busch InBev SA/NV, ADR		Belgium		300,000		24,612,000
The Coca-Cola Co.		United States		245,600		13,593,960
PepsiCo Inc.		United States		300,000		41,001,000
Philip Morris International Inc.		United States		350,000		29,781,500
The Procter & Gamble Co.		United States		500,000		62,450,000
						171,438,460
Energy 5.7%
Baker Hughes Co., A		United States		614,100		15,739,383
Chevron Corp.		United States		400,000		48,204,000
Exxon Mobil Corp.		United States		500,000		34,890,000
Halliburton Co.		United States		839,165		20,534,367
Occidental Petroleum Corp.		United States		500,000		20,605,000
Royal Dutch Shell PLC, A, ADR		United Kingdom		900,000		53,082,000
Schlumberger Ltd.		United States		225,000		9,045,000
TC Energy Corp.		Canada		350,000		18,658,500
a Weatherford International PLC		United States		1,153,568		32,242,226
The Williams Cos. Inc.		United States		1,200,000		28,464,000
						281,464,476
Financials 5.2%
Bank of America Corp.		United States		365,000		12,855,300
Barclays PLC		United Kingdom		12,500,000		29,740,524
JPMorgan Chase & Co.		United States		600,000		83,640,000
MetLife Inc.		United States		535,108		27,274,455
Morgan Stanley		United States		250,000		12,780,000
Wells Fargo & Co.		United States		1,665,000		89,577,000
						255,867,279
Health Care 7.0%
AstraZeneca PLC		United Kingdom		700,000		70,525,637
Bayer AG		Germany		311,750		25,455,253
Bristol-Myers Squibb Co.		United States		1,000,000		64,190,000
CVS Health Corp.		United States		520,000		38,630,800
Johnson & Johnson		United States		230,000		33,550,100
Merck & Co. Inc.		United States		700,000		63,665,000
Pfizer Inc.		United States		1,300,000		50,934,000
						346,950,790

FI-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Shares		Value
Common Stocks (continued)
Industrials 1.5%
3M Co.		United States		250,000	$	44,105,000
The Boeing Co.		United States		36,300		11,825,088
Cummins Inc.		United States		100,000		17,896,000
						73,826,088
Information Technology 2.9%
Applied Materials Inc.		United States		286,000		17,457,440
Cisco Systems Inc.		United States		300,000		14,388,000
Intel Corp.		United States		414,307		24,796,274
International Business Machines Corp.		United States		109,976		14,741,183
Lam Research Corp.		United States		70,000		20,468,000
Microchip Technology Inc.		United States		150,000		15,708,000
Texas Instruments Inc.		United States		276,000		35,408,040
						142,966,937
Materials 2.0%
BASF SE		Germany		700,000		52,870,761
Rio Tinto PLC, ADR		Australia		800,000		47,488,000
						100,358,761
Real Estate 0.6%
Host Hotels & Resorts Inc.		United States		1,500,000		27,825,000
Utilities 6.1%
Dominion Energy Inc.		United States		1,036,638		85,854,359
Duke Energy Corp.		United States		577,500		52,673,775
Sempra Energy		United States		275,000		41,657,000
The Southern Co.		United States		1,560,000		99,372,000
Xcel Energy Inc.		United States		400,000		25,396,000
						304,953,134
Total Common Stocks (Cost $1,462,457,605)						1,889,718,120
b Equity-Linked Securities 10.4%
Communication Services 0.9%
c Goldman Sachs International into Alphabet Inc., 7.00%, A, 144A		United States		35,000		42,756,839
Consumer Discretionary 1.5%
c JPMorgan Chase Bank NA into Target Corp., 9.00%, 144A		United States		250,000		29,212,042
c JPMorgan Chase Financial Co. LLC into Amazon.com Inc., 9.00%, 144A		United States		25,000		46,049,372
						75,261,414
Financials 2.6%
c Barclays Bank PLC into Bank of America Corp., 8.50%, 144A		United States		600,000		20,578,525
c Credit Suisse AG into Bank of America Corp., 7.00%, 144A		United States		750,000		24,894,809
c Merrill Lynch International & Co. CV into Wells Fargo &Co., 8.00%, 144A		United States		775,000		40,789,631
c UBS AG London into MetLife Inc., 7.50%, 144A		United States		800,000		41,931,074
						128,194,039
Health Care 0.5%
c UBS AG London into CVS Health Corp., 8.50%, 144A		United States		400,000		26,996,955

Annual Report         FI-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Shares			Value
b Equity-Linked Securities (continued)
Information Technology 4.9%
c Credit Suisse AG London into Analog Devices Inc., 7.50%, 144A		United States		260,000		$	29,858,291
c JPMorgan Chase Bank NA into Apple Inc., 7.00%, 144A		United States		450,000			102,439,065
c Royal Bank of Canada into Intel Corp., 8.00%, 144A		United States		1,100,000			58,465,881
c UBS AG London into Texas Instruments Inc., 8.50%, 144A		United States		400,000			52,106,747
							242,869,984
Total Equity-Linked Securities (Cost $ 467,531,300)							516,079,231
Convertible Preferred Stocks 2.3%
Financials 1.4%
Bank of America Corp., 7.25%, cvt. pfd., L		United States		34,600			50,135,400
a FNMA, 5.375%, cvt. pfd.		United States		475			19,118,199
							69,253,599
Information Technology 0.6%
Broadcom Inc., 8.00%, cvt. pfd., A		United States		25,000			29,449,250
Utilities 0.3%
The Southern Co., 6.75%, cvt. pfd.		United States		280,000			15,092,000
Total Convertible Preferred Stocks (Cost $104,397,102)							113,794,849
Preferred Stocks (Cost $15,000,000) 0.3%
Financials 0.3%
JPMorgan Chase & Co., 6.00%, pfd., EE		United States		600,000			16,884,000
				Principal Amount	*
Corporate Bonds 35.3%
Communication Services 4.9%
AMC Entertainment Holdings Inc., senior sub. note, 5.875%, 11/15/26		United States	$	5,600,000			5,060,006
AT&T Inc., senior bond, 4.125%, 2/17/26		United States		12,000,000			13,004,642
CCO Holdings LLC/CCO Holdings Capital Corp.,
senior bond, 5.125%, 2/15/23		United States		10,000,000			10,124,900
senior bond, 5.75%, 1/15/24		United States		1,352,000			1,379,601
c senior bond, 144A, 5.50%, 5/01/26		United States		10,000,000			10,560,725
DISH DBS Corp.,
senior bond, 5.875%, 7/15/22		United States		27,000,000			28,668,060
senior bond, 5.00%, 3/15/23		United States		21,000,000			21,595,140
senior note, 5.875%, 11/15/24		United States		9,400,000			9,625,224
Netflix Inc., senior bond, 4.875%, 4/15/28		United States		22,000,000			22,906,950
Sprint Communications Inc.,
senior bond, 11.50%, 11/15/21		United States		30,000,000			34,329,600
senior note, 7.00%, 8/15/20		United States		7,500,000			7,668,000
senior note, 6.00%, 11/15/22		United States		6,300,000			6,618,339
Sprint Corp.,
senior bond, 7.875%, 9/15/23		United States		12,500,000			13,817,688
senior bond, 7.125%, 6/15/24		United States		8,200,000			8,862,847
senior note, 7.625%, 3/01/26		United States		7,500,000			8,284,875

FI-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Principal   Amount*		Value
Corporate Bonds (continued)
Communication Services (continued)
c Sprint Spectrum Co. LLC, senior secured bond, first lien, 144A, 5.152%, 9/20/29		United States	$	16,000,000	$	17,485,560
c Univision Communications Inc.,
senior secured note, first lien, 144A, 5.125%, 5/15/23		United States		15,000,000		15,000,000
senior secured note, first lien, 144A, 5.125%, 2/15/25		United States		7,140,000		7,077,525
						242,069,682
Consumer Discretionary 1.8%
c 24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22		United States		10,000,000		4,628,120
Ford Motor Co., senior note, 4.346%, 12/08/26		United States		18,500,000		19,112,730
General Motors Co., senior bond, 5.15%, 4/01/38		United States		16,000,000		16,359,553
c Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		5,000,000		5,187,450
c Shea Homes LP/Shea Homes Funding Corp.,
senior bond, 144A, 6.125%, 4/01/25		United States		10,000,000		10,379,150
senior note, 144A, 5.875%, 4/01/23		United States		10,000,000		10,216,650
c Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
senior bond, 144A, 5.50%, 3/01/25		United States		13,200,000		14,173,368
senior bond, 144A, 5.25%, 5/15/27		United States		10,000,000		10,637,500
						90,694,521
Consumer Staples 1.1%
BAT Capital Corp.,
senior note, 3.222%, 8/15/24		United Kingdom		10,000,000		10,226,546
senior note, 3.557%, 8/15/27		United Kingdom		20,000,000		20,413,687
Kraft Heinz Foods Co., senior bond, 4.625%, 1/30/29		United States		13,000,000		14,295,442
c Post Holdings Inc.,
senior bond, 144A, 5.00%, 8/15/26		United States		7,500,000		7,935,750
senior bond, 144A, 5.625%, 1/15/28		United States		2,500,000		2,698,375
						55,569,800
Energy 5.5%
c Ascent Resources Utica Holdings LLC/ARU Finance Corp., senior note, 144A, 10.00%, 4/01/22		United States		3,000,000		2,991,371
Calumet Specialty Products Partners LP/Calumet Finance Corp.,
d senior note, 7.625%, 1/15/22		United States		8,000,000		8,022,496
d senior note, 7.75%, 4/15/23		United States		2,000,000		2,000,830
c senior note, 144A, 11.00%, 4/15/25		United States		28,500,000		31,064,715
Chesapeake Energy Corp.,
c second lien, 144A, 11.50%, 1/01/25		United States		81,444,000		77,168,190
senior note, 7.00%, 10/01/24		United States		21,000,000		12,704,790
c CNX Resources Corp., senior note, 144A, 7.25%, 3/14/27		United States		8,000,000		7,017,800
HighPoint Operating Corp.,
senior bond, 7.00%, 10/15/22		United States		17,937,000		17,090,589
senior note, 8.75%, 6/15/25		United States		26,600,000		24,339,000
Kinder Morgan Inc.,
senior bond, 7.75%, 1/15/32		United States		22,000,000		30,253,383
c senior secured bond, first lien, 144A, 5.625%, 11/15/23		United States		6,400,000		7,082,146
c Weatherford International Ltd., senior note, 144A, 11.00%, 12/01/24		United States		49,344,000		53,476,560
						273,211,870

Annual Report         FI-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Principal   Amount*		Value
Corporate Bonds (continued)
Financials 3.9%
Bank of America Corp.,
e junior sub. bond, AA, 6.10% to 3/17/25, FRN thereafter, Perpetual		United States	$	8,000,000	$	8,916,120
e junior sub. bond, X, 6.25% to 9/05/24, FRN thereafter, Perpetual		United States		6,000,000		6,671,790
senior bond, 3.419% to 12/20/27, FRN thereafter, 12/20/28		United States		10,000,000		10,495,330
Capital One Financial Corp., senior sub. note, 4.20%, 10/29/25		United States		15,500,000		16,727,689
Citigroup Inc.,
e junior sub. bond, O, 5.875% to 3/27/20, FRN thereafter, Perpetual		United States		25,000,000		25,133,625
sub. bond, 4.125%, 7/25/28		United States		18,500,000		20,181,935
The Goldman Sachs Group Inc., senior note, 3.272% to 9/29/24, FRN thereafter, 9/29/25		United States		15,500,000		16,043,206
HSBC Holdings PLC, senior note, 4.292% to 9/12/25, FRN thereafter, 9/12/26		United Kingdom		28,500,000		30,811,762
e JPMorgan Chase & Co.,
f junior sub. bond, FRN, 5.406%, (3-month USD LIBOR + 3.47%), Perpetual		United States		19,559,000		19,764,761
junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		3,200,000		3,438,288
e Morgan Stanley, junior sub. bond, 5.55% to 7/15/20, FRN thereafter, Perpetual		United States		7,300,000		7,446,511
Prudential Financial Inc., junior sub. bond, 5.70% to 9/15/28, FRN thereafter, 9/15/48		United States		17,000,000		19,448,340
e Wells Fargo & Co., junior sub. bond, S, 5.90% to 6/15/24, FRN thereafter, Perpetual		United States		6,600,000		7,190,931
						192,270,288
Health Care 14.1%
Allergan Funding SCS, senior bond, 3.80%, 3/15/25		United States		17,000,000		17,830,059
c Bausch Health Cos. Inc.,
senior bond, 144A, 6.125%, 4/15/25		United States		9,400,000		9,731,961
senior note, 144A, 5.50%, 3/01/23		United States		15,000,000		15,118,725
senior note, 144A, 5.875%, 5/15/23		United States		13,564,000		13,691,162
senior note, 144A, 9.00%, 12/15/25		United States		5,000,000		5,698,500
senior note, first lien, 144A, 7.00%, 3/15/24		United States		4,500,000		4,689,383
senior secured note, first lien, 144A, 6.50%, 3/15/22		United States		3,000,000		3,071,250
senior secured note, first lien, 144A, 5.50%, 11/01/25		United States		35,000,000		36,647,975
c Bayer U.S. Finance II LLC, senior note, 144A, 4.25%, 12/15/25		Germany		15,000,000		16,183,515
c Bristol-Myers Squibb Co.,
senior bond, 144A, 3.40%, 7/26/29		United States		8,000,000		8,556,359
senior bond, 144A, 4.25%, 10/26/49		United States		8,000,000		9,480,790
CHS/Community Health Systems Inc.,
c senior note, 144A, 9.875%, 6/30/23		United States		101,596,000		88,684,672
c senior note, 144A, 8.125%, 6/30/24		United States		42,388,000		34,863,706
c senior note, 144A, 8.00%, 12/15/27		United States		38,674,000		39,157,425
c senior note, 144A, 6.875%, 4/01/28		United States		92,000,000		52,783,160
c senior secured note, 144A, 8.00%, 3/15/26		United States		15,500,000		15,994,047
senior secured note, first lien, 6.25%, 3/31/23		United States		39,000,000		39,682,500
Cigna Corp., senior note, 3.75%, 7/15/23		United States		20,000,000		20,978,484
CVS Health Corp.,
senior bond, 4.30%, 3/25/28		United States		8,000,000		8,737,004
senior bond, 5.05%, 3/25/48		United States		3,900,000		4,615,118
senior note, 4.10%, 3/25/25		United States		5,100,000		5,473,858

FI-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Principal   Amount*		Value
Corporate Bonds (continued)
Health Care (continued)
DaVita Inc.,
senior bond, 5.125%, 7/15/24		United States	$	5,000,000	$	5,135,425
senior bond, 5.00%, 5/01/25		United States		4,000,000		4,123,340
c Endo DAC/Endo Finance LLC/Endo Finco Inc.,
senior bond, 144A, 6.00%, 2/01/25		United States		6,300,000		4,266,297
senior note, 144A, 6.00%, 7/15/23		United States		10,000,000		7,249,900
HCA Inc.,
senior bond, 5.875%, 5/01/23		United States		7,500,000		8,304,338
senior note, 7.50%, 2/15/22		United States		25,000,000		27,669,500
senior secured note, first lien, 5.00%, 3/15/24		United States		10,400,000		11,370,760
c Mallinckrodt International Finance SA/Mallinckrodt CB LLC,
senior note, 144A, 4.875%, 4/15/20		United States		5,800,000		4,484,514
senior note, 144A, 5.75%, 8/01/22		United States		12,100,000		5,142,500
senior note, 144A, 5.625%, 10/15/23		United States		11,800,000		4,518,397
senior note, 144A, 5.50%, 4/15/25		United States		10,000,000		3,575,000
Mylan NV, senior note, 3.95%, 6/15/26		United States		10,000,000		10,433,821
c Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27		United States		8,500,000		8,478,962
Tenet Healthcare Corp.,
secured note, second lien, 5.125%, 5/01/25		United States		2,500,000		2,581,250
senior note, 8.125%, 4/01/22		United States		27,600,000		30,581,628
senior note, 6.75%, 6/15/23		United States		58,200,000		64,066,269
senior note, 7.00%, 8/01/25		United States		12,175,000		12,867,514
c senior note, second lien, 144A, 6.25%, 2/01/27		United States		29,000,000		31,247,500
						697,766,568
Industrials 0.8%
c Ashtead Capital Inc., second lien, 144A, 4.25%, 11/01/29		United Kingdom		4,500,000		4,606,875
United Rentals North America Inc., senior bond, 4.875%, 1/15/28		United States		20,000,000		20,861,600
United Technologies Corp., senior note, 3.95%, 8/16/25		United States		15,000,000		16,362,088
						41,830,563
Information Technology 0.3%
c CommScope Inc., senior bond, 144A, 5.50%, 6/15/24		United States		10,000,000		10,150,100
NCR Corp., senior note, 6.375%, 12/15/23		United States		4,212,000		4,326,082
						14,476,182
Materials 1.5%
c Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24		Mexico		9,665,000		9,959,782
DuPont de Nemours Inc., senior note, 4.493%, 11/15/25		United States		10,500,000		11,560,614
c FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 5.125%, 5/15/24		Australia		6,700,000		7,168,799
c Mauser Packaging Solutions Holding Co.,
secured note, 144A, 5.50%, 4/15/24		United States		10,000,000		10,325,900
senior note, 144A, 7.25%, 4/15/25		United States		23,000,000		22,769,770
c Syngenta Finance NV, senior note, 144A, 4.441%, 4/24/23		Switzerland		10,000,000		10,443,243
						72,228,108

Annual Report         FI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Principal   Amount*		Value
Corporate Bonds (continued)
Real Estate 0.6%
Equinix Inc., senior bond, 5.375%, 5/15/27		United States	$	11,000,000	$	11,966,680
Iron Mountain Inc., senior sub. bond, 5.75%, 8/15/24		United States		18,000,000		18,247,320
						30,214,000
Utilities 0.8%
Calpine Corp.,
senior note, 5.375%, 1/15/23		United States		20,000,000		20,276,023
senior note, 5.50%, 2/01/24		United States		16,375,000		16,661,399
						36,937,422
Total Corporate Bonds (Cost $1,825,007,981)						1,747,269,004
f,g Senior Floating Rate Interests 0.9%
Consumer Discretionary 0.5%
24 Hour Fitness Worldwide Inc., Term Loan, 5.299%, (1-month USD LIBOR + 3.50%), 5/30/25		United States		13,790,000		10,512,407
Belk Inc., Extended Term Loan B, 8.803%, (3-month USD LIBOR + 6.75%), 7/31/25		United States		18,499,734		13,088,562
						23,600,969
Energy 0.4%
Chesapeake Energy Corp., Class A Loan, 9.928%, (3-month USD LIBOR + 8.00%), 6/23/24		United States		19,000,000		19,629,375
Total Senior Floating Rate Interests (Cost $49,677,378)						43,230,344
U.S. Government and Agency Securities 7.2%
U.S. Treasury Note,
2.25%, 3/31/20		United States		50,000,000		50,071,532
2.50%, 5/31/20		United States		75,000,000		75,260,499
2.50%, 6/30/20		United States		50,000,000		50,213,401
2.375%, 3/15/21		United States		75,000,000		75,652,883
2.75%, 4/30/23		United States		25,000,000		25,893,723
2.75%, 5/31/23		United States		50,000,000		51,821,556
2.875%, 5/31/25		United States		25,000,000		26,460,558
Total U.S. Government and Agency Securities (Cost $349,769,660)						355,374,152
Mortgage-Backed Securities 3.0%
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 0.1%
FHLMC 30 Year, 4.00%, 9/01/49 - 10/01/49		United States		3,931,050		4,096,606
Federal National Mortgage Association (FNMA) Fixed Rate 0.7%
FNMA 30 Year, 4.00%, 8/01/49 - 1/01/50		United States		30,186,659		31,617,466
Government National Mortgage Association (GNMA) Fixed Rate 2.2%
GNMA II SF 30 Year, 3.50%, 9/20/49 - 11/20/49		United States		47,550,789		49,247,092
GNMA II SF 30 Year, 3.50%, 12/20/49		United States		23,600,000		24,453,659
GNMA II SF 30 Year, 4.00%, 9/20/49 - 12/20/49		United States		35,508,216		37,041,828
Total Mortgage-Backed Securities (Cost $146,694,857)						146,456,651

FI-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund (continued)

	Country		Shares		Value
Escrows and Litigation Trusts (Cost $62,602) 0.0%
a,h Motors Liquidation Co., Escrow Account, cvt. pfd., C		United States		1,400,000	$	—
	Number of Contracts		Notional Amount
Options Purchased 0.2%
Puts - Exchange-Traded
S&P 500 Index, March Strike Price $2,900.00, Expires 3/20/20		1,000		100,000		1,750,000
S&P 500 Index, September Strike Price $3,000.00, Expires 9/18/20		1,000		100,000		9,520,000
Total Options Purchased (Cost $34,004,076)						11,270,000
Total Investments before Short Term Investments (Cost $4,454,602,561)						4,840,076,351
	Country		Shares
Short Term Investments 1.7%
Money Market Funds (Cost $83,971,136) 1.7%
i,j Institutional Fiduciary Trust Money Market Portfolio, 1.26%		United States		83,971,136		83,971,136
k Investments from Cash Collateral Received for Loaned Securities 0.0%†
Money Market Funds (Cost $747,000) 0.0%†
i,j Institutional Fiduciary Trust Money Market Portfolio, 1.26%		United States		747,000		747,000
			Principal   Amount*
Repurchase Agreement (Cost $187,657) 0.0%†
l Joint Repurchase Agreement, 1.55%, 1/02/20 (Maturity Value $187,673)
BofA Securities Inc.
Collateralized by U.S. Treasury Notes, 1.75% - 2.00%, 6/15/22 - 6/30/24 (valued at $191,274)		United States	$	187,657		187,657
Total Investments from Cash Collateral Received for Loaned Securities (Cost $934,657)						934,657
Total Investments (Cost $4,539,508,354) 99.5%						4,924,982,144
Other Assets, less Liabilities 0.5%						26,084,987
Net Assets 100.0%					$	4,951,067,131

Annual Report         FI-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Income VIP Fund(continued)

See Abbreviations on page FI-31.

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

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

^aNon-income producing.

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

^cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At December 31, 2019, the aggregate value of these securities was $1,309,600,355, representing 26.5% of net assets.

^dA portion or all of the security is on loan at December 31, 2019. See Note 1(f).

^ePerpetual security with no stated maturity date.

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

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

^hFair valued using significant unobservable inputs. See Note 10 regarding fair value measurements.

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

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

^kSee Note 1(f) regarding securities on loan.

^lSee Note 1(c) regarding repurchase agreement.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Income VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	4,454,602,561
Cost - Non-controlled affiliates (Note 3e)		84,718,136
Cost - Unaffiliated repurchase agreements		187,657
Value - Unaffiliated issuers+	$	4,840,076,351
Value - Non-controlled affiliates (Note 3e)		84,718,136
Value - Unaffiliated repurchase agreements		187,657
Cash		198,633
Receivables:
Investment securities sold		2,535,000
Capital shares sold		2,977,767
Dividends and interest		27,454,974
Other assets		633
Total assets		4,958,149,151
Liabilities:
Payables:
Capital shares redeemed		2,750,725
Management fees		1,878,619
Distribution fees		1,001,502
Payable upon return of securities loaned		934,657
Accrued expenses and other liabilities.		516,517
Total liabilities		7,082,020
Net assets, at value	$	4,951,067,131
Net assets consist of:
Paid-in capital	$	4,318,916,349
Total distributable earnings (losses)		632,150,782
Net assets, at value	$	4,951,067,131
Class 1:
Net assets, at value	$	309,329,668
Shares outstanding		18,719,960
Net asset value and maximum offering price per share		$16.52
Class 2:
Net assets, at value	$	4,318,155,959
Shares outstanding		271,348,136
Net asset value and maximum offering price per share		$15.91
Class 4:
Net assets, at value	$	323,581,504
Shares outstanding		19,831,473
Net asset value and maximum offering price per share		$16.32

⁺Includes securities loaned $           884,317

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Income VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$	77,022,504
Non-controlled affiliates (Note 3e)		2,711,159
Interest:
Unaffiliated issuers		166,530,732
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		30,912
Non-controlled affiliates (Note 3e)		27,098
Total investment income		246,322,405
Expenses:
Management fees (Note 3a)		23,173,719
Distribution fees: (Note 3c)
Class 2		10,790,993
Class 4		1,095,119
Custodian fees (Note 4)		54,743
Reports to shareholders		428,371
Professional feesa		(226,875	)
Trustees’ fees and expenses		30,668
Other		125,030
Total expenses		35,471,768
Expense reductions (Note 4)		(52,296	)
Expenses waived/paid by affiliates (Note 3e)		(514,740	)
Net expenses		34,904,732
Net investment income		211,417,673
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		37,328,890
Written options		2,885,179
Foreign currency transactions		(166,248	)
Net realized gain (loss)		40,047,821
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		514,968,335
Translation of other assets and liabilities denominated in foreign currencies		504
Net change in unrealized appreciation (depreciation)		514,968,839
Net realized and unrealized gain (loss)		555,016,660
Net increase (decrease) in net assets resulting from operations	$	766,434,333
*Foreign taxes withheld on dividends	$	1,410,045

^aIncludes unaffiliated reimbursement of legal fees incurred in connection with certain fund holdings.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Income VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	211,417,673		$	235,338,694
Net realized gain (loss)		40,047,821			351,140,755
Net change in unrealized appreciation (depreciation)		514,968,839			(809,608,127	)
Net increase (decrease) in net assets resulting from operations		766,434,333			(223,128,678	)
Distributions to shareholders:
Class 1		(26,604,329	)		(34,377,723	)
Class 2		(301,656,285	)		(227,495,537	)
Class 4		(21,101,452	)		(14,948,805	)
Total distributions to shareholders		(349,362,066	)		(276,822,065	)
Capital share transactions: (Note 2)
Class 1		(360,324,820	)		(62,663,457	)
Class 2		(103,843,936	)		(543,422,123	)
Class 4		4,153,985			(11,817,756	)
Total capital share transactions		(460,014,771	)		(617,903,336	)
Net increase (decrease) in net assets		(42,942,504	)		(1,117,854,079	)
Net assets:
Beginning of year		4,994,009,635			6,111,863,714
End of year	$	4,951,067,131		$	4,994,009,635

The accompanying notes are an integral part of these financial statements.  |  Annual Report         FI-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

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. Occasionally,

FI-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund (continued)

events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.   Foreign Currency Translation

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

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

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

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, 2019.

Annual Report         FI-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund(continued)

1. Organization and Significant Accounting Policies (continued)

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 8 regarding other derivative information.

e.  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.

f.  Securities Lending

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

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

FI-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund (continued)

borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

h.  Income and Deferred Taxes

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

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income

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

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

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

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

Annual Report         FI-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund(continued)

1. Organization and Significant Accounting Policies (continued)

k. Guarantees and Indemnifications (continued)

unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

				Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		1,872,752		$	30,211,199			1,947,322		$	31,806,598
Shares issued in reinvestment of distributions		1,709,790			26,604,329			2,128,651			34,377,723
Shares redeemed		(25,004,206	)		(417,140,348	)		(7,908,010	)		(128,847,778)
Net increase (decrease)		(21,421,664	)	$	(360,324,820	)		(3,832,037	)	$	(62,663,457)
Class 2 Shares:
Shares sold		16,435,568		$	256,969,286			11,659,052		$	185,115,657
Shares issued in reinvestment of distributions		20,097,021			301,656,285			14,573,705			227,495,537
Shares redeemed		(42,487,994	)		(662,469,507	)		(60,726,257	)		(956,033,317)
Net increase (decrease)		(5,955,405	)	$	(103,843,936	)		(34,493,500	)	$	(543,422,123)
Class 4 Shares:
Shares sold		2,582,430		$	41,387,759			2,953,880		$	48,028,259
Shares issued in reinvestment of distributions		1,370,224			21,101,452			934,885			14,948,805
Shares redeemed		(3,658,374	)		(58,335,226	)		(4,625,977	)		(74,794,820)
Net increase (decrease)		294,280		$	4,153,985			(737,212	)	$	(11,817,756)

3. Transactions with Affiliates

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

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

FI-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin 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:

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

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.455% 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 for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
																Dividends
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	157,193,174	$	1,445,763,458	$	(1,518,985,496	)		$    —		$    —	$	83,971,136		83,971,136		$2,711,159

Annual Report         FI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund(continued)

3.  Transactions with Affiliates (continued)

e.  Investments in Affiliated Management Investment Companies (continued)

	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
Non-Controlled Affiliates (continued)
																Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	1,099,000	$	82,069,000	$	(82,421,000	)		$    —		$    —	$	747,000		747,000	$      27,098
Total Affiliated Securities	$	158,292,174	$	1,527,832,458	$	(1,601,406,496	)		$    —		$    —	$	84,718,136			$2,738,257

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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	268,440,004	$  276,822,065
Long term capital gain		80,922,062	—
	$	349,362,066	$  276,822,065

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	4,539,905,082
Unrealized appreciation	$	748,366,284
Unrealized depreciation		(363,289,222)
Net unrealized appreciation (depreciation)	$	385,077,062
Distributable earnings:
Undistributed ordinary income	$	249,420,965
Undistributed long term capital gains		3,475,287
Total distributable earnings	$	252,896,252

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

FI-28         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund (continued)

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $1,235,622,655 and $1,795,514,964, respectively.

At December 31, 2019, in connection with securities lending transactions, the Fund loaned corporate bonds and received $934,657 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, 2019, the Fund had 26.7% 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.  Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Equity contracts	Investments in securities, at value	$	11,270,000	a	Options written, at value	$  —

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

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Equity contracts	Investments	$	—	Investments	$	(22,734,076	)a
	Written options		2,885,179	Written options		—
Totals		$	2,885,179		$	(22,734,076	)

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

For the year ended December 31, 2019, the average month end notional amount of options represented 378,731 shares.

See Note 1(d) regarding derivative financial instruments.

Annual Report         FI-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund(continued)

9.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, 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.

FI-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Income VIP Fund (continued)

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3			Total
Assets:
Investments in Securities:a
Equity Investments:b
Financials	$	322,886,679	$	19,118,199	$	—		$     342,004,878
All Other Equity Investments		1,678,392,091		—		—		1,678,392,091
Equity-Linked Securities		—		516,079,231		—		516,079,231
Corporate Bonds		—		1,747,269,004		—		1,747,269,004
Senior Floating Rate Interests		—		43,230,344		—		43,230,344
U.S. Government and Agency Securities		—		355,374,152		—		355,374,152
Mortgage-Backed Securities		—		146,456,651		—		146,456,651
Escrows and Litigation Trusts		—		—		—	c	—
Options Purchased		11,270,000		—		—		11,270,000
Short Term Investments		84,718,136		187,657		—		84,905,793
Total Investments in Securities	$	2,097,266,906	$	2,827,715,238	$	—		$  4,924,982,144

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

^bIncludes common, preferred and convertible preferred stocks.

^cIncludes securities determined to have no value at December 31, 2019.

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

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

Currency	Selected Portfolio
USD     United States Dollar	ADR	American Depositary Receipt
	FNMA	Federal National Mortgage Association
	FRN	Floating Rate Note
	LIBOR	London InterBank Offered Rate

Annual Report         FI-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

FI-32         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Income VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $80,922,062 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 20.62% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

Annual Report         FI-33

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Franklin Mutual Global Discovery VIP Fund

This annual report for Franklin Mutual Global Discovery VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+24.28%		+5.22%		+7.87%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 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.

Annual Report         MGD-1

FRANKLIN MUTUAL GLOBAL DISCOVERY VIP FUND

Fund Goal and Main Investments

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

Fund Risks

All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated, or may decline further in value. The Fund’s investments in foreign securities involve more risks than U.S. securities, including political and economic developments, trading practices, availability of information, limited markets, and currency exchange fluctuations and policies. Because the Fund may invest at least a significant portion of its assets in companies in a specific region, including Europe, the Fund is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Derivatives involve costs and can create economic leverage in the Fund’s portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as gains) in an amount that exceeds the Fund’s initial investment. The Fund’s investments in companies engaged in mergers, reorganizations or liquidations also involve special risks as pending deals may not be completed on time or on favorable terms, as well as lower-rated bonds, which entail higher credit risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Geographic Composition*

Based on Total Net Assets as of 12/31/19

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

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s benchmark, the MSCI World Index posted a +28.40% total return for the same period.¹

Economic and Market Overview

Global developed and emerging market stocks, as measured by the MSCI All Country World Index, posted strong returns during the reporting period. Although global economic growth slowed from 2018, interest-rate cuts from many central banks and the easing of trade tensions near period-end contributed to the generally positive environment for equities worldwide. Reflecting investor optimism and slowing but resilient economic growth, stocks advanced in every major region of the globe.

In the U.S., solid economic growth also supported equities, as healthy consumer spending and a strong labor market

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

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

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kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

The U.S. Federal Reserve (Fed) provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Growth slowed overall in the eurozone, particularly in Germany and Italy. Germany, which is heavily reliant on exports, was adversely affected by the trade conflict between the U.S. and China and the resulting slowdown in global trade. In Italy, political uncertainty and budget concerns caused the country’s annual gross domestic product (GDP) growth to stall in 2019’s first quarter before accelerating in the second quarter. Despite sluggish economic conditions, European developed market equities, as measured by the MSCI Europe Index, posted strong returns overall, as easing trade tensions buoyed investor optimism and an electoral victory by the Conservative Party in the U.K. alleviated uncertainty surrounding Brexit. Although the European Central Bank left its headline refinancing rate unchanged, it lowered the deposit rate and restarted its bond-buying stimulus program, further supporting stocks.

Economic growth in Asia was relatively solid overall, despite slowdowns in several large emerging market countries, such as China and India. Japan’s economy grew amid the Bank of Japan’s sizable stimulus program. The trade war between the U.S. and China provided the backdrop for Asian stocks, which rose and fell in sync with investor sentiment regarding a trade deal. A phase one trade agreement between the two countries reached in December 2019 propelled Asian developed and emerging market stocks, which ultimately ended with strong returns over the 12-month period, as measured by the MSCI All Country Asia Index.

Emerging market stocks overall experienced several sharp selloffs and subsequent rebounds throughout the reporting period before ending with gains. In aggregate, economic growth slowed somewhat from 2018 but remained solid, although there was some variation among individual countries. Many central banks in emerging markets cut interest rates throughout the reporting period which, along with resilient GDP growth, provided a supportive environment for equities. Russian stocks posted the highest returns among emerging markets as the threat of further sanctions receded and a solid fiscal environment reassured investors. Overall, global emerging markets, as measured by the MSCI Emerging Markets Index, posted robust returns for the period.

Investment Strategy

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

We complement this more traditional investment strategy with two others. One is distressed investing, which is complex and can take many forms. The most common distressed investment the Fund undertakes is the purchase of financially troubled or bankrupt companies’ debt at a substantial discount to face value. After the financially distressed company is reorganized, often in bankruptcy court, the old debt is typically replaced with new securities issued by the financially stronger company.

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

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

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when it is trading below the value we believe it would receive in a deal. In keeping with our commitment to a relatively conservative investment approach, we typically focus our arbitrage efforts on announced deals, and eschew rumored deals or other situations we consider relatively risky.

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

What is meant by "hedge"?

To hedge an investment is to take a position intended to offset potential losses that may be incurred by a companion financial instrument. Hedging an investment may also offset potential gains.

Manager’s Discussion

The end of a decade is a natural time for reflection about the years that have just passed and to look ahead to what the next 10 might have in store. Across Wall Street, we see many prognostications, and while we are not in the forecasting business, we do allow ourselves to think about investment opportunities over such an extended time period. But experience has taught us that while trying to predict the exact course of markets and/or economic and political events that will drive them may be fun, it is not all that useful.

As 2010 began, the global economy was still recovering from the Global Financial Crisis. The U.S. government owned significant portions of the banking and automotive sectors. The Fed had already started quantitative easing (QE), with QE 2 and QE 3 still to come. In Europe, concerns about Greece’s finances were emerging, and in China the effects of 2009’s massive stimulus programs were starting to take hold.

Over the subsequent years we saw ongoing, global QE, culminating in trillions of dollars of debt yielding negative interest rates. The European Union (EU) was in continuous upheaval, with Greece threatening to leave, but eventually staying in the eurozone; the U.K. pursuing and achieving Brexit; and ongoing strain between core members Germany, France, Italy and Spain. In the U.S., average annual economic growth was restrained and finished the decade below 2%, trailing the minimum 3% expectation of prior decades. Strong corporate profits and lower corporate tax rates were bright spots.

Equity markets delivered a very good decade—one of the best in history—with the MSCI World Index and the S&P 500 posting average annual total returns of +10.08% and

Top 10 Sectors/Industries

12/31/19

	% of Total Net Assets
Banks		11.7%
Oil, Gas & Consumable Fuels		11.2%
Pharmaceuticals		10.2%
Insurance		9.1%
Technology Hardware, Storage & Peripherals		5.0%
Software		4.3%
Automobiles		3.8%
Tobacco		3.2%
Health Care Equipment & Supplies		2.9%
Media		2.8%

+13.56%, respectively.¹ During the decade, Franklin Mutual Global Discovery VIP Fund posted a solid return that nonetheless lagged the MSCI World Index, its benchmark. The Fund’s value strategy, which seeks to identify mispriced securities and limit downside risk, was out of favor in an environment that generally encouraged investors to assume more risk. Conversely, in the prior decade, the Fund outperformed the MSCI World Index. Our active investment approach focusing on individual opportunities was more conducive to the prior decade’s greater volatility.

In our view, going forward we expect more political and monetary uncertainty and economic growth in unexpected places. Corporate profits will have good years and bad years. Some industries will be massively disrupted, while others will find a way to adjust and prosper, even within the context of artificial intelligence and machine learning. Recent events, such as the coronavirus outbreak, have caused, and may continue to cause, uncertainty and volatility in the Chinese economy, potentially leading to vulnerability in 2020 global growth expectations. As for investment positioning, we intend to avoid forecasts that would lead us to make the Fund’s success dependent on a specific set of outcomes. Rather, we will seek to continue with our time-tested value process and complement it with new tools that enhance our security evaluation and selection process. To that end, we have integrated risk and quantitative portfolio analysis tools that provide us with fresh insights about performance, and help us identify companies and securities that we believe satisfy our investors’ goals of risk-adjusted returns that are not wholly dependent on any one economic or political scenario.

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Fund Performance

Turning to Fund performance, top positive contributors included U.S.-based companies Charter Communications, Citigroup and Walt Disney.

Shares of cable operator Charter Communications surged after the company reported operating and financial results that were broadly ahead of consensus estimates. Capital expenditures were lower than expected and drove free cash flow, which was used during the period to buy back $3.1 billion of the company’s stock. The market was anticipating share repurchases totaling $2.25 billion. Revenue accelerated 5.1% compared with consensus forecasts of 4.5%. The increased revenue, however, did not reflect the impact of a broad-based increase in subscriber fees implemented during the period, which could drive revenue growth and margin expansion in 2020. According to the company’s management, there has not been a meaningful decrease in customers as a result of the higher subscriber fees.

Investors bid up shares of bank and financial service provider Citigroup following the release of third-quarter earnings that beat consensus expectations. Highlights included increases in deposits of 6% quarter-over-quarter and 11% year-over-year; growth in revenues and purchase volumes in the North America-branded cards division by 11% and 7% year-over-year, respectively; and strong results in the bank’s Asian operations across the board. Management also repurchased 76 million, or 3.3%, of outstanding shares of the company during the period.

Shares of family entertainment and media enterprise Walt Disney surged in late 2019. The rally was kicked off by an earnings report characterized by across-the-board outperformance of Disney legacy assets and a better-than-expected outlook for fiscal-year 2020 earnings. The company’s stock continued to rise following the successful launch of Disney+, which reported more than 10 million subscribers on the first day of service, exceeding forecasts. The box office performance of Frozen II, which set a record for Thanksgiving-weekend receipts, also helped boost the stock’s performance.

During the period under review, Fund investments that detracted from performance included U.S.-based companies Occidental Petroleum (not held at period-end), Walgreens Boots Alliance and Clear Channel Outdoor Holdings (not held at period-end).

The stock of Occidental Petroleum, a petroleum and chemical products company, traded lower in 2019 as investors struggled to accept its acquisition of Anadarko

Top 10 Holdings

12/31/19

Company Sector/Industry, Country	% of Total Net Assets
GlaxoSmithKline PLC Pharmaceuticals, U.K.		3.3%
Novartis AG Pharmaceuticals, Switzerland		2.9%
Medtronic PLC Health Care Equipment & Supplies, U.S.		2.9%
The Walt Disney Co. Entertainment, U.S.		2.6%
Volkswagen AG Automobiles, Germany		2.5%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		2.5%
Kinder Morgan Inc. Oil, Gas & Consumable Fuels, U.S.		2.4%
British American Tobacco PLC Tobacco, U.K.		2.3%
Citigroup Inc. Banks, U.S.		2.1%
The Hartford Financial Services Group Inc. Insurance, U.S.		2.0%

Petroleum, during a period in which energy stocks were under pressure from falling crude oil prices. We think the Anadarko deal should be highly beneficial to the company’s per share metrics, although the acquisition will make the company more dependent on oil prices, while significantly weakening its balance sheet. The acquired Permian Basin assets complement Occidental’s existing portfolio, and the considerable free cash flow generated from Anadarko’s Gulf of Mexico operations can help reduce debt and support its dividend. Occidental’s management is strengthening the company’s financial position by disposing of non-core assets, which is key to restoring investor confidence, in our view.

Shares of drug store services provider Walgreens Boots Alliance began to sell off early in 2019, when the chief financial officer cited negative industry trends in drug prices and pharmacy benefit manager (PBM) reimbursement rates. Shares also fell in reaction to the company’s limited success in offsetting those challenges by increasing its volume of drug sales or renegotiating with PBMs. These pressures, and weakness in both its U.S. and U.K. stores, resulted in a cut to full-year guidance in April. However, Walgreens is reducing costs throughout the enterprise, and is attempting to reduce exposure to lower margin categories within the

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front of its stores, which we believe can help boost growth and profitability over the longer term. The company’s share price rallied in early November based on news that global investment firm KKR had approached the company about taking it private via a leveraged buyout that would likely be the largest in history. However, the stock retreated later when deal terms failed to materialize.

Shares of outdoor advertising company Clear Channel Outdoor Holdings weakened after the company sold 100 million shares of stock in July, shortly after emerging from bankruptcy and separating from mass media company iHeart Communications. The company Clear Channel Outdoor announced it is using the stock proceeds to repurchase the debt of Clear Channel Worldwide Holdings, a subsidiary. Following the equity issuance, which was dilutive and at a depressed price, Clear Channel Outdoor reported mixed earnings. The strength of domestic operations was overshadowed by significantly lower international results, driven primarily by a 51%-owned China joint venture.

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 modestly positive overall impact on the Fund’s performance.

What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

What is a future?

A future is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

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

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,084.70	$6.78	$1,018.70	$6.56	1.29%

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.

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Financial Highlights

Franklin Mutual Global Discovery VIP Fund

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

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

^bBased on average daily shares outstanding.

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.   |  Annual Report            MGD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Global Discovery VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Mutual Global Discovery VIP Fund

	Country		Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests 93.6%
Aerospace & Defense 1.1%
BAE Systems PLC		United Kingdom		847,691	$	6,341,147
Auto Components 0.0%†
a,b,c International Automotive Components Group Brazil LLC		Brazil		424,073		15,394
Automobiles 1.3%
General Motors Co.		United States		198,100		7,250,460
Banks 11.7%
CIT Group Inc.		United States		95,582		4,361,407
Citigroup Inc.		United States		152,950		12,219,176
Citizens Financial Group Inc.		United States		259,123		10,522,985
First Horizon National Corp.		United States		353,473		5,853,513
ING Groep NV		Netherlands		489,415		5,866,156
JPMorgan Chase & Co.		United States		64,286		8,961,468
Standard Chartered PLC		United Kingdom		892,332		8,419,493
Wells Fargo & Co.		United States		209,020		11,245,276
						67,449,474
Building Products 1.5%
Johnson Controls International PLC		United States		206,500		8,406,615
Capital Markets 1.8%
Credit Suisse Group AG		Switzerland		499,643		6,766,725
Deutsche Bank AG		Germany		207,029		1,605,938
Guotai Junan Securities Co. Ltd.		China		1,275,797		2,259,410
						10,632,073
Chemicals 1.5%
BASF SE		Germany		113,111		8,543,235
Communications Equipment 0.9%
Cisco Systems Inc.		United States		110,580		5,303,417
Construction Materials 1.3%
LafargeHolcim Ltd., B		Switzerland		133,134		7,388,308
Consumer Finance 1.4%
Capital One Financial Corp.		United States		76,488		7,871,380
Containers & Packaging 1.1%
International Paper Co.		United States		134,900		6,212,145
Diversified Financial Services 1.9%
a M&G PLC		United Kingdom		998,386		3,136,525
Voya Financial Inc.		United States		129,550		7,899,959
						11,036,484
Diversified Telecommunication Services 0.6%
Koninklijke KPN NV		Netherlands		1,251,951		3,693,925
Electric Utilities 1.5%
Enel SpA		Italy		1,094,464		8,680,078

Annual Report         MGD-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Country		Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Energy Equipment & Services 1.2%
Schlumberger Ltd.		United States		173,200	$	6,962,640
Entertainment 2.6%
The Walt Disney Co.		United States		102,991		14,895,588
Food & Staples Retailing 1.1%
Walgreens Boots Alliance Inc.		United States		102,904		6,067,220
Food Products 1.5%
The Kraft Heinz Co.		United States		274,500		8,819,685
Health Care Equipment & Supplies 2.9%
Medtronic PLC		United States		146,210		16,587,524
Health Care Providers & Services 1.9%
CVS Health Corp.		United States		148,791		11,053,683
Hotels, Restaurants & Leisure 2.4%
Accor SA		France		186,049		8,710,914
Sands China Ltd.		Macau		916,400		4,898,177
						13,609,091
Independent Power & Renewable Electricity Producers 0.1%
Vistra Energy Corp.		United States		27,527		632,846
Industrial Conglomerates 1.2%
General Electric Co.		United States		624,350		6,967,746
Insurance 9.1%
a Alleghany Corp.		United States		2,730		2,182,826
American International Group Inc.		United States		177,333		9,102,503
China Pacific Insurance Group Co. Ltd., H		China		1,523,508		6,002,297
Chubb Ltd.		United States		38,866		6,049,882
Everest Re Group Ltd.		United States		10,778		2,983,781
The Hartford Financial Services Group Inc.		United States		192,796		11,716,213
NN Group NV		Netherlands		280,241		10,628,823
RSA Insurance Group PLC		United Kingdom		501,149		3,754,152
						52,420,477
IT Services 1.4%
Cognizant Technology Solutions Corp., A		United States		126,860		7,867,857
Machinery 0.7%
CNH Industrial NV		United Kingdom		361,439		3,968,237
Media 2.8%
a Charter Communications Inc., A		United States		19,886		9,646,301
a DISH Network Corp., A		United States		139,003		4,930,437
a iHeartMedia Inc., A		United States		95,199		1,608,863
a,b iHeartMedia Inc., B		United States		1,606		23,070
						16,208,671

MGD-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Country		Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Oil, Gas & Consumable Fuels 11.2%
BP PLC		United Kingdom		1,710,858	$	10,686,201
Caltex Australia Ltd.		Australia		137,968		3,286,538
Canadian Natural Resources Ltd.		Canada		308,400		9,974,434
Crescent Point Energy Corp.		Canada		670,900		2,991,307
JXTG Holdings Inc.		Japan		897,639		4,112,578
Kinder Morgan Inc.		United States		640,670		13,562,984
Plains All American Pipeline LP		United States		195,500		3,595,245
Royal Dutch Shell PLC, A (EUR Traded)		United Kingdom		94,818		2,782,220
Royal Dutch Shell PLC, A (GBP Traded)		United Kingdom		226,238		6,696,974
The Williams Cos. Inc.		United States		269,101		6,383,076
						64,071,557
Pharmaceuticals 10.2%
Allergan PLC		United States		27,100		5,180,707
a Bristol-Myers Squibb Co., rts., 2/01/49		United States		83,100		250,131
Eli Lilly & Co.		United States		80,284		10,551,726
GlaxoSmithKline PLC		United Kingdom		807,616		19,029,020
Merck & Co. Inc.		United States		75,545		6,870,818
Novartis AG, ADR		Switzerland		176,997		16,759,846
						58,642,248
Semiconductors & Semiconductor Equipment 1.0%
a Renesas Electronics Corp.		Japan		791,797		5,464,438
Software 4.3%
a Avaya Holdings Corp.		United States		4		54
a Avaya Holdings Corp., wts., 12/15/22		United States		5,179		6,215
a Check Point Software Technologies Ltd.		Israel		90,067		9,993,834
NortonLifeLock Inc.		United States		357,461		9,122,405
Oracle Corp.		United States		110,700		5,864,886
						24,987,394
Specialty Retail 0.8%
Dufry AG		Switzerland		44,773		4,442,829
Technology Hardware, Storage & Peripherals 5.0%
Hewlett Packard Enterprise Co.		United States		376,580		5,972,559
Samsung Electronics Co. Ltd.		South Korea		297,113		14,341,738
Western Digital Corp.		United States		132,012		8,378,801
						28,693,098
Textiles, Apparel & Luxury Goods 0.7%
Cie Financiere Richemont SA		Switzerland		50,194		3,945,389
Tobacco 3.2%
Altria Group Inc.		United States		107,584		5,369,517
British American Tobacco PLC		United Kingdom		224,633		9,614,203
British American Tobacco PLC, ADR		United Kingdom		83,985		3,566,003
						18,549,723

Annual Report         MGD-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Country		Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Wireless Telecommunication Services 0.7%
Vodafone Group PLC		United Kingdom		1,960,056	$	3,809,884
Total Common Stocks and Other Equity Interests   (Cost $424,606,367)						537,491,960
Preferred Stocks (Cost $12,962,908) 2.5%
Automobiles 2.5%
d Volkswagen AG, 2.758%, pfd.		Germany		72,588		14,346,608

		Principal Amount
Corporate Notes 0.6%
Frontier Communications Corp.,
senior note, 10.50%, 9/15/22	United States	$	3,610,000	1,770,026
senior note, 11.00%, 9/15/25	United States		4,065,000	1,981,688
Total Corporate Notes (Cost $7,129,469)				3,751,714
		Shares
Companies in Liquidation 0.0%†
a,b,e iHeartCommunications Inc., Contingent Distribution	United States		9,103,035	—
a,b,e Tribune Media, Litigation Trust, Contingent Distribution	United States		57,197	—
a,b,e Vistra Energy Corp., Litigation Trust, Contingent Distribution	United States		5,912,264	3,251
a,b,e Walter Energy Inc., Litigation Trust, Contingent Distribution	United States		966,000	—
Total Companies in Liquidation (Cost $185,800)				3,251
Total Investments before Short Term Investments   (Cost $444,884,544)				555,593,533

MGD-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Country		Principal Amount		Value
Short Term Investments 3.2%
U.S. Government and Agency Securities 3.2%
f FHLB, 1/02/20		United States	$	2,000,000	$	2,000,000
f U.S. Treasury Bill,
1/02/20 - 5/21/20		United States		13,000,000		12,974,591
g 3/05/20 - 5/28/20		United States		3,500,000		3,486,393
Total U.S. Government and Agency Securities (Cost $18,454,593)						18,460,984
Total Investments (Cost $463,339,137) 99.9%						574,054,517
Securities Sold Short (0.4)%						(2,077,945	)
Other Assets, less Liabilities 0.5%						2,526,223
Net Assets 100.0%					$	574,502,795
			Shares
h Securities Sold Short (Proceeds $1,702,994) (0.4)%
Common Stocks (0.4)%
Biotechnology (0.4)%
AbbVie Inc.		United States		23,469		(2,077,945	)

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

^aNon-income producing.

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

^cSee Note 9 regarding restricted securities.

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

^eContingent 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.

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

^gA portion or all of the security has been segregated as collateral for securities sold short and open forward exchange contracts. At December 31, 2019, the aggregate value of these securities pledged amounted to $1,893,070, representing 0.3% of net assets.

^hSee Note 1(d) regarding securities sold short.

At December 31, 2019, the Fund had the following futures contracts outstanding. See Note 1(c).

Futures Contracts

Description	Type	Number of Contracts		Notional Amount	*	Expiration Date	Value/ Unrealized Appreciation (Depreciation)
Currency Contracts
EUR/USD	Short	181	$	25,525,525		3/16/20		$	(245,242	)
GBP/USD	Short	139		11,547,425		3/16/20			(89,209	)
Total Futures Contracts								$	(334,451	)

*As of period end.

Annual Report         MGD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

At December 31, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(c).

Forward Exchange Contracts

Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized   Depreciation
OTC Forward Exchange Contracts
Swiss Franc		HSBK		Sell		39,201	$	39,779		1/13/20		$       —	$	(771	)
Swiss Franc		UBSW		Sell		6,436,481		6,509,922		1/13/20		—		(148,038	)
Euro		BOFA		Sell		41,939,500		46,650,801		1/15/20		—		(427,524	)
Euro		SSBT		Sell		437,264		488,143		1/15/20		—		(2,699	)
Euro		UBSW		Sell		141,904		158,957		1/15/20		—		(335	)
British Pound		BOFA		Sell		166,758		223,234		1/16/20		2,267		—
British Pound		BOFA		Sell		1,207,372		1,576,422		1/16/20		—		(23,443	)
British Pound		HSBK		Sell		97,014		129,849		1/16/20		1,298		—
British Pound		HSBK		Sell		12,594,167		16,294,993		1/16/20		—		(393,283	)
British Pound		UBSW		Sell		166,758		223,375		1/16/20		2,408		—
South Korean Won		HSBK		Sell		16,153,194,107		13,656,198		1/17/20		—		(322,001	)
South Korean Won		UBSW		Sell		356,186,851		300,757		1/17/20		—		(7,470	)
Australian Dollar		HSBK		Sell		353,607		243,600		2/14/20		—		(4,786	)
Australian Dollar		UBSW		Sell		4,270,804		2,950,001		2/14/20		—		(49,981	)
Total Forward Exchange Contracts												$  5,973	$	(1,380,331	)
Net unrealized appreciation (depreciation)													$	(1,374,358	)

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

See Note 10 regarding other derivative information.

See Abbreviations on page MGD-30.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Mutual Global Discovery VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$	463,339,137
Value - Unaffiliated issuers		$	574,054,517
Cash			82,689
Receivables:
Investment securities sold			741,428
Capital shares sold			20,862
Dividends and interest			1,982,038
European Union tax reclaims			319,576
Deposits with brokers for:
Securities sold short			2,119,026
Futures contracts			693,960
Unrealized appreciation on OTC forward exchange contracts			5,973
Other assets			70
Total assets			580,020,139
Liabilities:
Payables:
Investment securities purchased			795,081
Capital shares redeemed			295,413
Management fees			423,174
Distribution fees			122,611
Variation margin on futures contracts			187,138
Securities sold short, at value (proceeds $1,702,994)			2,077,945
Unrealized depreciation on OTC forward exchange contracts			1,380,331
Accrued expenses and other liabilities			235,651
Total liabilities			5,517,344
Net assets, at value		$	574,502,795
Net assets consist of:
Paid-in capital		$	446,095,828
Total distributable earnings (losses)			128,406,967
Net assets, at value		$	574,502,795
Class 1:
Net assets, at value		$	3,878,175
Shares outstanding			202,352
Net asset value and maximum offering price per share			$19.17
Class 2:
Net assets, at value		$	539,759,410
Shares outstanding			29,114,287
Net asset value and maximum offering price per share			$18.54
Class 4:
Net assets, at value		$	30,865,210
Shares outstanding			1,626,608
Net asset value and maximum offering price per share			$18.98

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Mutual Global Discovery VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$	15,939,529
Interest:
Unaffiliated issuers		1,732,097
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		123,051
Non-controlled affiliates (Note 3e)		23,202
Total investment income		17,817,879
Expenses:
Management fees (Note 3a)		4,934,366
Distribution fees: (Note 3c)
Class 2		1,322,538
Class 4		108,329
Custodian fees (Note 4)		33,116
Reports to shareholders		115,303
Professional fees		57,437
Trustees’ fees and expenses		3,385
Dividends on securities sold short		97,358
Other		43,659
Total expenses		6,715,491
Expense reductions (Note 4)		(4,004	)
Expenses waived/paid by affiliates (Note 3e)		(4,124	)
Net expenses		6,707,363
Net investment income		11,110,516
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		6,602,456
Foreign currency transactions		32,221
Forward exchange contracts		2,765,809
Futures contracts		1,382,877
Securities sold short		(582,788	)
Net realized gain (loss)		10,200,575
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		102,910,728
Translation of other assets and liabilities denominated in foreign currencies		1,579
Forward exchange contracts		(197,547	)
Futures contracts		(361,482	)
Securities sold short		(1,454,026	)
Net change in unrealized appreciation (depreciation)		100,899,252
Net realized and unrealized gain (loss)		111,099,827
Net increase (decrease) in net assets resulting from operations	$	122,210,343
*Foreign taxes withheld on dividends	$	800,948

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Mutual Global Discovery VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income		$ 11,110,516			$ 9,851,636
Net realized gain (loss)		10,200,575			54,878,424
Net change in unrealized appreciation (depreciation)		100,899,252			(132,139,062	)
Net increase (decrease) in net assets resulting from operations		122,210,343			(67,409,002	)
Distributions to shareholders:
Class 1		(427,555	)		(139,418	)
Class 2		(61,286,007	)		(21,021,401	)
Class 4		(3,431,154	)		(1,188,087	)
Total distributions to shareholders		(65,144,716	)		(22,348,906	)
Capital share transactions: (Note 2)
Class 1		231,219			642,511
Class 2		(14,266,368	)		(46,304,313	)
Class 4		(2,510,695	)		(6,678,610	)
Total capital share transactions		(16,545,844	)		(52,340,412	)
Net increase (decrease) in net assets		40,519,783			(142,098,320	)
Net assets:
Beginning of year		533,983,012			676,081,332
End of year		$574,502,795			$533,983,012

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Franklin Mutual Global Discovery VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Mutual Global Discovery VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At December 31, 2019, 44.3% of the Fund’s shares were held through one insurance company. Investment activities of these insurance company separate accounts could have a material impact on the Fund. The Fund offers three classes of shares: Class 1, Class 2, and Class 4. Each class of shares may differ by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

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

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

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

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

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 or duration of any restrictions on the disposition of the investments. Due to the

MGD-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in

foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

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

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

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

Annual Report         MGD-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

c. Derivative Financial Instruments (continued)

counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement. At December 31, 2019, the Fund had OTC derivatives in a net liability position of $1,374,358 and the aggregate value of collateral pledged for such contracts was $646,932.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are

not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

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

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

See Note 10 regarding other derivative information.

d.  Securities Sold Short

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

The Fund is required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale to the extent necessary to meet margin requirements until the short position is closed out. A deposit must also be maintained with the Fund’s custodian/counterparty broker consisting of cash and/or securities having a value equal to a specified percentage of the value of the securities sold short. The Fund is obligated to pay fees for borrowing the securities sold short and is required to pay the counterparty any dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund.

MGD-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

e.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2019, the Fund had no securities on loan.

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.

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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 and dividends declared on securities sold short are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined

Annual Report         MGD-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

1.   Organization and Significant Accounting Policies (continued)

g   Security Transactions, Investment Income, Expenses and Distributions (continued)

according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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.

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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		24,462		$	464,734			45,098		$	915,165
Shares issued in reinvestment of distributions		24,488			427,555			6,995			139,418
Shares redeemed		(34,522	)		(661,070	)		(20,687	)		(412,072	)
Net increase (decrease)		14,428		$	231,219			31,406		$	642,511
Class 2 Shares:
Shares sold		753,358		$	13,863,507			1,060,981		$	20,521,165
Shares issued in reinvestment of distributions		3,626,391			61,286,007			1,085,816			21,021,401
Shares redeemed		(4,790,566	)		(89,415,882	)		(4,500,413	)		(87,846,879	)
Net increase (decrease)		(410,817	)	$	(14,266,368	)		(2,353,616	)	$	(46,304,313	)

MGD-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 4 Shares:
Shares sold		22,659		$	428,560			49,992		$	917,196
Shares issued in reinvestment of distributions		198,332			3,431,154			60,157			1,188,087
Shares redeemed		(334,363	)		(6,370,409	)		(438,307	)		(8,783,893	)
Net increase (decrease)		(113,372	)	$	(2,510,695	)		(328,158	)	$	(6,678,610	)

3.  Transactions with Affiliates

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

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

a.  Management Fees

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

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

b.   Administrative Fees

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

Annual Report         MGD-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

3.   Transactions with Affiliates (continued)

c.  Distribution Fees

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

d.   Transfer Agent Fees

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

e.   Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		$  —	$	67,077,000	$	(67,077,000	)		$  —		$  —		$  —		—		$23,202

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, 2019, these purchase and sale transactions aggregated $0 and $1,292,720, 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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	16,065,752	$	14,592,064

MGD-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

	2019		2018
Long term capital gain		49,078,964		7,756,842
	$	65,144,716	$	22,348,906

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	461,668,406
Unrealized appreciation	$	136,550,325
Unrealized depreciation		(27,950,179	)
Net unrealized appreciation (depreciation)	$	108,600,146
Distributable earnings:
Undistributed ordinary income	$	13,951,901
Undistributed long term capital gains		5,579,033
Total distributable earnings	$	19,530,934

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

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities and securities sold short) for the year ended December 31, 2019, aggregated $115,811,528 and $164,645,377, 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, 2019, 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. 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.

Annual Report         MGD-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

9.   Restricted Securities

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

At December 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares	Issuer	Acquisition     Date		Cost		Value
424,073	International Automotive Components Group Brazil LLC, (Value is 0.0%† of Net Assets)		4/13/06 -12/26/08	$	281,629	$15,394

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

10.   Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives			Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Variation margin on futures contracts		$      —	Variation margin on futures contracts	$	334,451	a
	Unrealized appreciation on OTC forward exchange contracts		5,973	Unrealized depreciation on OTC forward exchange contracts		1,380,331
Totals			$5,973		$	1,714,782

^aThis 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.

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Foreign exchange contracts	Forward exchange contracts		$2,765,809	Forward exchange contracts		$(197,547	)
	Futures contracts		1,382,877	Futures contracts		(361,482	)
Totals			$4,148,686			$(559,029	)

For the year ended December 31, 2019, the average month end notional amount of futures contracts represented $37,005,142. The average month end contract value of forward exchange contracts was $85,569,664.

MGD-28         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

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 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

12.   Fair Value Measurements

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

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

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

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

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

Annual Report         MGD-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Franklin Mutual Global Discovery VIP Fund (continued)

12.  Fair Value Measurements(continued)

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3			Total
Assets:
Investments in Securities:a
Equity Investments:b
Auto Components	$	—	$	—	$	15,394		$	15,394
Media		16,185,601		—		23,070			16,208,671
All Other Equity Investments		535,614,503		—		—			535,614,503
Corporate Notes		—		3,751,714		—			3,751,714
Companies in Liquidation		—		—		3,251	c		3,251
Short Term Investments		16,460,984		2,000,000		—			18,460,984
Total Investments in Securities	$	568,261,088	$	5,751,714	$	41,715		$	574,054,517
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	5,973	$	—		$	5,973
Liabilities:
Other Financial Instruments:
Securities Sold Short	$	2,077,945	$	—	$	—		$	2,077,945
Futures Contracts		334,451		—		—			334,451
Forward Exchange Contracts		—		1,380,331		—			1,380,331
Total Other Financial Instruments	$	2,412,396	$	1,380,331	$	—		$	3,792,727

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

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

^cIncludes securities determined to have no value at December 31, 2019.

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

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

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

MGD-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund” ) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

Annual Report         MGD-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Mutual Global Discovery VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $49,078,964 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 39.13% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

MGD-32         Annual Report

Franklin Mutual Shares VIP Fund

This annual report for Franklin Mutual Shares VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+22.44%		+5.80%		+8.58%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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.

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Fund Goal and Main Investments

The Fund seeks capital appreciation, with income as a secondary goal, by investing 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. To a lesser extent, the Fund also invests in merger arbitrage securities and the debt and equity of distressed companies. The Fund may invest up to 35% of its assets in foreign securities, which may include sovereign debt and participations in foreign government debt.

Fund Risks

All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated or may decline further in value. The Fund’s investments in foreign securities involve more risks than investing in U.S. securities, including currency exchange rates and policies, country or government specific issues, less favorable trading practices regulation and greater price volatility. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Derivatives involve costs and can create economic leverage in the Fund’s portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as gains) in an amount that exceeds the Fund’s initial investment. The Fund may also invest in companies engaged in mergers, reorganizations or liquidations, which involve special risks as pending deals may not be completed on time or on favorable terms, as well as lower-rated bonds, which entail higher credit risk. To the extent that the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, the Fund may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Geographic Composition*

Based on Total Net Assets as of 12/31/19

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

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s benchmark, the S&P 500 posted a +31.49% total return for the period under review.¹

Economic and Market Overview

Global developed and emerging market stocks, as measured by the MSCI All Country World Index, posted strong returns during the reporting period. Although global economic growth slowed from 2018, interest-rate cuts from many central banks and the easing of trade tensions near period-end contributed to the generally positive environment for equities worldwide. Reflecting investor optimism and slowing but resilient economic growth, stocks advanced in every major region of the globe.

In the U.S., solid economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at

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

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

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

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the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

The U.S. Federal Reserve (Fed) provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Growth slowed overall in the eurozone, particularly in Germany and Italy. Germany, which is heavily reliant on exports, was adversely affected by the trade conflict between the U.S. and China and the resulting slowdown in global trade. In Italy, political uncertainty and budget concerns caused the country’s annual gross domestic product (GDP) growth to stall in 2019’s first quarter before accelerating in the second quarter. Despite sluggish economic conditions, European developed market equities, as measured by the MSCI Europe Index, posted strong returns overall, as easing trade tensions buoyed investor optimism and an electoral victory by the Conservative Party in the U.K. alleviated uncertainty surrounding Brexit. Although the European Central Bank left its headline refinancing rate unchanged, it lowered the deposit rate and restarted its bond-buying stimulus program, further supporting stocks.

Economic growth in Asia was relatively solid overall, despite slowdowns in several large emerging market countries, such as China and India. Japan’s economy grew amid the Bank of Japan’s sizable stimulus program. The trade war between the U.S. and China provided the backdrop for Asian stocks, which rose and fell in sync with investor sentiment regarding a trade deal. A phase one trade agreement between the two countries reached in December 2019 propelled Asian developed and emerging market stocks, which ultimately ended with strong returns over the 12-month period, as measured by the MSCI All Country Asia Index.

Emerging market stocks overall experienced several sharp selloffs and subsequent rebounds throughout the reporting period before ending with gains. In aggregate, economic growth slowed somewhat from 2018 but remained solid, although there was some variation among individual countries. Many central banks in emerging markets cut interest rates throughout the reporting period which, along with resilient GDP growth, provided a supportive

Top 10 Sectors/Industries

12/31/19

	% of Total Net Assets
Pharmaceuticals	9.9%
Banks	9.7%
Insurance	8.2%
Oil, Gas & Consumable Fuels	7.7%
Media	6.3%
Technology Hardware, Storage & Peripherals	4.3%
Tobacco	3.1%
Health Care Equipment & Supplies	3.1%
Software	3.1%
Food Products	3.0%

environment for equities. Russian stocks posted the highest returns among emerging markets as the threat of further sanctions receded and a solid fiscal environment reassured investors. Overall, global emerging markets, as measured by the MSCI Emerging Markets Index, posted robust returns for the period.

Investment Strategy

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

We complement this more traditional investment strategy with two others. One is distressed investing, which is complex and can take many forms. The most common distressed investment the Fund undertakes is the purchase of financially troubled or bankrupt companies’ debt at a substantial discount to face value. After the financially distressed company is reorganized, often in bankruptcy court, the old debt is typically replaced with new securities issued by the financially stronger company.

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

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

What is meant by “hedge”?

To hedge an investment is to take a position intended to offset potential losses that may be incurred by a companion financial instrument. Hedging an investment may also offset potential gains.

Manager’s Discussion

The end of a decade is a natural time for reflection about the years that have just passed and to look ahead to what the next 10 might have in store. Across Wall Street, we see many prognostications, and while we are not in the forecasting business, we do allow ourselves to think about investment opportunities over such an extended time period. But experience has taught us that while trying to predict the exact course of markets and/or economic and political events that will drive them may be fun, it is not all that useful.

As 2010 began, the global economy was still recovering from the Global Financial Crisis. The U.S. government owned significant portions of the banking and automotive sectors. The Fed had already started quantitative easing (QE), with QE 2 and QE 3 still to come. In Europe, concerns about Greece’s finances were emerging, and in China the effects of 2009’s massive stimulus programs were starting to take hold.

Over the subsequent years we saw ongoing, global QE, culminating in trillions of dollars of debt yielding negative interest rates. The European Union (EU) was in continuous upheaval, with Greece threatening to leave, but eventually staying in the eurozone; the U.K. pursuing and achieving Brexit; and ongoing strain between core members Germany, France, Italy and Spain. In the U.S., average annual economic growth was restrained and finished the decade below 2%, trailing the minimum 3% expectation of prior

decades. Strong corporate profits and lower corporate tax rates were bright spots.

Equity markets delivered a very good decade—one of the best in history—with the S&P 500 and the MSCI World Index posting average annual total returns of +13.56% and +10.08%, respectively.¹ During the decade, Franklin Mutual Shares VIP Fund posted a solid return that nonetheless lagged the S&P 500, its benchmark. The Fund’s value strategy, which seeks to identify mispriced securities and limits downside risk, was out of favor in an environment that generally encouraged investors to assume more risk. Conversely, in the prior decade, the Fund outperformed the MSCI World Index. Our active investment approach focusing on individual opportunities was more conducive to the prior decade’s greater volatility.

In our view, going forward we expect more political and monetary uncertainty and economic growth in unexpected places. Corporate profits will have good years and bad years. Some industries will be massively disrupted, while others will find a way to adjust and prosper, even within the context of artificial intelligence and machine learning. Recent events, such as the coronavirus outbreak, have caused, and may continue to cause, uncertainty and volatility in the Chinese economy, potentially leading to vulnerability in 2020 global growth expectations. As for investment positioning, we intend to avoid forecasts that would lead us to make the Fund’s success dependent on a specific set of outcomes. Rather, we will seek to continue with our time-tested value process and complement it with new tools that enhance our security evaluation and selection process. To that end, we have integrated risk and quantitative portfolio analysis tools that provide us with fresh insights about performance, and help us identify companies and securities that we believe satisfy our investors’ goals of risk-adjusted returns that are not wholly dependent on any one economic or political scenario.

Fund Performance

Turning to Fund performance, top positive contributors included U.S.-based companies Charter Communications, Citigroup and Walt Disney.

Shares of cable operator Charter Communications surged after the company reported operating and financial results that were broadly ahead of consensus estimates. Capital expenditures were lower than expected and drove free cash flow, which was used during the period to buy back $3.1 billion of the company’s stock. The market was anticipating share repurchases totaling $2.25 billion. Revenue accelerated 5.1% compared with consensus

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forecasts of 4.5%. The increased revenue, however, did not reflect the impact of a broad-based increase in subscriber fees implemented during the period, which could drive revenue growth and margin expansion in 2020. According to the company’s management, there has not been a meaningful decrease in customers as a result of the higher subscriber fees.

Investors bid up shares of bank and financial service provider Citigroup following the release of third-quarter earnings that beat consensus expectations. Highlights included increases in deposits of 6% quarter-over-quarter and 11% year-over-year; growth in revenues and purchase volumes in the North America-branded cards division by 11% and 7% year-over-year, respectively; and strong results in the bank’s Asian operations across the board. Management also repurchased 76 million, or 3.3%, of outstanding shares of the company during the period.

Shares of family entertainment and media enterprise Walt Disney surged in late 2019. The rally was kicked off by an earnings report characterized by across-the-board outperformance of Disney legacy assets and a better-than-expected outlook for fiscal-year 2020 earnings. The company’s stock continued to rise following the successful launch of Disney+, which reported more than 10 million subscribers on the first day of service, exceeding forecasts. The box office performance of Frozen II, which set a record for Thanksgiving-weekend receipts, also helped boost the stock’s performance.

During the period under review, Fund investments that detracted from performance included U.S.-based companies Fluor (not held at period-end), Occidental Petroleum and Walgreens Boots Alliance.

The share price of Fluor, a global engineering and construction company, fell significantly during the period. The company withdrew 2019 guidance after reporting significant project charges and materially lower-than-expected earnings and revenues. Following these disappointing results, the company announced the return of the former chief executive officer (CEO) as executive chairman, promoted the general counsel to CEO, rehired the former chief financial officer and initiated a strategic review that recommends simplifying the company’s business model by divesting of non-core businesses.

The stock of Occidental Petroleum, a petroleum and chemical products company, traded lower in 2019 as investors struggled to accept its acquisition of Anadarko Petroleum, during a period in which energy stocks were under pressure from falling crude oil prices. We think the

Top 10 Holdings

12/31/19

Company Sector/Industry, Country	% of Total Net Assets
Medtronic PLC Health Care Equipment & Supplies, U.S.	3.1%
Novartis AG Pharmaceuticals, Switzerland	2.4%
Charter Communications Inc. Media, U.S.	2.3%
Alleghany Corp. Insurance, U.S.	2.3%
GlaxoSmithKline PLC Pharmaceuticals, U.K.	2.2%
JPMorgan Chase & Co. Banks, U.S.	2.2%
American International Group Inc. Insurance, U.S.	2.2%
The Walt Disney Co. Entertainment, U.S.	2.2%
Citigroup Inc. Banks, U.S.	2.2%
Wells Fargo & Co. Banks, U.S.	2.1%

Anadarko deal should be highly beneficial to the company’s per share metrics, although the acquisition will make the company more dependent on oil prices, while significantly weakening its balance sheet. The acquired Permian Basin assets complement Occidental’s existing portfolio, and the considerable free cash flow generated from Anadarko’s Gulf of Mexico operations can help reduce debt and support its dividend. Occidental’s management is strengthening the company’s financial position by disposing of non-core assets, which is key to restoring investor confidence, in our view.

Shares of drug store services provider Walgreens Boots Alliance began to sell off early in 2019, when the chief financial officer cited negative industry trends in drug prices and pharmacy benefit manager (PBM) reimbursement rates. Shares also fell in reaction to the company’s limited success in offsetting those challenges by increasing its volume of drug sales or renegotiating with PBMs. These pressures, and weakness in both its U.S. and U.K. stores, resulted in a cut to full-year guidance in April. However, Walgreens is reducing costs throughout the enterprise, and is attempting to reduce exposure to lower margin categories within the front of its stores, which we believe can help boost growth and profitability over the longer term. The company’s share price rallied in early November based on news that global

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Investment firm KKR had approached the company about taking it private via a leveraged buyout that would likely be the largest in history. However, the stock retreated later when deal terms failed to materialize.

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 modestly positive overall impact on the Fund’s performance.

What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

What is a future?

A future is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

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

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,080.90	$5.56	$1,019.86	$5.40	1.06%

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

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Financial Highlights

Franklin Mutual Shares VIP Fund

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

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

^bBased on average daily shares outstanding.

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Mutual Shares VIP Fund (continued)

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

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Mutual Shares VIP Fund

	Country	Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests 90.4%
Aerospace & Defense 2.2%
BAE Systems PLC	United Kingdom		4,356,429	$	32,588,239
Huntington Ingalls Industries Inc.	United States		152,745		38,320,665
					70,908,904
Auto Components 0.0%†
a,b,c International Automotive Components Group Brazil LLC	Brazil		1,730,515		62,818
Automobiles 1.2%
General Motors Co.	United States		1,031,445		37,750,887
Banks 9.7%
Cadence Bancorp	United States		423,846		7,684,328
CIT Group Inc.	United States		600,346		27,393,788
Citigroup Inc.	United States		870,481		69,542,727
Citizens Financial Group Inc.	United States		1,204,366		48,909,303
JPMorgan Chase & Co.	United States		517,782		72,178,811
Synovus Financial Corp.	United States		498,092		19,525,207
Wells Fargo & Co.	United States		1,234,125		66,395,925
					311,630,089
Building Products 1.1%
Johnson Controls International PLC	United States		869,230		35,386,353
Communications Equipment 0.8%
Cisco Systems Inc.	United States		551,664		26,457,805
Consumer Finance 1.5%
Capital One Financial Corp.	United States		476,337		49,019,841
Containers & Packaging 1.7%
International Paper Co.	United States		901,475		41,512,924
WestRock Co.	United States		268,071		11,502,926
					53,015,850
Diversified Financial Services 1.4%
Voya Financial Inc.	United States		758,210		46,235,646
Diversified Telecommunication Services 0.6%
Koninklijke KPN NV	Netherlands		7,044,218		20,784,212
Electrical Equipment 1.8%
a Sensata Technologies Holding PLC	United States		1,052,926		56,721,124
Electronic Equipment, Instruments & Components 1.0%
Corning Inc.	United States		1,131,869		32,948,707
Energy Equipment & Services 1.6%
Baker Hughes Co., A	United States		663,295		17,000,251
Schlumberger Ltd.	United States		893,500		35,918,700
					52,918,951
Entertainment 2.2%
The Walt Disney Co.	United States		482,642		69,804,512

Annual Report         MS-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Shares VIP Fund (continued)

	Country	Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Equity Real Estate Investment Trusts (REITs) 1.4%
Alexander’s Inc.	United States		31,168	$	10,296,349
Vornado Realty Trust	United States		496,915		33,044,847
					43,341,196
Food & Staples Retailing 2.7%
The Kroger Co.	United States		1,747,360		50,655,966
Walgreens Boots Alliance Inc.	United States		595,730		35,124,241
					85,780,207
Food Products 3.0%
Archer-Daniels-Midland Co.	United States		657,200		30,461,220
Conagra Brands Inc.	United States		382,465		13,095,602
The Kraft Heinz Co.	United States		1,686,635		54,191,582
					97,748,404
Health Care Equipment & Supplies 3.1%
Medtronic PLC	United States		871,507		98,872,469
Health Care Providers & Services 1.7%
CVS Health Corp.	United States		731,362		54,332,883
Household Durables 3.0%
Lennar Corp., A	United States		570,094		31,805,544
Newell Brands Inc.	United States		2,394,574		46,023,713
Toll Brothers Inc.	United States		460,200		18,182,502
					96,011,759
Household Products 0.7%
Energizer Holdings Inc.	United States		428,700		21,529,314
Independent Power & Renewable Electricity Producers 0.1%
Vistra Energy Corp.	United States		170,478		3,919,289
Industrial Conglomerates 1.1%
General Electric Co.	United States		3,184,898		35,543,462
Insurance 8.2%
a Alleghany Corp.	United States		91,903		73,482,882
American International Group Inc.	United States		1,371,086		70,377,845
Chubb Ltd.	United States		46,099		7,175,770
Everest Re Group Ltd.	United States		116,329		32,204,520
The Hartford Financial Services Group Inc.	United States		904,974		54,995,270
MetLife Inc.	United States		506,303		25,806,264
					264,042,551
IT Services 1.6%
Cognizant Technology Solutions Corp., A	United States		804,421		49,890,190
Machinery 0.8%
CNH Industrial NV	United Kingdom		605,230		6,644,817
CNH Industrial NV, special voting.	United Kingdom		1,844,814		20,254,205
					26,899,022

MS-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Shares VIP Fund (continued)

	Country	Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Media 6.3%
a Charter Communications Inc., A	United States		153,748	$	74,580,080
Comcast Corp., A	United States		1,246,110		56,037,567
a Discovery Inc., C	United States		1,152,073		35,126,706
a DISH Network Corp., A	United States		696,483		24,704,252
a iHeartMedia Inc., A	United States		717,645		12,128,200
a,b iHeartMedia Inc., B	United States		12,783		183,628
					202,760,433
Oil, Gas & Consumable Fuels 7.7%
BP PLC	United Kingdom		7,231,237		45,167,074
Kinder Morgan Inc.	United States		2,748,517		58,186,105
Marathon Oil Corp.	United States		2,662,301		36,154,048
Occidental Petroleum Corp.	United States		508,819		20,968,431
Plains All American Pipeline LP	United States		930,400		17,110,056
Royal Dutch Shell PLC, A (EUR Traded)	United Kingdom		409,528		12,016,673
Royal Dutch Shell PLC, A (GBP Traded)	United Kingdom		696,358		20,613,211
The Williams Cos. Inc.	United States		1,534,284		36,393,216
					246,608,814
Pharmaceuticals 9.9%
Allergan PLC	United States		187,800		35,901,726
a Bristol-Myers Squibb Co., rts., 2/01/49	United States		401,188		1,207,576
Eli Lilly & Co.	United States		500,301		65,754,561
GlaxoSmithKline PLC	United Kingdom		3,070,511		72,347,273
Merck & Co. Inc.	United States		456,132		41,485,205
Novartis AG, ADR	Switzerland		808,869		76,591,806
Perrigo Co. PLC	United States		446,400		23,061,024
					316,349,171
Software 3.1%
a Avaya Holdings Corp.	United States		116		1,566
a Avaya Holdings Corp., wts., 12/15/22	United States		91,551		109,861
NortonLifeLock Inc.	United States		2,284,561		58,301,997
Oracle Corp.	United States		756,881		40,099,555
					98,512,979
Specialty Retail 0.2%
a,b TRU Kids Parent LLC	United States		2,040		7,609,922
a,b Wayne Services Legacy Inc.	United States		2,039		—
					7,609,922
Technology Hardware, Storage & Peripherals 4.3%
Hewlett Packard Enterprise Co.	United States		2,038,215		32,326,090
Samsung Electronics Co. Ltd.	South Korea		1,327,497		64,078,697
Western Digital Corp.	United States		644,800		40,925,456
					137,330,243

Annual Report         MS-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Shares VIP Fund (continued)

	Country	Shares/ Rights/ Units/ Warrants		Value
Common Stocks and Other Equity Interests (continued)
Textiles, Apparel & Luxury Goods 1.2%
PVH Corp.	United States		364,405	$	38,317,186
Tobacco 3.1%
Altria Group Inc.	United States		570,425		28,469,912
British American Tobacco PLC	United Kingdom		1,052,864		45,062,159
British American Tobacco PLC, ADR	United Kingdom		372,933		15,834,735
Imperial Brands PLC	United Kingdom		393,858		9,749,549
					99,116,355
Wireless Telecommunication Services 0.4%
Vodafone Group PLC	United Kingdom		7,301,663		14,192,701
Total Common Stocks and Other Equity Interests  (Cost $2,059,518,038)					2,902,354,249
		Principal       Amount
Corporate Notes and Senior Floating Rate Interests 3.8%
d Banff Merger Sub Inc., senior note, 144A, 9.75%, 9/01/26	United States	$	18,444,000		18,721,121
Frontier Communications Corp.,
senior note, 10.50%, 9/15/22	United States		22,633,000		11,097,232
senior note, 11.00%, 9/15/25	United States		25,535,000		12,448,313
d senior secured note, first lien, 144A, 8.00%, 4/01/27	United States		6,148,000		6,436,034
e Veritas U.S. Inc.
Term Loan B1, 6.299%, (1-month USD LIBOR + 4.50%), 1/27/23	United States		14,532,614		14,048,198
Term Loan B1, 6.445%, (3-month USD LIBOR + 4.50%), 1/27/23	United States		2,791,821		2,698,761
d Veritas U.S. Inc./Veritas Bermuda Ltd.,
senior note, 144A, 7.50%, 2/01/23	United States		2,856,000		2,857,185
senior note, 144A, 10.50%, 2/01/24	United States		23,445,000		21,754,967
e Windstream Services LLC,
f Revolving Commitment, 7.75%, (Prime + 3.00%), 4/24/20	United States		26,279,371		24,636,911
Term Loan B6, 9.75%, (Prime + 5.00%), 3/30/21	United States		6,671,000		6,400,584
Total Corporate Notes and Senior Floating Rate Interests  (Cost $141,734,288)					121,099,306
Corporate Notes in Reorganization (Cost $9,381,238) 0.0%†
d,g McDermott Technology Americas Inc., senior note, 144A, 10.625%, 5/01/24	United States		9,797,000		860,274
		Shares
Companies in Liquidation 0.0%†
a,b,h Clear Channel Communications Inc., Contingent Distribution	United States		26,449,000		—
a,b,h iHeartCommunications Inc., Contingent Distribution	United States		45,914,872		—
a,b,h Tribune Media, Litigation Trust, Contingent Distribution	United States		395,935		—
a,b,h Vistra Energy Corp., Litigation Trust, Contingent Distribution	United States		90,618,405		49,840

MS-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Shares VIP Fund (continued)

	Country		Shares		Value
Companies in Liquidation (continued)
a,b,h Walter Energy Inc., Litigation Trust, Contingent Distribution		United States		6,301,000	$	—
Total Companies in Liquidation (Cost $2,834,274)						49,840
Total Investments before Short Term Investments (Cost $2,213,467,838)						3,024,363,669
			Principal Amount
Short Term Investments 5.9%
U.S. Government and Agency Securities 5.9%
i FHLB, 1/02/20		United States	$	48,900,000		48,900,000
i U.S. Treasury Bill,
j 3/05/20 - 3/19/20		United States		35,500,000		35,398,533
1/02/20 - 6/25/20		United States		105,000,000		104,631,101
Total U.S. Government and Agency Securities (Cost $188,860,811)						188,929,634
Total Investments (Cost $2,402,328,649) 100.1%						3,213,293,303
Securities Sold Short (0.4)%						(14,400,942	)
Other Assets, less Liabilities 0.3%.						11,637,020
Net Assets 100.0%					$	3,210,529,381
			Shares
k Securities Sold Short (Proceeds $12,428,238) (0.4)%
Common Stocks (0.4)%
Biotechnology (0.4)%
AbbVie Inc.		United States		162,649		(14,400,942	)

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

^aNon-income producing.

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

^cSee Note 8 regarding restricted securities.

^dSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At December 31, 2019, the aggregate value of these securities was $50,629,581, representing 1.6% of net assets.

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

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

^gSee Note 7 regarding credit risk and defaulted securities.

^hContingent 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.

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

^jA portion or all of the security has been segregated as collateral for securities sold short and open forward exchange contracts. At December 31, 2019, the aggregate value of these securities pledged amounted to $9,086,774, representing 0.3% of net assets.

^kSee Note 1(e) regarding securities sold short.

Annual Report         MS-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Mutual Shares VIP Fund (continued)

At December 31, 2019, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts

Description	Type	Number of Contracts	Notional  Amount	*	Expiration Date	Value/ Unrealized Appreciation     (Depreciation)
Currency Contracts
EUR/USD	Short	211	$29,756,275		3/16/20	$(285,724	)
GBP/USD	Short	675	56,075,625		3/16/20	(434,543	)
Total Futures Contracts						$(720,267	)

*As of period end.

At December 31, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts

					Contract		Settlement		Unrealized		Unrealized
Currency	Counterpartya	Type	Quantity		Amount		Date		Appreciation		Depreciation
OTC Forward Exchange Contracts
Euro	BOFA	Buy		2,357,999	$	2,634,337		1/15/20	$	12,587	$	—
Euro	BOFA	Sell		23,751,736		26,419,769		1/15/20		—		(242,255	)
Euro	HSBK	Buy		265,000		297,743		1/15/20		—		(273	)
Euro	HSBK	Buy		2,309,661		2,567,345		1/15/20		25,317		—
British Pound	BOFA	Buy		2,654,040		3,440,886		1/16/20		75,929		—
British Pound	BOFA	Sell		1,148,314		1,502,132		1/16/20		—		(19,476	)
British Pound	HSBK	Sell		23,503,287		30,378,116		1/16/20		—		(765,611	)
South Korean Won	HSBK	Sell		45,586,583,448		38,567,286		1/17/20		—		(881,159	)
South Korean Won	UBSW	Sell		28,177,114,854		23,792,210		1/17/20		—		(590,915	)
Total Forward Exchange Contracts									$	113,833	$	(2,499,689	)
Net unrealized appreciation (depreciation)											$	(2,385,856	)

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

See Note 9 regarding other derivative information.

See Abbreviations on page MS-31.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Mutual Shares VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$2,402,328,649
Value - Unaffiliated issuers		$3,213,293,303
Cash		377,832
Foreign currency, at value (cost $389,179)		396,623
Receivables:
Investment securities sold		4,917,521
Capital shares sold		76,963
Dividends and interest		10,432,193
European Union tax reclaims		1,795,174
Deposits with brokers for:
Securities sold short		14,698,388
Futures contracts		2,116,140
Unrealized appreciation on OTC forward exchange contracts		113,833
Other assets		847,490
Total assets		3,249,065,460
Liabilities:
Payables:
Investment securities purchased		16,568,985
Capital shares redeemed		1,332,326
Management fees		1,823,724
Distribution fees		652,012
Variation margin on futures contracts		695,853
Securities sold short, at value (proceeds $12,428,238)		14,400,942
Unrealized depreciation on OTC forward exchange contracts		2,499,689
Accrued expenses and other liabilities		562,548
Total liabilities		38,536,079
Net assets, at value		$3,210,529,381
Net assets consist of:
Paid-in capital		$2,261,034,664
Total distributable earnings (losses)		949,494,717
Net assets, at value		$3,210,529,381
Class 1:
Net assets, at value		$ 158,431,333
Shares outstanding		8,256,970
Net asset value and maximum offering price per share		$19.19
Class 2:
Net assets, at value		$2,931,752,809
Shares outstanding		155,882,081
Net asset value and maximum offering price per share		$18.81
Class 4:
Net assets, at value		$ 120,345,239
Shares outstanding		6,337,390
Net asset value and maximum offering price per share		$18.99

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Mutual Shares VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$   79,438,336
Interest:
Unaffiliated issuers		21,341,565
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		253,088
Non-controlled affiliates (Note 3e)		47,926
Other income (Note 1h)		223,118
Total investment income		101,304,033
Expenses:
Management fees (Note 3a)		22,367,019
Distribution fees: (Note 3c)
Class 2		7,049,418
Class 4		402,943
Custodian fees (Note 4)		85,083
Reports to shareholders		485,988
Professional feesa		(194,465	)
Trustees’ fees and expenses		19,788
Dividends and interest on securities sold short		569,637
Other		61,769
Total expenses		30,847,180
Expense reductions (Note 4)		(17,169	)
Expenses waived/paid by affiliates (Note 3e)		(8,871	)
Net expenses		30,821,140
Net investment income		70,482,893
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		95,233,800
Realized gain distributions from REITs		141,370
Foreign currency transactions		495,056
Forward exchange contracts		5,238,183
Futures contracts		1,329,818
Securities sold short		(6,921,402	)
Net realized gain (loss)		95,516,825
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		508,856,878
Translation of other assets and liabilities denominated in foreign currencies		(20,880	)
Forward exchange contracts		(1,434,738	)
Futures contracts		(884,259	)
Securities sold short		(8,907,834	)
Net change in unrealized appreciation (depreciation)		497,609,167
Net realized and unrealized gain (loss)		593,125,992
Net increase (decrease) in net assets resulting from operations		$663,608,885

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations (continued)

For the year ended December 31, 2019

*Foreign taxes withheld on dividends $     1,359,043

^aIncludes unaffiliated reimbursement of legal fees incurred in connection with certain fund holdings.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Mutual Shares VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income		$    70,482,893			$    60,982,102
Net realized gain (loss)		95,516,825			308,792,402
Net change in unrealized appreciation (depreciation)		497,609,167			(689,920,400	)
Net increase (decrease) in net assets resulting from operations		663,608,885			(320,145,896	)
Distributions to shareholders:
Class 1		(35,828,591	)		(37,929,843	)
Class 2		(330,340,832	)		(194,310,469	)
Class 4		(13,089,406	)		(7,177,027	)
Total distributions to shareholders		(379,258,829	)		(239,417,339	)
Capital share transactions: (Note 2)
Class 1		(436,530,771	)		(27,996,947	)
Class 2		198,182,849			(506,425,142	)
Class 4		5,322,730			(365,846	)
Total capital share transactions.		(233,025,192	)		(534,787,935	)
Net increase (decrease) in net assets		51,324,864			(1,094,351,170	)
Net assets:
Beginning of year		3,159,204,517			4,253,555,687
End of year		$3,210,529,381			$3,159,204,517

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Franklin Mutual Shares VIP Fund

1. Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

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

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

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

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

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

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.

Annual Report         MS-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (continued)

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in

foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

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

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

c.  Securities Purchased on a Delayed Delivery Basis

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

d.  Derivative Financial Instruments

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

MS-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement. At December 31, 2019, the Fund had OTC derivatives in a net liability position of $2,385,856 and the aggregate value of collateral pledged for such contracts was $1,727,954.

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

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

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

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

See Note 9 regarding other derivative information.

e.  Securities Sold Short

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

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

Annual Report         MS-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

e.  Securities Sold Short (continued)

dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund.

f.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2019, the Fund had no securities on loan.

g.  Senior Floating Rate Interests

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

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

h.  Income and Deferred Taxes

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

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

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

MS-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

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, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.  Security Transactions, Investment Income, Expenses and Distributions

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

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

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.

Annual Report         MS-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

2. Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

				Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		765,653		$	14,772,259			1,228,202		$	23,646,682
Shares issued in reinvestment of distributions		2,031,099			35,828,591			1,881,441			37,929,843
Shares redeemed		(24,880,289	)		(487,131,621	)		(4,336,171	)		(89,573,472	)
Net increase (decrease)		(22,083,537	)	$	(436,530,771	)		(1,226,528	)	$	(27,996,947	)
Class 2 Shares:
Shares sold		29,854,091		$	583,466,693			14,955,793		$	302,887,079
Shares issued in reinvestment of distributions		19,094,846			330,340,832			9,803,757			194,310,469
Shares redeemed		(37,705,675	)		(715,624,676	)		(50,860,562	)		(1,003,622,690	)
Net increase (decrease)		11,243,262		$	198,182,849			(26,101,012	)	$	(506,425,142	)
Class 4 Shares:
Shares sold		625,179		$	11,842,479			743,333		$	14,855,135
Shares issued in reinvestment of distributions		749,250			13,089,406			358,852			7,177,027
Shares redeemed		(1,022,438	)		(19,609,155	)		(1,104,232	)		(22,398,008	)
Net increase (decrease)		351,991		$	5,322,730			(2,047	)	$	(365,846	)

3. Transactions with Affiliates

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

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

MS-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

a.  Management Fees

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

Annualized Fee Rate	Net Assets
0.675%	Up to and including $5 billion
0.645%	Over $5 billion, up to and including $10 billion
0.625%	Over $10 billion, up to and including $15 billion
0.595%	Over $15 billion, up to and including $20 billion
0.585%	Over $20 billion, up to and including $25 billion
0.565%	Over $25 billion, up to and including $30 billion
0.555%	Over $30 billion, up to and including $35 billion
0.545%	In excess of $35 billion

b.  Administrative Fees

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 for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		$    —		$121,376,000		$(121,376,000)		$    —		$    —		$    —		—		$47,926

Annual Report          MS-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

3.  Transactions with Affiliates (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, 2019, these purchase and sale transactions aggregated $0 and $4,607,489, 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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	66,965,945	$	94,583,983
Long term capital gain		312,292,884		144,833,356
	$	379,258,829	$	239,417,339

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	2,418,505,668
Unrealized appreciation	$	895,224,355
Unrealized depreciation		(117,941,295	)
Net unrealized appreciation (depreciation)	$	777,283,060
Distributable earnings:
Undistributed ordinary income	$	91,385,739
Undistributed long term capital gains		79,022,349
Total distributable earnings	$	170,408,088

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

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities and securities sold short) for the year ended December 31, 2019, aggregated $1,167,301,560 and $1,477,326,286, respectively.

MS-28         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

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, 2019, the aggregate long value of distressed company securities for which interest recognition has been discontinued represents less than 0.1% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.

8. Restricted Securities

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

At December 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares	Issuer	Acquisition Date		Cost		Value
1,730,515	International Automotive Components Group Brazil LLC, (Value is 0.0%† of Net Assets)		4/13/06 -12/26/08	$	1,149,241	$	62,818

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

9. Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives		Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value	Statement of Assets and Liabilities Location	Fair Value
Foreign exchange contracts	Variation margin on futures contracts	$         —	Variation margin on futures contracts	$	720,267	a
	Unrealized appreciation on OTC forward exchange contracts	113,833	Unrealized depreciation on OTC forward exchange contracts		2,499,689
Totals		$113,833		$	3,219,956

^aThis 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.

Annual Report          MS-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

9. Other Derivative Information (continued)

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Foreign exchange contracts	Forward exchange contracts		$5,238,183	Forward exchange contracts		$(1,434,738)
	Futures contracts		1,329,818	Futures contracts		(884,259)
Totals			$6,568,001			$(2,318,997)

For the year ended December 31, 2019, the average month end notional amount of futures contracts represented $96,195,661. The average month end contract value of forward exchange contracts was $116,464,877.

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 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, 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.

MS-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Mutual Shares VIP Fund (continued)

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Auto Components	$	—	$	—	$	62,818	$	62,818
Machinery		6,644,817		20,254,205		—		26,899,022
Media		202,576,805		—		183,628		202,760,433
Specialty Retail		—		—		7,609,922c		7,609,922
All Other Equity Investments		2,665,022,054		—		—		2,665,022,054
Corporate Notes and Senior Floating Rate Interests		—		121,959,580		—		121,959,580
Companies in Liquidation		—		—		49,840c		49,840
Short Term Investments		140,029,634		48,900,000		—		188,929,634
Total Investments in Securities	$	3,014,273,310	$	191,113,785	$	7,906,208	$	3,213,293,303
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	113,833	$	—	$	113,833
Liabilities:
Other Financial Instruments:
Securities Sold Short	$	14,400,942	$	—	$	—	$	14,400,942
Futures Contracts		720,267		—		—		720,267
Forward Exchange Contracts		—		2,499,689		—		2,499,689
Total Other Financial Instruments	$	15,121,209	$	2,499,689	$	—	$	17,620,898

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

^bIncludes common stocks as well as other equity interests.

^cIncludes securities determined to have no value at December 31, 2019.

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

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		Currency		Selected Portfolio
BOFA	Bank of America Corp.	EUR	Euro	ADR	American Depositary Receipt
HSBK	HSBC Bank PLC	GBP	British Pound	FHLB	Federal Home Loan Bank
UBSW	UBS AG	USD	United States Dollar	LIBOR	London InterBank Offered Rate

Annual Report          MS-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

MS-32         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Mutual Shares VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $312,292,884 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 72.64% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

Annual Report         MS-33

This page intentionally left blank.

Franklin Rising Dividends VIP Fund

This annual report for Franklin Rising Dividends VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+29.16%		+10.48%		+12.70%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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.

Annual Report         FRD-1

FRANKLIN RISING DIVIDENDS VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital appreciation, with preservation of capital as an important consideration. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of financially sound companies that have paid consistently rising dividends.

Fund Risks

All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated or may decline further in value. For stocks paying dividends, dividends are not guaranteed, and can increase, decrease or be totally eliminated without notice. Securities issued by smaller and midsize companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered relatively more speculative. To the extent that the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, the Fund may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the S&P 500 posted a +31.49% total return for the same period.¹ Please note the Fund employs a bottom-up stock selection process, and the managers invest in securities without regard to benchmark comparisons.

Economic and Market Overview

U.S. equities, as measured by the S&P 500, posted strong returns during the reporting period, driven by the U.S. Federal Reserve’s (Fed’s) monetary policy easing, solid domestic economic growth and diminished concerns about

the global economy and trade relations. Stocks gained sharply early in the year and experienced heightened volatility in May and September before reaching record price highs near the end of 2019. The decline in market volatility reflected many market participants’ shift from growth concerns to a more optimistic outlook.

The Fed provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Solid U.S. economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

International and trade developments also impacted U.S. stocks during the period. Investors were concerned about slowing global growth and the impact it might have on U.S. equities, but some market participants’ predictions of a global recession did not materialize as growth proved resilient amid a series of interest-rate cuts by many central banks. The trade war between the U.S. and China was a dominant theme over the period, and stocks fluctuated as many investors responded to the latest developments, both positive and negative. However, by period-end, markets were reassured by a phase one trade agreement between the two countries, which lowered certain tariffs and addressed some of the principal areas of conflict.

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

2. Source: Bureau of Labor Statistics.

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

FRD-2         Annual Report

FRANKLIN RISING DIVIDENDS VIP FUND

Investment Strategy

We are a research-driven, fundamental investment adviser, pursuing a disciplined value-oriented strategy. As bottom-up investors concentrating primarily on individual securities, we seek fundamentally sound companies that we believe meet our screening criteria, which include consistent, substantial dividend increases; reinvested earnings; and strong balance sheets. We attempt to acquire such stocks at attractive prices, often when they are out of favor with other investors. In following these criteria, we do not necessarily focus on companies whose securities pay a high dividend but rather on companies that consistently raise their dividends.

Manager’s Discussion

During the fiscal year ended December 31, 2019, some holdings that contributed to absolute performance included Dover, Accenture and Microsoft. Microsoft is listed among the Fund’s largest positions in the Top 10 Holdings table on page FRD-4.

Strong earnings supported share price performance of electrical equipment company Dover during the period. Despite a weaker economic environment, Dover posted solid organic revenue growth and robust free cash flow in recent quarters. Order growth also improved, which we believe can bolster Dover’s overall growth in 2020.

The stock performance of technology outsourcing firm Accenture supported relative returns in 2019, as investors responded favorably to strong earnings growth, boosting the company’s stock price. The company’s robust financial results have been driven by strong growth in digital, cloud and security-related services. Late in 2019, Accenture also increased its full-year 2020 revenue growth forecast on strong consulting and outsourcing bookings growth.

Business software company Microsoft contributed to performance as it posted solid financial results across its businesses during the year. We believe the company can continue to demonstrate solid growth as the transition to cloud computing leads customers to potentially adopt more of its software and services. We also believe that the company can continue to raise its dividend over time as earnings per share continue to grow.

Conversely, some holdings that detracted from absolute performance included Albemarle, Occidental Petroleum and Gap.

Shares of Albemarle, a specialty chemicals producer, declined in price amid concerns about lithium oversupply and pricing implications. In response, Albemarle announced

Portfolio Composition

Based on Total Net Assets as of 12/31/19

steps to curtail capital expenditures to moderate supply growth over the next few years. While lithium pricing may soften over the coming year, we believe the company’s leading resource base provides solid growth prospects as demand continues to accelerate.

The performance of Occidental Petroleum stock also detracted from performance. The company acquired oil and gas exploration and production firm Anadarko Petroleum (not a Fund holding) during the period. While the transaction gives Occidental Petroleum a greater presence in the U.S.

Annual Report         FRD-3

FRANKLIN RISING DIVIDENDS VIP FUND

Top 10 Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
Microsoft Corp. Software & Services	7.2%
Roper Technologies Inc. Industrial Conglomerates	5.5%
Stryker Corp. Health Care Equipment & Services	3.8%
Accenture PLC Software & Services	3.8%
Linde PLC (United Kingdom) Materials	3.7%
Honeywell International Inc. Industrial Conglomerates	3.6%
Becton, Dickinson and Co. Health Care Equipment & Services	3.5%
Air Products and Chemicals Inc. Materials	3.4%
Texas Instruments Inc. Semiconductors & Semiconductor Equipment	3.2%
Analog Devices Inc. Semiconductors & Semiconductor Equipment	3.2%

shale-producing Permian Basin and allows the company to reduce costs, concerns about the financing needed to complete the transaction weighed on Occidental’s stock price.

Shares of apparel retailer Gap weighed on relative performance amid a more challenging environment for retail stocks in general. Gap has also missed earnings guidance in recent quarters due to weaker same-store sales comparisons and pressure from higher tariff and labor costs. Gap’s decision to spin off its Old Navy brand has also created greater uncertainty around the stock.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FRD-4         Annual Report

FRANKLIN RISING DIVIDENDS VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual		Hypothetical
		(actual return after expenses)		(5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,073.80	$5.12	$1,020.27	$4.99	0.98%

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.

Annual Report         FRD-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Rising Dividends VIP Fund

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$25.75			$29.21			$25.51			$25.26		$29.63
Income from investment operationsa:
Net investment incomeb		0.37			0.39			0.40			0.42		0.45
Net realized and unrealized gains (losses)		6.77			(1.65	)		4.76			3.45		(1.33)
Total from investment operations		7.14			(1.26	)		5.16			3.87		(0.88)
Less distributions from:
Net investment income		(0.45	)		(0.44	)		(0.48	)		(0.44	)	(0.48)
Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)	(3.01)
Total distributions		(4.99	)		(2.20	)		(1.46	)		(3.62	)	(3.49)
Net asset value, end of year		$27.90			$25.75			$29.21			$25.51		$25.26
Total returnc		29.58%			(4.84)%			20.85%			16.33%		(3.42)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.63%			0.62%			0.62%			0.63%		0.63%
Expenses net of waiver and payments by affiliates		0.63%	d,e		0.62%	d,e		0.62%	d,e		0.62%	d	0.63%e
Net investment income		1.34%			1.38%			1.49%			1.67%		1.65%
Supplemental data
Net assets, end of year (000’s)		$150,864			$157,838			$216,015			$181,072		$143,376
Portfolio turnover rate		7.26%	f		3.09%	f		3.36%			6.66%		4.74%

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

^bBased on average daily shares outstanding.

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

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

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

^fExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 8.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$25.04			$28.46			$24.89			$24.72			$29.06
Income from investment operationsa:
Net investment incomeb		0.29			0.31			0.33			0.35			0.37
Net realized and unrealized gains (losses)		6.57			(1.61	)		4.63			3.37			(1.29	)
Total from investment operations		6.86			(1.30	)		4.96			3.72			(0.92	)
Less distributions from:
Net investment income		(0.37	)		(0.36	)		(0.41	)		(0.37	)		(0.41	)
Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)
Total distributions		(4.91	)		(2.12	)		(1.39	)		(3.55	)		(3.42	)
Net asset value, end of year		$26.99			$25.04			$28.46			$24.89			$24.72
Total returnc		29.23%			(5.07)%			20.56%			16.04%			(3.65)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.88%			0.87%			0.87%			0.88%			0.88%
Expenses net of waiver and payments by affiliates		0.88%	d,e		0.87%	d,e		0.87%	d,e		0.87%	d		0.88%	e
Net investment income		1.09%			1.13%			1.24%			1.42%			1.40%
Supplemental data
Net assets, end of year (000’s)		$1,387,688			$1,106,334			$1,640,883			$1,530,374			$1,310,783
Portfolio turnover rate		7.26%	f		3.09%	f		3.36%			6.66%			4.74%

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

^bBased on average daily shares outstanding.

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

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

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

^fExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 8.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Rising Dividends VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$25.11			$28.54			$24.98			$24.81			$29.19
Income from investment operationsa:
Net investment incomeb		0.26			0.29			0.30			0.32			0.35
Net realized and unrealized gains (losses)		6.60			(1.62	)		4.65			3.39			(1.31	)
Total from investment operations		6.86			(1.33	)		4.95			3.71			(0.96	)
Less distributions from:
Net investment income		(0.35	)		(0.34	)		(0.41	)		(0.36	)		(0.41	)
Net realized gains		(4.54	)		(1.76	)		(0.98	)		(3.18	)		(3.01	)
Total distributions		(4.89	)		(2.10	)		(1.39	)		(3.54	)		(3.42	)
Net asset value, end of year		$27.08			$25.11			$28.54			$24.98			$24.81
Total returnc		29.16%			(5.16)%			20.40%			15.93%			(3.75)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.98%			0.97%			0.97%			0.98%			0.98%
Expenses net of waiver and payments by affiliates		0.98%	d,e		0.97%	d,e		0.97%	d,e		0.97%	d		0.98%	e
Net investment income		0.99%			1.03%			1.14%			1.32%			1.30%
Supplemental data
Net assets, end of year (000’s)		$46,539			$32,825			$36,407			$28,579			$20,453
Portfolio turnover rate		7.26%	f		3.09%	f		3.36%			6.66%			4.74%

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

^bBased on average daily shares outstanding.

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

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

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

^fExcludes the value of portfolio securities delivered as a result of redemptions in-kind. See Note 8.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Rising Dividends VIP Fund

	Shares		Value
Common Stocks 98.7%
Aerospace & Defense 6.6%
The Boeing Co.		54,325	$	17,696,912
General Dynamics Corp.		159,352		28,101,725
Raytheon Co.		111,624		24,528,258
United Technologies Corp.		223,607		33,487,384
				103,814,279
Building Products 1.4%
Johnson Controls International PLC		552,410		22,488,611
Commercial & Professional Services 2.2%
Cintas Corp.		104,872		28,218,958
Matthews International Corp., A		182,117		6,951,406
				35,170,364
Consumer Durables & Apparel 2.1%
NIKE Inc., B		320,284		32,447,972
Consumer Services 1.7%
McDonald’s Corp.		135,599		26,795,718
Diversified Financials 0.3%
State Street Corp.		57,541		4,551,493
Electrical Equipment 0.6%
nVent Electric PLC		383,926		9,820,827
Energy 5.2%
aApergy Corp.		186,565		6,302,166
Chevron Corp.		174,594		21,040,323
EOG Resources Inc.		190,961		15,994,893
Exxon Mobil Corp.		160,861		11,224,881
Occidental Petroleum Corp.		308,985		12,733,272
Schlumberger Ltd.		358,692		14,419,418
				81,714,953
Food & Staples Retailing 1.5%
Walgreens Boots Alliance Inc.		18,077		1,065,820
Walmart Inc.		196,608		23,364,895
				24,430,715
Food, Beverage & Tobacco 4.2%
Bunge Ltd.		269,004		15,481,180
McCormick & Co. Inc.		150,647		25,569,316
PepsiCo Inc.		191,430		26,162,738
				67,213,234
Health Care Equipment & Services 15.4%
Abbott Laboratories		349,995		30,400,566
Becton, Dickinson and Co.		202,415		55,050,808
CVS Health Corp.		167,393		12,435,626
Dentsply Sirona Inc.		59,392		3,360,993
Medtronic PLC		438,254		49,719,916

Annual Report         FRD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Rising Dividends VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Health Care Equipment & Services (continued)
Stryker Corp.		288,545	$	60,577,137
West Pharmaceutical Services Inc.		219,601		33,012,618
				244,557,664
Household & Personal Products 2.9%
Colgate-Palmolive Co.		273,440		18,823,610
The Procter & Gamble Co.		220,394		27,527,210
				46,350,820
Industrial Conglomerates 9.7%
Carlisle Cos. Inc.		69,002		11,167,284
Honeywell International Inc.		318,575		56,387,775
Roper Technologies Inc.		245,183		86,851,174
				154,406,233
Insurance 1.7%
Aflac Inc.		257,104		13,600,802
Erie Indemnity Co., A		76,670		12,727,220
				26,328,022
Machinery 3.4%
Donaldson Co. Inc.		205,297		11,829,213
Dover Corp.		233,088		26,865,723
Pentair PLC		340,594		15,623,047
				54,317,983
Materials 11.2%
Air Products and Chemicals Inc.		229,667		53,969,448
Albemarle Corp.		528,947		38,634,289
Ecolab Inc.		100,809		19,455,129
Linde PLC (United Kingdom)		275,532		58,660,763
Nucor Corp.		130,102		7,322,140
				178,041,769
Media & Entertainment 0.1%
John Wiley & Sons Inc., A		31,848		1,545,265
Pharmaceuticals, Biotechnology & Life Sciences 3.7%
AbbVie Inc.		134,736		11,929,525
Johnson & Johnson		220,129		32,110,217
Perrigo Co. PLC		119,563		6,176,625
Pfizer Inc.		204,715		8,020,734
				58,237,101
Retailing 4.1%
Lowe’s Cos. Inc.		102,872		12,319,951
Ross Stores Inc.		166,730		19,410,706
Target Corp.		128,337		16,454,087
Tiffany & Co.		120,530		16,108,834
				64,293,578

FRD-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Rising Dividends VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Semiconductors & Semiconductor Equipment 6.4%
Analog Devices Inc.		422,419	$	50,200,274
Texas Instruments Inc.		395,268		50,708,932
				100,909,206
Software & Services 12.0%
Accenture PLC, A		285,378		60,092,045
Microsoft Corp.		723,328		114,068,826
Visa Inc., A		80,662		15,156,390
				189,317,261
Trading Companies & Distributors 0.7%
W.W. Grainger Inc.		34,393		11,642,718
Transportation 1.6%
Norfolk Southern Corp.		45,047		8,744,974
United Parcel Service Inc., B		143,967		16,852,777
				25,597,751
Total Common Stocks (Cost $759,125,903)				1,563,993,537
Short Term Investments (Cost $17,735,928) 1.1%
Money Market Funds 1.1%
b,c Institutional Fiduciary Trust Money Market Portfolio, 1.26%		17,735,928		17,735,928
Total Investments (Cost $776,861,831) 99.8%				1,581,729,465
Other Assets, less Liabilities 0.2%				3,361,835
Net Assets 100.0%			$	1,585,091,300

^aNon-income producing.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Rising Dividends VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	759,125,903
Cost - Non-controlled affiliates (Note 3e)		17,735,928
Value - Unaffiliated issuers	$	1,563,993,537
Value - Non-controlled affiliates (Note 3e)		17,735,928
Receivables:
Investment securities sold		6,295,282
Capital shares sold		306,378
Dividends		2,118,202
Other assets		163
Total assets		1,590,449,490
Liabilities:
Payables:
Investment securities purchased		3,159,159
Capital shares redeemed		885,425
Management fees		821,044
Distribution fees		305,489
Accrued expenses and other liabilities		187,073
Total liabilities		5,358,190
Net assets, at value		$1,585,091,300
Net assets consist of:
Paid-in capital	$	693,868,963
Total distributable earnings (losses)		891,222,337
Net assets, at value		$1,585,091,300
Class 1:
Net assets, at value		$ 150,864,298
Shares outstanding		5,407,633
Net asset value and maximum offering price per share		$27.90
Class 2:
Net assets, at value		$1,387,688,420
Shares outstanding		51,407,676
Net asset value and maximum offering price per share		$26.99
Class 4:
Net assets, at value	$	46,538,582
Shares outstanding		1,718,696
Net asset value and maximum offering price per share		$27.08

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Rising Dividends VIP Fund
Investment income:
Dividends:
Unaffiliated issuers		$   29,959,717
Non-controlled affiliates (Note 3e)		615,331
Total investment income		30,575,048
Expenses:
Management fees (Note 3a)		9,600,864
Distribution fees: (Note 3c)
Class 2		3,334,309
Class 4		136,693
Custodian fees (Note 4)		13,898
Reports to shareholders		176,250
Professional fees		57,984
Trustees’ fees and expenses		9,165
Other		35,092
Total expenses		13,364,255
Expense reductions (Note 4)		(1,496	)
Expenses waived/paid by affiliates (Note 3e)		(109,752	)
Net expenses		13,253,007
Net investment income		17,322,041
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:+
Unaffiliated issuers		82,812,044
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		279,796,675
Net realized and unrealized gain (loss)		362,608,719
Net increase (decrease) in net assets resulting from operations		$379,930,760
+Includes gains from a redemption in-kind (Note 8)		$  10,655,992

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Rising Dividends VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income		$     17,322,041		$	20,055,601
Net realized gain (loss)		82,812,044			314,858,432
Net change in unrealized appreciation (depreciation)		279,796,675			(398,447,639	)
Net increase (decrease) in net assets resulting from operations		379,930,760			(63,533,606	)
Distributions to shareholders:
Class 1		(28,799,833	)		(13,329,516	)
Class 2		(227,983,493	)		(115,786,937	)
Class 4		(6,300,776	)		(2,574,964	)
Total distributions to shareholders		(263,084,102	)		(131,691,417	)
Capital share transactions: (Note 2)
Class 1		(21,678,109	)		(37,447,873	)
Class 2		182,626,753			(364,402,663	)
Class 4		10,299,225			766,328
Total capital share transactions		171,247,869			(401,084,208	)
Net increase (decrease) in net assets		288,094,527			(596,309,231	)
Net assets:
Beginning of year		1,296,996,773			1,893,306,004
End of year		$1,585,091,300		$	1,296,996,773

FRD-14         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Franklin Rising Dividends VIP Fund

1.  Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

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

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

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

Annual Report         FRD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

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

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

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

c.  Income and Deferred Taxes

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

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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

FRD-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		238,379		$	6,420,546			296,177		$     8,482,359
Shares issued in reinvestment of distributions		1,132,514			28,799,833			481,211		13,329,516
Shares redeemed		(2,092,688	)		(56,898,488	)		(2,043,710	)	(59,259,748)
Net increase (decrease)		(721,795	)	$	(21,678,109	)		(1,266,322	)	$  (37,447,873)
Class 2 Shares:
Shares sold		7,298,801		$	200,248,939			3,479,467		$   95,894,196
Shares issued in reinvestment of distributions		9,252,577			227,983,493			4,293,174		115,786,937
Shares redeemed in-kind (Note 8)		(897,175	)		(22,646,135	)		(5,455,397	)	(147,395,561)
Shares redeemed		(8,430,854	)		(222,959,544	)		(15,794,114	)	(428,688,235)
Net increase (decrease)		7,223,349		$	182,626,753			(13,476,870	)	$(364,402,663)

Annual Report          FRD-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

2. Shares of Beneficial Interest (continued)

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 4 Shares:
Shares sold		415,831		$	10,934,186			206,879		$	5,727,225
Shares issued in reinvestment of distributions		254,783			6,300,776			95,123			2,574,964
Shares redeemed		(258,933	)		(6,935,737	)		(270,440	)		(7,535,861	)
Net increase (decrease)		411,681		$	10,299,225			31,562		$	766,328

3. Transactions with Affiliates

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

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

a. Management Fees

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

Annualized Fee Rate	Net Assets
0.750%	Up to and including $500 million
0.625%	Over $500 million, up to and including $1 billion
0.500%	Over $1 billion, up to and including $5 billion
0.490%	In excess of $5 billion

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.621% 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.

FRD-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

d.  Transfer Agent Fees

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

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	8,504,577	$	239,899,829	$	(230,668,478	)		$    —		$    —	$	17,735,928		17,735,928	$	615,331

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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	20,051,545	$	28,678,971
Long term capital gain		243,032,557		103,012,446
	$	263,084,102	$	131,691,417

Annual Report          FRD-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

5. Income Taxes (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	779,980,316
Unrealized appreciation	$	860,356,117
Unrealized depreciation		(58,606,968	)
Net unrealized appreciation (depreciation)	$	801,749,149
Distributable earnings:
Undistributed ordinary income	$	20,920,086
Undistributed long term capital gains		68,249,399
Total distributable earnings	$	89,169,485

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of gains realized on in-kind shareholder redemptions.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $109,585,740 and $180,665,168, respectively. Sales of investments excludes in-kind transactions of $22,345,743.

7. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

8. Redemptions In-Kind

During the years ended December 31, 2019 and 2018, the Fund realized $10,655,992 and $70,642,118, respectively, 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.

FRD-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Rising Dividends VIP Fund (continued)

9. Fair Value Measurements

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

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

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

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

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

At December 31, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statement of Investments.

10. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Annual Report          FRD-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

FRD-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Rising Dividends VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $243,032,557 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 100% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

Annual Report         FRD-23

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Franklin Small Cap Value VIP Fund

This annual report for Franklin Small Cap Value VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+26.23%		+7.88%		+11.28%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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.

Annual Report         FSV-1

FRANKLIN SMALL CAP VALUE VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term total return. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of small capitalization companies. For this Fund, small capitalization companies are those with market capitalizations not exceeding either the highest market capitalization in the Russell 2000^® Index or the 12-month average of the highest market capitalization in the Russell 2000^® Index, whichever is greater, at the time of purchase. The Fund generally invests in equity securities of companies that the manager believes are undervalued at the time of purchase and have the potential for capital appreciation.

Fund Risks

All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated, or may decline further in value. The Fund’s investments in smaller company stocks carry special risks as such stocks have historically exhibited greater price volatility than large-company stocks, particularly over the short term. Additionally, smaller companies often have relatively small revenues, limited product lines and a small market share. In addition, the Fund may invest up to 25% of its total assets in foreign securities, which involve special risks, including currency fluctuations and economic and political uncertainty. The Fund also may invest in equity real estate investment trusts (REITs). The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Russell 2000^® Value Index posted a +22.39% total return for the same period.¹ Please note the Fund employs a bottom-up stock selection process, and the managers invest in securities without regard to benchmark comparisons.

Economic and Market Overview

U.S. equities, as measured by the Standard & Poor’s^® 500 Index (S&P 500^®), posted strong returns during the reporting period, driven by the U.S. Federal Reserve’s (Fed’s)

monetary policy easing, solid domestic economic growth and diminished concerns about the global economy and trade relations. Stocks gained sharply early in the year and experienced heightened volatility in May and September before reaching record price highs near the end of 2019. The decline in market volatility reflected many market participants’ shift from growth concerns to a more optimistic outlook.

The Fed provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Solid U.S. economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

International and trade developments also impacted U.S. stocks during the period. Investors were concerned about slowing global growth and the impact it might have on U.S. equities, but some market participants’ predictions of a global recession did not materialize as growth proved resilient amid a series of interest-rate cuts by many central banks. The trade war between the U.S. and China was a dominant theme over the period, and stocks fluctuated as many investors responded to the latest developments, both positive and negative. However, by period-end, markets were reassured by a phase one trade agreement between the two countries, which lowered certain tariffs and addressed some of the principal areas of conflict.

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

2. Source: Bureau of Labor Statistics.

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

FSV-2         Annual Report

FRANKLIN SMALL CAP VALUE VIP FUND

Investment Strategy

Our strategy is to invest in small-cap companies that we believe are undervalued at the time of purchase and have the potential for capital appreciation. A stock is undervalued, or is a “value,” when it trades at less than the price at which the investment manager believes it would trade if the market reflected all factors relating to the company’s worth. Following this strategy, the Fund invests in companies that the investment manager believes have, for example: stock prices that are low relative to current, or historical or future earnings, book value, cash flow or sales; recent sharp price declines but the potential for good long-term earnings prospects; and valuable intangibles not reflected in the stock price. The Fund also may invest in equity real estate investment trusts (REITs).

The Fund may invest up to 25% of its total assets in foreign securities.

Manager’s Discussion

For the fiscal year ended December 31, 2019, some contributors to Fund performance included Versum Materials, Crocs and Coherent.

Versum Materials, a specialty materials and equipment company that primarily supplies the semiconductor end market, agreed to be acquired by Merck (not a Fund holding) for $53 per share. The revised offer was higher than Merck’s initial $48 bid and substantially higher than Entegris’s (not a Fund holding) competing proposal of approximately $41 per share. Merck’s offer represented a 68% premium to Versum’s share price on the day prior to the announcement of the Entegris merger proposal. We exited the position at a significant premium to our purchase price.

Crocs, a designer and manufacturer of footwear, posted strong returns as accelerating brand momentum resulted in stronger-than-expected sales and margin expansion. The company’s investment in advertising and partnerships, along with a focus on tight inventory management and cost rationalization, could potentially drive future increases in revenues and earnings. However, we exited the position as it exceeded our price target.

Shares of Coherent, a developer and seller of lasers, laser-based technologies and laser-based system solutions, rose due to an improved 2020 capital expenditure outlook for organic light-emitting diode (OLED) displays. A temporary easing of the trade rhetoric between the U.S. and China was an added contributor. We maintain a position in the company as the introduction of new form factors in display technology (such as foldable OLED displays) and increased use of

Portfolio Composition

Based on Total Net Assets as of 12/31/19

lasers in manufacturing and aerospace and defense could lead to an increase in revenues and earnings.

Detractors from performance included OceanaGold, Caleres and Greenbrier Companies.

Shares of mid-tier gold producer OceanaGold declined meaningfully on concerns about the renewal of its production permit for the Didipio mine in the Philippines, amid pressure from local environmental groups. OceanaGold’s management asserts that the company exceeds all environmental requirements. However, operations have been

Annual Report         FSV-3

FRANKLIN SMALL CAP VALUE VIP FUND

Top 10 Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
The Hanover Insurance Group Inc. Insurance	3.0%
Columbia Banking System Inc. Banks	2.9%
Wyndham Hotels and Resorts Inc. Consumer Services	2.8%
Horace Mann Educators Corp. Insurance	2.8%
First Horizon National Corp. Banks	2.7%
Old Republic International Corp. Insurance	2.7%
Eagle Materials Inc. Materials	2.6%
Carter’s Inc. Consumer Durables & Apparel	2.5%
Mueller Water Products Inc. Machinery	2.5%
Regal Beloit Corp. Electrical Equipment	2.5%

halted while the permit is under review. We reduced our position to reflect the increased level of risk to the long-term outlook.

The shares of footwear retailer and wholesaler Caleres came under pressure due to underperformance in its branded portfolio division, the impact of tariffs on footwear and a challenging promotional environment within its Famous Footwear segment. While we view Caleres’ stock as relatively attractive, based on its valuation and modest growth potential, we would like to see a greater emphasis on operational improvements that have the potential to increase earnings.

Shares of Greenbrier Companies, a manufacturer of railroad freight car equipment, declined due to weak economic activity and manufacturing challenges that drove down earnings in early 2019. We believe the company’s balance sheet is strong enough to weather a potential slowdown in railcar demand. In our view, the stock was attractively valued on a price-to-book basis at the end of the period.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

FSV-4         Annual Report

FRANKLIN SMALL CAP VALUE VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191,  2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,127.20	$5.47	$1,020.06	$5.19	1.02%

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.

Annual Report         FSV-5

FSV P1 P2 P4 12/19

SUPPLEMENT DATED DECEMBER 31, 2019

TO THE PROSPECTUS DATED MAY 1, 2019

OF

FRANKLIN SMALL CAP VALUE VIP FUND

(A series of Franklin Templeton Variable Insurance Products Trust)

The prospectus is amended as follows:

I. The portfolio management team under the “Fund Summary – Portfolio Managers” section on page FSV-S4 is revised as follows:

Steven B. Raineri Portfolio Manager of Franklin Mutual and portfolio manager of the Fund since 2012.

Christopher Meeker, CFA Portfolio Manager of Franklin Mutual and portfolio manager of the Fund since 2015.

Nicholas Karzon, CFA Research Analyst of Franklin Mutual and portfolio manager of the Fund since December 2019.

II. The portfolio management team under the “Fund Details – Management” section on page FSV-D5 is revised as follows:

The Fund is managed by a team of dedicated professionals focused on investments of small cap value companies. The portfolio managers of the team are as follows:

Steven B. Raineri

Portfolio Manager of Franklin Mutual

Mr. Raineri has been a lead portfolio manager of the Fund since 2012. Mr. Raineri has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund’s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. He joined Franklin Templeton in 2005.

Christopher Meeker, CFA

Portfolio Manager of Franklin Mutual

Mr. Meeker has been a portfolio manager of the Fund since 2015, providing support to the lead portfolio manager as needed. He joined Franklin Templeton in 2012.

Nicholas Karzon, CFA

Research Analyst of Franklin Mutual

Mr. Karzon has been a portfolio manager of the Fund since December 2019, providing support to the lead portfolio manager as needed. He joined Franklin Templeton in 2014.

CFA^® and Chartered Financial Analyst^® are trademarks owned by CFA Institute.

Please keep this supplement with your prospectus for future reference.

FSV-6

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Franklin Small Cap Value VIP Fund

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$15.14			$20.43			$19.93			$18.12			$22.81
Income from investment operationsa:
Net investment incomeb		0.24	c		0.21			0.21	d		0.15			0.21
Net realized and unrealized gains (losses)		3.35			(2.29	)		1.82			4.79			(1.53	)
Total from investment operations		3.59			(2.08	)		2.03			4.94			(1.32	)
Less distributions from:
Net investment income		(0.22	)		(0.23	)		(0.15	)		(0.21	)		(0.20	)
Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions		(3.00	)		(3.21	)		(1.53	)		(3.13	)		(3.37	)
Net asset value, end of year		$15.73			$15.14			$20.43			$19.93			$18.12
Total returne		26.72%			(12.69	)%		10.92%			30.54%			(7.18)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.67%			0.66%			0.66%			0.66%			0.65%
Expenses net of waiver and payments by affiliatesf		0.67%	g		0.65%			0.65%			0.64%			0.64%
Net investment income		1.58%	c		1.13%			1.06%	d		0.84%			1.04%
Supplemental data
Net assets, end of year (000’s)		$46,980			$40,644			$51,245			$47,831			$45,897
Portfolio turnover rate		54.36%			47.82%			33.36%			34.60%			27.05%

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

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 1.23%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.75%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small Cap Value VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$14.60			$19.80			$19.36			$17.68			$22.32
Income from investment operationsa:
Net investment incomeb		0.20	c		0.16			0.15	d		0.10			0.16
Net realized and unrealized gains (losses)		3.20			(2.20	)		1.77			4.66			(1.49	)
Total from investment operations		3.40			(2.04	)		1.92			4.76			(1.33	)
Less distributions from:
Net investment income		(0.17	)		(0.18	)		(0.10	)		(0.16	)		(0.14	)
Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions.		(2.95	)		(3.16	)		(1.48	)		(3.08	)		(3.31	)
Net asset value, end of year		$15.05			$14.60			$19.80			$19.36			$17.68
Total returne		26.35%			(12.88	)%		10.65%			30.19%			(7.39)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.92%			0.91%			0.91%			0.91%			0.90%
Expenses net of waiver and payments by affiliatesf		0.92%	g		0.90%			0.90%			0.89%			0.89%
Net investment income		1.33%	c		0.88%			0.81%	d		0.59%			0.79%
Supplemental data
Net assets, end of year (000’s)		$1,123,093			$978,675			$1,302,055			$1,366,807			$1,172,173
Portfolio turnover rate		54.36%			47.82%			33.36%			34.60%			27.05%

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

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.98%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.50%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small Cap Value VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$14.96			$20.22			$19.74			$17.96			$22.63
Income from investment operationsa:
Net investment incomeb		0.19	c		0.15			0.14	d		0.09			0.14
Net realized and unrealized gains (losses)		3.30			(2.28	)		1.81			4.75			(1.52	)
Total from investment operations		3.49			(2.13	)		1.95			4.84			(1.38	)
Less distributions from:
Net investment income		(0.16	)		(0.15	)		(0.09	)		(0.14	)		(0.12	)
Net realized gains		(2.78	)		(2.98	)		(1.38	)		(2.92	)		(3.17	)
Total distributions		(2.94	)		(3.13	)		(1.47	)		(3.06	)		(3.29	)
Net asset value, end of year		$15.51			$14.96			$20.22			$19.74			$17.96
Total returne		26.23%			(13.01	)%		10.56%			30.12%			(7.52)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.02%			1.01%			1.01%			1.01%			1.00%
Expenses net of waiver and payments by affiliatesf		1.02%	g		1.00%			1.00%			0.99%			0.99%
Net investment income		1.23%	c		0.78%			0.71%	d		0.49%			0.69%
Supplemental data
Net assets, end of year (000’s)		$29,238			$24,592			$32,053			$32,751			$26,128
Portfolio turnover rate		54.36%			47.82%			33.36%			34.60%			27.05%

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

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.88%.

^dNet investment income per share includes approximately $0.06 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been 0.40%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle.

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         FSV-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Franklin Small Cap Value VIP Fund

	Shares		Value
Common Stocks 97.6%
Automobiles & Components 1.3%
Gentex Corp.		36,000	$	1,043,280
LCI Industries		22,770		2,439,350
Thor Industries Inc.		161,800		12,020,122
				15,502,752
Banks 17.3%
Atlantic Union Bankshares Corp.		183,648		6,895,982
Bryn Mawr Bank Corp.		473,732		19,536,708
CenterState Bank Corp.		590,300		14,745,694
Columbia Banking System Inc.		851,300		34,635,141
First Horizon National Corp.		1,971,637		32,650,309
First of Long Island Corp.		614,355		15,408,023
German American Bancorp Inc.		183,833		6,548,131
Glacier Bancorp Inc.		209,600		9,639,504
Lakeland Financial Corp.		516,362		25,265,593
Peoples Bancorp Inc.		289,712		10,041,418
TCF Financial Corp.		293,542		13,737,766
TrustCo Bank Corp. NY		782,700		6,786,009
Washington Trust Bancorp Inc.		217,565		11,702,821
				207,593,099
Building Products 4.8%
a Gibraltar Industries Inc.		519,013		26,179,016
Insteel Industries Inc.		390,746		8,397,131
Universal Forest Products Inc.		488,640		23,308,128
				57,884,275
Commercial & Professional Services 2.5%
a Huron Consulting Group Inc.		107,157		7,363,829
McGrath RentCorp		303,168		23,204,479
				30,568,308
Consumer Durables & Apparel 5.0%
Brunswick Corp.		200,100		12,001,998
Carter’s Inc.		276,293		30,209,877
Toll Brothers Inc.		334,805		13,228,145
a Unifi Inc.		171,800		4,339,668
				59,779,688
Consumer Services 5.9%
Brinker International Inc.		412,040		17,305,680
Jack in the Box Inc.		241,700		18,859,851
Wyndham Hotels and Resorts Inc.		543,100		34,112,111
				70,277,642
Diversified Financials 0.7%
Houlihan Lokey Inc.		177,100		8,654,877

FSV-10           Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small Cap Value VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Electrical Equipment 2.8%
Encore Wire Corp.		75,262	$	4,320,039
Regal Beloit Corp.		343,900		29,441,279
				33,761,318
Energy 3.0%
Crescent Point Energy Corp. (Canada)		3,534,800		15,760,428
Hunting PLC (United Kingdom)		3,199,919		17,689,966
a Natural Gas Services Group Inc.		173,987		2,133,080
				35,583,474
Food & Staples Retailing 0.6%
a BJ’s Wholesale Club Holdings Inc.		332,400		7,558,776
Food, Beverage & Tobacco 1.3%
Glanbia PLC (Ireland)		284,200		3,270,027
Maple Leaf Foods Inc. (Canada)		606,057		12,078,204
				15,348,231
Health Care Equipment & Services 0.6%
a Integer Holdings Corp.		94,500		7,600,635
Insurance 9.6%
CNO Financial Group Inc.		159,400		2,889,922
The Hanover Insurance Group Inc.		265,500		36,285,885
Horace Mann Educators Corp.		760,444		33,200,985
Old Republic International Corp.		1,449,500		32,425,315
Selective Insurance Group Inc.		167,300		10,906,287
				115,708,394
Machinery 13.7%
Astec Industries Inc.		220,765		9,272,130
Barnes Group Inc.		117,100		7,255,516
Columbus McKinnon Corp.		152,931		6,121,828
Federal Signal Corp.		181,451		5,851,795
The Greenbrier Cos. Inc.		227,040		7,362,907
Kennametal Inc.		557,374		20,561,527
Mueller Industries Inc.		266,662		8,466,518
Mueller Water Products Inc., A		2,519,049		30,178,207
Oshkosh Corp.		299,000		28,300,350
a Rexnord Corp.		708,800		23,121,056
a SPX Flow Inc.		357,680		17,479,822
				163,971,656
Materials 9.9%
Carpenter Technology Corp.		184,024		9,160,714
Eagle Materials Inc.		336,600		30,516,156
Minerals Technologies Inc.		410,552		23,660,112
OceanaGold Corp. (Australia)		4,344,481		8,531,054
PH Glatfelter Co.		758,294		13,876,780
PolyOne Corp.		393,400		14,473,186

Annual Report          FSV-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small Cap Value VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Materials (continued)
Reliance Steel & Aluminum Co.		151,900	$	18,191,544
				118,409,546
Media & Entertainment 1.1%
Cinemark Holdings Inc.		380,300		12,873,155
Real Estate 6.2%
Brandywine Realty Trust		1,064,700		16,769,025
Highwoods Properties Inc.		478,400		23,398,544
Retail Properties of America Inc., A		1,587,211		21,268,627
Sunstone Hotel Investors Inc.		925,297		12,880,134
				74,316,330
Retailing 0.6%
Caleres Inc.		280,733		6,667,409
Semiconductors & Semiconductor Equipment 4.0%
a Advanced Energy Industries Inc.		267,532		19,048,279
MKS Instruments Inc.		135,494		14,905,695
a Synaptics Inc.		220,781		14,520,766
				48,474,740
Technology Hardware & Equipment 5.3%
a Coherent Inc.		156,808		26,085,011
a FARO Technologies Inc.		12,000		604,200
a II-VI Inc.		361,000		12,154,870
a Plexus Corp.		328,000		25,236,320
				64,080,401
Transportation 0.1%
Heartland Express Inc.		30,600		644,130
Utilities 1.3%
Black Hills Corp.		91,600		7,194,264
IDACORP Inc.		50,389		5,381,545
Spire Inc.		39,355		3,278,665
				15,854,474
Total Common Stocks (Cost $967,253,354)				1,171,113,310
	Principal Amount
Corporate Bonds (Cost $2,378,000) 0.2%
Machinery 0.2%
Mueller Industries Inc., sub. bond, 6.00%, 3/01/27	$	2,378,000		2,441,249
Total Investments before Short Term Investments (Cost $969,631,354)				1,173,554,559

FSV-12           Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small Cap Value VIP Fund (continued)

	Shares		Value
Short Term Investments (Cost $24,977,897) 2.1%
Money Market Funds 2.1%
b,c Institutional Fiduciary Trust Money Market Portfolio, 1.26%		24,977,897	$	24,977,897
Total Investments (Cost $994,609,251) 99.9%				1,198,532,456
Other Assets, less Liabilities 0.1%				778,975
Net Assets 100.0%			$	1,199,311,431

^aNon-income producing.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Small Cap Value VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	969,631,354
Cost - Non-controlled affiliates (Note 3e)		24,977,897
Value - Unaffiliated issuers	$	1,173,554,559
Value - Non-controlled affiliates (Note 3e)		24,977,897
Receivables:
Investment securities sold		432,306
Capital shares sold		691,889
Dividends and interest		1,672,552
Other assets		137
Total assets		1,201,329,340
Liabilities:
Payables:
Investment securities purchased		288,543
Capital shares redeemed		579,311
Management fees		637,606
Distribution fees		244,709
Reports to shareholders		205,398
Accrued expenses and other liabilities		62,342
Total liabilities		2,017,909
Net assets, at value	$	1,199,311,431
Net assets consist of:
Paid-in capital	$	919,933,522
Total distributable earnings (losses)		279,377,909
Net assets, at value	$	1,199,311,431
Class 1:
Net assets, at value	$	46,979,609
Shares outstanding		2,987,402
Net asset value and maximum offering price per share		$15.73
Class 2:
Net assets, at value	$	1,123,093,483
Shares outstanding		74,620,134
Net asset value and maximum offering price per share		$15.05
Class 4:
Net assets, at value	$	29,238,339
Shares outstanding		1,884,787
Net asset value and maximum offering price per share		$15.51

FSV-14           Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Small Cap Value VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$   24,609,000
Non-controlled affiliates (Note 3e)		527,278
Interest:
Unaffiliated issuers		427,670
Total investment income		25,563,948
Expenses:
Management fees (Note 3a)		7,295,196
Distribution fees: (Note 3c)
Class 2		2,664,003
Class 4		94,836
Custodian fees (Note 4)		16,172
Reports to shareholders		265,038
Professional fees		64,649
Trustees’ fees and expenses		6,716
Other		27,355
Total expenses		10,433,965
Expense reductions (Note 4)		(333	)
Expenses waived/paid by affiliates (Note 3e)		(99,612	)
Net expenses		10,334,020
Net investment income		15,229,928
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		61,218,063
Foreign currency transactions		(149,737	)
Net realized gain (loss)		61,068,326
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		187,554,405
Translation of other assets and liabilities denominated in foreign currencies		367
Net change in unrealized appreciation (depreciation)		187,554,772
Net realized and unrealized gain (loss)		248,623,098
Net increase (decrease) in net assets resulting from operations		$263,853,026

*Foreign taxes withheld on dividends $       92,739

The accompanying notes are an integral part of these financial statements.  |   Annual Report          FSV-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Small Cap Value VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income		$     15,229,928			$     11,431,886
Net realized gain (loss)		61,068,326			192,518,890
Net change in unrealized appreciation (depreciation)		187,554,772			(356,985,491	)
Net increase (decrease) in net assets resulting from operations		263,853,026			(153,034,715	)
Distributions to shareholders:
Class 1		(7,896,338	)		(7,555,429	)
Class 2		(189,976,242	)		(194,090,505	)
Class 4		(4,683,798	)		(4,574,106	)
Total distributions to shareholders		(202,556,378	)		(206,220,040	)
Capital share transactions: (Note 2)
Class 1		3,898,876			2,769,926
Class 2		87,139,038			14,343,221
Class 4		3,066,346			698,981
Total capital share transactions		94,104,260			17,812,128
Net increase (decrease) in net assets		155,400,908			(341,442,627	)
Net assets:
Beginning of year		1,043,910,523			1,385,353,150
End of year		$1,199,311,431			$1,043,910,523

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

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.

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at

Annual Report         FSV-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b. Foreign Currency Translation

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

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

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

c. Income and Deferred Taxes

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

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

FSV-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

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. 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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

				Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		262,210		$	4,085,267			140,744		$	2,624,857
Shares issued in reinvestment of distributions		578,063			7,896,338			419,746			7,555,429
Shares redeemed		(537,480	)		(8,082,729	)		(384,144	)		(7,410,360	)
Net increase (decrease)		302,793		$	3,898,876			176,346		$	2,769,926
Class 2 Shares:
Shares sold		5,696,678		$	84,262,242			3,241,202		$	57,622,650
Shares issued in reinvestment of distributions		14,513,082			189,976,242			11,167,463			194,090,505
Shares redeemed		(12,637,486	)		(187,099,446	)		(13,111,818	)		(237,369,934	)
Net increase (decrease)		7,572,274		$	87,139,038			1,296,847		$	14,343,221

Annual Report         FSV-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

2. Shares of Beneficial Interest (continued)

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 4 Shares:
Shares sold		279,692		$	4,200,102			142,312		$	2,499,385
Shares issued in reinvestment of distributions		346,948			4,683,798			256,684			4,574,106
Shares redeemed		(385,667	)		(5,817,554	)		(340,602	)		(6,374,510	)
Net increase (decrease)		240,973		$	3,066,346			58,394		$	698,981

3.   Transactions with Affiliates

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

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

a.   Management Fees

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

Annualized Fee Rate	Net Assets
0.750%	Up to and including $200 million
0.635%	Over $200 million, up to and including $700 million
0.600%	Over $700 million, up to and including $1.2 billion
0.575%	Over $1.2 billion, up to and including $1.3 billion
0.475%	In excess of $1.3 billion

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.642% 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.

FSV-20           Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

c. Distribution Fees

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

d. Transfer Agent Fees

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

e. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		$45,444,842		$272,960,890		$(293,427,835)		$    —		$    —		$24,977,897		24,977,897		$527,278

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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	23,319,400	$	23,876,649
Long term capital gain		179,236,978		182,343,391
	$	202,556,378	$	206,220,040

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

5. Income Taxes (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	998,714,383
Unrealized appreciation	$	221,883,900
Unrealized depreciation		(22,065,827	)
Net unrealized appreciation (depreciation)	$	199,818,073
Distributable earnings:
Undistributed ordinary income	$	20,694,217
Undistributed long term capital gains		58,865,254
Total distributable earnings	$	79,559,471

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, 2019, aggregated $598,873,062 and $671,429,267, respectively.

7. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

8. Fair Value Measurements

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small Cap Value VIP Fund (continued)

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

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

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments	$	1,171,113,310	$	—	$	—	$	1,171,113,310
Corporate Bonds		—		2,441,249		—		2,441,249
Short Term Investments		24,977,897		—		—		24,977,897
Total Investments in Securities	$	1,196,091,207	$	2,441,249	$	—	$	1,198,532,456

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

9. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Small Cap Value VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $179,236,978 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 90.88% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

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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, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+31.26%		+8.77%		+11.72%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 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.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of small-capitalization and mid-capitalization companies. For this Fund, small-cap companies are those within the market capitalization range of companies in the Russell 2500^TM Index at the time of purchase, and midcap companies are those within the market capitalization range of companies in the Russell Midcap^® Index at the time of purchase.¹

Fund Risks

All investments involve risks, including possible loss of principal. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. Smaller, midsized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger-company stocks, especially over the short term. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risk of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. From time to time, the trading market for a particular security or type of security in which the Fund invests may become less liquid or even illiquid. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s narrow benchmark, the Russell Midcap^® Growth Index, posted a +35.47% total return, and its broad benchmark, the S&P 500 posted a +31.49% total return for the same period.²

Portfolio Composition

Based on Total Net Assets as of 12/31/19

Economic and Market Overview

U.S. equities, as measured by the S&P 500, posted strong returns during the reporting period, driven by the U.S. Federal Reserve’s (Fed’s) monetary policy easing, solid domestic economic growth and diminished concerns about the global economy and trade relations. Stocks gained sharply early in the year and experienced heightened volatility in May and September before reaching record price highs near the end of 2019. The decline in market volatility reflected many market participants’ shift from growth concerns to a more optimistic outlook.

The Fed provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three

1. Please see Index Descriptions following the Fund Summaries.

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

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

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Solid U.S. economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September and November 2019, the lowest recorded unemployment rate in 50 years.³ Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

International and trade developments also impacted U.S. stocks during the period. Investors were concerned about slowing global growth and the impact it might have on U.S. equities, but some market participants’ predictions of a global recession did not materialize as growth proved resilient amid a series of interest-rate cuts by many central banks. The trade war between the U.S. and China was a dominant theme over the period, and stocks fluctuated as many investors responded to the latest developments, both positive and negative. However, by period-end, markets were reassured by a phase one trade agreement between the two countries, which lowered certain tariffs and addressed some of the principal areas of conflict.

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

Top 10 Holdings

12/31/19

Company Sector/Industry	% of Total Net Assets
CoStar Group Inc. Industrials	2.1%
Verisk Analytics Inc. Industrials	1.9%
SBA Communications Corp. Real Estate	1.8%
Global Payments Inc. Information Technology	1.8%
MSCI Inc. Financials	1.8%
IDEX Corp. Industrials	1.7%
IAC/InterActiveCorp Communication Services	1.6%
Mettler-Toledo International Inc. Health Care	1.6%
Black Knight Inc. Information Technology	1.6%
IDEXX Laboratories Inc. Health Care	1.6%

reflect the balance of the sustainable growth opportunities relative to business and financial risks.

Manager’s Discussion

During the period under review, nearly all sectors represented in the portfolio contributed to the Fund’s strong absolute returns. Relative to the Russell Midcap^® Growth Index, however, the Fund slightly underperformed. Detractors from relative performance included stock selection in the information technology (IT) and consumer discretionary sectors, as well as stock selection and an underweight in health care. In contrast, stock selection in financials along with stock selection and underweights in consumer staples and communication services contributed.

In IT, relative detractors included education technology company 2U and software-as-a-service provider New Relic. 2U’s stock declined after disappointing earnings for 2019’s second quarter. We liquidated our position after discussions with 2U executives and industry consultants led us to believe the company’s growth profile had reset lower due to broad challenges across its graduate- and short-course portfolios. We also sold off our position in New Relic, whose shares

3. Source: Bureau of Labor Statistics.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

declined following lower-than-expected sales figures for 2019’s second quarter. Management cited the launch of a new data analysis platform and a reorganization of its sales teams as reasons for the poor performance. Guidance for sales and cash flow for the remainder of its 2020 fiscal year also came in below expectations.

In consumer discretionary, postsecondary education services provider Grand Canyon Education and online travel booking company Expedia Group detracted from relative results. An underweighted position in well-performing fast-casual restaurant operator Chipotle Mexican Grill detracted as well.

In health care, medical device manufacturer ABIOMED (not held at period-end) detracted from relative performance. Shares declined after the company was forced to cut guidance after the U.S. Food and Drug Administration (FDA) issued a letter in February 2019 expressing concern about the safety of the Impella RP heart pump. The FDA issued a correction later in the year that stated the pump was safe. Off-benchmark positions in remote dentistry services provider SmileDirectClub (not held at period-end) and cannabinoid-based biopharmaceutical company GW Pharmaceuticals also detracted.

In contrast, relative contributors in financials included electronic trading platform MarketAxess Holding. MarketAxess benefited from healthy trading levels in 2019 due partially to increased uncertainty and volatility in the broader market, and the company’s volumes outpaced the industry as more trading activity shifts from voice to electronic platforms. Higher demand for U.S. bonds also drove increased trading levels from international clients. The company also acquired LiquidityEdge, a trading platform for rates, whose protocols and liquidity MarketAxess plans to leverage to strengthen its core credit trading business. Other contributors in the sector included index and portfolio risk and performance analytics provider MSCI and global alternative asset manager Ares Management (not part of the Index).

The consumer staples sector benefited from the Fund’s lack of position in a major cleaning company, as well as smaller relative contributors such as BellRing Brands, a nutritional food and supplements company which spun off from its parent company Post Holdings in late 2019.

In communication services, a lack of positions in several poor-performing media and communication platforms boosted relative results.

Elsewhere, off-benchmark positions in clinical stage biopharmaceutical firm Reata Pharmaceuticals and cancer-focused biopharmaceutical company Array BioPharma (not held at period-end) contributed to relative results. Reata Pharmaceuticals’ share price surged after the company announced positive results for a clinical trial for omaveloxolone, a treatment for neuromuscular disorder Friedreich’s ataxia. Array BioPharma was acquired by pharmaceuticals firm Pfizer (not a Fund holding) for a significant premium over the preannouncement stock closing price. Real estate information provider CoStar Group and ecommerce platform Shopify also contributed.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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FRANKLIN SMALL-MID CAP GROWTH VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,036.80	$6.06	$1,019.26	$6.01	1.18%

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST    

Financial Highlights

Franklin Small-Mid Cap Growth VIP Fund

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$17.04			$19.71			$17.77			$19.09			$24.95
Income from investment operationsa:
Net investment income (loss)b		(0.04	)		(0.05	)		(0.04	)		(0.03	)		—	c,d
Net realized and unrealized gains (losses)		5.31			(0.70	)		3.74			0.77			(0.03	)
Total from investment operations		5.27			(0.75	)		3.70			0.74			(0.03	)
Less distributions from:
Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of year		$19.74			$17.04			$19.71			$17.77			$19.09
Total returne		31.80%			(5.15)%			21.75%			4.40%			(2.44)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.84%			0.86%			0.85%			0.84%			0.81%
Expenses net of waiver and payments by affiliates		0.83%	f		0.85%	f		0.84%	f		0.82%	f		0.81%	g
Net investment income (loss)		(0.19)%			(0.24)%			(0.24)%			(0.16)%			0.01%	d
Supplemental data
Net assets, end of year (000’s)		$43,169			$33,518			$36,864			$31,756			$87,866
Portfolio turnover rate		59.07%			44.78%			40.49%			32.23%h			37.85%

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

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.24)%.

^eTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle.

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

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

^hExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$15.22			$17.83			$16.27			$17.69			$23.56
Income from investment operationsa:
Net investment income (loss)b		(0.08	)		(0.09	)		(0.08	)		(0.07	)		(0.05	)c
Net realized and unrealized gains (losses)		4.72			(0.60	)		3.40			0.71			0.01
Total from investment operations		4.64			(0.69	)		3.32			0.64			(0.04	)
Less distributions from:
Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of year		$17.29			$15.22			$17.83			$16.27			$17.69
Total returnd		31.44%			(5.37)%			21.40%			4.17%			(2.66)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.09%			1.11%			1.10%			1.09%			1.06%
Expenses net of waiver and payments by affiliates		1.08%	e		1.10%	e		1.09%	e		1.07%	e		1.06%	f
Net investment income (loss)		(0.44)%			(0.49)%			(0.49)%			(0.41)%			(0.24)%	c
Supplemental data
Net assets, end of year (000’s)		$372,442			$310,300			$390,094			$392,777			$478,649
Portfolio turnover rate		59.07%			44.78%			40.49%			32.23%g			37.85%

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

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.49)%

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

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

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

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$15.81			$18.47			$16.81			$18.23			$24.14
Income from investment operationsa:
Net investment income (loss)b		(0.10	)		(0.11	)		(0.10	)		(0.09	)		(0.07	)c
Net realized and unrealized gains (losses)		4.90			(0.63	)		3.52			0.73			(0.01	)
Total from investment operations		4.80			(0.74	)		3.42			0.64			(0.08	)
Less distributions from:
Net realized gains		(2.57	)		(1.92	)		(1.76	)		(2.06	)		(5.83	)
Net asset value, end of year		$18.04			$15.81			$18.47			$16.81			$18.23
Total returnd		31.26%			(5.46)%			21.30%			4.04%			(2.77)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.19%			1.21%			1.20%			1.19%			1.16%
Expenses net of waiver and payments by affiliates		1.18%	e		1.20%	e		1.19%	e		1.17%	e		1.16%f
Net investment income (loss)		(0.54)%			(0.59)%			(0.59)%			(0.51)%			(0.34)%c
Supplemental data
Net assets, end of year (000’s)		$17,662			$13,759			$15,829			$13,825			$15,105
Portfolio turnover rate		59.07%			44.78%			40.49%			32.23%g			37.85%

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

^bBased on average daily shares outstanding.

^cNet investment income per share includes approximately $0.05 per share related to income received in the form of special dividends in connection with certain Fund holdings. Excluding this amount, the ratio of net investment income to average net assets would have been (0.59)%.

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

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

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

^gExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

    _

Statement of Investments, December 31, 2019

Franklin Small-Mid Cap Growth VIP Fund

	Shares		Value
Common Stocks 97.8%
Communication Services 3.1%
aIAC/InterActiveCorp.		28,500	$	7,099,635
aPinterest Inc., A		178,500		3,327,240
aSpotify Technology SA		20,000		2,991,000
				13,417,875
Consumer Discretionary 18.1%
Aptiv PLC		25,977		2,467,036
aBurlington Stores Inc.		27,500		6,270,825
aChipotle Mexican Grill Inc.		6,605		5,529,111
Dollar General Corp.		33,500		5,225,330
Domino’s Pizza Inc.		11,000		3,231,580
a,b,cDraftKings Inc.		733,541		2,241,958
Expedia Group Inc.		52,100		5,634,094
aFive Below Inc.		30,400		3,886,944
aGrand Canyon Education Inc.		15,057		1,442,310
Levi Strauss & Co., A		150,000		2,893,500
MGM Resorts International		134,500		4,474,815
aNVR Inc.		932		3,549,438
aO’Reilly Automotive Inc.		11,307		4,955,406
a,dPeloton Interactive Inc., A		81,500		2,314,600
a,dRevolve Group Inc.		64,500		1,184,220
aRH		6,900		1,473,150
Tractor Supply Co.		60,737		5,675,265
aUlta Beauty Inc.		18,100		4,581,834
aUnder Armour Inc., A		109,500		2,365,200
Vail Resorts Inc.		23,600		5,659,988
Wingstop Inc.		37,500		3,233,625
				78,290,229
Consumer Staples 2.0%
a BellRing Brands Inc., A		55,500		1,181,595
Church & Dwight Co. Inc.		59,500		4,185,230
McCormick & Co. Inc.		19,500		3,309,735
				8,676,560
Energy 0.7%
Diamondback Energy Inc.		30,400		2,822,944
Financials 7.5%
Ares Management Corp., A		88,500		3,158,565
CBOE Global Markets Inc.		42,000		5,040,000
MarketAxess Holdings Inc.		15,796		5,988,422
MSCI Inc.		30,000		7,745,400
TCF Financial Corp.		61,000		2,854,800
Tradeweb Markets Inc.		87,500		4,055,625
Western Alliance Bancorp		63,000		3,591,000
				32,433,812

Annual Report         FSC-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Health Care 14.7%
a Argenx SE, ADR (Netherlands)		9,000	$	1,444,680
a Avantor Inc.		190,500		3,457,575
a DexCom Inc.		29,688		6,493,953
a Elanco Animal Health Inc.		98,500		2,900,825
a Guardant Health Inc.		28,800		2,250,432
a GW Pharmaceuticals PLC, ADR (United Kingdom)		21,600		2,258,496
a HealthEquity Inc.		51,500		3,814,605
a Heron Therapeutics Inc.		172,400		4,051,400
a IDEXX Laboratories Inc.		25,750		6,724,098
a iRhythm Technologies Inc.		25,500		1,736,295
a,d Livongo Health Inc.		73,000		1,829,380
a Masimo Corp.		14,000		2,212,840
a Mettler-Toledo International Inc.		8,655		6,865,838
a Neurocrine Biosciences Inc.		19,144		2,057,789
a Penumbra Inc.		22,748		3,736,814
a PTC Therapeutics Inc.		40,000		1,921,200
a Reata Pharmaceuticals Inc.		19,800		4,047,714
a Revance Therapeutics Inc.		74,001		1,201,036
a Sage Therapeutics Inc.		7,500		541,425
a Veeva Systems Inc.		30,600		4,304,196
				63,850,591
Industrials 17.5%
BWX Technologies Inc.		63,500		3,942,080
a CoStar Group Inc.		15,535		9,294,590
Fortive Corp.		75,100		5,736,889
IDEX Corp.		42,500		7,310,000
L3Harris Technologies Inc.		19,500		3,858,465
a Lyft Inc., A		55,500		2,387,610
a Mercury Systems Inc.		51,000		3,524,610
Old Dominion Freight Line Inc.		11,500		2,182,470
Republic Services Inc.		54,000		4,840,020
Rockwell Automation Inc.		31,500		6,384,105
Roper Technologies Inc.		17,243		6,107,988
Stanley Black & Decker Inc.		25,296		4,192,559
TransUnion		55,500		4,751,355
a Univar Solutions Inc.		57,800		1,401,072
a Upwork Inc.		161,000		1,717,870
Verisk Analytics Inc.		54,861		8,192,942
				75,824,625
Information Technology 29.4%
a Advanced Micro Devices Inc.		23,900		1,096,054
a Adyen NV (Netherlands)		2,900		2,377,362
a Alteryx Inc.		37,300		3,732,611
Amphenol Corp., A		54,200		5,866,066
a ANSYS Inc.		21,200		5,457,092
a Atlassian Corp. PLC		40,000		4,813,600

FSC-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Shares		Value
Common Stocks (continued)
Information Technology (continued)
a Bill.Com Holdings Inc.		16,800	$	639,240
a,b,c Bill.Com Holdings Inc.		48,148		1,763,456
a Black Knight Inc.		106,000		6,834,880
a CloudFlare Inc., A		101,300		1,728,178
a DocuSign Inc.		89,500		6,632,845
a EPAM Systems Inc.		20,500		4,349,280
Global Payments Inc.		42,600		7,777,056
a GoDaddy Inc., A		98,117		6,664,107
a Keysight Technologies Inc.		20,800		2,134,704
KLA Corp.		32,237		5,743,666
a Lattice Semiconductor Corp.		112,195		2,147,412
Microchip Technology Inc.		31,327		3,280,563
Monolithic Power Systems		30,500		5,429,610
NXP Semiconductors NV (Netherlands)		10,600		1,348,956
a Okta Inc., A		18,400		2,122,808
a Paylocity Holding Corp.		39,500		4,772,390
a Q2 Holdings Inc.		39,996		3,242,876
a Semtech Corp.		17,000		899,300
a SiTime Corp. (Japan)		59,100		1,507,050
a Square Inc., A		42,000		2,627,520
a Synopsys Inc.		47,000		6,542,400
a Trimble Inc.		66,500		2,772,385
a Twilio Inc., A		56,000		5,503,680
a ViaSat Inc.		51,266		3,752,415
a WEX Inc.		18,500		3,875,010
a Wix.com Ltd. (Israel)		16,000		1,958,080
Xilinx Inc.		37,000		3,617,490
a Zendesk Inc.		53,700		4,115,031
				127,125,173
Materials 3.0%
Ball Corp.		70,700		4,572,169
a Ingevity Corp.		44,741		3,909,469
Martin Marietta Materials Inc.		16,500		4,614,060
				13,095,698
Real Estate 1.8%
SBA Communications Corp., A		33,057		7,966,406
Total Common Stocks (Cost $312,287,852)				423,503,913
Short Term Investments 3.5%
Money Market Funds (Cost $10,406,987) 2.4%
e,f Institutional Fiduciary Trust Money Market Portfolio, 1.26%		10,406,987		10,406,987

Annual Report          FSC-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

	Shares		Value
Short Term Investments (continued)
g Investments from Cash Collateral Received for Loaned Securities 1.1%
Money Market Funds (Cost $4,879,541) 1.1%
e,f Institutional Fiduciary Trust Money Market Portfolio, 1.26%		4,879,541	$	4,879,541
Total Investments (Cost $327,574,380) 101.3%				438,790,441
Other Assets, less Liabilities (1.3)%				(5,517,932	)
Net Assets 100.0%			$	433,272,509

See Abbreviations on page FSC-24.

^aNon-income producing.

^bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.

^cSee Note 7 regarding restricted securities.

^dA portion or all of the security is on loan at December 31, 2019. See Note 1(c).

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

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

^gSee Note 1(c) regarding securities on loan.

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Franklin Small-Mid Cap Growth VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$312,287,852
Cost - Non-controlled affiliates (Note 3e)		15,286,528
Value - Unaffiliated issuers+		$423,503,913
Value - Non-controlled affiliates (Note 3e)		15,286,528
Receivables:
Investment securities sold		15,696
Capital shares sold		14,442
Dividends and interest		134,686
Other assets		49
Total assets		438,955,314
Liabilities:
Payables:
Capital shares redeemed		282,565
Management fees		287,779
Distribution fees		84,249
Payable upon return of securities loaned		4,879,541
Accrued expenses and other liabilities		148,671
Total liabilities		5,682,805
Net assets, at value		$433,272,509
Net assets consist of:
Paid-in capital		$260,632,765
Total distributable earnings (losses)		172,639,744
Net assets, at value		$433,272,509
Class 1:
Net assets, at value		$  43,168,760
Shares outstanding		2,187,123
Net asset value and maximum offering price per share		$19.74
Class 2:
Net assets, at value		$372,442,179
Shares outstanding		21,541,516
Net asset value and maximum offering price per share		$17.29
Class 4:
Net assets, at value		$  17,661,570
Shares outstanding		978,862
Net asset value and maximum offering price per share		$18.04
+Includes securities loaned		$  4,887,803

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Franklin Small-Mid Cap Growth VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$      2,321,013
Non-controlled affiliates (Note 3e)		263,730
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)		103,423
Non-controlled affiliates (Note 3e)		53,015
Total investment income		2,741,181
Expenses:
Management fees (Note 3a)		3,406,669
Distribution fees: (Note 3c)
Class 2		919,701
Class 4		58,641
Custodian fees (Note 4)		3,406
Reports to shareholders		122,129
Professional fees		55,888
Trustees’ fees and expenses		2,513
Other		17,763
Total expenses		4,586,710
Expense reductions (Note 4)		(69	)
Expenses waived/paid by affiliates (Note 3e)		(60,763	)
Net expenses		4,525,878
Net investment income (loss)		(1,784,697	)
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		63,676,743
Foreign currency transactions		(1,441	)
Net realized gain (loss)		63,675,302
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		48,782,330
Net realized and unrealized gain (loss)		112,457,632
Net increase (decrease) in net assets resulting from operations		$110,672,935

*Foreign taxes withheld on dividends $                37

FSC-14         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Franklin Small-Mid Cap Growth VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income (loss)		$    (1,784,697	)		$    (2,030,124	)
Net realized gain (loss)		63,675,302			59,101,775
Net change in unrealized appreciation (depreciation)		48,782,330			(74,199,939	)
Net increase (decrease) in net assets resulting from operations		110,672,935			(17,128,288	)
Distributions to shareholders:
Class 1		(5,113,428	)		(3,540,738	)
Class 2		(51,808,967	)		(39,501,499	)
Class 4		(2,209,122	)		(1,517,449	)
Total distributions to shareholders		(59,131,517	)		(44,559,686	)
Capital share transactions: (Note 2)
Class 1		4,136,766			1,966,782
Class 2		18,159,781			(25,664,064	)
Class 4		1,857,466			175,962
Total capital share transactions		24,154,013			(23,521,320	)
Net increase (decrease) in net assets		75,695,431			(85,209,294	)
Net assets:
Beginning of year		357,577,078			442,786,372
End of year		$433,272,509			$357,577,078

The accompanying notes are an integral part of these financial statements.  |  Annual Report         FSC-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Franklin Small-Mid Cap Growth VIP Fund

1.   Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Small-Mid Cap Growth VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At December 31, 2019, 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 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. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

FSC-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid 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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b. Foreign Currency Translation

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

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

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

c. Securities Lending

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

d. Income and Deferred Taxes

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

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital 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.

Annual Report          FSC-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

d.   Income and Deferred Taxes(continued)

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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.

FSC-18         Annual Report  

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

2. Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		318,754		$	6,251,939			148,944		$	2,929,602
Shares issued in reinvestment of distributions		273,885			5,113,428			179,278			3,540,738
Shares redeemed		(372,027	)		(7,228,601	)		(231,919	)		(4,503,558	)
Net increase (decrease)		220,612		$	4,136,766			96,303		$	1,966,782
Class 2 Shares:
Shares sold		1,911,894		$	33,367,659			706,305		$	12,308,866
Shares issued in reinvestment of distributions		3,162,941			51,808,967			2,236,778			39,501,499
Shares redeemed		(3,921,307	)		(67,016,845	)		(4,433,380	)		(77,474,429	)
Net increase (decrease)		1,153,528		$	18,159,781			(1,490,297	)	$	(25,664,064	)
Class 4 Shares:
Shares sold		191,080		$	3,405,783			136,649		$	2,474,956
Shares issued in reinvestment of distributions		129,188			2,209,122			82,695			1,517,449
Shares redeemed		(211,768	)		(3,757,439	)		(205,969	)		(3,816,443	)
Net increase (decrease)		108,500		$	1,857,466			13,375		$	175,962

3. Transactions with Affiliates

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

3.  Transactions with Affiliates (continued)

a.  Management Fees

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

Annualized Fee Rate	Net Assets
0.800%	Up to and including $500 million
0.700%	Over $500 million, up to and including $1 billion
0.650%	Over $1 billion, up to and including $1.5 billion
0.600%	Over $1.5 billion, up to and including $6.5 billion
0.575%	Over $6.5 billion, up to and including $11.5 billion
0.550%	Over $11.5 billion, up to and including $16.5 billion
0.540%	Over $16.5 billion, up to and including $19 billion
0.530%	Over $19 billion, up to and including $21.5 billion
0.520%	In excess of $21.5 billion

b.  Administrative Fees

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

c.  Distribution Fees

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

d.  Transfer Agent Fees

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		$12,085,918		$114,308,590		$(115,987,521	)		$    —		$    —		$10,406,987		10,406,987		$263,730
																	Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		—		51,372,997		(46,493,456	)		—		—		4,879,541		4,879,541		53,015
Total Affiliated Securities		$12,085,918		$165,681,587		$(162,480,977	)		$    —		$    —		$15,286,528				$316,745

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, 2019, these purchase and sale transactions aggregated $0 and $295,036, 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, 2019, 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, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	—	$	4,739,598
Long term capital gain		59,131,517		39,820,088
	$	59,131,517	$	44,559,686

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

5. Income Taxes (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	327,888,701
Unrealized appreciation	$	117,591,450
Unrealized depreciation		(6,689,710	)
Net unrealized appreciation (depreciation)	$	110,901,740
Distributable earnings:
Undistributed ordinary income	$	4,541,205
Undistributed long term capital gains		57,196,798
Total distributable earnings	$	61,738,003

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, 2019, aggregated $242,597,679 and $278,418,875, respectively.

At December 31, 2019, in connection with securities lending transactions, the Fund loaned equity investments and received $4,879,541 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, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares		Issuer	Acquisition     Date		Cost		Value
	48,148	Bill.Com Holdings Inc.		12/21/18	$	799,998	$	1,763,456
	733,541	DraftKings Inc.		8/07/15		2,800,003		2,241,958
		Total Restricted Securities (Value is 0.9% of Net Assets)			$	3,600,001	$	4,005,414

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid 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 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

9.  Fair Value Measurements

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

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

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

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

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

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:
Consumer Discretionary	$	76,048,271	$	—	$	2,241,958	$	78,290,229
Information Technology		125,361,717		—		1,763,456		127,125,173
All Other Equity Investments		218,088,511		—		—		218,088,511
Short Term Investments		15,286,528		—		—		15,286,528
Total Investments in Securities	$	434,785,027	$	—	$	4,005,414	$	438,790,441

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

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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Franklin Small-Mid Cap Growth VIP Fund (continued)

10.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Abbreviations

Selected Portfolio

ADR     American Depositary Receipt

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Franklin Small-Mid Cap Growth VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $59,131,517 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

FSC-26         Annual Report

Franklin Strategic Income VIP Fund

This annual report for Franklin Strategic Income VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+7.93%		+2.69%		+4.37%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 Barclays 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.

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FRANKLIN STRATEGIC INCOME VIP FUND

Fund Goal and Main Investments

The Fund seeks a high level of current income, with capital appreciation over the long term as a secondary goal. Under normal market conditions, the Fund invests primarily to predominantly in U.S. and foreign debt securities, including those in emerging markets.

Fund Risks

All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. High yields reflect the higher credit risks associated with certain lower rated securities held in the portfolio. Floating rate loans and high yield corporate bonds are rated below investment grade and are subject to greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. The risks of foreign securities include currency fluctuations and political uncertainty. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. For comparison, the Fund’s benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, posted a +8.72% 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 +9.77% return.²

Economic and Market Overview

Bond prices rose sharply during the reporting period, as interest-rate cuts and many investors’ search for income pushed down yields on most bond categories. Notably, U.S. bonds, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, performed well alongside high returns from U.S. equities, as measured by the Standard & Poor’s^® 500 Index.

The primary driver of U.S. bond performance was a shift in the U.S. Federal Reserve’s (Fed’s) monetary policy. After a period of tightening in 2018, the Fed shifted course, announcing in January 2019 that it would not be raising interest rates in the near future. Three interest-rate cuts followed thereafter, with the Fed lowering the federal funds rate to a range of 1.50%–1.75%. Falling interest rates typically increase the value of existing bonds, since their relatively higher yields become more attractive to investors.

Both long-term and short-term U.S. bonds, as measured by subindexes of the Bloomberg Barclays U.S. Aggregate Bond Index, gained during the period, with long-term bonds posting stronger returns due to their higher sensitivity to interest-rate changes. Interest rates on long-term U.S. Treasuries initially fell more than interest rates on short-term U.S. Treasuries, leading to a flattening of the yield curve, which charts the yields of U.S. Treasuries at varying maturity dates. In August 2019, the yield on 10-year U.S. Treasuries fell below the yield on two-year U.S. Treasuries. While some investors considered this inversion a sign that the economy was moving toward a recession, the two-year and 10-year U.S. Treasury yield curve steepened again shortly thereafter amid positive economic signals.

U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, gained during the period, which was characterized by high levels of Treasury issuance due to the government’s deficit spending. A strong U.S. dollar during most of the period and comparatively higher Treasury yields relative to sovereign debt issued by other developed market countries made Treasuries attractive to foreign investors.

Corporate bonds also posted noteworthy returns, driven by the combination of a relatively strong economy and lower interest rates. Both investment-grade and high-yield

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).

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FRANKLIN STRATEGIC INCOME VIP FUND

corporate bonds gained significantly, as measured by the Bloomberg Barclays U.S. Corporate Bond Index and Bloomberg Barclays U.S. Corporate High Yield Bond Index, respectively, as solid corporate profits and steady economic growth helped strengthen investors’ confidence in corporate creditworthiness. The positive environment for debt extended to mortgage-backed securities, as prepayments due to homeowner refinancing declined after hitting a three-year high in August 2019.

Investment Strategy

We allocate our investments among the various types of debt available based on our assessment of changing economic, global market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, seeking to take advantage of varying sector reactions to economic events. For example, we may evaluate business cycles, yield curves, country risk, and the relative interest rates among currencies, and values between and within markets. In selecting debt securities, we generally conduct our own analysis of the security’s intrinsic value rather than simply relying on the coupon rate or rating. We may also enter into various transactions involving certain currency-, interest rate- or credit-related derivative instruments.

What is the yield curve?

A yield curve is a line that plots the yield to maturity of bonds having equal credit quality against their maturity dates.

Manager’s Discussion

The Fund allocated assets across the broad fixed income markets with an emphasis on spread sectors, both corporate and securitized. Our largest allocations were in high-yield corporate credit, non-agency residential mortgage-backed securities (RMBS) and sovereign emerging market bonds, with smaller exposures to collateralized loan obligations (CLOs), senior secured floating-rate loans and investment-grade corporate credit. Over the period we pared exposure to high-yield and investment-grade corporate credit as well as senior secured floating-rate loans, while we increased our CLO exposure. The Fund added to RMBS over the period. For our RMBS exposure we preferred to remain allocated to the seasoned credit risk transfer where fundamental and technical forces remained positive. Our foreign-currency exposure was held through a basket of shorts with major positions in the euro, Australian dollar, Canadian dollar, Chinese Renminbi, New Zealand dollar and South Korean won versus a basket of longs with major positions in the

Portfolio Composition*

Based on Consolidated Net Assets

	12/31/19
High-Yield Corporate Bonds		16.89%
Residential Mortgage-Backed Securities		12.89%
Non-Local Currency Emerging Market Bonds		11.88%
Collateralized Loan Obligations		10.60%
Floating-Rate Loans		9.96%
Investment-Grade Corporate Bonds		9.13%
Agency Mortgage-Backed Securities		8.24%
Interest-Rate Derivatives		6.75%
Municipal Bonds		4.80%
Treasury Inflation-Protected Securities		4.04%
Non-U.S. Developed Bonds		3.82%
Local Currency Emerging Market Bonds		3.73%
Asset-Backed Securities		1.91%
Commercial Mortgage-Backed Securities		1.64%
U.S. Treasuries		1.46%
Marketplace Loans		0.65%
Covered Bonds		0.13%
Currency Derivatives		-0.18%
Other		1.82%
Short-Term Investments & Other Net Assets		1.44%

*Notional exposure figures are intended to estimate the portfolio’s exposure, including any hedged or increased exposure through certain derivatives held in the portfolio (or their underlying reference assets). Portfolio breakdown percentages may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors. Interest-rate derivatives sector consists of Treasury, interest rate and other derivatives that are primarily used for duration management.

Japanese yen, Norwegian krone, Indonesian rupiah, Colombian, Uruguayan and Mexican peso, South African rand, Brazilian real and other emerging-market currencies.

The Fund’s U.S. dollar yield curve positioning was a significant contributor to performance. Allocations across corporate credit provided sizable contributions to results over the period, including high-yield and investment-grade corporate credit, senior secured floating-rate loans and CLOs. Sovereign emerging-market and developed market debt, non-dollar developed market bonds, tax-exempt municipal bonds and RMBS also benefited returns. Foreign currency exposure detracted from overall returns as performance gains mainly from our long Mexican peso, Swedish krona and Norwegian krone exposures and short euro, Chinese renminbi and South Korean won positions, were offset by negative returns from long positions in the Japanese yen, Uruguayan peso and Brazilian real and short Canadian dollar position. Additionally, the Fund’s exposure to fixed-rate agency MBS detracted from performance.

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FRANKLIN STRATEGIC INCOME VIP FUND

The Fund utilized derivatives, including credit default swaps, currency forwards and government bond futures, for hedging purposes and to take active exposures. These derivative transactions may provide the same, or similar, net long or short exposure to select currencies, interest rates, countries, duration or credit risks compared to holding securities.

What are swap agreements?

Swap agreements, such as interest-rate, currency and credit default swaps, are contracts between the Fund and another party (the swap counterparty). In a basic swap transaction, the Fund agrees with the swap counterparty to exchange the returns (or differentials in rates of return) earned or realized on a particular “notional amount” of underlying instruments. The notional amount is the set amount selected by the parties as the basis on which to calculate the obligations that they have agreed to exchange. The parties typically do not actually exchange the notional amount. Instead, they agree to exchange the returns that would be earned or realized if the notional amount were invested in given instruments or at given interest rates.

What is a currency forward?

A currency forward is a direct agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

What is a futures contract?

A futures contract is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

What is meant by “hedge”?

To hedge an investment is to take a position intended to offset potential losses that may be incurred by a companion financial instrument. Hedging an investment may also offset potential gains.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,011.20	$5.27	$1,019.96	$5.30	1.04%

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

Annual Report          FSI-5

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Consolidated Financial Highlights

Franklin Strategic Income VIP Fund

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$10.65			$11.15			$11.01			$10.55			$11.90
Income from investment operationsa:
Net investment incomeb		0.45			0.47			0.45			0.48			0.53
Net realized and unrealized gains (losses)		0.43			(0.65	)		0.04			0.37			(0.91	)
Total from investment operations		0.88			(0.18	)		0.49			0.85			(0.38	)
Less distributions from:
Net investment income and net foreign currency gains		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.77	)
Net realized gains		—			—			—			—			(0.20	)
Total distributions		(0.60	)		(0.32	)		(0.35	)		(0.39	)		(0.97	)
Net asset value, end of year		$10.93			$10.65			$11.15			$11.01			$10.55
Total returnc		8.41%			(1.65)%			4.46%			8.25%			(3.62)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.71%			0.67%			0.68%			0.67%			0.63%
Expenses net of waiver and payments by affiliatesd		0.68%			0.63%			0.63%			0.60%			0.62%
Net investment income		4.09%			4.28%			4.00%			4.42%			4.71%
Supplemental data
Net assets, end of year (000’s)		$285,437			$302,610			$361,465			$396,170			$441,658
Portfolio turnover rate		114.89%	e		107.90%	f		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsg		72.45%	e		40.38%	f		48.11%			77.93%			51.47%

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

^bBased on average daily shares outstanding.

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

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

^eExcludes the value of portfolio activity as a result of in-kind transactions. See Note 6.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

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

FSI-6             Annual Report  |  The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin Strategic Income VIP Fund (continued)

				Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$10.28			$10.76			$10.64			$10.21			$11.55
Income from investment operationsa:
Net investment incomeb		0.40			0.42			0.40			0.43			0.49
Net realized and unrealized gains (losses)		0.42			(0.61	)		0.04			0.36			(0.89	)
Total from investment operations		0.82			(0.19	)		0.44			0.79			(0.40	)
Less distributions from:
Net investment income and net foreign currency gains		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.74	)
Net realized gains		—			—			—			—			(0.20	)
Total distributions		(0.55	)		(0.29	)		(0.32	)		(0.36	)		(0.94	)
Net asset value, end of year		$10.55			$10.28			$10.76			$10.64			$10.21
Total returnc		8.05%			(1.77)%			4.17%			7.94%			(3.87	)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.96%			0.92%			0.93%			0.92%			0.88%
Expenses net of waiver and payments by affiliatesd		0.93%			0.88%			0.88%			0.85%			0.87%
Net investment income		3.84%			4.03%			3.75%			4.17%			4.46%
Supplemental data
Net assets, end of year (000’s)		$94,928			$89,264			$214,271			$203,418			$202,192
Portfolio turnover rate		114.89%	e		107.90%	f		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsg		72.45%	e		40.38%	f		48.11%			77.93%			51.47%

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

^bBased on average daily shares outstanding.

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

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

^eExcludes the value of portfolio activity as a result of in-kind transactions. See Note 6.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

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

The accompanying notes are an integral part of these consolidated financial statements.  |  Annual Report         FSI-7

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin Strategic Income VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$10.56			$11.04			$10.90			$10.44			$11.78
Income from investment operationsa:
Net investment incomeb		0.41			0.43			0.40			0.43			0.49
Net realized and unrealized gains (losses)		0.42			(0.64	)		0.04			0.38			(0.91	)
Total from investment operations		0.83			(0.21	)		0.44			0.81			(0.42	)
Less distributions from:
Net investment income and net foreign currency gains		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.72	)
Net realized gains		—			—			—			—			(0.20	)
Total distributions		(0.56	)		(0.27	)		(0.30	)		(0.35	)		(0.92	)
Net asset value, end of year		$10.83			$10.56			$11.04			$10.90			$10.44
Total returnc		7.93%			(1.88)%			4.08%			7.86%			(3.98)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.06%			1.02%			1.03%			1.02%			0.98%
Expenses net of waiver and payments by affiliatesd		1.03%			0.98%			0.98%			0.95%			0.97%
Net investment income		3.74%			3.93%			3.65%			4.07%			4.36%
Supplemental data
Net assets, end of year (000’s)		$54,485			$60,763			$74,013			$80,175			$92,965
Portfolio turnover rate		114.89%	e		107.90%	f		108.73%			128.51%			85.85%
Portfolio turnover rate excluding mortgage dollar rollsg		72.45%	e		40.38%	f		48.11%			77.93%			51.47%

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

^bBased on average daily shares outstanding.

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

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

^eExcludes the value of portfolio activity as a result of in-kind transactions. See Note 6.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind. See Note 11.

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

FSI-8         Annual Report  |  The accompanying notes are an integral part of these  consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Consolidated Statement of Investments, December 31, 2019

Franklin Strategic Income VIP Fund

	Country/ Organization		Shares/ Warrants		Value
Common Stocks and Other Equity Interests 0.3%
Commercial & Professional Services 0.0%†
a,b Remington Outdoor Co. Inc.		United States		74,576	$	46,610
Consumer Services 0.0%†
a,b,c Turtle Bay Resort		United States		1,901,449		41,832
Energy 0.2%
Amplify Energy Corp.		United States		431		2,849
a,b Amplify Energy Corp., wts., 4/21/20		United States		4,121		—
a Birch Permian Holdings Inc.		United States		4,478		44,780
a Birch Permian Holdings Inc.		United States		34,907		344,707
a Halcon Resources Corp.		United States		183		2,461
a,b Halcon Resources Corp., wts., 9/09/20		United States		6,591		—
a,b Halcon Resources Corp., wts., A, 10/08/22		United States		879		805
a,b Halcon Resources Corp., wts., B, 10/08/22		United States		1,098		706
a,b Halcon Resources Corp., wts., C, 10/08/22		United States		1,412		562
Riviera Resources Inc.		United States		6,620		52,827
a Weatherford International PLC		United States		13,794		385,542
						835,239
Materials 0.1%
a,b,d Appvion Operations Inc.		United States		18,684		254,512
a Verso Corp., A		United States		5,620		101,329
a Verso Corp., wts., 7/25/23		United States		592		2,072
						357,913
Media & Entertainment 0.0%†
a Clear Channel Outdoor Holdings Inc.		United States		20,804		59,499
a iHeartMedia Inc., A		United States		8,384		141,690
a,b iHeartMedia Inc., B		United States		142		2,040
						203,229
Retailing 0.0%†
a,b,d K2016470219 South Africa Ltd., A		South Africa		14,792,309		10,563
a,b,d K2016470219 South Africa Ltd., B		South Africa		1,472,041		1,051
						11,614
Total Common Stocks and Other Equity Interests (Cost $6,847,916)						1,496,437
Management Investment Companies (Cost $11,072,145) 2.1%
Diversified Financials 2.1%
e Franklin Floating Rate Income Fund		United States		1,118,951		9,264,918

Annual Report          FSI-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization		Principal  Amount*			Value
Corporate Bonds 29.6%
Banks 2.9%
f Akbank T.A.S., senior note, 144A, 5.125%, 3/31/25		Turkey		1,200,000		$	1,177,111
Bank of America Corp.,
senior bond, 3.248%, 10/21/27		United States		647,000			674,251
senior note, 3.50%, 4/19/26		United States		2,480,000			2,637,037
g BDO Unibank Inc., senior note, Reg S, 2.95%, 3/06/23		Philippines		200,000			202,152
Citigroup Inc.,
senior note, 3.30%, 4/27/25		United States		243,000			255,020
senior note, 3.40%, 5/01/26		United States		1,106,000			1,161,639
Industrial & Commercial Bank of China Ltd., senior note, 3.538%, 11/08/27		China		900,000			932,103
JPMorgan Chase & Co.,
h junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		213,000			228,861
senior bond, 3.20%, 6/15/26		United States		1,213,000			1,267,065
sub. note, 3.375%, 5/01/23		United States		809,000			840,755
sub. note, 3.875%, 9/10/24		United States		809,000			865,990
g Turkiye Vakiflar Bankasi TAO, secured note, Reg S, 2.375%, 11/04/22		Turkey		500,000	EUR		566,797
Wells Fargo & Co., senior note, 3.00%, 4/22/26		United States		2,021,000			2,077,696
							12,886,477
Capital Goods 0.8%
f Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		1,094,000			1,101,751
CNH Industrial NV, senior bond, 3.85%, 11/15/27		United Kingdom		566,000			590,629
f Herc Holdings Inc., senior note, 144A, 5.50%, 7/15/27		United States		500,000			527,513
i Onsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23		Australia		262,519			240,861
f Vertiv Group Corp., senior note, 144A, 9.25%, 10/15/24		United States		994,000			1,070,623
							3,531,377
Commercial & Professional Services 0.6%
f Intrado Corp., senior note, 144A, 8.50%, 10/15/25		United States		1,521,000			1,220,603
United Rentals North America Inc., senior bond, 5.875%, 9/15/26		United States		1,194,000			1,283,878
							2,504,481
Consumer Durables & Apparel 0.8%
f Hanesbrands Inc., senior bond, 144A, 4.875%, 5/15/26		United States		1,482,000			1,571,809
KB Home, senior note, 7.00%, 12/15/21		United States		970,000			1,043,138
Toll Brothers Finance Corp., senior bond, 5.625%, 1/15/24		United States		889,000			977,158
							3,592,105
Consumer Services 1.3%
f 1011778 BC ULC/New Red Finance Inc.,
secured note, second lien, 144A, 5.00%, 10/15/25		Canada		970,000			1,003,547
senior secured note, first lien, 144A, 4.25%, 5/15/24		Canada		428,000			439,592
f Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		1,132,000			1,174,439
f KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC,
senior note, 144A, 5.00%, 6/01/24		United States		728,000			755,908
senior note, 144A, 5.25%, 6/01/26		United States		851,000			899,954

FSI-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Corporate Bonds (continued)
Consumer Services (continued)
f Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
senior bond, 144A, 5.50%, 3/01/25	United States	970,000	$	1,041,528
senior bond, 144A, 5.25%, 5/15/27	United States	200,000		212,750
				5,527,718
Diversified Financials 2.2%
Capital One Financial Corp., senior note, 3.20%, 2/05/25	United States	1,617,000		1,674,631
The Goldman Sachs Group Inc.,
senior note, 3.50%, 1/23/25	United States	1,725,000		1,809,665
senior note, 3.75%, 2/25/26	United States	1,213,000		1,283,720
Morgan Stanley,
senior bond, 3.591% to 7/22/27, FRN thereafter, 7/22/28	United States	809,000		859,860
senior note, 3.875%, 1/27/26	United States	2,395,000		2,572,220
Springleaf Finance Corp., senior note, 6.625%, 1/15/28	United States	1,000,000		1,130,650
g TNB Global Ventures Capital Bhd., senior note, Reg S, 3.244%, 10/19/26	Malaysia	400,000		402,432
				9,733,178
Energy 2.8%
f Aker BP ASA, senior note, 144A, 4.75%, 6/15/24	Norway	600,000		623,994
f California Resources Corp., secured note, second lien, 144A, 8.00%, 12/15/22	United States	579,000		257,655
Cheniere Energy Partners LP, senior secured note, first lien, 5.25%, 10/01/25	United States	970,000		1,013,243
CONSOL Energy Inc., senior note, 5.875%, 4/15/22	United States	1,317,000		1,321,214
Ecopetrol SA, senior bond, 4.125%, 1/16/25	Colombia	800,000		842,340
Energy Transfer Operating LP,
senior bond, 4.05%, 3/15/25	United States	200,000		210,206
senior note, 7.50%, 10/15/20	United States	1,536,000		1,596,488
f,i EnQuest PLC, senior note, 144A, PIK, 7.00%, 4/15/22	United Kingdom	820,556		710,802
Enterprise Products Operating LLC, senior bond, 4.80%, 2/01/49	United States	150,000		175,927
f,j Gazprom PJSC Via Gaz Capital SA, senior note, 144A, (OJSC Gazprom), loan  participation, 3.85%, 2/06/20	Russia	1,213,000		1,214,899
Martin Midstream Partners LP/Martin Midstream Finance Corp.,  senior note, 7.25%, 2/15/21	United States	1,617,000		1,476,159
Oceaneering International Inc., senior note, 4.65%, 11/15/24	United States	200,000		196,500
k Sanchez Energy Corp., senior note, 6.125%, 1/15/23	United States	243,000		12,150
f Schlumberger Holdings Corp, senior note, 144A, 3.90%, 5/17/28	United States	400,000		425,984
Sunoco LP/Sunoco Finance Corp., senior note, 4.875%, 1/15/23	United States	485,000		497,336
f Weatherford International Ltd., senior note, 144A, 11.00%, 12/01/24	United States	417,000		451,924
f Woodside Finance Ltd.,
senior bond, 144A, 3.70%, 3/15/28	Australia	647,000		669,952
senior note, 144A, 3.70%, 9/15/26	Australia	405,000		421,719
				12,118,492

Annual Report          FSI-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Corporate Bonds (continued)
Food & Staples Retailing 0.7%
f Cencosud SA, senior note, 144A, 4.375%, 7/17/27	Chile	800,000	$	790,154
The Kroger Co., senior bond, 4.45%, 2/01/47	United States	150,000		159,385
Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24	United States	2,087,000		2,170,784
				3,120,323
Food, Beverage & Tobacco 0.1%
BAT Capital Corp., senior bond, 4.54%, 8/15/47	United Kingdom	50,000		50,229
Bunge Ltd. Finance Corp., senior note, 3.25%, 8/15/26	United States	200,000		200,006
Reynolds American Inc., senior note, 4.45%, 6/12/25	United Kingdom	200,000		215,324
				465,559
Health Care Equipment & Services 1.5%
Anthem Inc., senior bond, 3.70%, 9/15/49	United States	150,000		149,935
Centene Corp.,
f senior bond, 144A, 4.625%, 12/15/29	United States	200,000		211,140
senior note, 4.75%, 5/15/22	United States	750,000		766,335
f senior note, 144A, 5.375%, 6/01/26	United States	324,000		344,444
f senior note, 144A, 4.25%, 12/15/27	United States	300,000		309,180
CHS/Community Health Systems Inc.,
senior note, 6.875%, 2/01/22	United States	183,000		148,688
senior secured note, first lien, 6.25%, 3/31/23	United States	405,000		412,088
Cigna Corp., senior bond, 4.90%, 12/15/48	United States	150,000		179,357
DaVita Inc.,
senior bond, 5.125%, 7/15/24	United States	305,000		313,261
senior bond, 5.00%, 5/01/25	United States	728,000		750,448
HCA Inc., senior note, 5.375%, 9/01/26	United States	713,000		795,904
f MEDNAX Inc., senior note, 144A, 6.25%, 1/15/27	United States	1,100,000		1,130,277
f,i Polaris Intermediate Corp., senior note, 144A, PIK, 8.50%, 12/01/22	United States	500,000		466,872
Stryker Corp., senior bond, 3.50%, 3/15/26	United States	405,000		430,960
				6,408,889
Materials 4.5%
f Alpek SAB de CV, senior note, 144A, 4.25%, 9/18/29	Mexico	800,000		817,400
f Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 2/15/25	Luxembourg	900,000		946,125
f Braskem Netherlands Finance BV, senior bond, 144A, 4.50%, 1/31/30	Brazil	500,000		496,950
f Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24	Mexico	299,000		308,119
f Cemex SAB de CV, senior secured bond, first lien, 144A, 5.70%, 1/11/25	Mexico	1,013,000		1,043,390
g CNAC HK Finbridge Co. Ltd., senior note, Reg S, 4.875%, 3/14/25	China	800,000		869,436
Crown Americas LLC/Crown Americas Capital Corp. VI, senior note, 4.75%, 2/01/26	United States	566,000		599,449
f First Quantum Minerals Ltd., senior note, 144A, 7.25%, 4/01/23	Zambia	1,294,000		1,342,350
f FMG Resources (August 2006) Pty. Ltd.,
senior note, 144A, 5.125%, 3/15/23	Australia	324,000		343,032
senior note, 144A, 5.125%, 5/15/24	Australia	647,000		692,271

FSI-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal   Amount*	Value
Corporate Bonds (continued)
Materials (continued)
Freeport-McMoRan Inc., senior note, 4.55%, 11/14/24	United States	1,017,000	$	1,077,171
f Glencore Funding LLC,
senior note, 144A, 4.125%, 5/30/23	Switzerland	485,000		505,726
senior note, 144A, 4.625%, 4/29/24	Switzerland	250,000		265,725
LYB International Finance BV, senior note, 4.00%, 7/15/23	United States	1,698,000		1,795,998
f Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25	United States	1,278,000		1,265,207
f New Gold Inc., senior note, 144A, 6.375%, 5/15/25	Canada	566,000		525,092
f Novelis Corp., senior bond, 144A, 5.875%, 9/30/26	United States	1,059,000		1,129,347
f Owens-Brockway Glass Container Inc.,
senior note, 144A, 5.00%, 1/15/22	United States	732,000		761,112
senior note, 144A, 5.875%, 8/15/23	United States	566,000		605,385
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA,
f senior note, 144A, 7.00%, 7/15/24	United States	105,000		108,741
senior secured note, first lien, 5.75%, 10/15/20	United States	548,375		549,746
f senior secured note, first lien, 144A, 5.125%, 7/15/23	United States	566,000		580,623
f SABIC Capital II BV, senior note, 144A, 4.50%, 10/10/28	Saudi Arabia	600,000		670,184
f Sealed Air Corp.,
senior bond, 144A, 5.125%, 12/01/24	United States	809,000		873,720
senior bond, 144A, 5.50%, 9/15/25	United States	124,000		136,761
senior note, 144A, 4.875%, 12/01/22	United States	85,000		90,233
f SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%, 6/15/25	United States	1,100,000		1,060,576
				19,459,869
Media & Entertainment 2.4%
f Altice Financing SA, secured bond, 144A, 7.50%, 5/15/26	Luxembourg	200,000		215,370
CCO Holdings LLC/CCO Holdings Capital Corp.,
senior bond, 5.25%, 9/30/22	United States	689,000		697,978
f senior bond, 144A, 5.375%, 5/01/25	United States	728,000		753,178
f Clear Channel Worldwide Holdings Inc.,
senior secured note, first lien, 144A, 5.125%, 8/15/27	United States	600,000		625,890
senior sub. note, 144A, 9.25%, 2/15/24	United States	256,000		284,054
f CSC Holdings LLC, senior secured note, first lien, 144A, 5.50%, 5/15/26	United States	1,378,000		1,462,144
f Diamond Sports Group LLC/Diamond Sports Finance Co.,
first lien, 144A, 5.375%, 8/15/26	United States	400,000		405,370
senior note, 144A, 6.625%, 8/15/27	United States	300,000		292,305
DISH DBS Corp.,
senior bond, 6.75%, 6/01/21	United States	405,000		426,518
senior note, 5.875%, 11/15/24	United States	670,000		686,053
iHeartCommunications Inc.,
secured note, 6.375%, 5/01/26	United States	48,209		52,397
senior note, 8.375%, 5/01/27	United States	87,378		96,714

Annual Report          FSI-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal   Amount*	Value
Corporate Bonds (continued)
Media & Entertainment (continued)
f Live Nation Entertainment Inc., senior note, 144A, 4.75%, 10/15/27	United States	400,000	$	414,740
Netflix Inc., senior bond, 5.875%, 2/15/25	United States	1,000,000		1,117,085
f Nexstar Broadcasting Inc., senior note, 144A, 5.625%, 8/01/24	United States	1,417,000		1,480,177
f Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25	United States	1,321,000		1,309,441
				10,319,414
Pharmaceuticals, Biotechnology & Life Sciences 1.7%
f AbbVie Inc., senior note, 144A, 2.95%, 11/21/26	United States	600,000		609,897
Allergan Funding SCS, senior bond, 3.80%, 3/15/25	United States	1,778,000		1,864,814
f Bausch Health Cos. Inc.,
senior bond, 144A, 6.125%, 4/15/25	United States	243,000		251,581
senior note, 144A, 8.50%, 1/31/27	United States	809,000		922,786
senior note, first lien, 144A, 7.00%, 3/15/24	United States	200,000		208,417
f Bayer U.S. Finance II LLC, senior bond, 144A, 4.375%, 12/15/28	Germany	889,000		969,975
f,i Eagle Holdings Co. II LLC, senior note, 144A, PIK, 7.625%, 5/15/22	United States	566,000		576,320
f Endo DAC/Endo Finance LLC/Endo Finco Inc.,
senior bond, 144A, 6.00%, 2/01/25	United States	970,000		656,874
senior note, 144A, 6.00%, 7/15/23	United States	328,000		237,797
f Jaguar Holding Co. II/Pharmaceutical Product Development LLC, senior note, 144A, 6.375%, 8/01/23	United States	970,000		1,003,637
				7,302,098
Real Estate 0.5%
g China Overseas Finance Cayman VI Ltd., senior note, Reg S, 5.95%, 5/08/24	China	700,000		787,617
Equinix Inc., senior bond, 5.875%, 1/15/26	United States	100,000		106,311
MPT Operating Partnership LP/MPT Finance Corp.,
senior bond, 5.25%, 8/01/26	United States	247,000		261,514
senior bond, 5.00%, 10/15/27	United States	889,000		944,585
				2,100,027
Retailing 0.2%
b,f,i K2016470219 South Africa Ltd., senior secured note, 144A, PIK, 3.00%, 12/31/22	South Africa	962,008		1,202
b,f,i K2016470260 South Africa Ltd., senior secured note, 144A, PIK, 25.00%, 12/31/22	South Africa	313,364		1,567
f Party City Holdings Inc., senior note, 144A, 6.625%, 8/01/26	United States	1,085,000		767,445
				770,214
Semiconductors & Semiconductor Equipment 0.0%†
Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23	United States	100,000		102,291
Software & Services 0.2%
f Norton Lifelock Inc., senior note, 144A, 5.00%, 4/15/25	United States	978,000		999,342
Technology Hardware & Equipment 0.3%
f Blackboard Inc., secured note, second lien, 144A, 10.375%, 11/15/24	United States	200,000		200,500
f CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27	United States	1,374,000		1,295,029
				1,495,529

FSI-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Corporate Bonds (continued)
Telecommunication Services 1.1%
Bell Canada Inc., senior bond, 4.464%, 4/01/48	Canada	150,000	$	173,693
f Digicel Group Two Ltd., senior note, 144A, 8.25%, 9/30/22	Bermuda	486,000		118,229
f Digicel Ltd., senior note, 144A, 6.00%, 4/15/21	Bermuda	1,000,000		780,000
Sprint Communications Inc.,
senior note, 6.00%, 11/15/22	United States	405,000		425,465
f senior note, 144A, 7.00%, 3/01/20	United States	647,000		651,212
Sprint Corp., senior bond, 7.875%, 9/15/23	United States	405,000		447,693
Telefonica Emisiones SA, senior bond, 4.895%, 3/06/48	Spain	150,000		171,729
TELUS Corp., senior bond, 4.60%, 11/16/48	Canada	150,000		177,001
T-Mobile USA Inc.,
senior bond, 6.50%, 1/15/24	United States	405,000		417,660
senior bond, 6.375%, 3/01/25	United States	1,051,000		1,088,221
senior note, 6.00%, 4/15/24	United States	200,000		206,998
				4,657,901
Transportation 1.6%
CSX Corp., senior bond, 4.10%, 3/15/44	United States	150,000		163,739
f DAE Funding LLC, senior note, 144A, 5.00%, 8/01/24	United Arab Emirates	1,294,000		1,361,845
FedEx Corp., senior bond, 4.05%, 2/15/48	United States	150,000		144,735
f Kazakhstan Temir Zholy Finance BV, senior bond, 144A, 6.95%, 7/10/42	Kazakhstan	1,700,000		2,286,721
f Mexico City Airport Trust, senior secured bond, first lien, 144A, 5.50%, 7/31/47	Mexico	1,200,000		1,241,634
g,j RZD Capital PLC, (Russian Railways), loan participation, senior bond, Reg S, 5.70%, 4/05/22	Russia	1,700,000		1,829,229
				7,027,903
Utilities 3.4%
Calpine Corp.,
senior bond, 5.75%, 1/15/25	United States	970,000		997,888
f senior note, 144A, 5.125%, 3/15/28	United States	200,000		204,640
g CGNPC International Ltd., senior note, Reg S, 3.75%, 12/11/27	China	300,000		316,024
Clearway Energy Operating LLC, senior note, 5.75%, 10/15/25	United States	1,132,000		1,193,790
f Colbun SA, senior note, 144A, 3.95%, 10/11/27	Chile	800,000		834,508
f,h EDF SA, junior sub. note, 144A, 5.25% to 1/29/23, FRN thereafter, Perpetual	France	2,425,000		2,547,984
f InterGen NV, secured bond, 144A, 7.00%, 6/30/23	Netherlands	700,000		684,250
f Israel Electric Corp. Ltd., secured bond, 144A, 4.25%, 8/14/28	Israel	1,000,000		1,091,575
The Southern Co., senior bond, 3.25%, 7/01/26	United States	2,410,000		2,510,062
f State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27	China	1,651,000		1,729,093
f Talen Energy Supply LLC, senior secured note, 144A, 7.25%, 5/15/27	United States	1,300,000		1,370,265
f Three Gorges Finance I Cayman Islands Ltd., senior note, 144A, 3.15%, 6/02/26	China	1,051,000		1,076,032
Virginia Electric & Power Co., senior bond, 6.35%, 11/30/37	United States	85,000		117,873
				14,673,984
Total Corporate Bonds (Cost $128,965,730)				128,797,171

Annual Report          FSI-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
l,m Senior Floating Rate Interests 7.0%
Automobiles & Components 0.6%
Adient U.S. LLC, Initial Term Loans, 6.144% - 6.195%, (3-month USD LIBOR + 4.25%), 5/06/24	United States	1,164,150	$	1,172,639
Thor Industries Inc., Initial USD Term Loans, 5.50%, (1-month USD LIBOR + 3.75%), 2/01/26	United States	1,279,890		1,285,890
				2,458,529
Capital Goods 0.1%
Altra Industrial Motion Corp., Term Loan, 3.799%, (1-month USD LIBOR + 2.00%), 10/01/25	United States	224,146		225,080
Doncasters U.S. Finance LLC, Second-Lien Term Loans, 10.195%, (3-month USD LIBOR + 8.25%), 10/09/20	United States	742,509		82,914
Harsco Corp., Term Loan B-2, 4.063%, (1-month USD LIBOR + 2.25%), 12/10/24	United States	110,062		110,750
Onsite Rental Group Operations Pty. Ltd., Term Loan, 6.292%, (1-month USD LIBOR + 4.50%), 10/25/22	Australia	192,010		187,529
				606,273
Commercial & Professional Services 0.0%†
n,o Pitney Bowes Inc., Term Loan B, TBD, 1/15/25	United States	100,000		99,094
n Prime Security Services Borrower LLC, Term B-1, 4.944%, (1-month USD LIBOR + 3.25%), 9/12/26	United States	125,000		125,486
				224,580
Consumer Services 0.4%
Aristocrat Technologies Inc., Term B-3 Loans, 3.716%, (3-month USD LIBOR + 1.75%), 10/19/24	United States	775,372		779,953
Avis Budget Car Rental LLC, Tranche B Term Loans, 3.80%, (1-month USD LIBOR + 2.00%), 2/13/25	United States	1,008,728		1,015,820
Eldorado Resorts Inc., Initial Term Loan, 4.00% - 4.063%, (1-month USD LIBOR + 2.25%), 4/17/24	United States	179,897		180,038
				1,975,811
Diversified Financials 0.3%
Russell Investments U.S. Institutional Holdco Inc., Initial Term Loan, 5.049%, (1-month USD LIBOR + 3.25%), 6/01/23	United States	1,160,977		1,163,444
Energy 1.3%
Fieldwood Energy LLC, Closing Date Loans, 7.177%, (3-month USD LIBOR + 5.25%), 4/11/22	United States	2,603,076		2,189,109
Utex Industries Inc.,
First Lien Initial Term Loan, 5.799%, (1-month USD LIBOR + 4.00%), 5/21/21	United States	515,671		382,886
Second Lien Initial Term Loan, 9.049%, (1-month USD LIBOR + 7.25%), 5/20/22	United States	53,878		28,960
Wolverine Fuels Holding LLC,
First Lien Initial Term Loan, 7.659%, (3-month USD LIBOR + 5.75%), 8/14/20	United States	1,702,456		1,666,278
Second Lien Initial Term Loan, 12.659%, (3-month USD LIBOR + 10.75%), 2/16/21	United States	1,571,327		1,484,904
				5,752,137

FSI-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
l,m Senior Floating Rate Interests (continued)
Food & Staples Retailing 0.2%
Aramark Corp.,
U.S. Term B-3 Loan, 3.549%, (1-month USD LIBOR + 1.75%), 3/11/25	United States	359,644	$	361,611
n,o U.S. Term B-4 Loan, TBD, 12/31/26	United States	500,000		503,281
				864,892
Food, Beverage & Tobacco 0.2%
CSM Bakery Supplies LLC, Second Lien Term Loan, 9.78%, (3-month USD LIBOR + 7.75%), 7/03/21	United States	478,111		460,182
n JBS USA Lux SA, New Term Loans, 3.799%, (1-month USD LIBOR + 2.00%), 5/01/26	United States	209,563		211,303
				671,485
Health Care Equipment & Services 0.1%
HCA Inc., Term Loan B13, 3.549%, (1-month USD LIBOR + 1.75%), 3/18/26	United States	483,959		487,287
Household & Personal Products 0.6%
b FGI Operating Co. LLC (Freedom Group),
i Term Loan, PIK, 12.00%, (3-month USD LIBOR + 10.00%), 5/15/22	United States	849,545		799,658
Term Loan FILO, 9.409% - 9.50%, (3-month USD LIBOR + 7.50%), 5/15/21	United States	1,616,351		1,616,532
				2,416,190
Materials 0.2%
Appvion Operations, Inc.,
Term Loan, 8.10%, (3-month USD LIBOR + 6.00%), 6/15/26	United States	18,480		18,665
Term Loan, 8.22%, (6-month USD LIBOR + 6.00%), 6/15/26	United States	397,237		401,209
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 3.695%, (3-month USD LIBOR + 1.75%), 6/01/24	United States	268,206		269,179
				689,053
Media & Entertainment 1.1%
Charter Communications Operating LLC, Term A-2 Loan, 3.30%, (1-month USD LIBOR + 1.50%), 3/31/23	United States	845,479		843,102
CSC Holdings LLC, March 2017 Incremental Term Loans, 3.99%, (1-month USD LIBOR + 2.25%), 7/17/25	United States	1,203,344		1,206,353
Diamond Sports Group LLC, Term Loan, 5.03%, (1-month USD LIBOR + 3.25%), 8/24/26	United States	453,976		453,976
Gray Television Inc.,
Term B-2 Loan, 3.947%, (1-month USD LIBOR + 2.25%), 2/07/24	United States	843,033		846,260
Term C Loan, 4.197%, (1-month USD LIBOR + 2.50%), 1/02/26	United States	536,353		539,772
iHeartCommunications Inc., Term Loan, 5.691%, (1-month USD LIBOR + 4.00%), 5/04/26	United States	136,140		137,623
Lions Gate Capital Holdings LLC, Term A Loan, 3.549%, (1-month USD LIBOR + 1.75%), 3/22/23	Canada	246,301		244,659
Mediacom Illinois LLC, Tranche N Term Loan, 3.38%, (1-week USD LIBOR + 1.75%), 2/15/24	United States	451,476		454,579
				4,726,324

Annual Report          FSI-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
l,m Senior Floating Rate Interests (continued)
Retailing 0.2%
n Bass Pro Group LLC, Initial Term Loans, 6.799%, (1-month USD LIBOR + 5.00%), 9/25/24	United States	200,000	$	199,550
General Nutrition Centers, Inc.,
Tranche B-2 Term Loans, 10.55%, (1-month USD LIBOR + 8.75%), 3/04/21	United States	218,455		206,531
Tranche B-2 Term Loans, 10.60%, (2-month USD LIBOR + 8.75%), 3/04/21	United States	341,366		322,733
n Harbor Freight Tools USA Inc., Refinancing Loans, 4.299%, (1-month USD LIBOR + 2.50%), 8/19/23	United States	200,000		199,313
				928,127
Semiconductors & Semiconductor Equipment 0.4%
MKS Instruments Inc., Tranche B-6 Term Loan, 3.549%, (1-month USD LIBOR + 1.75%), 2/02/26	United States	507,311		508,579
ON Semiconductor Corp., 2019 Replacement Term B-4 Loans, 3.799%, (1-month USD LIBOR + 2.00%), 9/18/26	United States	1,137,106		1,146,737
				1,655,316
Software & Services 0.2%
n,o Infor (US) Inc. (Lawson), First Lien Term Loan, TBD, 2/01/22	United States	149,615		150,457
WEX Inc., Term B-3 Loan, 4.049%, (1-month USD LIBOR + 2.25%), 5/17/26	United States	640,128		645,128
				795,585
Telecommunication Services 0.2%
Global Tel*Link Corp.,
First Lien Term Loan, 6.049%, (1-month USD LIBOR + 4.25%), 11/29/25	United States	396,992		362,752
Second Lien Term Loan, 10.049%, (1-month USD LIBOR + 8.25%), 11/29/26	United States	183,038		159,014
Securus Technologies Holdings Inc.,
Initial Term Loan, 6.299%, (1-month USD LIBOR + 4.50%), 11/01/24	United States	248,092		184,828
Second Lien Initial Loan, 10.049%, (1-month USD LIBOR + 8.25%), 11/01/25	United States	597,127		288,860
				995,454
Transportation 0.3%
Allegiant Travel Co., Class B Term Loans, 6.394%, (3-month USD LIBOR + 4.50%), 2/05/24	United States	231,542		232,989
Hertz Corp., Tranche B-1 Term Loan, 4.55%, (1-month USD LIBOR + 2.75%), 6/30/23	United States	1,245,713		1,253,110
				1,486,099

FSI-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization			Principal   Amount*				Value
l,m Senior Floating Rate Interests (continued)
Utilities 0.6%
EFS Cogen Holdings I LLC (Linden),
Term B Advance, 5.05%, (1-month USD LIBOR + 3.25%), 6/28/23		United States			782,085			$	786,191
Term B Advance, 5.20%, (3-month USD LIBOR + 3.25%), 6/28/23		United States			1,898,271				1,908,237
									2,694,428
Total Senior Floating Rate Interests (Cost $31,969,542)									30,591,014
Foreign Government and Agency Securities 12.5%
f The African Export-Import Bank, senior bond, 144A, 3.994%, 9/21/29		Supranational	p		900,000				915,282
f Angolan Government International Bond, senior note, 144A, 8.25%, 5/09/28		Angola			2,500,000				2,706,770
g Banque Centrale de Tunisie International Bond, senior note, Reg S, 5.625%, 2/17/24		Tunisia			2,400,000		EUR		2,683,204
f Banque Ouest Africaine de Developpement, senior note, 144A, 5.00%, 7/27/27		Supranational	p		800,000				850,000
f Dominican Republic, senior note, 144A, 8.90%, 2/15/23		Dominican Republic			81,500,000		DOP		1,548,515
f The Export-Import Bank of India, senior note, 144A, 3.875%, 2/01/28		India			1,455,000				1,523,941
f Government of Belarus International Bond,
senior bond, 144A, 6.20%, 2/28/30		Belarus			1,200,000				1,277,814
senior note, 144A, 7.625%, 6/29/27		Belarus			800,000				911,949
Government of China, 3.29%, 5/23/29		China			26,200,000		CNY		3,801,431
Government of Colombia,
senior bond, 9.85%, 6/28/27		Colombia			5,315,000,000		COP		2,032,920
senior bond, 4.50%, 3/15/29		Colombia			500,000				554,635
senior bond, 5.00%, 6/15/45		Colombia			1,900,000				2,213,376
f Government of Gabon, 144A, 6.375%, 12/12/24		Gabon			2,700,000				2,826,643
Government of Indonesia,
senior bond, FR64, 6.125%, 5/15/28		Indonesia			26,500,000,000		IDR		1,803,508
senior bond, FR70, 8.375%, 3/15/24		Indonesia			19,648,000,000		IDR		1,514,095
f Government of Iraq, 144A, 5.80%, 1/15/28		Iraq			2,700,000				2,649,702
f Government of Kazakhstan, senior bond, 144A, 4.875%, 10/14/44		Kazakhstan			1,800,000				2,228,562
Government of Mexico,
senior bond, M, 6.50%, 6/10/21		Mexico			293,000	q	MXN		1,543,649
senior note, 4.15%, 3/28/27		Mexico			1,300,000				1,393,613
Government of Peru, senior bond, 6.55%, 3/14/37		Peru			1,000,000				1,463,395
f Government of Russia, senior note, 144A, 4.875%, 9/16/23		Russia			800,000				873,496
Government of South Africa, senior bond, 7.00%, 2/28/31		South Africa			34,100,000		ZAR		2,062,897
f,g Government of Spain,
senior bond, 144A, Reg S, 1.45%, 4/30/29		Spain			1,600,000		EUR		1,961,856
senior bond, 144A, Reg S, 2.70%, 10/31/48		Spain			3,350,000		EUR		4,994,028
f Government of Ukraine,
144A, 7.75%, 9/01/22		Ukraine			200,000				215,750
144A, 7.75%, 9/01/23		Ukraine			369,000				401,595
144A, 7.75%, 9/01/24		Ukraine			369,000				402,649
a,r 144A, VRI, GDP Linked Security, 5/31/40		Ukraine			978,000				937,657

Annual Report          FSI-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization		Principal  Amount*				Value
Foreign Government and Agency Securities (continued)
f Government of Ukraine, (continued)
senior bond, 144A, 7.375%, 9/25/32		Ukraine		500,000			$	534,608
Government of Uruguay,
senior bond, 4.375%, 1/23/31		Uruguay		800,000				896,200
s senior bond, Index Linked, 3.70%, 6/26/37		Uruguay		78,775,448		UYU		2,066,692
Nota do Tesouro Nacional,
10.00%, 1/01/21		Brazil		2,900	t	BRL		758,530
10.00%, 1/01/23		Brazil		2,800	t	BRL		774,530
f Panama Notas del Tesoro, senior note, 144A, 3.75%, 4/17/26		Panama		800,000				837,600
Total Foreign Government and Agency Securities (Cost $53,099,799)								54,161,092
U.S. Government and Agency Securities 5.5%
U.S. Treasury Bond, 7.875%, 2/15/21		United States		728,000				777,681
U.S. Treasury Note,
2.75%, 2/15/24		United States		809,000				843,357
2.125%, 9/30/24		United States		4,600,000				4,688,591
s Index Linked, 0.125%, 7/15/24		United States		7,462,342				7,508,016
s Index Linked, 0.375%, 7/15/25		United States		4,557,464				4,651,243
s Index Linked, 0.375%, 7/15/27		United States		5,291,324				5,398,828
Total U.S. Government and Agency Securities (Cost $23,684,215)								23,867,716
Asset-Backed Securities and Commercial Mortgage-Backed Securities 27.6%
Banks 0.4%
u Commercial Mortgage Trust, 2006-GG7, AJ, FRN, 5.619%, 7/10/38		United States		425,000				393,747
CSAIL Commercial Mortgage Trust, 2015-C1, A4, 3.505%, 4/15/50		United States		740,000				777,085
u CWABS Asset-Backed Certificates Trust, 2005-11, AF4, FRN, 5.21%, 3/25/34		United States		537,156				539,298
v Merrill Lynch Mortgage Investors Trust, 2005-A6, 2A3, FRN, 2.172%, (1-month USD LIBOR + 0.38%), 8/25/35		United States		56,580				56,947
								1,767,077
Diversified Financials 27.2%
v American Express Credit Account Master Trust, 2017-2, A, FRN, 2.19%, (1-month USD LIBOR + 0.45%), 9/16/24		United States		670,000				673,542
f,v AMMC CLO XI Ltd., 2012-11A, BR2, 144A, FRN, 3.536%, (3-month USD LIBOR + 1.60%), 4/30/31		United States		350,000				343,385
f,v Antares CLO Ltd., 2018-1A, B, 144A, FRN, 3.616%, (3-month USD LIBOR + 1.65%), 4/20/31		United States		1,455,000				1,428,097
f,u ARES L CLO Ltd., 2018-50A, B, 144A, FRN, 3.701%, 1/15/32		United States		500,000				494,265
f,u ARES LII CLO Ltd.,
2019-52A, A2, 144A, FRN, 3.603%, 4/22/31		United States		250,000				249,348
2019-52A, B, 144A, FRN, 3.803%, 4/22/31		United States		500,000				500,470

FSI-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization		Principal  Amount*			Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
f,v Ares XLIII CLO Ltd., 2017-43A, A, 144A, FRN, 3.221%, (3-month USD LIBOR + 1.22%), 10/15/29		United States		432,000		$	432,220
Banc of America Commercial Mortgage Trust,
2015-UBS7, A3, 3.441%, 9/15/48		United States		849,000			891,987
2015-UBS7, A4, 3.705%, 9/15/48		United States		946,000			1,007,391
u 2015-UBS7, B, FRN, 4.361%, 9/15/48		United States		615,000			657,557
f,u BCC Middle Market CLO LLC, 2018-1A, A2, 144A, FRN, 4.116%, 10/20/30		United States		700,000			694,890
f,u Betony CLO 2 Ltd., 2018-1A, A1, 144A, FRN, 3.016%, 4/30/31		United States		1,250,000			1,240,337
f,u BlueMountain CLO Ltd.,
2012-2A, BR2, 144A, FRN, 3.349%, 11/20/28		United States		510,000			506,792
2012-2A, CR2, 144A, FRN, 3.899%, 11/20/28		United States		270,000			267,646
2018-1A, D, 144A, FRN, 4.986%, 7/30/30		United States		1,000,000			960,330
f,u BlueMountain EUR CLO,
5A, A, 144A, FRN, 0.91%, 1/15/33		Ireland		1,900,000	EUR		2,129,166
5A, B, 144A, FRN, 1.55%, 1/15/33		Ireland		600,000	EUR		672,472
f,v BlueMountain Fuji U.S. CLO II Ltd., 2017-2A, A1A, 144A, FRN, 3.166%, (3-month USD LIBOR + 1.20%), 10/20/30		United States		1,455,000			1,455,902
f,v BlueMountain Fuji U.S. CLO III Ltd., 2017-3A, A2, 144A, FRN, 3.151%, (3-month USD LIBOR + 1.15%), 1/15/30		United States		200,000			195,650
f BRAVO Residential Funding Trust,
2019-1, A1C, 144A, 3.50%, 3/25/58		United States		941,241			954,681
u 2019-2, A3, 144A, FRN, 3.50%, 10/25/44		United States		1,043,286			1,061,938
f,u Burnham Park CLO Ltd.,
2016-1A, BR, 144A, FRN, 3.466%, 10/20/29		United States		460,000			454,632
2016-1A, CR, 144A, FRN, 4.116%, 10/20/29		United States		460,000			451,821
f,u Buttermilk Park CLO Ltd., 2018-1A, C, 144A, FRN, 4.101%, 10/15/31		United States		1,408,860			1,375,780
v Capital One Multi-Asset Execution Trust,
2016-A2, A2, FRN, 2.37%, (1-month USD LIBOR + 0.63%), 2/15/24		United States		3,225,000			3,245,900
2016-A7, A7, FRN, 2.25%, (1-month USD LIBOR + 0.51%), 9/16/24		United States		320,000			322,180
f,v Carlyle Global Market Strategies CLO Ltd., 2014-4RA, C, 144A, FRN, 4.901%, (3-month USD LIBOR + 2.90%), 7/15/30		United States		300,000			268,710
f,u Carlyle GMS Finance MM CLO LLC, 2015-1A, A2R, 144A, FRN, 4.201%, 10/15/31		United States		1,213,000			1,203,296
f,v Carlyle U.S. CLO Ltd., 2017-2A, A1B, 144A, FRN, 3.186%, (3-month USD LIBOR + 1.22%), 7/20/31		United States		1,150,000			1,147,090
f,v Catamaran CLO Ltd., 2014-2A, BR, 144A, FRN, 4.953%, (3-month USD LIBOR + 2.95%), 10/18/26		United States		1,253,000			1,253,401
f,u CGRBS Commercial Mortgage Trust, 2013-VN05, C, 144A, FRN, 3.584%, 3/13/35		United States		704,000			732,832
f,u CIM Trust,
2019-INV1, A1, 144A, FRN, 4.00%, 2/25/49		United States		1,189,136			1,209,867
2019-INV2, A3, 144A, FRN, 4.00%, 5/25/49		United States		1,783,314			1,827,537
u Citibank Credit Card Issuance Trust,
2016-A3, A3, FRN, 2.20%, 12/07/23		United States		350,000			352,206
2017-A7, A7, FRN, 2.08%, 8/08/24		United States		2,685,000			2,695,262

Annual Report          FSI-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization		Principal  Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
f,u Cole Park CLO Ltd., 2015-1A, BR, 144A, FRN, 3.566%, 10/20/28		United States		270,000	$	268,331
f,u Consumer Loan Underlying Bond CLUB Certificate Issuer Trust, 2019-52, PT, 144A, FRN, 11.118%, 1/15/45		United States		1,079,392		1,057,240
f,u Consumer Loan Underlying Bond CLUB Certificate Issuer Trust I,
2019-51, PT, 144A, FRN, 16.852%, 1/15/45		United States		1,053,641		1,016,973
2019-S8, PT, 144A, FRN, 11.541%, 1/15/45		United States		795,174		742,566
u Discover Card Execution Note Trust, 2017-A7, A7, FRN, 2.10%, 4/15/25		United States		390,000		390,264
f,u Dryden 38 Senior Loan Fund, 2015-38A, CR, 144A, FRN, 4.001%, 7/15/30		United States		863,000		839,639
f,v Dryden 41 Senior Loan Fund, 2015-41A, AR, 144A, FRN, 2.956%, (3-month USD LIBOR + 0.97%), 4/15/31		United States		1,100,000		1,091,695
f,v Dryden 55 CLO Ltd.,
2018-55A, A1, 144A, FRN, 3.021%, (3-month USD LIBOR + 1.02%), 4/15/31		United States		900,000		895,059
2018-55A, D, 144A, FRN, 4.851%, (3-month USD LIBOR + 2.85%), 4/15/31		United States		300,000		284,892
f,u Eaton Vance CLO Ltd., 2014-1RA, C, 144A, FRN, 4.101%, 7/15/30		United States		315,610		308,474
f,u Eleven Madison Trust 2015-11MD Mortgage Trust, 2015-11MD, A, 144A, FRN, 3.555%, 9/10/35		United States		1,091,000		1,143,399
FHLMC Structured Agency Credit Risk Debt Notes,
v 2013-DN2, M2, FRN, 6.042%, (1-month USD LIBOR + 4.25%), 11/25/23		United States		1,715,076		1,849,656
v 2014-DN1, M2, FRN, 3.992%, (1-month USD LIBOR + 2.20%), 2/25/24		United States		604,467		611,191
v 2014-DN2, M3, FRN, 5.392%, (1-month USD LIBOR + 3.60%), 4/25/24		United States		2,290,000		2,435,372
v 2014-DN3, M3, FRN, 5.792%, (1-month USD LIBOR + 4.00%), 8/25/24		United States		162,276		173,029
v 2014-DN4, M3, FRN, 6.342%, (1-month USD LIBOR + 4.55%), 10/25/24		United States		1,202,738		1,290,820
v 2014-HQ1, M3, FRN, 5.892%, (1-month USD LIBOR + 4.10%), 8/25/24		United States		299,114		316,933
v 2014-HQ2, M2, FRN, 3.992%, (1-month USD LIBOR + 2.20%), 9/25/24		United States		422,766		427,875
v 2014-HQ3, M3, FRN, 6.542%, (1-month USD LIBOR + 4.75%), 10/25/24		United States		598,635		634,391
v 2015-DNA1, M3, FRN, 5.092%, (1-month USD LIBOR + 3.30%), 10/25/27		United States		250,000		266,657
v 2015-DNA3, M3, FRN, 6.492%, (1-month USD LIBOR + 4.70%), 4/25/28		United States		1,819,000		2,016,941
v 2015-HQ1, M3, FRN, 5.592%, (1-month USD LIBOR + 3.80%), 3/25/25		United States		654,972		672,140
v 2015-HQA1, M3, FRN, 6.492%, (1-month USD LIBOR + 4.70%), 3/25/28		United States		1,835,000		1,954,749
v 2016-DNA2, M3, FRN, 6.442%, (1-month USD LIBOR + 4.65%), 10/25/28		United States		1,561,028		1,682,515
u 2017-DNA1, M2, FRN, 5.042%, 7/25/29		United States		990,000		1,041,452
u 2017-DNA2, M2, FRN, 5.242%, 10/25/29		United States		1,340,000		1,428,745

FSI-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
FHLMC Structured Agency Credit Risk Debt Notes, (continued)
v 2017-DNA3, M2, FRN, 4.292%, (1-month USD LIBOR + 2.50%), 3/25/30	United States	2,920,000	$	2,991,328
u 2017-HQA1, M2, FRN, 5.342%, 8/25/29	United States	1,180,000		1,240,378
f,v Flagship CLO VIII Ltd., 2014-8A, ARR, 144A, FRN, 2.851%, (3-month USD LIBOR + 0.85%), 1/16/26	United States	379,761		379,826
FNMA Connecticut Avenue Securities,
v 2013-C01, M2, FRN, 7.042%, (1-month USD LIBOR + 5.25%), 10/25/23	United States	306,249		338,238
v 2014-C01, M2, FRN, 6.192%, (1-month USD LIBOR + 4.40%), 1/25/24	United States	473,305		514,725
v 2014-C02, 1M2, FRN, 4.392%, (1-month USD LIBOR + 2.60%), 5/25/24	United States	1,302,284		1,357,073
v 2014-C02, 2M2, FRN, 4.392%, (1-month USD LIBOR + 2.60%), 5/25/24	United States	647,643		671,647
v 2014-C03, 1M2, FRN, 4.792%, (1-month USD LIBOR + 3.00%), 7/25/24	United States	2,628,407		2,766,834
v 2014-C03, 2M2, FRN, 4.692%, (1-month USD LIBOR + 2.90%), 7/25/24	United States	127,124		132,577
v 2015-C01, 1M2, FRN, 6.092%, (1-month USD LIBOR + 4.30%), 2/25/25	United States	835,466		890,164
v 2015-C01, 2M2, FRN, 6.342%, (1-month USD LIBOR + 4.55%), 2/25/25	United States	681,652		708,773
v 2015-C02, 1M2, FRN, 5.792%, (1-month USD LIBOR + 4.00%), 5/25/25	United States	1,845,428		1,959,498
v 2015-C02, 2M2, FRN, 5.792%, (1-month USD LIBOR + 4.00%), 5/25/25	United States	820,182		850,373
v 2015-C03, 1M2, FRN, 6.792%, (1-month USD LIBOR + 5.00%), 7/25/25	United States	2,698,239		2,940,097
v 2015-C03, 2M2, FRN, 6.792%, (1-month USD LIBOR + 5.00%), 7/25/25	United States	1,206,175		1,282,364
u 2016-C02, 1M2, FRN, 7.792%, 9/25/28	United States	752,065		828,231
u 2016-C04, 1M2, FRN, 6.042%, 1/25/29	United States	1,590,000		1,691,926
u 2016-C05, 2M2, FRN, 6.242%, 1/25/29	United States	1,491,681		1,577,138
u 2016-C06, 1M2, FRN, 6.042%, 4/25/29	United States	440,000		472,998
u 2016-C07, 2M2, FRN, 6.142%, 5/25/29	United States	981,320		1,035,636
v 2017-C01, 1M2, FRN, 5.342%, (1-month USD LIBOR + 3.55%), 7/25/29	United States	1,858,000		1,967,845
u 2017-C03, 1M2, FRN, 4.792%, 10/25/29	United States	2,720,000		2,843,996
u 2017-C03, 2M2, FRN, 4.642%, 11/25/29	United States	450,000		465,777
u 2017-C05, 1M2, FRN, 3.992%, 1/25/30	United States	1,020,000		1,038,371
f Galaxy XVIII CLO Ltd.,
u 2018-28A, A2, 144A, FRN, 3.071%, 7/15/31	United States	900,000		899,010
v 2018-28A, C, 144A, FRN, 3.951%, (3-month USD LIBOR + 1.95%), 7/15/31	United States	250,000		238,475

Annual Report          FSI-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
f,u Galaxy XXVI CLO Ltd., 2018-26A, A, 144A, FRN, 3.099%, 11/22/31	United States	700,000		$	697,935
f,v Galaxy XXVII CLO Ltd., 2018-27A, C, 144A, FRN, 3.704%, (3-month USD LIBOR + 1.80%), 5/16/31	United States	400,000			383,988
GS Mortgage Securities Trust,
u 2016-GS3, B, FRN, 3.395%, 10/10/49	United States	728,000			745,019
2017-GS6, B, 3.869%, 5/10/50	United States	704,000			739,589
f,v LCM 26 Ltd., 26A, B, 144A, FRN, 3.366%, (3-month USD LIBOR + 1.40%), 1/20/31	United States	250,000			242,533
f,u LCM XVI LP, 2016A, BR2, 144A, FRN, 3.751%, 10/15/31	United States	351,320			350,400
f,u LCM XVII LP,
2017A, BRR, 144A, FRN, 3.601%, 10/15/31	United States	350,000			342,874
2017A, CRR, 144A, FRN, 4.101%, 10/15/31	United States	320,000			305,683
f,v LCM XVIII LP, 2018A, DR, 144A, FRN, 4.766%, (3-month USD LIBOR + 2.80%), 4/20/31	United States	770,000			718,726
f,v LCM XXIV Ltd., 24A, A, 144A, FRN, 3.276%, (3-month USD LIBOR + 1.31%), 3/20/30	United States	480,000			481,680
f,u Madison Park Euro Funding VIII DAC,
8A, ARN, 144A, FRN, 0.95%, 4/15/32	Ireland	2,700,000	EUR		3,025,222
8A, BRN, 144A, FRN, 1.70%, 4/15/32	Ireland	400,000	EUR		448,197
f,u Madison Park Euro Funding XIV DAC, 2014A, A1N, 144A, FRN, 1.12%, 7/15/32	Ireland	1,000,000	EUR		1,126,089
f,v Madison Park Funding XXIII Ltd.,
2017-23A, B, 144A, FRN, 3.636%, (3-month USD LIBOR + 1.70%), 7/27/30	United States	400,000			399,828
2017-23A, C, 144A, FRN, 4.286%, (3-month USD LIBOR + 2.35%), 7/27/30	United States	500,000			500,360
f,u Mill City Mortgage Loan Trust, 2018-4, A1B, 144A, FRN, 3.50%, 4/25/66	United States	1,470,000			1,507,168
v MortgageIT Trust, 2004-1, A2, FRN, 2.692%, (1-month USD LIBOR + 0.90%), 11/25/34	United States	114,163			115,219
f,u Mountain View Funding CLO XIV Ltd.,
2019-1A, A1, 144A, FRN, 3.441%, 4/15/29	United States	500,000			501,025
2019-1A, C, 144A, FRN, 4.901%, 4/15/29	United States	500,000			500,485
f,v NZCG Funding Ltd., 2015-1A, A2R, 144A, FRN, 3.467%, (3-month USD LIBOR + 1.55%), 2/26/31	United States	2,182,000			2,144,928
f,u Octagon Investment Partners 24 Ltd., 2015-1A, BS, 144A, FRN, 3.866%, 4/21/31	United States	390,000			389,965
f,u Octagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN, 3.736%, 10/24/30	United States	250,000			250,557
f,v Octagon Investment Partners 30 Ltd., 144A, FRN, 3.286%, (3-month USD LIBOR + 1.32%), 3/17/30	United States	480,000			480,197
f,v Octagon Investment Partners 36 Ltd., 2018-1A, A1, 144A, FRN, 2.971%, (3-month USD LIBOR + 0.97%), 4/15/31	United States	500,000			496,385
f,v Octagon Investment Partners 37 Ltd., 2018-2A, C, 144A, FRN, 4.79%, (3-month USD LIBOR + 2.85%), 7/25/30	United States	400,000			380,644
f,u Octagon Investment Partners 38 Ltd., 2018-1A, C, 144A, FRN, 4.916%, 7/20/30	United States	1,000,000			963,410
f,v Octagon Investment Partners XVI Ltd., 2013-1A, DR, 144A, FRN, 5.002%, (3-month USD LIBOR + 3.00%), 7/17/30	United States	400,000			382,776

FSI-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
f,v Octagon Investment Partners XXIII Ltd., 2015-1A, BR, 144A, FRN, 3.201%, (3-month USD LIBOR + 1.20%), 7/15/27	United States	400,000	$	393,652
v Opteum Mortgage Acceptance Corp. Trust, 2005-4, 1APT, FRN, 2.102%, (1-month USD LIBOR + 0.31%), 11/25/35	United States	135,852		136,677
f,u Provident Funding Mortgage Trust, 2019-1, A2, 144A, FRN, 3.00%, 12/25/49	United States	968,477		976,005
f,v Race Point IX CLO Ltd., 2015-9A, A1AR, 144A, FRN, 3.211%, (3-month USD LIBOR + 1.21%), 10/15/30	United States	400,000		399,740
f,u Strata CLO I Ltd., 2018-1A, B, 144A, FRN, 4.201%, 1/15/31	United States	1,300,000		1,298,063
v Structured Asset Securities Corp., 2005-2XS, 2A2, FRN, 3.191%, (1-month USD LIBOR + 1.50%), 2/25/35	United States	134,890		136,479
u Thornburg Mortgage Securities Trust, 2005-1, A3, FRN, 4.459%, 4/25/45	United States	99,235		99,731
f Upgrade Master Pass-Thru Trust, 2019-PT2, A, 144A, 4.846%, 2/15/26	United States	604,538		607,509
f Voya CLO Ltd.,
v 2013-2A, BR, 144A, FRN, 3.79%, (3-month USD LIBOR + 1.85%), 4/25/31	United States	780,000		746,281
v 2014-1A, CR2, 144A, FRN, 4.803%, (3-month USD LIBOR + 2.80%), 4/18/31	United States	1,000,000		946,490
u 2015-2A, BR, 144A, FRN, 3.434%, 7/23/27	United States	820,000		813,612
u 2016-3A, A1R, 144A, FRN, 3.193%, 10/18/31	United States	900,000		899,073
v 2017-2A, B, 144A, FRN, 4.351%, (3-month USD LIBOR + 2.35%), 6/07/30	United States	1,455,000		1,440,886
u 2018-2A, A1, 144A, FRN, 3.001%, 7/15/31	United States	400,000		397,900
				118,195,856
Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $121,391,817)				119,962,933
Mortgage-Backed Securities 8.2%
w Federal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 0.0%†
FHLMC, 4.973%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/33	United States	5,515		5,651
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 2.2%
FHLMC 30 Year, 2.50%, 10/01/49	United States	1,199,881		1,186,329
x FHLMC 30 Year, 2.50%, 12/01/49	United States	1,000,000		988,272
x FHLMC 30 Year, 3.00%, 12/01/49	United States	6,900,000		6,994,048
FHLMC Gold 30 Year, 5.00%, 4/01/34 - 8/01/35	United States	187,595		206,790
FHLMC Gold 30 Year, 5.50%, 3/01/33 - 1/01/35	United States	132,684		145,523
FHLMC Gold 30 Year, 6.00%, 4/01/33 - 2/01/36	United States	84,923		95,682
FHLMC Gold 30 Year, 6.50%, 11/01/27 - 7/01/32	United States	16,326		18,145
FHLMC Gold 30 Year, 7.00%, 9/01/21 - 4/01/30	United States	5,441		5,756
FHLMC Gold 30 Year, 7.50%, 8/01/30	United States	168		197
				9,640,742
w Federal National Mortgage Association (FNMA) Adjustable Rate 0.0%†
FNMA, 4.031%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34	United States	66,345		70,179

Annual Report          FSI-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Mortgage-Backed Securities (continued)
Federal National Mortgage Association (FNMA) Fixed Rate 3.4%
FNMA 15 Year, 2.50%, 7/01/22 - 12/01/34	United States	1,959,415	$	1,977,337
FNMA 15 Year, 4.50%, 3/01/20	United States	71		73
FNMA 30 Year, 3.00%, 9/01/48	United States	3,262,385		3,339,904
FNMA 30 Year, 3.00%, 11/01/48	United States	4,034,736		4,125,001
FNMA 30 Year, 4.50%, 5/01/48	United States	4,874,251		5,229,999
FNMA 30 Year, 5.00%, 4/01/30	United States	41,287		44,452
FNMA 30 Year, 6.50%, 6/01/28 - 10/01/37	United States	107,922		122,128
				14,838,894
Government National Mortgage Association (GNMA) Fixed Rate 2.6%
GNMA I SF 30 Year, 5.00%, 11/15/33 - 7/15/34	United States	173,744		191,842
GNMA I SF 30 Year, 7.00%, 10/15/28 - 6/15/32	United States	13,403		13,530
GNMA I SF 30 Year, 7.50%, 9/15/30	United States	1,128		1,305
GNMA II SF 30 Year, 3.50%, 11/20/49	United States	4,280,954		4,435,803
x GNMA II SF 30 Year, 3.50%, 12/01/49	United States	1,700,000		1,751,875
GNMA II SF 30 Year, 3.50%, 12/20/49	United States	4,410,000		4,569,519
GNMA II SF 30 Year, 5.00%, 9/20/33 - 11/20/33	United States	46,411		51,367
GNMA II SF 30 Year, 6.00%, 11/20/34	United States	63,518		73,398
GNMA II SF 30 Year, 6.50%, 4/20/31 - 2/20/34	United States	32,805		37,413
GNMA II SF 30 Year, 7.50%, 1/20/28 - 4/20/32	United States	8,347		9,431
				11,135,483
Total Mortgage-Backed Securities   (Cost $35,223,310)				35,690,949
Municipal Bonds 4.3%
Birmingham Water Works Board Water Revenue, Senior, Refunding, 3.573%, 1/01/45	United States	1,145,000		1,159,748
Board of Regents of the Texas A & M University System Revenue, Permanent University Fund, Refunding, 3.10%, 7/01/49	United States	765,000		746,280
Broward County Airport System Revenue, Refunding, Series C, 3.477%, 10/01/43	United States	310,000		311,634
California Health Facilities Financing Authority Revenue,
Senior, 2.934%, 6/01/32	United States	295,000		294,298
Senior, 2.984%, 6/01/33	United States	250,000		248,272
Senior, 3.034%, 6/01/34	United States	190,000		188,594
City of Austin Electric Utility System Revenue, Travis and Williamson Counties, Refunding, 6.262%, 11/15/32	United States	580,000		717,083
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, Refunding, Series A, 4.094%, 1/15/49	United States	150,000		150,000
Gilroy USD, GO, Santa Clara County, Refunding, 3.364%, 8/01/47	United States	630,000		618,528
Greenville City School District GO, County of Darke, School Improvement, Refunding, 3.541%, 1/01/51	United States	715,000		701,458
Honolulu City and County Wastewater System Revenue, Second Bond Resolution, Refunding, Junior, Series B, 2.585%, 7/01/28	United States	115,000		116,786
Kaiser Foundation Hospitals, 3.266%, 11/01/49	United States	955,000		961,232
Massachusetts State College Building Authority Revenue, Refunding, Series C, 3.373%, 5/01/43	United States	500,000		493,260

FSI-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Principal  Amount*	Value
Municipal Bonds (continued)
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Subordinated, Refunding, Series B, 3.395%, 10/15/40	United States	575,000	$	575,368
Metro Wastewater Reclamation District Sewer Revenue, Refunding, Series B, 3.158%, 4/01/41	United States	475,000		471,566
Metropolitan St. Louis Sewer District Wastewater System Revenue, Refunding, Series C, 3.259%, 5/01/45	United States	1,375,000		1,376,581
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Series B, 4.131%, 6/15/42	United States	345,000		342,688
New York State Dormitory Authority Revenues, Non State Supported Debt, State University of New York Dormitory Facilities, Series B, 3.142%, 7/01/43	United States	305,000		302,795
New York State GO, Refunding, Series B, 3.20%, 2/15/39	United States	1,140,000		1,141,254
New York State Urban Development Corp. Sales Tax Revenue, Bidding Group 2, Series B, 2.97%, 3/15/34	United States	1,865,000		1,862,072
Ohio State Hospital Facility Revenue, Cleveland Clinic Health System Obligated Group, Refunding, Series G, 3.276%, 1/01/42	United States	190,000		191,233
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Refunding, Series B, 3.168%, 11/15/38	United States	380,000		378,902
Orlando Health Obligated Group, 3.777%, 10/01/28	United States	330,000		350,506
Pennsylvania State Turnpike Commission Turnpike Revenue, Motor License Fund-Enhanced, Subordinate, Refunding, First Series, 3.579%, 12/01/43	United States	955,000		953,854
Regional Transportation District Sales Tax Revenue, Fastracks Project, Refunding, Series A, 3.258%, 11/01/38	United States	305,000		305,485
RWJ Barnabas Health Inc., 3.477%, 7/01/49	United States	255,000		251,844
Salt Lake City Sales and Excise Tax Revenue, Refunding, Series B, 3.102%, 4/01/38	United States	270,000		264,354
San Bernardino Community College District GO, Election of 2018, Series A-1, 3.271%, 8/01/39	United States	210,000		207,877
San Diego County Regional Transportation Commission Revenue, Refunding, 3.248%, 4/01/48	United States	230,000		230,306
y San Francisco City and County Public Utilities Commission Water Revenue, Refunding, 3.473%, 11/01/43	United States	230,000		229,936
San Jose RDA Successor Agency Tax Allocation, Senior, Refunding, Series A-T, 3.25%, 8/01/29	United States	440,000		456,953
Texas State GO, Transportation Commission, Highway Improvement, Refunding, 3.211%, 4/01/44	United States	575,000		581,204
Texas State University System Financing Revenue,
Refunding, Series B, 2.938%, 3/15/33	United States	225,000		226,175
Refunding, Serise B, 3.289%, 3/15/40	United States	190,000		188,180
University of Pittsburgh of the Commonwealth System of Higher Education Revenue, Refunding, Series C, 3.005%, 9/15/41	United States	535,000		524,648
Utah Transit Authority Sales Tax Revenue, Refunding, Series B, 3.443%, 12/15/42	United States	380,000		386,123
Total Municipal Bonds (Cost $18,483,375)				18,507,077

Annual Report          FSI-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

	Country/ Organization	Shares/ Units	Value
Escrows and Litigation Trusts 0.0%†
a,b Clear Channel Communications Inc., Escrow Account	United States	485,000	$	—
a,b iHeartCommunications Inc., Escrow Account	United States	324,000		—
a,b,d Remington Outdoor Co. Inc., Litigation Units	United States	7,021		—
a,b T-Mobile USA Inc., Escrow Account	United States	1,654,665		—
a Vistra Energy Corp., Escrow Account	United States	3,000,000		6,000
Total Escrows and Litigation Trusts (Cost $82,648)				6,000
Total Investments before Short Term Investments   (Cost $430,820,497)				422,345,307
		Shares
Short Term Investments (Cost $11,463,714) 2.7%
Money Market Funds 2.7%
e,z Institutional Fiduciary Trust Money Market Portfolio, 1.26%	United States	11,463,714		11,463,714
Total Investments (Cost $442,284,211) 99.8%				433,809,021
Other Assets, less Liabilities 0.2%				1,041,105
Net Assets 100.0%			$	434,850,126

FSI-28         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

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

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

^aNon-income producing.

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

^cThe security is owned by FT Holdings Corporation III, a wholly-owned subsidiary of the Fund. See Note 1(g).

^dSee Note 8 regarding restricted securities.

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

^fSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At December 31, 2019, the aggregate value of these securities was $153,934,036, representing 35.4% of net assets.

^gSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At December 31, 2019, the aggregate value of these securities was $14,612,775, representing 3.4% of net assets.

^hPerpetual security with no stated maturity date.

ⁱIncome may be received in additional securities and/or cash.

^jSee Note 1(f) regarding loan participation notes.

^kSee Note 7 regarding defaulted securities.

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

^mSee Note 1(i) regarding senior floating rate interests.

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

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

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

^qPrincipal amount is stated in 100 Mexican Peso Units.

^rThe principal represents the notional amount. See Note 1(d) regarding value recovery instruments.

^sPrincipal amount of security is adjusted for inflation. See Note 1(k).

^tPrincipal amount is stated in 1,000 Brazilian Real Units.

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

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

^wAdjustable Rate Mortgage-Backed Security (ARM); the rate shown is the effective rate at period end. ARM rates are not based on a published reference rate and spread, but instead pass-through weighted average interest income inclusive of any caps or floors, if applicable, from the underlying mortgage loans in which the majority of mortgages pay interest based on the index shown at their designated reset dates plus a spread, less the applicable servicing and guaranty fee (MBS margin).

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

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

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

At December 31, 2019, the Fund had the following futures contracts outstanding. See Note 1(d).

Futures Contracts

Description	Type		Number of Contracts		Notional  Amount*		Expiration Date		Value/ Unrealized Appreciation (Depreciation)
Interest Rate Contracts
Australian 10 Yr. Bond		Long		77	$	7,723,607		3/16/20		$(109,738	)
Canada 10 Yr. Bond		Long		54		5,716,864		3/20/20		(106,114	)
Euro-BTP		Long		44		7,029,518		3/06/20		27,201
Euro-OAT		Short		36		6,571,383		3/06/20		47,968
U.S. Treasury 5 Yr. Note		Long		60		7,116,562		3/31/20		(22,576	)
Total Futures Contracts										$(163,259	)

*As of period end.

Annual Report          FSI-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

At December 31, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts

Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Australian Dollar		JPHQ		Buy		2,200,000	$	1,516,488		1/09/20	$	27,502	$	—
Australian Dollar		JPHQ		Sell		3,200,000		2,159,312		1/09/20		—		(86,492	)
Canadian Dollar		JPHQ		Buy		500,000		380,134		1/21/20		4,940		—
Canadian Dollar		JPHQ		Sell		4,000,000		3,064,711		1/21/20		—		(15,874	)
Australian Dollar		JPHQ		Sell		2,710,000		1,843,242		1/28/20		—		(59,610	)
Australian Dollar		JPHQ		Sell		3,050,000		2,147,468		1/28/20		5,882		—
Japanese Yen		JPHQ		Buy		1,521,800,000		14,421,093		1/29/20		—		(394,867	)
Canadian Dollar		JPHQ		Buy		200,000		151,136		1/30/20		2,901		—
Canadian Dollar		JPHQ		Sell		2,300,000		1,733,011		1/30/20		—		(38,411	)
Euro		JPHQ		Sell		4,176,907		4,690,090		1/30/20		—		(3,129	)
Euro		JPHQ		Sell		5,824,713		6,587,653		1/30/20		42,941		—
Mexican Peso		JPHQ		Sell		1,700,000		87,568		1/30/20		—		(1,852	)
Norwegian Krone		JPHQ		Buy		26,200,000		2,911,474		1/30/20		73,849		—
Australian Dollar		JPHQ		Sell		1,350,000		924,811		2/11/20		—		(23,417	)
Chinese Yuan Renminbi		JPHQ		Sell		60,750,000		8,510,610		2/24/20		—		(204,805	)
Brazilian Real		JPHQ		Sell		1,600,000		386,591		3/04/20		—		(10,503	)
South Korean Won		JPHQ		Sell		1,700,000,000		1,431,181		3/04/20		—		(41,600	)
Indonesian Rupiah		JPHQ		Sell		7,200,000,000		504,414		3/05/20		—		(13,200	)
Japanese Yen		JPHQ		Buy		57,100,000		523,951		3/13/20		3,662		—
Japanese Yen		JPHQ		Buy		420,000,000		3,940,793		3/13/20		—		(59,925	)
Canadian Dollar		JPHQ		Sell		1,500,000		1,139,473		3/16/20		—		(15,924	)
Euro		DBAB		Sell		650,000		728,683		3/16/20		—		(3,750	)
Euro		JPHQ		Sell		12,100,083		13,500,153		3/16/20		—		(134,460	)
Norwegian Krone		JPHQ		Buy		39,200,000		4,377,443		3/16/20		89,535		—
Swedish Krona		JPHQ		Buy		27,800,000		2,836,315		3/16/20		142,688		—
Swedish Krona		JPHQ		Sell		27,800,000		2,922,808		3/16/20		—		(56,195	)
New Zealand Dollar		JPHQ		Sell		3,000,000		1,980,941		3/19/20		—		(40,224	)
Turkish Lira		JPHQ		Buy		5,800,000		919,686		4/15/20		29,141		—
Mexican Peso		JPHQ		Buy		1,300,000		66,117		6/16/20		901		—
Total Forward Exchange Contracts												$    423,942	$	(1,204,238	)
Net unrealized appreciation (depreciation)													$	(780,296	)

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

FSI-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

At December 31, 2019, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

Credit Default Swap Contracts

Description	Periodic Payment Rate Received (Paid)			Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
Centrally Cleared Swap Contracts
Contracts to Sell Protectionc,d
Traded Index
CDX.EM.31		1.00	%		Quarterly				6/20/24	$	4,500,000	$	(117,781	)	$	(105,369	)	$	(12,412	)		Investment Grade
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name
Ally Financial Inc.		(5.00	)%		Quarterly		JPHQ		12/20/24	$	1,810,000	$	(366,933	)	$	(336,411	)	$	(30,522	)
Government of Italy		(1.00	)%		Quarterly		BZWS		6/20/23		1,500,000		(21,317	)		11,338			(32,655	)
Contracts to Sell Protectionc,d
Single Name
Government of Argentina		5.00	%		Quarterly		CITI		12/20/21		4,300,000		(2,335,477	)		(2,228,602	)		(106,875	)		CC
Government of Indonesia		1.00	%		Quarterly		CITI		12/20/24		2,300,000		41,227			14,967			26,260			NR
Government of Italy		1.00	%		Quarterly		BZWS		6/20/23		1,500,000		2,438			(49,718	)		52,156			NR
Government of Russia		1.00	%		Quarterly		CITI		12/20/24		1,300,000		27,915			12,816			15,099			BBB-
Traded Index
eBNP Paribas Bespoke Bordeaux Index, Mezzanine Tranche 7-10%		2.10	%		Quarterly		BNDP		6/20/20		750,000		6,100			—			6,100			Non- Investment Grade
eBNP Paribas Bespoke Rodez2 Index, Mezzanine Tranche 5-7%		3.20	%		Quarterly		BNDP		12/20/20		300,000		7,310			—			7,310			Non- Investment Grade
eCitibank Bespoke Bogota Index, Mezzanine Tranche 7-10%		1.35	%		Quarterly		CITI		6/20/20		750,000		2,543			—			2,543			Non- Investment Grade
eCitibank Bespoke Palma Index, Mezzanine Tranche 5-7%		2.30	%		Quarterly		CITI		6/20/21		620,000		12,709			—			12,709			Non- Investment Grade
eCitibank Bespoke Singapore Index, Equity Tranche 0-3%		0.00	%		Quarterly		CITI		6/20/20		300,000		(18,965	)		(19,725	)		760			Non- Investment Grade
eCitibank Bespoke Sydney Index, Equity Tranche 0-3%		0.00	%		Quarterly		CITI		6/20/20		359,511		(27,543	)		(26,986	)		(557	)		Non- Investment Grade

Annual Report          FSI-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

Credit Default Swap Contracts (continued)

Description	Periodic Payment Rate Received (Paid)			Payment Frequency		Counter- party		Maturity Date		Notional  Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)		Ratingb
OTC Swap Contracts (continued)
Contracts to Sell Protectionc,d (continued)
Traded Index (continued)
MCDX.NA.31		1.00	%		Quarterly		CITI		12/20/23	$	2,270,000	$	40,013		$	18,257		$	21,756	Investment Grade
eMorgan Stanley Bespoke Pecan Index, Mezzanine Tranche 5-10%		3.98	%		Quarterly		MSCO		12/20/21		850,000		36,585			—			36,585	Non- Investment Grade
eMorgan Stanley Bespoke Pecan Index, Mezzanine Tranche 5-10%		4.10	%		Quarterly		MSCO		12/20/21		850,000		36,807			—			36,807	Non- Investment Grade
Total OTC Swap Contracts												$	(2,556,588	)	$	(2,604,064	)	$	47,476
Total Credit Default Swap Contracts												$	(2,674,369	)	$	(2,709,433	)	$	35,064

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

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

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

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

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

At December 31, 2019, the Fund had the following cross-currency swap contracts outstanding. See Note 1(d).

Cross-Currency Swap Contracts

Description	Payment Frequency		Coun- terparty		Maturity Date		Notional Amount		Value/ Unrealized Appreciation (Depreciation)
OTC Swap Contracts
Receive Floating 3-month USD LIBOR + 2.87%		Quarterly						464,800		USD
Pay Fixed 2.50%		Annual		CITI		5/04/21		400,000		EUR	$12,412
Receive Floating 3-month USD LIBOR + 1.334%		Quarterly						1,120,000		USD
Pay Floating 3-month EUR LIBOR + 1.12%		Quarterly		CITI		7/10/21		1,000,000		EUR	4,310
Total Cross Currency Swap Contracts											$16,722

FSI-32         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED STATEMENT OF INVESTMENTS

Franklin Strategic Income VIP Fund (continued)

At December 31, 2019, the Fund had the following interest rate swap contracts outstanding. See Note 1(d).

Interest Rate Swap Contracts

Description	Payment Frequency		Maturity Date		Notional  Amount*			Value/ Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts
Receive Fixed 2.773%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/23/24		18,850,000	CNY		$(20,219	)
Receive Fixed 2.765%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/26/24		15,150,000	CNY		(14,708	)
Receive Fixed 2.79%		Quarterly
Pay Floating 3-month CNY CNRR		Quarterly		8/30/24		24,000,000	CNY		(19,556	)
Total Interest Rate Swap Contracts									$(54,483	)

*In U.S. dollars unless otherwise indicated.

At December 31, 2019, the Fund had the following total return swap contracts outstanding. See Note 1(d).

Total Return Swap Contracts

Underlying Instruments	Financing Rate	Payment Frequency		Counter- party		Maturity Date		Notional Value		Value/ Unrealized Appreciation (Depreciation)
OTC Swap Contracts
Longa
Markit iBoxx USD Liquid Leveraged Loan Index	3-month USD LIBOR		Quarterly		FBCO		3/20/20	$	750,000		$33,128
Markit iBoxx USD Liquid Leveraged Loan Index	3-month USD LIBOR		Quarterly		GSCO		3/20/20		1,100,000		53,351
Markit iBoxx USD Liquid Leveraged Loan Index	3-month USD LIBOR		Quarterly		GSCO		9/20/20		1,300,000		3,514
Total Total Return Swap Contracts											$89,993

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

See Note 9 regarding other derivative information.

See Abbreviations on page FSI-53.

The accompanying notes are an integral part of these consolidated financial statements.   |  Annual Report            FSI-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities

December 31, 2019

	Franklin Strategic Income VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$419,748,352
Cost - Non-controlled affiliates (Note 3e)		22,535,859
Value - Unaffiliated issuers		$413,080,389
Value - Non-controlled affiliates (Note 3e)		20,728,632
Cash		6,379,909
Restricted cash for OTC derivative contracts (Note 1e)		110,000
Receivables:
Investment securities sold		1,519,230
Capital shares sold		265,645
Dividends and interest		3,479,909
Deposits with brokers for:
OTC derivative contracts		3,320,000
Futures contracts		469,399
Centrally cleared swap contracts		831,145
OTC swap contracts (upfront payments $68,130)		57,378
Unrealized appreciation on OTC forward exchange contracts		423,942
Unrealized appreciation on OTC swap contracts		324,800
FT Subsidiary deferred tax benefit (Note 1g)		137,222
Other assets		899
Total assets		451,128,499
Liabilities:
Payables:
Investment securities purchased		11,452,244
Capital shares redeemed		95,676
Management fees		222,034
Distribution fees		36,027
Variation margin on futures contracts		67,450
Variation margin on centrally cleared swap contracts		1,033
Deposits from brokers for:
OTC derivative contracts		110,000
OTC swap contracts (upfront receipts $3,043,728)		2,661,442
Unrealized depreciation on OTC forward exchange contracts		1,204,238
Unrealized depreciation on OTC swap contracts		170,609
Deferred tax		26,200
Accrued expenses and other liabilities		231,420
Total liabilities		16,278,373
Net assets, at value		$434,850,126
Net assets consist of:
Paid-in capital		$463,537,885
Total distributable earnings (losses)		(28,687,759	)
Net assets, at value		$434,850,126

FSI-34         Annual Report  |  The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities (continued)

December 31, 2019

	Franklin Strategic Income VIP Fund
Class 1:
Net assets, at value		$285,437,319
Shares outstanding		26,117,176
Net asset value and maximum offering price per share		$10.93
Class 2:
Net assets, at value		$  94,928,196
Shares outstanding		8,997,865
Net asset value and maximum offering price per share		$10.55
Class 4:
Net assets, at value		$  54,484,611
Shares outstanding		5,029,789
Net asset value and maximum offering price per share		$10.83

The accompanying notes are an integral part of these consolidated financial statements.   |  Annual Report            FSI-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Operations

for the year ended December 31, 2019

	Franklin Strategic Income VIP Fund
Investment income:
Dividends:
Unaffiliated issuers		$       43,056
Non-controlled affiliates (Note 3e)		1,402,046
Interest: (net of foreign taxes)~ Unaffiliated issuers		19,936,506
Total investment income		21,381,608
Expenses:
Management fees (Note 3a)		2,803,767
Distribution fees: (Note 3c)
Class 2		229,318
Class 4		202,648
Custodian fees (Note 4)		10,343
Reports to shareholders		147,122
Professional fees		106,222
Trustees’ fees and expenses		2,771
Other		99,853
Total expenses		3,602,044
Expense reductions (Note 4)		(6,860	)
Expenses waived/paid by affiliates (Note 3e)		(118,335	)
Net expenses		3,476,849
Net investment income		17,904,759
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(1,163,883	)
Non-controlled affiliates (Note 3e)		(2,146,446	)
Foreign currency transactions		(11,410	)
Forward exchange contracts		705,050
Futures contracts		2,909,366
Swap contracts		(1,199,870	)
Net realized gain (loss)		(907,193	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		18,010,634
Non-controlled affiliates (Note 3e)		501,918
Translation of other assets and liabilities denominated in foreign currencies		8,152
Forward exchange contracts		(1,043,046	)
Futures contracts		(854,940	)
Swap contracts		2,155,087
Change in FT Subsidiary deferred tax benefit (Note 1g)		(44,004	)
Change in deferred taxes on unrealized appreciation		(17,839	)
Net change in unrealized appreciation (depreciation)		18,715,962
Net realized and unrealized gain (loss)		17,808,769
Net increase (decrease) in net assets resulting from operations		$35,713,528
~Foreign taxes withheld on interest		$       25,472

FSI-36         Annual Report  |  The accompanying notes are an integral part of these consolidated financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Net Assets

for the year ended December 31, 2019

	Franklin Strategic Income VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	17,904,759		$	24,508,744
Net realized gain (loss)		(907,193	)		(9,616,538	)
Net change in unrealized appreciation (depreciation)		18,715,962			(23,561,419	)
Net increase (decrease) in net assets resulting from operations		35,713,528			(8,669,213	)
Distributions to shareholders:
Class 1		(16,055,733	)		(9,703,924	)
Class 2		(4,608,498	)		(5,724,625	)
Class 4		(2,951,572	)		(1,690,861	)
Total distributions to shareholders		(23,615,803	)		(17,119,410	)
Capital share transactions: (Note 2)
Class 1		(25,284,669	)		(43,986,518	)
Class 2		3,227,556			(117,066,128	)
Class 4		(7,826,645	)		(10,271,574	)
Total capital share transactions		(29,883,758	)		(171,324,220	)
Net increase (decrease) in net assets		(17,786,033	)		(197,112,843	)
Net assets:
Beginning of year		452,636,159			649,749,002
End of year	$	434,850,126		$	452,636,159

The accompanying notes are an integral part of these consolidated financial statements.   |  Annual Report            FSI-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Consolidated Financial Statements

Franklin Strategic Income VIP Fund

1.  Organization and Significant Accounting Policies

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of eighteen separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Strategic Income VIP Fund (Fund) is included in this report. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. At December 31, 2019, 79.0% 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 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

FSI-38         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.  Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items

denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

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

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

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

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

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

Annual Report          FSI-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

d.  Derivative Financial Instruments (continued)

contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Consolidated Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Consolidated Statement of Operations.

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

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

$100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

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

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

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

FSI-40         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Consolidated Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Consolidated Statement of Operations.

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

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate

swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

The Fund 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 invests in value recovery instruments (VRI) primarily to gain exposure to economic growth. Periodic payments from VRI are dependent on established benchmarks for underlying variables. VRI has a notional amount, which is used to calculate amounts of payments to holders. Payments are recorded upon receipt as realized gains in the Consolidated Statement of Operations. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.

See Note 9 regarding other derivative information.

e.  Restricted Cash

At December 31, 2019, the Fund held restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s custodian and is reflected in the Consolidated Statement of Assets and Liabilities.

f.  Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship

Annual Report          FSI-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

f.  Loan Participation Notes (continued)

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.

g.  Investments in FT Holdings Corporation III (FT Subsidiary)

The Fund invests in certain financial instruments through its investment in FT Subsidiary. FT Subsidiary is a Delaware Corporation, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments consistent with the investment objective of the Fund. At December 31, 2019, FT Subsidiary’s investment, Turtle Bay Resort, as well as any other assets and liabilities of FT Subsidiary are reflected in the Fund’s Consolidated Statement of Investments and Consolidated Statement of Assets and Liabilities.

At December 31, 2019, FT Subsidiary, which is a tax paying entity, recognized an unrealized loss on its Turtle Bay investment. An estimated deferred tax asset based on such unrealized loss is reflected as FT Subsidiary deferred tax benefit in the Consolidated Statement of Assets and Liabilities. The estimated benefit was calculated using a federal rate of 21%. When the Turtle Bay investment liquidates, the FT Subsidiary will recognize a capital loss which can be carried-back to offset prior year capital gains, resulting in a tax refund which will relieve the deferred tax asset.

The financial statements have been consolidated and include the accounts of the Fund and FT Subsidiary. All intercompany transactions and balances have been eliminated. At December 31, 2019, the net assets of FT Subsidiary were $6,351,182, representing 1.5% of the Fund’s consolidated net assets. The Fund’s investment in FT Subsidiary is limited to 25% of consolidated assets.

h.  Mortgage Dollar Rolls

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.

i.  Senior Floating Rate Interests

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

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

FSI-42         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

k.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Paydown gains and losses are recorded as an adjustment to interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax

character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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

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

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Consolidated Statement of Operations.

l.  Accounting Estimates

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

m.  Guarantees and Indemnifications

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

Annual Report          FSI-43

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

2.  Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		671,682		$	7,349,679			529,935		$	5,819,800
Shares issued in reinvestment of distributions		1,499,135			16,055,733			904,373			9,703,924
Shares redeemed		(4,454,817	)		(48,690,081	)		(5,463,142	)		(59,510,242	)
Net increase (decrease)		(2,284,000	)	$	(25,284,669	)		(4,028,834	)	$	(43,986,518	)
Class 2 Shares:
Shares sold		1,948,126		$	20,598,257			1,939,103		$	20,473,500
Shares issued in reinvestment of distributions		445,266			4,608,498			552,570			5,724,625
Shares redeemed in-kind (Note 11)		—			—			(10,844,970	)		(113,023,023	)
Shares redeemed		(2,080,736	)		(21,979,199	)		(2,870,064	)		(30,241,230	)
Net increase (decrease)		312,656		$	3,227,556			(11,223,361	)	$	(117,066,128	)
Class 4 Shares:
Shares sold		332,522		$	3,653,954			351,399		$	3,829,733
Shares issued in reinvestment of distributions		277,403			2,951,572			158,766			1,690,861
Shares redeemed		(1,334,939	)		(14,432,171	)		(1,457,847	)		(15,792,168	)
Net increase (decrease)		(725,014	)	$	(7,826,645	)		(947,682	)	$	(10,271,574	)

3.  Transactions with Affiliates

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

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

FSI-44         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

a.  Management Fees

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

Annualized Fee Rate	Net Assets
0.625%	Up to and including $500 million
0.525%	Over $500 million, up to and including $1 billion
0.480%	Over $1 billion, up to and including $1.5 billion
0.435%	Over $1.5 billion, up to and including $6.5 billion
0.415%	Over $6.5 billion, up to and including $11.5 billion
0.400%	Over $11.5 billion, up to and including $16.5 billion
0.390%	Over $16.5 billion, up to and including $19 billion
0.380%	Over $19 billion, up to and including $21.5 billion
0.370%	In excess of $21.5 billion

b.  Administrative Fees

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

c.  Distribution Fees

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

d.  Transfer Agent Fees

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

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Consolidated Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
Franklin Floating Rate Income Funda	$	12,230,563	$	—	$	(2,001,600	)	$	(376,800	)	$	(587,245	)	$	9,264,918			1,118,951	$	854,937
Franklin Lower Tier Floating Rate Fund		13,000,405		—		(12,319,922	)b		(1,769,646	)		1,089,163			—	c		—		359,788

Annual Report          FSI-45

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

3.  Transactions with Affiliates (continued)

e.  Investments in Affiliated Management Investment Companies (continued)

	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
Non-Controlled Affiliates (continued)
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	10,265,231	$	172,567,900		$  (171,369,417	)	$	—		$	—	$	11,463,714		11,463,714	$	187,321
Total Affiliated Securities	$	35,496,199	$	172,567,900		$  (185,690,939	)	$	(2,146,446	)	$	501,918	$	20,728,632			$	1,402,046

^aEffective May 31, 2019, Franklin Middle Tier Floating Rate Fund was renamed Franklin Floating Rate Income Fund.

^bThe Fund sold shares of the affiliate through an in-kind transfer of common stocks and other equity interests, corporate bonds and senior floating rate interests securities and cash. See Note 6.

^cAs of December 31, 2019, no longer held by the fund.

4.  Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended December 31, 2019, the custodian fees were reduced as noted in the Consolidated Statement of Operations.

5.  Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	271,803
Long term		44,135,035
Total capital loss carryforwards	$	44,406,838	a

^aSubject to certain limitations under Internal Revenue Code Section 382.

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from ordinary income	$	23,615,803	$	17,119,410

FSI-46         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:

Cost of investments	$	440,938,896
Unrealized appreciation	$	10,049,141
Unrealized depreciation		(20,779,688	)
Net unrealized appreciation (depreciation)	$	(10,730,547	)
Distributable earnings:
Undistributed ordinary income	$	20,233,001

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

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $522,526,315 and $575,617,931, respectively. Purchases and sales of investments excludes in-kind transactions of $10,271,362 and $12,319,922, respectively.

7.  Credit Risk and Defaulted Securities

At December 31, 2019, the Fund had 34.1% of its portfolio invested in high yield, senior secured floating rate loans, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

The Fund held defaulted security and/or other securities for which the income has been deemed uncollectible. At December 31, 2019, the value of this security represents less than 0.1% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The security has been identified in the accompanying Consolidated Statement of Investments.

8.  Restricted Securities

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

At December 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Principal Amount/ Shares/ Units		Issuer	Acquisition Date		Cost		Value
	18,684	a Appvion Operations Inc.		4/12/19	$	252,711	$	254,512

Annual Report          FSI-47

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

8.   Restricted Securities (continued)

Principal Amount/ Shares/ Units		Issuer	Acquisition Date		Cost		Value
	14,792,309	b K2016470219 South Africa Ltd., A		2/08/13 - 2/01/17	$	114,768	$	10,563
	1,472,041	b K2016470219 South Africa Ltd., B		2/01/17		1,093		1,051
	7,021	c Remington Outdoor Co. Inc., Litigation Units		4/12/19		—		—
		Total Restricted Securities (Value is 0.1% of Net Assets)			$	368,572	$	266,126

^aThe Fund also invests in unrestricted securities of the issuer, valued at $419,874 as of December 31, 2019.

^bThe Fund also invests in unrestricted securities of the issuer, valued at $1,202 as of December 31, 2019.

^cThe Fund also invests in unrestricted securities of the issuer, valued at $ 46,610 as of December 31, 2019.

9.  Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Consolidated Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Assets and Liabilities Location	Fair Value			Consolidated Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on futures contracts	$	75,169	a	Variation margin on futures contracts	$	238,428	a
	Variation margin on centrally cleared swap contracts		—		Variation margin on centrally cleared swap contracts		54,483	a
	Unrealized appreciation on OTC swap contracts		106,715		Unrealized depreciation on OTC swap contracts		—
Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts		423,942		Unrealized depreciation on OTC forward exchange contracts		1,204,238
Credit contracts	Variation margin on centrally cleared swap contracts		—		Variation margin on centrally cleared swap contracts		12,412	a
	OTC swap contracts (upfront payments)		57,378		OTC swap contracts (upfront receipts)		2,661,442
	Unrealized appreciation on OTC swap contracts		218,085		Unrealized depreciation on OTC swap contracts		170,609
Value recovery instruments	Investments in securities, at value		937,657	b
Totals		$	1,818,946			$	4,341,612

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

^bVRI are included in investments in securities, at value in the Consolidated Statement of Assets and Liabilities.

FSI-48         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

For the year ended December 31, 2019, the effect of derivative contracts in the Consolidated Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Operations Location	Net Realized Gain (Loss) for the Year			Consolidated Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Futures contracts		$  2,909,366		Futures contracts		$  (854,940	)
	Swap contracts		924,836		Swap contracts		474,756
Foreign exchange contracts	Forward exchange contracts		705,050		Forward exchange contracts		(1,043,046	)
Credit contracts	Swap contracts		(2,124,706	)	Swap contracts		1,680,331
Value recovery instruments	Investments		98,000	a	Investments		301,784	a
Totals			$  2,512,546				$   558,885

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

For the year ended December 31, 2019, the average month end notional amount of futures contracts and swap contracts and the average month end contract value for forward exchange contracts, and average month end fair value of VRI, were as follows:

Futures contracts	$	64,842,977
Swap contracts	$	51,399,737
Forward exchange contracts	$	52,416,090
VRI	$	805,640

	Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
	Assetsa	Liabilitiesa
Derivatives
Forward exchange contracts	$423,942	$1,204,238
Swap contracts	382,178	2,832,051
Total	$806,120	$4,036,289

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

Annual Report          FSI-49

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

9.  Other Derivative Information (continued)

At December 31, 2019, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the
			Consolidated Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Receiveda		Cash Collateral Receiveda			Net Amount  (Not less  than zero)
Counterparty
BNDP		$  13,410		$            —			$    —		$        —			$  13,410
BZWS		63,494		(63,494	)		—		—			—
CITI		141,889		(141,889	)		—		—			—
DBAB		—		—			—		—			—
FBCO		33,128		—			—		—			33,128
GSCO		56,865		—			—		(56,865	)		—
JPHQ		423,942		(423,942	)		—		—			—
MSCO		73,392		—			—		—			73,392
Total		$806,120		$(629,325	)		$    —		$(56,865	)		$119,930
At December 31, 2019, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:
			Amounts Not Offset in the
			Consolidated Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledgeda			Net Amount  (Not less  than zero)
Counterparty
BNDP		$            —		$            —			$    —		$              —			$          —
BZWS		82,373		(63,494	)		—		—			18,879
CITI		2,382,745		(141,889	)		—		(2,240,856	)		—
DBAB		3,750		—			—		—			3,750
FBCO		—		—			—		—			—
GSCO		—		—			—		—			—
JPHQ		1,567,421		(423,942	)		—		(980,000	)		163,479
MSCO		—		—			—		—			—
Total		$4,036,289		$(629,325	)		$    —		$(3,220,856	)		$186,108

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

See Note 1(d) regarding derivative financial instruments.

See Abbreviations on page FSI-53.

FSI-50         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

10.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

11.  Redemption In-Kind

During the year ended December 31, 2018, the Fund realized $2,963,426 of net losses resulting from a redemption in-kind in which a shareholder redeemed fund shares for cash and securities held by the Fund. Because such losses are not taxable to the Fund, are not netted with capital gains that are distributed to remaining shareholders, they are reclassified from accumulated net realized losses to paid-in capital.

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.

Annual Report          FSI-51

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

12. Fair Value Measurements (continued)

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3			Total
Assets:
Investments in Securities:a
Equity Investments:b
Commercial & Professional Services	$	—	$	—	$	46,610		$	46,610
Consumer Services		—		—		41,832			41,832
Energy		443,679		389,487		2,073c			835,239
Materials		103,401		—		254,512			357,913
Media & Entertainment		201,189		—		2,040			203,229
Retailing		—		—		11,614			11,614
All Other Equity Investments		9,264,918		—		—			9,264,918
Corporate Bonds:
Retailing		—		767,445		2,769			770,214
All Other Corporate Bonds		—		128,026,957		—			128,026,957
Senior Floating Rate Interests:
Household & Personal Products		—		—		2,416,190			2,416,190
All Other Senior Floating Rate Interests		—		28,174,824		—			28,174,824
Foreign Government and Agency Securities		—		54,161,093		—			54,161,093
U.S. Government and Agency Securities		—		23,867,716		—			23,867,716
Asset-Backed Securities and Commercial
Mortgage-Backed Securities		—		119,962,933		—			119,962,933
Mortgage-Backed Securities		—		35,690,949		—			35,690,949
Municipal Bonds		—		18,507,076		—			18,507,076
Escrows and Litigation Trusts		—		6,000		—	c		6,000
Short Term Investments		11,463,714		—		—			11,463,714
Total Investments in Securities	$	21,476,901	$	409,554,480	$	2,777,640		$	433,809,021
Other Financial Instruments:
Futures Contracts	$	75,169	$	—	$	—		$	75,169
Forward Exchange Contracts		—		423,942		—			423,942
Swap Contracts.		—		324,800		—			324,800
Total Other Financial Instruments	$	75,169	$	748,742	$	—		$	823,911
Liabilities:
Other Financial Instruments:
Futures Contracts	$	238,428	$	—	$	—		$	238,428
Forward Exchange Contracts		—		1,204,238		—			1,204,238
Swap Contracts		—		237,504		—			237,504
Total Other Financial Instruments	$	238,428	$	1,441,742	$	—		$	1,680,170

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

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

^cIncludes securities determined to have no value at December 31, 2019.

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

FSI-52         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin Strategic Income VIP Fund (continued)

13.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the consolidated financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the consolidated financial statements.

Abbreviations
Counterparty		Currency		Selected Portfolio
BNDP	BNP Paribas SA	BRL	Brazilian Real	ARM	Adjustable Rate Mortgage
BZWS	Barclays Bank PLC	CNY	Chinese Yuan	CLO	Collateralized Loan Obligation
CITI	Citigroup, Inc.	COP	Colombian Peso	CMT	1 year Constant Maturity Treasury Index
DBAB	Deutsche Bank AG	DOP	Dominican Peso	CNRR	China Reverse Repo Rate
FBCO	Credit Suisse International	EUR	Euro	FHLMC	Federal Home Loan Mortgage Corp.
GSCO	The Goldman Sachs Group, Inc.	IDR	Indonesian Rupiah	FNMA	Federal National Mortgage Association
JPHQ	JP Morgan Chase & Co.	MXN	Mexican Peso	FRN	Floating Rate Note
MSCO	Morgan Stanley	USD	United States Dollar	GDP	Gross Domestic Product
		UYU	Uruguayan peso	GNMA	Government National Mortgage Association
		ZAR	South African rand	LIBOR	London InterBank Offered Rate
				MBS	Mortgage-Backed Security
				PIK	Payment-In-Kind
				RDA	Redevelopment Agency/Authority
				SF	Single Family
				T-Note	Treasury Note
				VRI	Value Recovery Instrument

Index
CDX.EM.Series number	CDX Emerging Markets Index
MCDX.NA.Series number	MCDX North America Index

Annual Report          FSI-53

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

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 consolidated statement of assets and liabilities, including the consolidated statement of investments, of Franklin Strategic Income VIP Fund and its subsidiary (the “Fund”) as of December 31, 2019, the related consolidated statements of operations for the year ended December 31, 2019, the consolidated statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the consolidated financial highlights for each of the five years in the period ended December 31, 2019 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. Our procedures included confirmation of securities owned as of December 31, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

FSI-54         Annual Report

Templeton Developing Markets VIP Fund

This annual report for Templeton Developing Markets VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year	5-Year	10-Year
Average Annual Total Return	+26.49%	+7.08%	+3.59%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 and the Standard & Poor’s^®/International Finance Corporation Investable (S&P^®/IFCI) Composite 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.

Annual Report          TD-1

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. 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 MSCI EM Index posted a +18.90% total return, and the S&P/IFCI Composite Index posted a +18.09% 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 economies in general continued to grow faster than their developed market counterparts during the reporting period, though several emerging market countries’ growth rates fell to multi-year lows. China’s year-on-year growth rate in 2019’s third and fourth quarters reached the lowest level since 1992. Trade tensions with the U.S. and soft global demand weighed on the economy, while increased industrial production provided some support. Taiwan’s year-on-year growth rate slowed in 2019’s first quarter

Geographic Composition

Based on Total Net Assets as of 12/31/19

before accelerating in the next three quarters. South Korea’s year-on-year growth rate slowed in 2019’s first quarter, then improved in the next three quarters, aided by exports, services and consumption. India’s year-on-year growth rate moderated to a six-year low in 2019’s third quarter, as exports and manufacturing contracted. Turning to Europe, Russia’s year-on-year growth rate accelerated in 2019’s second and third quarters following a slowdown in the first quarter. Many sectors saw quarterly contractions, while manufacturing, real estate activities and financial and insurance activities growth accelerated. In Latin America, Brazil’s year-on-year growth rate accelerated in 2019’s second and third quarters, aided by household spending and construction, after moderating in the first quarter.

Many emerging market central banks adopted more accommodative monetary policies during the period in response to sluggish global economic growth and U.S.-China trade tensions. The People’s Bank of China (PBOC) implemented an interest-rate reform in August, designating the loan prime rate (LPR) as the new benchmark for household and business loans, effectively lowering interest rates. The PBOC subsequently lowered the LPR twice. Additionally, the PBOC lowered its cash reserve requirement ratio for some banks in an effort to improve market liquidity. Taiwan’s central bank left its benchmark interest rate unchanged during the period, while South Korea’s central bank lowered its benchmark interest rate twice amid deflationary pressures. India’s central bank cut its

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

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

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benchmark rate several times in an effort to boost slowing growth. Russia’s central bank cut its key rate several times as inflation slowed. Brazil’s central bank cut its benchmark interest rate several times to its lowest rate on record due to a slower-than-expected economic recovery and relatively benign inflation.

Emerging market equities rose during the 12-month period, though they lagged their developed market counterparts. Calendar-year 2019 was a strong but volatile year for emerging market stocks, which performed well in the first and fourth quarters but posted anemic or negative returns in the middle two quarters. Interest-rate cuts by the U.S. Federal Reserve and other central banks supported equities, as did signs of an imminent phase one of the U.S.-China trade deal near year-end. Factors holding back gains included persistent U.S.-China trade tensions, geopolitical instability and the global economic slowdown. Regionally, Asian emerging market equities were led by export-oriented Taiwan, partly due to strong pre-orders of the new iPhone. In Latin America, Brazil posted strong returns as investors responded positively to President Jair Bolsonaro’s economic policies. In Europe, Russian equities posted robust returns due to many companies’ greater emphasis on shareholder returns as well as the country’s perceived relative insulation from global trade conflicts. In this environment, emerging market stocks, as measured by the MSCI Emerging Markets Index, posted a +18.90% total return for the 12 months ended December 31, 2019.1

Investment Strategy

We employ a fundamental research, value-oriented, long-term investment approach. We focus on the market price of a company’s securities relative to our evaluation of its long-term earnings, asset value and cash flow potential. This includes an assessment of the potential impacts of material environmental, social and governance factors on the long-term risk and return profile of a company. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price of the company’s securities. Our analysis considers the company’s position in its sector, the economic framework and political environment.

Manager’s Discussion

Key stock contributors to absolute performance during the period were Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics and Alibaba Group Holding.

TSMC is one of the world’s leading semiconductor manufacturers and counts major technology companies

Top 10 Countries

12/31/19

	% of Total Net Assets
China		26.2%
South Korea		17.0%
Taiwan		10.7%
Russia		9.1%
Brazil		8.0%
India		7.5%
South Africa		3.8%
U.S.		2.8%
U.K.		2.7%
Thailand		2.2%

among its clients. The chip maker posted solid growth in its 2019 third-quarter revenues and earnings, and projected further revenue growth due to the rollout of premium smartphones and high-performance computing applications. An improving global outlook for memory chips and easing U.S.-China trade friction—which boosted sentiment towards companies within the global technology supply chain—further benefitted the company. As a supplier to smartphone maker Apple (not a Fund holding), TSMC also rose on better-than-expected sales for the latest iPhone.

Samsung is a South Korea-based consumer electronics and semiconductor manufacturer. It is one of the world’s largest smartphone and memory chip producers as well as a key supplier of organic light-emitting diode (LED) displays. The company’s share price was pressured early in the year by disappointing first- and second-quarter 2019 corporate results, weak investor confidence in the technology sector and increased macroeconomic uncertainties resulting from geopolitical issues. In the latter part of the period, shares recovered to near record highs due to expectations of better supply and demand dynamics leading to the bottoming of memory prices as well as improving market sentiment.

Alibaba is the leading e-commerce company in China. The company also provides cloud computing services and is involved in payment, financing and logistics services. Following a period of share-price volatility driven by the U.S.-China trade conflict, shares jumped in the final quarter to end 2019 at a record high. Operationally, Alibaba continued to report strong quarterly results throughout the year. Solid e-commerce sales growth trends in China also boded well for the company’s businesses. Strong investor demand for its secondary listing in Hong Kong and market optimism about its multiple digital ventures further drove investor confidence in the stock.

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In contrast, key detractors included Massmart Holdings, Glenmark Pharmaceuticals and HDC Hyundai Development Co-Engineering & Construction (HDC).

Massmart is a leading South African wholesaler, distributor and retailer of food products, general merchandise, alcohol, and home improvement equipment and supplies. U.S.-based Walmart (not a Fund holding), the world’s largest retailer, owns a controlling stake in the company. Weak merchandising, online competition and slowing revenue growth amid a weak macroeconomic environment has delayed a turnaround in the group’s retail discount stores segment. Depreciation in regional currencies further pressured the business and, following the release of a profit decline warning, the company reported a loss for the first half of 2019 and did not pay out any dividends. The resignation of the chief executive officer (CEO) and chief financial officer further impacted sentiment. A new CEO was brought in from Walmart to turn around the business, and we have already seen some management changes aimed at driving sales and margins. The stock price has since stabilized on expectations that the new management will continue to take a proactive approach.

Glenmark Pharmaceuticals is a mid-size Indian pharmaceutical company with a presence in generics and research and development. The company’s shares fell sharply due to delays in U.S. approvals, including for the launch of a new product for the treatment of seasonal allergic rhinitis, and regulatory concerns at one of its formulation facilities. Weak 2019 second-quarter results further impacted sentiment, as lower U.S. revenues and higher research and development costs led to lower-than-expected revenue and earnings. Shares rebounded late in the year, however, following the release of better-than-expected third-quarter results driven by strong performance in India and the U.S.

HDC is a leading residential property developer in South Korea. With a strong brand name, “I-Park,” the company is estimated to have the largest market share in the residential construction business in South Korea. The downturn in the housing market and delayed development projects due to the government’s tightening regulations continued to impact investor sentiment in the stock. Disappointing third-quarter results, which included a decline in revenues and operating profits, also pressured shares. The company’s ultimately successful bid to acquire South Korea-based Asiana Airlines also hurt its share price. Though HDC has some exposure to non-residential businesses like hotels and duty-free stores,

Top 10 Holdings

12/31/19

Company Sector/Industry, Country	% of Total Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan		8.3%
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		7.8%
Alibaba Group Holding Ltd. Internet & Direct Marketing Retail, China		5.9%
Tencent Holdings Ltd. Interactive Media & Services, China		5.5%
ICICI Bank Ltd. Banks, India		4.1%
Naspers Ltd. Internet & Direct Marketing Retail, South Africa		3.2%
Naver Corp. Interactive Media & Services, South Korea		3.0%
LUKOIL PJSC Oil, Gas & Consumable Fuels, Russia		2.8%
Unilever PLC Personal Products, U.K.		2.7%
Brilliance China Automotive Holdings Ltd. Automobiles, China		2.6%

investors viewed the move unfavorably due to its divergence from the company’s core activity and concerns that acquisition costs could impact company finances.

In the last 12 months, the Fund increased its holdings in China, Brazil and Mexico due to their solid fundamentals. Investments in U.S.-listed companies that have significant exposure to emerging markets were also increased. In terms of sectors, additions were undertaken in financials and industrials.² Key additions to the portfolio included Vale, a major global iron ore producer; China Merchants Bank, a Chinese Bank; and Samsung Life Insurance, one of the largest insurance companies in South Korea. We increased our existing positions in Cognizant Technology Solutions, a major global information technology services company, and Tencent Holdings, one of the largest internet services companies in China.

The Fund reduced its investments in South Africa, Taiwan and Peru in favor of stocks we deemed to be more attractively valued within our investment universe. Sectors which experienced the largest sales were consumer

2. The financials sector comprises banks, capital markets, diversified financial services and insurance in the SOI. The industrials sector comprises construction and engineering, industrial conglomerates and transportation infrastructure in the SOI.

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discretionary, communication services and consumer staples.³ Key reductions included Naspers, an internet and media group based in South Africa; Prosus, the international internet assets spin-off of Naspers; and Ping An Bank, a Chinese bank. Key liquidations included Peruvian precious metals company Compania De Minas Buenaventura, cement producer Semen Indonesia, and beverages maker Nigerian Breweries, the last of which eliminated the Fund’s exposure to that market.

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

3. The consumer discretionary sector comprises auto components; automobiles; hotels, restaurants and leisure; internet and direct marketing retail; multiline retail; and textiles, apparel and luxury goods in the SOI. The communication services sector comprises entertainment, interactive media and services, media and wireless telecommunication services in the SOI. The consumer staples sector comprises beverages, food and staples retailing, food products and personal products in the SOI.

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TEMPLETON DEVELOPING MARKETS VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account     Value 7/1/19	Ending Account     Value 12/31/19	Fund-Level Expenses Paid During Period     7/1/19–12/31/191,  2	Ending Account     Value 12/31/19	Fund-Level Expenses Paid During Period     7/1/19–12/31/191,  2	Net     Annualized     Expense Ratio2
Class 4	$1,000	$1,109.20	$7.97	$1,017.64	$7.63	1.50%

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.

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Financial Highlights

Templeton Developing Markets VIP Fund

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$  8.62			$10.31			$  7.42			$ 6.37			$ 9.27
Income from investment operationsa:
Net investment incomeb		0.18			0.09			0.08			0.05			0.06
Net realized and unrealized gains (losses)		2.12			(1.67	)		2.92			1.08			(1.63	)
Total from investment operations		2.30			(1.58	)		3.00			1.13			(1.57	)
Less distributions from:
Net investment income		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(0.20	)
Net realized gains		—			—			—			—			(1.13	)
Total distributions		(0.12	)		(0.11	)		(0.11	)		(0.08	)		(1.33	)
Net asset value, end of year		$ 10.80			$  8.62			$10.31			$  7.42			$ 6.37
Total returnc		26.92%			(15.44)%			40.65%			17.79%			(19.42)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.15%			1.24%			1.36%			1.38%			1.33%
Expenses net of waiver and payments by affiliates		1.15%	d		1.24%	d		1.35%	e		1.36%			1.32%
Net investment income		1.83%			0.99%			0.86%			0.79%			0.74%
Supplemental data
Net assets, end of year (000’s)		$97,271			$85,397			$105,493			$82,596			$77,000
Portfolio turnover rate		18.04%			9.22%			10.76%			26.78%			71.69%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$ 8.54			$10.23			$ 7.36			$ 6.32			$ 9.20
Income from investment operationsa:
Net investment incomeb		0.15			0.07			0.05			0.04			0.04
Net realized and unrealized gains (losses)		2.11			(1.68	)		2.91			1.06			(1.61	)
Total from investment operations		2.26			(1.61	)		2.96			1.10			(1.57	)
Less distributions from:
Net investment income		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(0.18	)
Net realized gains		—			—			—			—			(1.13	)
Total distributions		(0.09	)		(0.08	)		(0.09	)		(0.06	)		(1.31	)
Net asset value, end of year		$10.71			$ 8.54			$10.23			$ 7.36			$ 6.32
Total returnc		26.70%			(15.79)%			40.41%			17.44%			(19.60)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.40%			1.49%			1.61%			1.63%			1.58%
Expenses net of waiver and payments by affiliates		1.40%	d		1.49%	d		1.60%	e		1.61%			1.57%
Net investment income		1.58%			0.74%			0.61%			0.54%			0.49%
Supplemental data
Net assets, end of year (000’s)		$231,645			$195,305			$270,433			$205,151			$192,120
Portfolio turnover rate		18.04%			9.22%			10.76%			26.78%			71.69%

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

^bBased on average daily shares outstanding.

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

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

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

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Developing Markets VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$ 8.59			$10.28			$ 7.39			$ 6.34			$ 9.22
Income from investment operationsa:
Net investment incomeb		0.15			0.06			0.05			0.03			0.03
Net realized and unrealized gains (losses)		2.11			(1.68	)		2.92			1.06			(1.62	)
Total from investment operations		2.26			(1.62	)		2.97			1.09			(1.59	)
Less distributions from:
Net investment income		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(0.16	)
Net realized gains		—			—			—			—			(1.13	)
Total distributions		(0.08	)		(0.07	)		(0.08	)		(0.04	)		(1.29	)
Net asset value, end of year		$10.77			$ 8.59			$10.28			$ 7.39			$ 6.34
Total returnc		26.49%			(15.81)%			40.30%			17.32%			(19.70)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.50%			1.59%			1.71%			1.73%			1.68%
Expenses net of waiver and payments by affiliates		1.50%	d		1.59%	d		1.70%	e		1.71%			1.67%
Net investment income		1.48%			0.64%			0.51%			0.44%			0.39%
Supplemental data
Net assets, end of year (000’s)		$5,590			$5,203			$7,199			$6,377			$7,109
Portfolio turnover rate		18.04%			9.22%			10.76%			26.78%			71.69%

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.   |  Annual Report            TD-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Templeton Developing Markets VIP Fund

	Industry	Shares/ Rights		Value
Common Stocks and Other Equity Interests 93.3%
Brazil 2.8%
a B2W Cia Digital	Internet & Direct Marketing Retail		87,800	$	1,373,083
B3 SA - Brasil Bolsa Balcao	Capital Markets		105,900		1,132,112
Lojas Americanas SA	Multiline Retail		169,200		829,267
a Lojas Americanas SA, rts., 1/08/20	Multiline Retail		1,632		3,049
M. Dias Branco SA	Food Products		136,200		1,292,706
Mahle-Metal Leve SA	Auto Components		2,500		17,913
Totvs SA	Software		48,900		785,295
Vale SA	Metals & Mining		304,900		4,043,083
					9,476,508
Cambodia 0.9%
NagaCorp Ltd.	Hotels, Restaurants & Leisure		1,787,400		3,119,572
China 26.2%
a Alibaba Group Holding Ltd., ADR	Internet & Direct Marketing Retail		93,210		19,769,841
BAIC Motor Corp. Ltd., H	Automobiles		1,686,100		956,401
a Baidu Inc., ADR	Interactive Media & Services		9,411		1,189,550
Brilliance China Automotive Holdings Ltd.	Automobiles		8,566,600		8,882,888
China Construction Bank Corp., H	Banks		7,168,000		6,190,809
China Merchants Bank Co. Ltd., A	Banks		337,500		1,821,469
China Merchants Bank Co. Ltd., H	Banks		507,700		2,609,420
China Mobile Ltd.	Wireless Telecommunication Services		447,000		3,757,363
China Petroleum & Chemical Corp., H	Oil, Gas & Consumable Fuels		2,500,900		1,505,232
China Resources Cement Holdings Ltd.	Construction Materials		2,675,000		3,405,413
CNOOC Ltd.	Oil, Gas & Consumable Fuels		2,411,500		4,010,759
COSCO SHIPPING Ports Ltd.	Transportation Infrastructure		865,196		708,385
Health & Happiness H&H International Holdings Ltd.	Food Products		418,400		1,731,632
NetEase Inc., ADR	Entertainment		4,253		1,304,140
Ping An Bank Co. Ltd., A	Banks		928,200		2,192,798
Ping An Insurance Group Co. of China Ltd., A	Insurance		225,745		2,770,589
a Prosus NV	Internet & Direct Marketing Retail		26,357		1,966,498
Sunny Optical Technology Group Co. Ltd.	Electronic Equipment, Instruments & Components		159,000		2,752,602
Tencent Holdings Ltd.	Interactive Media & Services		381,100		18,369,565
Uni-President China Holdings Ltd.	Food Products		1,103,300		1,158,194
Weifu High-Technology Co. Ltd., B	Auto Components		334,339		574,516
					87,628,064
Czech Republic 0.5%
Moneta Money Bank AS	Banks		390,403		1,463,376
Hong Kong 0.1%
Dairy Farm International Holdings Ltd.	Food & Staples Retailing		64,033		365,628
Hungary 1.0%
Richter Gedeon Nyrt	Pharmaceuticals		155,260		3,375,904
India 7.5%
Bajaj Holdings & Investment Ltd.	Diversified Financial Services		43,390		2,071,507
Biocon Ltd.	Biotechnology		574,280		2,363,759
Coal India Ltd.	Oil, Gas & Consumable Fuels		232,535		688,757

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Developing Markets VIP Fund (continued)

	Industry		Shares/ Rights		Value
Common Stocks and Other Equity Interests (continued)
India (continued)
Glenmark Pharmaceuticals Ltd.		Pharmaceuticals		292,323	$	1,423,413
ICICI Bank Ltd.		Banks		1,806,409		13,642,685
Infosys Ltd.		IT Services		306,365		3,139,216
Tata Chemicals Ltd.		Chemicals		194,400		1,817,452
						25,146,789
Indonesia 1.1%
Astra International Tbk PT		Automobiles		7,340,300		3,661,558
Kenya 0.3%
Equity Group Holdings PLC		Banks		2,127,994		1,123,312
Macau 1.1%
MGM China Holdings Ltd.		Hotels, Restaurants & Leisure		1,292,400		2,109,689
Sands China Ltd.		Hotels, Restaurants & Leisure		272,000		1,453,845
						3,563,534
Mexico 2.2%
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santander, ADR		Banks		949,761		6,439,380
Nemak SAB de CV		Auto Components		2,014,800		844,407
						7,283,787
Pakistan 0.4%
Habib Bank Ltd.		Banks		1,333,600		1,366,295
Peru 0.4%
Intercorp Financial Services Inc.		Banks		31,950		1,306,755
Philippines 0.3%
BDO Unibank Inc.		Banks		327,469		1,020,918
Russia 9.1%
Gazprom PJSC, ADR		Oil, Gas & Consumable Fuels		566,200		4,658,693
LUKOIL PJSC, ADR		Oil, Gas & Consumable Fuels		95,250		9,446,895
a Mail.Ru Group Ltd., GDR		Interactive Media & Services		112,799		2,515,418
Sberbank of Russia PJSC, ADR		Banks		498,847		8,201,045
a Yandex NV, A		Interactive Media & Services		126,319		5,493,613
						30,315,664
Singapore 0.2%
DBS Group Holdings Ltd.		Banks		25,706		494,552
South Africa 3.8%
Massmart Holdings Ltd.		Food & Staples Retailing		595,221		2,181,178
Naspers Ltd., N		Internet & Direct Marketing Retail		64,938		10,622,100
						12,803,278
South Korea 17.0%
Fila Korea Ltd.		Textiles, Apparel & Luxury Goods		59,210		2,714,669
Hankook Technology Group Co. Ltd.		Diversified Financial Services		37,500		467,132
Hankook Tire & Technology Co. Ltd.		Auto Components		21,600		626,891
Hanon Systems		Auto Components		94,741		913,816
HDC Hyundai Development Co-Engineering & Construction		Construction & Engineering		21,031		466,652

Annual Report          TD-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Developing Markets VIP Fund (continued)

	Industry		Shares/ Rights		Value
Common Stocks and Other Equity Interests (continued)
South Korea (continued)
KT Skylife Co. Ltd.		Media		166,071	$	1,252,726
LG Corp.		Industrial Conglomerates		96,342		6,150,606
Naver Corp.		Interactive Media & Services		61,961		9,996,390
POSCO		Metals & Mining		15,429		3,156,566
Samsung Electronics Co. Ltd.		Technology Hardware, Storage & Peripherals		538,229		25,980,483
Samsung Life Insurance Co. Ltd.		Insurance		41,400		2,668,103
SK Hynix Inc.		Semiconductors & Semiconductor Equipment		31,530		2,566,608
						56,960,642
Taiwan 10.7%
Catcher Technology Co. Ltd.		Technology Hardware, Storage & Peripherals		114,000		865,167
CTBC Financial Holding Co. Ltd.		Banks		2,244,000		1,680,505
FIT Hon Teng Ltd.		Electronic Equipment, Instruments & Components		1,759,800		591,696
Hon Hai Precision Industry Co. Ltd.		Electronic Equipment, Instruments & Components		1,332,000		4,043,516
Largan Precision Co. Ltd.		Electronic Equipment, Instruments & Components		5,300		885,962
Taiwan Semiconductor Manufacturing Co. Ltd.		Semiconductors & Semiconductor Equipment		2,505,000		27,720,738
						35,787,584
Thailand 2.2%
Kasikornbank PCL, fgn		Banks		705,000		3,564,075
Kiatnakin Bank PCL, fgn		Banks		1,009,800		2,238,723
Thai Beverage PCL, fgn		Beverages		2,335,600		1,545,260
						7,348,058
United Kingdom 2.7%
Unilever PLC		Personal Products		155,816		8,978,148
United States 2.8%
Cognizant Technology Solutions Corp., A		IT Services		112,421		6,972,350
a IMAX Corp.		Entertainment		123,155		2,516,057
						9,488,407
Total Common Stocks and Other Equity Interests (Cost $217,219,065)						312,078,333
Preferred Stocks 5.2%
Brazil 5.2%
b Banco Bradesco SA, 5.539%, ADR, pfd		Banks		933,515		8,354,959
b Itau Unibanco Holding SA, 8.209%, ADR, pfd		Banks		808,743		7,399,999
b Petroleo Brasileiro SA, 3.15%, ADR, pfd		Oil, Gas & Consumable Fuels		118,600		1,769,512
Total Preferred Stocks (Cost $8,582,220)						17,524,470
Total Investments before Short Term Investments (Cost $225,801,285)						329,602,803

TD-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Developing Markets VIP Fund (continued)

	Shares		Value
Short Term Investments (Cost $3,522,232) 1.1%
Money Market Funds 1.1%
United States 1.1%
c,d Institutional Fiduciary Trust Money Market Portfolio, 1.26%		3,522,232	$	3,522,232
Total Investments (Cost $229,323,517) 99.6%				333,125,035
Other Assets, less Liabilities 0.4%				1,381,143
Net Assets 100.0%			$	334,506,178

See Abbreviations on page TD-23.

^aNon-income producing.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Templeton Developing Markets VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$225,801,285
Cost - Non-controlled affiliates (Note 3e)		3,522,232
Value - Unaffiliated issuers		$329,602,803
Value - Non-controlled affiliates (Note 3e)		3,522,232
Receivables:
Investment securities sold		104,852
Capital shares sold		5,030,737
Dividends		1,460,873
Foreign tax refund		51,726
Other assets		37
Total assets		339,773,260
Liabilities:
Payables:
Investment securities purchased		388,676
Capital shares redeemed		3,776,749
Management fees		287,187
Distribution fees		49,267
Deferred tax		559,174
Accrued expenses and other liabilities		206,029
Total liabilities		5,267,082
Net assets, at value		$334,506,178
Net assets consist of:
Paid-in capital		$219,735,800
Total distributable earnings (losses)		114,770,378
Net assets, at value		$334,506,178
Class 1:
Net assets, at value		$  97,271,290
Shares outstanding		9,007,499
Net asset value and maximum offering price per share		$10.80
Class 2:
Net assets, at value		$231,644,964
Shares outstanding		21,626,916
Net asset value and maximum offering price per share		$10.71
Class 4:
Net assets, at value		$    5,589,924
Shares outstanding		519,038
Net asset value and maximum offering price per share		$10.77

TD-14         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Templeton Developing Markets VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers		$9,178,310
Non-controlled affiliates (Note 3e)		124,872
Total investment income		9,303,182
Expenses:
Management fees (Note 3a)		3,277,762
Distribution fees: (Note 3c)
Class 2		540,073
Class 4		19,027
Custodian fees (Note 4)		85,582
Reports to shareholders		139,691
Professional fees		91,078
Trustees’ fees and expenses		1,824
Other		30,167
Total expenses		4,185,204
Expenses waived/paid by affiliates (Note 3e)		(23,794	)
Net expenses		4,161,410
Net investment income		5,141,772
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:#
Unaffiliated issuers		16,811,756
Foreign currency transactions		(37,399	)
Net realized gain (loss)		16,774,357
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		50,175,353
Translation of other assets and liabilities denominated in foreign currencies		(2,559	)
Change in deferred taxes on unrealized appreciation		1,309
Net change in unrealized appreciation (depreciation)		50,174,103
Net realized and unrealized gain (loss)		66,948,460
Net increase (decrease) in net assets resulting from operations		$72,090,232
*Foreign taxes withheld on dividends.		$  1,158,072
#Net of foreign taxes		$     480,604

The accompanying notes are an integral part of these financial statements.   |  Annual Report            TD-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Developing Markets VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	5,141,772		$	2,697,670
Net realized gain (loss)		16,774,357			19,694,258
Net change in unrealized appreciation (depreciation)		50,174,103			(77,137,099	)
Net increase (decrease) in net assets resulting from operations		72,090,232			(54,745,171	)
Distributions to shareholders:
Class 1		(1,134,638	)		(1,013,838	)
Class 2		(2,113,534	)		(1,947,210	)
Class 4		(46,961	)		(46,243	)
Total distributions to shareholders		(3,295,133	)		(3,007,291	)
Capital share transactions: (Note 2)
Class 1		(8,627,549	)		(3,414,259	)
Class 2		(10,720,631	)		(35,130,020	)
Class 4		(845,695	)		(923,409	)
Total capital share transactions		(20,193,875	)		(39,467,688	)
Net increase (decrease) in net assets		48,601,224			(97,220,150	)
Net assets:
Beginning of year		285,904,954			383,125,104
End of year	$	334,506,178		$	285,904,954

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Templeton Developing Markets VIP Fund

1.  Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

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

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

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

  |  Annual Report            TD-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets VIP Fund (continued)

1.  Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.  Foreign Currency Translation

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

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

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

c.  Income and Deferred Taxes

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

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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

TD-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets VIP Fund (continued)

reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		544,413		$	5,344,264			1,801,012		$	17,302,432
Shares issued in reinvestment of distributions		121,873			1,134,638			105,170			1,013,838
Shares redeemed		(1,570,097	)		(15,106,451	)		(2,222,370	)		(21,730,529	)
Net increase (decrease)		(903,811	)	$	(8,627,549	)		(316,188	)	$	(3,414,259	)
Class 2 Shares:
Shares sold		5,803,158		$	55,845,696			4,771,227		$	45,978,347
Shares issued in reinvestment of distributions		228,490			2,113,534			203,470			1,947,210
Shares redeemed		(7,263,336	)		(68,679,861	)		(8,557,714	)		(83,055,577	)
Net increase (decrease)		(1,231,688	)	$	(10,720,631	)		(3,583,017	)	$	(35,130,020	)
Class 4 Shares:
Shares sold		26,510		$	252,720			48,260		$	471,887
Shares issued in reinvestment of distributions		5,050			46,961			4,802			46,243
Shares redeemed		(118,358	)		(1,145,376	)		(147,608	)		(1,441,539	)
Net increase (decrease)		(86,798	)	$	(845,695	)		(94,546	)	$	(923,409	)

Annual Report          TD-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets 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 trustees of the following subsidiaries:

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

a.  Management Fees

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

Annualized Fee Rate	Net Assets
1.050%	Up to and including $1 billion
1.000%	Over $1 billion, up to and including $5 billion
0.950%	Over $5 billion, up to and including $10 billion
0.900%	Over $10 billion, up to and including $15 billion
0.850%	Over $15 billion, up to and including $20 billion
0.800%	In excess of $20 billion

b.  Administrative Fees

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

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.

TD-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets VIP Fund (continued)

e.  Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	5,427,431	$	61,498,455	$	(63,403,654	)		$    —		$    —	$	3,522,232		3,522,232	$	124,872

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, 2019, there were no credits earned.

5.  Income Taxes

During the year ended December 31, 2019, the Fund utilized $6,657,029 of capital loss carryforwards.

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from ordinary income	$	3,295,133	$	3,007,291

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:

Cost of investments	$	236,854,313
Unrealized appreciation	$	117,899,365
Unrealized depreciation		(21,628,643	)
Net unrealized appreciation (depreciation)	$	96,270,722
Distributable earnings:
Undistributed ordinary income	$	11,804,377
Undistributed long term capital gains		7,281,404
Total distributable earnings	$	19,085,781

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.

Annual Report          TD-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets VIP Fund (continued)

6.  Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $55,126,299 and $72,022,991, 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. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

The United States and other nations have imposed and could impose additional sanctions on certain issuers in Russia due to regional conflicts. These sanctions could result in the devaluation of Russia’s currency, a downgrade in Russian issuers’ credit ratings, or a decline in the value and liquidity of Russian stocks or other securities. Such sanctions could also adversely affect Russia’s economy. The Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, if the Fund holds the securities of an issuer that is subject to such sanctions, an immediate freeze of that issuer’s securities could result, impairing the ability of the Fund to buy, sell, receive or deliver those securities. There is also the risk that countermeasures could be taken by Russia’s government, which could involve the seizure of the Fund’s assets. These risks could affect the value of the Fund’s portfolio. While the Fund holds securities of certain issuers impacted by the sanctions, existing investments do not presently violate the applicable terms and conditions of the sanctions. The sanctions currently do not affect the Fund’s ability to sell these securities. At December 31, 2019, the Fund had 9.1% of its net assets invested in Russia.

8.  Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

9.  Fair Value Measurements

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

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

TD-22         Annual Report  

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Developing Markets 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, 2019, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments:b
Brazil	$	26,997,929	$	3,049	$	—	$	27,000,978
Russia		25,656,971		4,658,693		—		30,315,664
All Other Equity Investments		272,286,161		—		—		272,286,161
Short Term Investments		3,522,232		—		—		3,522,232
Total Investments in Securities	$	328,463,293	$	4,661,742	$	—	$	333,125,035

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

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

10.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Abbreviations

Selected Portfolio

ADR	American Depositary Receipt
GDR	Global Depositary Receipt

  Annual Report            TD-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

TD-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Developing Markets VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Internal Revenue Code. This election will allow shareholders of record as of the 2020 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

  Annual Report            TD-25

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Templeton Foreign VIP Fund

This annual report for Templeton Foreign VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year	5-Year	10-Year
Average Annual Total Return	+12.49%	+2.07%	+3.28%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 All Country World Index (ACWI) ex USA 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.

Annual Report          TF-1

TEMPLETON FOREIGN VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of issuers located outside the U.S., including those in emerging markets.

Fund Risks

All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in developing markets involve heightened risks related to the same factors. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. Because the Fund may invest its assets in companies in a specific region, including Europe, it is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in companies in Europe. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as enable gains) on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s benchmark, the MSCI ACWI ex USA Index, posted a +22.13% total return for the same period.¹ Please note, index performance information is provided for reference and we do not attempt to track the index but rather undertake investments on the basis of fundamental research.

Geographic Composition

Based on Total Net Assets as of 12/31/19

Economic and Market Overview

Global developed and emerging market stocks, as measured by the MSCI ACWI, posted strong returns during the reporting period. Although global economic growth slowed from 2018, interest-rate cuts from many central banks and the easing of trade tensions near period-end contributed to the generally positive environment for equities worldwide. Reflecting investor optimism and slowing but resilient economic growth, stocks advanced in every major region of the globe.

In the U.S., solid economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

The U.S. Federal Reserve (Fed) provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after

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

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

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

TF-2         Annual Report

TEMPLETON FOREIGN VIP FUND

the Fed indicated it would likely leave interest rates unchanged in 2020.

Growth slowed overall in the eurozone, particularly in Germany and Italy. Germany, which is heavily reliant on exports, was adversely affected by the trade conflict between the U.S. and China and the resulting slowdown in global trade. In Italy, political uncertainty and budget concerns caused the country’s annual gross domestic product (GDP) growth to stall in 2019’s first quarter before accelerating in the second quarter. Despite sluggish economic conditions, European developed market equities, as measured by the MSCI Europe Index, posted strong returns overall, as easing trade tensions buoyed investor optimism and an electoral victory by the Conservative Party in the U.K. alleviated uncertainty surrounding Brexit. Although the European Central Bank left its headline refinancing rate unchanged, it lowered the deposit rate and restarted its bond-buying stimulus program, further supporting stocks.

Economic growth in Asia was relatively solid overall, despite slowdowns in several large emerging market countries, such as China and India. Japan’s economy grew amid the Bank of Japan’s sizable stimulus program. The trade war between the U.S. and China provided the backdrop for Asian stocks, which rose and fell in sync with investor sentiment regarding a trade deal. A phase one trade agreement between the two countries reached in December 2019 propelled Asian developed and emerging market stocks, which ultimately ended with strong returns over the 12-month period, as measured by the MSCI All Country Asia Index.

Emerging market stocks overall experienced several sharp selloffs and subsequent rebounds throughout the reporting period before ending with gains. In aggregate, economic growth slowed somewhat from 2018 but remained solid, although there was some variation among individual countries. Many central banks in emerging markets cut interest rates throughout the reporting period which, along with resilient GDP growth, provided a supportive environment for equities. Russian stocks posted the highest returns among emerging markets as the threat of further sanctions receded and a solid fiscal environment reassured investors. Overall, global emerging markets, as measured by the MSCI Emerging Markets Index, posted robust returns for the period.

Top 10 Holdings

12/31/19

Company Sector/Industry, Country	% of Total Net Assets
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea		4.8%
BNP Paribas SA Banks, France		3.1%
ING Groep NV Banks, Netherlands		3.1%
Standard Chartered PLC Banks, U.K.		3.0%
CK Hutchison Holdings Ltd. Industrial Conglomerates, Hong Kong		2.7%
KB Financial Group Inc. Banks, South Korea		2.7%
BP PLC Oil, Gas & Consumable Fuels, U.K.		2.5%
Bayer AG Pharmaceuticals, Germany		2.5%
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan		2.4%
Wheaton Precious Metals Corp. Metals & Mining, Canada		2.3%

Investment Strategy

Our investment philosophy is bottom up, value oriented and long term. When choosing investments for the Fund, we generally focus on the market price of a company’s securities relative to our evaluation of the company’s potential long-term earnings, asset value and cash flow. 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.

Annual Report         TF-3

TEMPLETON FOREIGN VIP FUND

Manager’s Discussion

During the 12 months under review, stock selection in the information technology (IT) and materials sectors contributed to the Fund’s performance relative to the MSCI ACWI ex USA Index.³

Within IT, key contributors to relative results included South Korean electronics firm Samsung Electronics, Netherlands-based semiconductor solutions company NXP Semiconductors, Swiss metering and smart grid solutions company Landis + Gyr Group (not part of the index) and Taiwanese integrated circuits and wafer semiconductor devices firm Taiwan Semiconductor Manufacturing. Samsung Electronics helped drive relative performance as its shares advanced after it posted better-than-expected earnings and projected a gradual recovery in the memory chip market as 5G wireless technology rolls out globally. We believe Samsung Electronics remains inexpensive for a global technology leader and could potentially benefit from a cyclical upswing in the memory chip segment and an increasing capital return program.

In materials, Canadian mining companies Wheaton Precious Metals and Alamos Gold (not part of the index) benefited relative performance. Shares of both companies rallied as the price of gold broke out of a six-year trading range. Anticipating an eventual move higher in gold prices given record-high debt levels, historically low interest rates, escalating geopolitical turmoil and renewed central bank buying, we maintained a modest precious metals allocation as a portfolio hedge and diversifier.

Other notable contributors to the Fund’s relative performance included French lender BNP Paribas, which benefited from solid results at its fixed income unit and from more benign European economic conditions. In our view, BNP Paribas is a diverse, high-quality European bank with an excellent track record of managing credit risk and maintaining profitability in various economic conditions.

In contrast, stock selection in the communication services, health care and energy sectors, as well as overweightings in communication services and energy, detracted from the Fund’s relative performance.⁴

Within communication services, Chinese language internet search company Baidu, Chinese telecommunication firm

China Telecom, Luxembourg-based satellite operator SES and German telecommunication firm Telefonica Deutschland Holding hurt relative results. China Telecom’s shares declined amid concerns about elevated 5G capital expenditures and continued security scrutiny of Chinese telecommunication services companies. We continue to believe the stock offers undemanding valuations, attractive dividend yields and a solid competitive position in a secular growth market. Shares of SES declined as investors, in our view, reacted too negatively to a regulatory ruling that we believe will likely prove less value-destructive than initially feared. We remain positive on the stock given its strong balance sheet and healthy dividend yield, as well as our expectation of renewed growth from the firm’s core business over a long-term investment horizon.

In health care, Israeli generic drugmaker Teva Pharmaceutical Industries (not held at period-end) declined amid legal and regulatory setbacks that, in our assessment, impaired the balance of risks, leading us to sell the stock.

In the energy sector, U.K.-based integrated energy firm BP, Canadian exploration and production company Husky Energy and U.K.-listed oil and natural gas producer Royal Dutch Shell dampened relative results. BP reported higher oil and gas production but disappointed investors hoping for a dividend increase. The company has made solid progress selling assets to shore up its balance sheet and, in our view, could potentially benefit from firmer oil prices and rising production following years of investment.

From a regional perspective, stock selection in North America, particularly in Canada, contributed to the Fund’s relative performance. In contrast, stock selection in Asia, especially in China and Japan, detracted from relative performance. Stock selection in Europe also hindered performance, as relative weakness in the U.K., Germany and Italy more than offset relative strength in the Netherlands and France. In the Middle East and Africa region, our position in Israel hindered relative performance.

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

3. The IT sector comprises electronic equipment, instruments and components; semiconductors and semiconductor equipment; and technology hardware, storage and peripherals in the SOI. The materials sector comprises chemicals and metals and mining in the SOI.

4. The communication services sector comprises diversified telecommunication services, interactive media and services, media and wireless telecommunication services in the SOI. The health care sector comprises health care providers and services and pharmaceuticals in the SOI. The energy sector comprises energy equipment and services and oil, gas and consumable fuels in the SOI.

TF-4         Annual Report

TEMPLETON FOREIGN VIP FUND

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Annual Report          TF-5

TEMPLETON FOREIGN VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,056.50	$6.06	$1,019.31	$5.96	1.17%

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.

TF-6         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Foreign VIP Fund

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$13.01			$15.80			$13.89			$13.46			$15.34
Income from investment operationsa:
Net investment incomeb		0.44			0.29			0.30			0.33			0.31
Net realized and unrealized gains (losses)		1.19			(2.64	)		2.03			0.62			(1.16	)
Total from investment operations		1.63			(2.35	)		2.33			0.95			(0.85	)
Less distributions from:
Net investment income		(0.27	)		(0.44	)		(0.42	)		(0.29	)		(0.53	)
Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.41	)		(0.44	)		(0.42	)		(0.52	)		(1.03	)
Net asset value, end of year		$14.23			$13.01			$15.80			$13.89			$13.46
Total returnc		12.84%			(15.27)%			17.02%			7.49%			(6.31)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		0.85%			0.83%			0.82%			0.80%			0.78%
Expenses net of waiver and payments by affiliates		0.83%			0.81%			0.81%	d		0.78%			0.78%	e
Net investment income		3.25%			1.96%			1.99%			2.38%			2.05%
Supplemental data
Net assets, end of year (000’s)		$121,948			$114,784			$152,684			$133,218			$214,172
Portfolio turnover rate		28.52%			21.38%			26.81%			20.93%			15.15%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$12.74			$15.47			$13.61			$13.20			$15.05
Income from investment operationsa:
Net investment incomeb		0.40			0.25			0.26			0.28			0.27
Net realized and unrealized gains (losses)		1.16			(2.58	)		1.98			0.62			(1.13	)
Total from investment operations		1.56			(2.33	)		2.24			0.90			(0.86	)
Less distributions from:
Net investment income		(0.23	)		(0.40	)		(0.38	)		(0.26	)		(0.49	)
Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.37	)		(0.40	)		(0.38	)		(0.49	)		(0.99	)
Net asset value, end of year		$13.93			$12.74			$15.47			$13.61			$13.20
Total returnc		12.53%			(15.44)%			16.69%			7.18%			(6.49)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.10%			1.08%			1.07%			1.05%			1.03%
Expenses net of waiver and payments by affiliates		1.08%			1.06%			1.06%	d		1.03%			1.03%	e
Net investment income		3.00%			1.71%			1.74%			2.13%			1.80%
Supplemental data
Net assets, end of year (000’s)		$1,117,813			$1,060,101			$1,394,475			$1,436,518			$1,456,854
Portfolio turnover rate		28.52%			21.38%			26.81%			20.93%			15.15%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Foreign VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$12.96			$15.71			$13.71			$13.29			$15.16
Income from investment operationsa:
Net investment incomeb		0.39			0.24			0.23			0.26			0.25
Net realized and unrealized gains (losses)		1.20			(2.63	)		2.03			0.63			(1.14	)
Total from investment operations		1.59			(2.39	)		2.26			0.89			(0.89	)
Less distributions from:
Net investment income		(0.21	)		(0.36	)		(0.26	)		(0.24	)		(0.48	)
Net realized gains		(0.14	)		—			—			(0.23	)		(0.50	)
Total distributions		(0.35	)		(0.36	)		(0.26	)		(0.47	)		(0.98	)
Net asset value, end of year		$14.20			$12.96			$15.71			$13.71			$13.29
Total returnc		12.49%			(15.54	)%		16.62%			7.09%			(6.65)%
Ratios to average net assets
Expenses before waiver and payments by affiliates		1.20%			1.18%			1.17%			1.15%			1.13%
Expenses net of waiver and payments by affiliates		1.18%			1.16%			1.16%	d		1.13%			1.13%	e
Net investment income		2.90%			1.61%			1.64%			2.03%			1.70%
Supplemental data
Net assets, end of year (000’s)		$113,681			$125,265			$159,944			$484,763			$472,189
Portfolio turnover rate		28.52%			21.38%			26.81%			20.93%			15.15%

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TF-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Templeton Foreign VIP Fund

	Country		Shares		Value
Common Stocks 94.4%
Aerospace & Defense 1.3%
BAE Systems PLC		United Kingdom		2,299,513	$	17,201,492
Auto Components 1.4%
Cie Generale des Etablissements Michelin SCA		France		158,794		19,428,477
Automobiles 1.3%
Hero Motocorp Ltd.		India		154,059		5,274,667
Isuzu Motors Ltd.		Japan		1,085,800		12,978,644
						18,253,311
Banks 17.8%
Bank of Ireland Group PLC		Ireland		2,346,131		12,844,877
BNP Paribas SA		France		717,204		42,491,615
Hana Financial Group Inc.		South Korea		540,193		17,243,334
ING Groep NV		Netherlands		3,440,596		41,239,182
Kasikornbank PCL, fgn		Thailand		1,860,000		9,403,090
KB Financial Group Inc., ADR		South Korea		871,106		36,037,655
Shinhan Financial Group Co. Ltd.		South Korea		366,922		13,759,694
Standard Chartered PLC		United Kingdom		4,362,317		41,160,126
Sumitomo Mitsui Financial Group Inc.		Japan		732,300		27,209,822
						241,389,395
Beverages 2.0%
Kirin Holdings Co. Ltd.		Japan		841,800		18,513,016
Suntory Beverage & Food Ltd.		Japan		217,100		9,079,544
						27,592,560
Building Products 1.1%
Compagnie de Saint-Gobain		France		373,982		15,308,177
Capital Markets 0.5%
UBS Group AG		Switzerland		540,632		6,830,183
Chemicals 2.7%
Johnson Matthey PLC		United Kingdom		580,290		23,026,210
Lotte Chemical Corp.		South Korea		67,855		13,148,487
						36,174,697
Construction & Engineering 0.5%
Sinopec Engineering Group Co. Ltd.		China		11,734,000		7,017,240
Diversified Telecommunication Services 3.1%
China Telecom Corp. Ltd., H		China		40,444,357		16,660,856
Singapore Telecommunications Ltd.		Singapore		6,240,400		15,633,473
Telefonica Deutschland Holding AG		Germany		3,133,398		9,080,045
						41,374,374
Electric Utilities 0.5%
a Korea Electric Power Corp.		South Korea		267,802		6,440,277
Electronic Equipment, Instruments & Components 0.9%
Landis+Gyr Group AG		Switzerland		120,834		12,574,778

TF-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Foreign VIP Fund (continued)

	Country		Shares		Value
Common Stocks (continued)
Energy Equipment & Services 1.8%
SBM Offshore NV		Netherlands		960,511	$	17,870,169
Tenaris SA		Italy		570,849		6,433,795
						24,303,964
Food & Staples Retailing 3.1%
Matsumotokiyoshi Holdings Co. Ltd.		Japan		347,500		13,541,868
Seven & i Holdings Co. Ltd.		Japan		360,100		13,264,139
Sundrug Co. Ltd.		Japan		410,400		14,935,652
						41,741,659
Health Care Providers & Services 0.8%
Sinopharm Group Co. Ltd., H		China		2,794,800		10,203,927
Household Durables 1.6%
Panasonic Corp.		Japan		2,272,100		21,524,058
Industrial Conglomerates 2.7%
CK Hutchison Holdings Ltd.		Hong Kong		3,873,500		36,934,031
Interactive Media & Services 1.3%
a Baidu Inc., ADR		China		138,230		17,472,272
Marine 0.6%
A.P. Moeller-Maersk AS, B		Denmark		5,208		7,509,675
Media 0.8%
SES SA, IDR		Luxembourg		809,562		11,348,541
Metals & Mining 5.1%
Alamos Gold Inc., A		Canada		3,063,752		18,443,787
Sumitomo Metal Mining Co. Ltd.		Japan		603,700		19,687,259
Wheaton Precious Metals Corp.		Canada		1,040,700		30,966,154
						69,097,200
Multi-Utilities 2.7%
E.ON SE		Germany		1,722,486		18,397,339
Veolia Environnement SA		France		671,188		17,846,607
						36,243,946
Oil, Gas & Consumable Fuels 11.8%
BP PLC		United Kingdom		5,505,186		34,385,976
Eni SpA		Italy		1,751,379		27,194,707
Equinor ASA		Norway		1,032,386		20,641,839
Galp Energia SGPS SA, B		Portugal		844,528		14,111,729
Husky Energy Inc.		Canada		1,163,600		9,336,757
Royal Dutch Shell PLC, B		United Kingdom		1,043,010		30,936,779
Total SA		France		418,732		23,103,681
						159,711,468
Pharmaceuticals 11.6%
Astellas Pharma Inc.		Japan		596,100		10,257,253
Bayer AG		Germany		412,732		33,700,713
Merck KGaA		Germany		175,053		20,681,594
Novartis AG		Switzerland		128,920		12,243,836
Roche Holding AG		Switzerland		79,825		25,903,013

Annual Report          TF-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Foreign VIP Fund (continued)

	Country		Shares		Value
Common Stocks (continued)
Pharmaceuticals (continued)
Sanofi		France		209,983	$	21,104,205
Takeda Pharmaceutical Co. Ltd.		Japan		816,694		32,555,035
						156,445,649
Real Estate Management & Development 3.1%
CK Asset Holdings Ltd.		Hong Kong		3,078,200		22,220,493
Mitsui Fudosan Co. Ltd.		Japan		767,500		18,870,578
Swire Pacific Ltd., A		Hong Kong		90,800		843,643
						41,934,714
Semiconductors & Semiconductor Equipment 5.2%
Infineon Technologies AG		Germany		590,665		13,453,370
NXP Semiconductors NV		Netherlands		221,300		28,162,637
Taiwan Semiconductor Manufacturing Co. Ltd.		Taiwan		2,587,000		28,628,163
						70,244,170
Specialty Retail 1.0%
Kingfisher PLC		United Kingdom		4,640,268		13,336,392
Technology Hardware, Storage & Peripherals 4.8%
Samsung Electronics Co. Ltd.		South Korea		1,337,964		64,583,942
Wireless Telecommunication Services 3.3%
China Mobile Ltd.		China		1,821,000		15,306,841
Vodafone Group PLC, ADR		United Kingdom		1,512,103		29,228,951
						44,535,792
Total Common Stocks (Cost $1,116,248,012)						1,276,756,361
Short Term Investments (Cost $70,825,763) 5.2%
Money Market Funds 5.2%
b,c Institutional Fiduciary Trust Money Market Portfolio, 1.26%		United States		70,825,763		70,825,763
Total Investments (Cost $1,187,073,775) 99.6%						1,347,582,124
Other Assets, less Liabilities 0.4%						5,859,442
Net Assets 100.0%					$	1,353,441,566

See Abbreviations on page TF-23.

^aNon-income producing.

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Templeton Foreign VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	1,116,248,012
Cost - Non-controlled affiliates (Note 3e)		70,825,763
Value - Unaffiliated issuers	$	1,276,756,361
Value - Non-controlled affiliates (Note 3e)		70,825,763
Receivables:
Investment securities sold		494,328
Capital shares sold		70,547
Dividends		8,442,994
European Union tax reclaims		851,866
Other assets		165
Total assets		1,357,442,024
Liabilities:
Payables:
Investment securities purchased		1,689,770
Capital shares redeemed		737,263
Management fees		886,909
Distribution fees		267,257
Reports to shareholders		202,736
Accrued expenses and other liabilities		216,523
Total liabilities		4,000,458
Net assets, at value	$	1,353,441,566
Net assets consist of:
Paid-in capital	$	1,199,267,363
Total distributable earnings (losses)		154,174,203
Net assets, at value	$	1,353,441,566
Class 1:
Net assets, at value	$	121,947,913
Shares outstanding		8,568,140
Net asset value and maximum offering price per share		$14.23
Class 2:
Net assets, at value	$	1,117,813,122
Shares outstanding		80,216,519
Net asset value and maximum offering price per share		$13.93
Class 4:
Net assets, at value	$	113,680,531
Shares outstanding		8,008,045
Net asset value and maximum offering price per share		$14.20

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Templeton Foreign VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$	52,458,556
Non-controlled affiliates (Note 3e)		1,028,147
Interest:
Unaffiliated issuers		4,197
Income from securities loaned:
Non-controlled affiliates (Note 3e)		254,421
Total investment income		53,745,321
Expenses:
Management fees (Note 3a)		10,579,830
Distribution fees: (Note 3c)
Class 2		2,711,228
Class 4		397,414
Custodian fees (Note 4)		136,162
Reports to shareholders		253,150
Professional fees		105,663
Trustees’ fees and expenses		7,868
Other		48,047
Total expenses		14,239,362
Expenses waived/paid by affiliates (Note 3e)		(244,795	)
Net expenses		13,994,567
Net investment income		39,750,754
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(42,774,216	)
Foreign currency transactions		(165,905	)
Net realized gain (loss)		(42,940,121	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		161,088,553
Translation of other assets and liabilities denominated in foreign currencies		(44,012	)
Net change in unrealized appreciation (depreciation)		161,044,541
Net realized and unrealized gain (loss)		118,104,420
Net increase (decrease) in net assets resulting from operations	$	157,855,174
*Foreign taxes withheld on dividends	$	4,376,801

TF-14         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Foreign VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	39,750,754		$	26,739,957
Net realized gain (loss)		(42,940,121	)		97,768,736
Net change in unrealized appreciation (depreciation)		161,044,541			(367,924,342	)
Net increase (decrease) in net assets resulting from operations		157,855,174			(243,415,649	)
Distributions to shareholders:
Class 1		(3,542,825	)		(3,961,619	)
Class 2		(29,727,357	)		(33,465,356	)
Class 4		(2,819,837	)		(3,521,973	)
Total distributions to shareholders		(36,090,019	)		(40,948,948	)
Capital share transactions: (Note 2)
Class 1		(3,622,678	)		(12,722,479	)
Class 2		(41,982,881	)		(102,793,664	)
Class 4		(22,867,835	)		(7,072,417	)
Total capital share transactions		(68,473,394	)		(122,588,560	)
Net increase (decrease) in net assets		53,291,761			(406,953,157	)
Net assets:
Beginning of year		1,300,149,805			1,707,102,962
End of year	$	1,353,441,566		$	1,300,149,805

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TF-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Templeton Foreign VIP Fund

1.   Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

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

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

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

TF-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign 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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b.   Foreign Currency Translation

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

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

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

c.   Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2019, 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.

Annual Report          TF-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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.

TF-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

2. Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019				2018
	Shares		Amount		Shares		Amount
Class 1 Shares:
Shares sold		315,303	$	4,277,207		438,905	$	6,719,723
Shares issued in reinvestment of distributions		273,789		3,542,825		263,056		3,961,619
Shares redeemed		(844,252)		(11,442,710)		(1,543,257)		(23,403,821)
Net increase (decrease)		(255,160)	$	(3,622,678)		(841,296)	$	(12,722,479)
Class 2 Shares:
Shares sold		7,564,257	$	99,786,234		7,214,702	$	104,866,589
Shares issued in reinvestment of distributions		2,342,581		29,727,357		2,265,765		33,465,356
Shares redeemed		(12,910,655)		(171,496,472)		(16,372,436)		(241,125,609)
Net increase (decrease)		(3,003,817)	$	(41,982,881)		(6,891,969)	$	(102,793,664)
Class 4 Shares:
Shares sold		784,963	$	10,500,046		1,564,942	$	23,205,250
Shares issued in reinvestment of distributions		218,085		2,819,837		234,330		3,521,973
Shares redeemed		(2,661,084)		(36,187,718)		(2,311,503)		(33,799,640)
Net increase (decrease)		(1,658,036)	$	(22,867,835)		(512,231)	$	(7,072,417)

3. Transactions with Affiliates

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

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

Annual Report          TF-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

3. Transactions with Affiliates (continued)

a. Management Fees

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

Annualized Fee Rate	Net Assets
0.900%	Up to and including $200 million
0.810%	Over $200 million, up to and including $700 million
0.775%	Over $700 million, up to and including $1.2 billion
0.750%	Over $1.2 billion, up to and including $1.3 billion
0.675%	Over $1.3 billion, up to and including $10 billion
0.655%	Over $10 billion, up to and including $15 billion
0.635%	Over $15 billion, up to and including $20 billion
0.615%	In excess of $20 billion

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.803% 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.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

e. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
																	Dividends
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	49,866,794	$	282,622,675	$	(261,663,706	)		$    —		$    —	$	70,825,763		70,825,763		$1,028,147
																	Income from securities loaned
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		13,003,937		336,062,006		(349,065,943	)		—		—		—		—		254,421
Total Affiliated Securities	$	62,870,731	$	618,684,681	$	(610,729,649	)		$    —		$    —	$	70,825,763				$1,282,568

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, 2019, there were no credits earned.

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:

Long term $ 43,306,383

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	24,584,858	$	40,948,948
Long term capital gain		11,505,161		—
	$	36,090,019	$	40,948,948

Annual Report          TF-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

5. Income Taxes (continued)

At December 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	1,190,574,785
Unrealized appreciation	$	241,602,360
Unrealized depreciation		(84,595,021)
Net unrealized appreciation (depreciation)	$	157,007,339
Distributable earnings:
Undistributed ordinary income	$	39,574,338

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

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $356,343,297 and $450,547,584, 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. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

8.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Foreign VIP Fund (continued)

9. Fair Value Measurements

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

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

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

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

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

At December 31, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statement of Investments.

10. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Abbreviations

Selected Portfolio
ADR	American Depositary Receipt
IDR	International Depositary Receipt

Annual Report          TF-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund” ) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

TF-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Foreign VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $11,505,161 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Internal Revenue Code. This election will allow shareholders of record as of the 2020 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

  Annual Report            TF-25

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Templeton Global Bond VIP Fund

This annual report for Templeton Global Bond VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year		5-Year		10-Year
Average Annual Total Return		+1.86%**		+0.76%		+3.39%

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

**Total return information is based on net asset values calculated for shareholder transactions. Certain adjustments were made to the net assets of the Fund at 12/31/19 for financial reporting purposes. Accordingly, adjusted total returns have been disclosed in the Financial Highlights and differ from those reported here.

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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), the FTSE World Government Bond Index (WGBI) and the Consumer Price 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.

****Source: Bureau of Labor Statistics, bls.gov/cpi. Please see Index Descriptions following the Fund Summaries.

Annual Report         TGB-1

TEMPLETON GLOBAL BOND VIP FUND

Fund Goal and Main Investments

The Fund seeks high current income, consistent with preservation of capital, with capital appreciation as a secondary consideration. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills and debentures.

Fund Risks

All investments involve risks, including possible loss of principal. Foreign securities involve special risks, including currency fluctuations and economic and political uncertainties. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due. Adverse conditions in a certain region or country can adversely affect securities of issuers in other countries whose economies appear to be unrelated. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities market. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. For comparison, the J.P. Morgan GGBI posted a +6.02% total return and the FTSE WGBI posted a +5.90% total return for the same period.¹

Economic and Market Overview

Global financial markets started 2019 on a positive note, with rallies in risk assets through much of the first quarter after a volatile end to 2018. However, escalating trade tensions between the U.S. and China sporadically resurfaced throughout the year, leading to broad resurgences in global

Geographic Composition*

Based on Total Net Assets as of 12/31/19

*Figures represent the net Fund exposure and include certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives or other factors.

**The Fund’s supranational investment was denominated in the Mexican peso.

risk aversion that intermittently affected market valuations. Both the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) increasingly cited trade uncertainties and global risks as policy concerns during the year, with the Fed building a case for rate cuts and the ECB signaling that additional monetary accommodation could arrive in the Fall.

The Fed took a dovish turn at its January 2019 meeting, halting its series of rate hikes from 2018 and removing its prior statement that “some further gradual increases in the target range for the federal funds rate” would be consistent with economic activity and inflation objectives. Policy guidance turned even further dovish at the March meeting as the Fed kept rates unchanged and moderately downgraded U.S. growth forecasts for 2019 and 2020. The Fed ultimately kept the federal funds target rate unchanged at its May and June meetings before cutting rates for the first time in more than a decade at its July meeting. The rate cut was 25 basis points (bps). In August, the Fed discontinued its monthly pace of balance sheet unwinding, two months earlier than originally forecast. It then consecutively cut rates 25 bps at its September and October meetings to a range of 1.50% to 1.75%, before signaling that it would likely keep rates unchanged going forward, barring a material change in the economic outlook.

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).

TGB-2         Annual Report

TEMPLETON GLOBAL BOND VIP FUND

The shifts in monetary policy affected the shape of the U.S. Treasury (UST) yield curve throughout the year. A yield curve inversion from the three-month UST bill to the 10-year UST note took hold in May, reaching a low of 50 bps of spread inversion in late August. However, the Fed provided updated forward guidance in September and October that enabled the curve to steepen, erasing the inversion as the front end rallied lower while longer-term UST yields rose. The curve continued to steepen through the end of the year, as the Fed kept rates unchanged at its December meeting with the first 10-0 consensus policy vote since May. The updated dot plot in December indicated that a strong majority of Fed officials expected rates to remain unchanged through the end of 2020.

In our view, longer-term USTs appeared vulnerable to a potential rate shock given rising deficit spending, rising debt issuance and over-levered financial markets. Additionally, inflation risks remained significantly underpriced, in our view, given supply chain disruptions, immigration restrictions and exceptional tightness in the labor market. Given each of these factors, we believed longer-term USTs remained highly overvalued. The Fed can control short-term rates, but it cannot always control the economic and technical pressures on the longer end of the curve. We believed the yield curve inversion was overdone and that longer-term UST yields would rise.

Despite escalating trade disputes between the U.S. and China during much of the year, including a peak in retaliatory measures by each country in August, the U.S. and China appeared to reach agreement on a “phase one” trade deal in December, expected to be ratified on January 15. The potential resolution bolstered market sentiment, driving risk asset valuations higher in several markets across the globe. However, we continued to monitor the broader implications of trade tensions on multiple fronts and the potential ramifications to risk assets in various regions. Despite the positive developments on trade policy, risks for additional disputes remained elevated, in our view.

In Europe, the ECB kept its policy rate unchanged (0.0% main refinancing operations, -0.40% deposit facility) for most of the reporting period, but delivered on an anticipated stimulus package at its September meeting, dropping the deposit rate to -0.5% and scheduling the re-start of its quantitative easing (QE) program in November, at a pace of €20 billion in bond purchases per month. Mario Draghi kept rates unchanged at his final meeting as ECB president in October, before Christine Lagarde took over the post in November. Lagarde held her first policy meeting in December, keeping rates and the QE program unchanged,

as largely expected. During the reporting period, it appeared Lagarde would maintain continuity with the policy framework she inherited from her predecessor, indicating her support for negative rates by commenting that the ECB has “done the right thing to act in favor of jobs and growth rather than the protection of savers.” We expected the euro to weaken against the U.S. dollar during the period on continued monetary accommodation from the ECB, as well as unresolved structural vulnerabilities in the eurozone.

The Bank of Japan (BOJ) kept monetary policy unchanged during the reporting period, retaining its 0.0% yield target on the 10-year Japanese government bond and its -0.1% target on the overnight rate. However, BOJ Governor Haruhiko Kuroda increasingly indicated a willingness to cut rates at future meetings if there were risks to achieving the 2.0% inflation target. We expected monetary policy to remain highly accommodative during the reporting period, but our expectations for weakness in the Japanese yen against the U.S. dollar shifted to expectations for strength on softer policy divergence between the Fed and BOJ, and the yen’s potential to rally as a perceived safe haven during periods of risk aversion, given Japan’s strong external balances.

A number of central banks around the world followed the dovish directions of the Fed and the ECB in 2019, taking the opportunity to cut their own domestic rates. Notably, Mexico and Indonesia cut their policy rates by 100 bps, India cut by 135 bps and Brazil cut by 200 bps. Overall, sovereign bond yields declined across much of the world during the reporting period. The yield on the 10-year UST note finished the period 77 bps lower at 1.92%, and the yield on the 10-year German Bund fell 43 bps to finish at -0.19%, after reaching its lowest level on record in August (-0.71%). On the whole, long-duration exposures tended to perform well in most markets, while currency valuations were more idiosyncratic to individual country dynamics.

Investment Strategy

We invest selectively in bonds around the world based upon our assessment of changing market, political and economic conditions. While seeking opportunities, we monitor various factors including changes in interest rates, currency exchange rates and credit risks. We seek to manage the Fund’s exposure to various currencies and regularly utilize currency and cross currency forward contracts and may also use currency and currency index futures contracts and other derivative instruments.

Annual Report         TGB-3

TEMPLETON GLOBAL BOND VIP FUND

Currency Composition*

12/31/19

	% of Total Net Assets
Americas		87.0%
U.S. Dollar		63.1%
Brazilian Real		10.4%
Mexican Peso		10.2%
Argentine Peso		1.8%
Colombian Peso		1.5%
Canadian Dollar		0.0%	**
Asia Pacific		26.7%
Japanese Yen		34.1%
Indonesian Rupiah		4.3%
Indian Rupee		0.1%
New Zealand Dollar		0.0%	**
South Korean Won		0.0%	**
Australian Dollar		-11.8%
Middle East & Africa		1.3%
Ghanaian Cedi		1.3%
Europe		-14.9%
Norwegian Krone		7.8%
Swiss Franc		5.2%
Swedish Krona		4.8%
Euro		-32.7%

*Figures represent the net Fund exposure and include certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives or other factors.

**Rounds to less than 0.1%.

What is a currency forward contract?

A currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date. Currency forward contracts are privately traded in the interbank market, not on a centralized exchange.

What is a futures contract?

A futures contract is an agreement between the Fund and a counterparty made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date.

Manager’s Discussion

During the reporting period the strategy continued to seek select duration exposures in countries that have attractive risk-adjusted yields, strong or improving economic fundamentals and prudent fiscal and monetary policies.

Several emerging markets continued to offer significantly higher yields than those available in the developed markets. The strategy also maintained negative duration exposure to longer-term U.S. Treasuries as the team believed that inflation pressures, rising deficit spending and surging levels of debt issuance were significantly underpriced risks in the longer-term U.S. Treasury markets. The strategy also increased its allocations to undervalued safe-haven assets to hedge against global financial market risks associated with geopolitical tensions and price distortions from ongoing loose monetary policy across the developed world, notably including the Japanese yen, Swiss franc, Swedish krona and Norwegian krone. The strategy held a net-negative position in the euro to hedge against broad-based U.S. dollar strength and unresolved structural risks across Europe, and a net-negative position in the Australian dollar to hedge against broad emerging market risks. During the period, we used forward currency exchange contracts to actively manage currencies. We also used interest-rate swaps to tactically manage duration exposures.

What is duration?

Duration is a measure of a bond’s price sensitivity to interest-rate changes. In general, a portfolio of securities with a lower duration can be expected to be less sensitive to interest-rate changes than a portfolio with a higher duration.

What is an interest-rate swap?

An interest-rate swap is an agreement between two parties to exchange interest-rate payment obligations, generally one based on an interest rate fixed to maturity and the other based on an interest rate that changes in accordance with changes in a designated benchmark (for example, LIBOR, prime, commercial paper or other benchmarks).

During the period, the Fund’s positive absolute performance was primarily attributable to currency positions. Interest-rate strategies detracted from absolute results, while sovereign credit exposures had a largely neutral effect. Among currencies, the Fund’s net-negative position in the euro contributed to absolute performance, as did its position in the Indonesian rupiah. However, currency positions in Latin America detracted from absolute results (the Argentine peso detracted, while the Mexican peso contributed). The Fund maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Negative duration exposure to U.S. Treasuries detracted from absolute results, while select duration exposures in Asia ex-Japan (Indonesia and India) and Latin America (Brazil) contributed.

TGB-4         Annual Report

TEMPLETON GLOBAL BOND VIP FUND

On a relative basis, the Fund underperformed its benchmark due to interest-rate strategies. Currency positions contributed to relative results, while sovereign credit exposures had a largely neutral effect. Underweighted duration exposures in the U.S. and Japan detracted from relative performance, as did select underweighted duration exposures in Europe and a lack of duration exposure in the U.K. However, select overweighted duration exposures in Asia ex-Japan (Indonesia and India) and Latin America (Brazil) contributed to relative results. Among currencies, the Fund’s underweighted position in the euro contributed to relative performance, as did its overweighted position in the Indonesian rupiah. However, overweighted currency positions in Latin America detracted from relative results (the Argentine peso detracted, while the Mexican peso contributed).

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, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Annual Report         TGB-5

TEMPLETON GLOBAL BOND VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual (actual return after expenses)		Hypothetical (5% annual return before expenses)
Share   Class	Beginning Account Value 7/1/19	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$988.50	$3.66	$1,021.53	$3.72	0.73%

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.

TGB-6         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Global Bond VIP Fund

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$17.54			$17.17			$16.85			$16.34			$18.56
Income from investment operationsa:
Net investment incomeb		0.89			0.88			0.83			0.62			0.52
Net realized and unrealized gains (losses)		(0.54	)		(0.51	)		(0.46	)		(0.10	)		(1.22)
Total from investment operations		0.35			0.37			0.37			0.52			(0.70)
Less distributions from:
Net investment income and net foreign currency gains		(1.26	)		—			—			—			(1.43)
Net realized gains		—			—			(0.05	)		(0.01	)		(0.09)
Total distributions		(1.26	)		—			(0.05	)		(0.01	)		(1.52)
Net asset value, end of year		$16.63			$17.54			$17.17			$16.85			$16.34
Total returnc		1.89%			2.15%			2.15%			3.21%			(4.10)%
Ratios to average net assets
Expenses before waiver and payments by affiliates and expense reduction		0.53%			0.56%			0.53%			0.53%			0.52%
Expenses net of waiver and payments by affiliates		0.44%			0.47%			0.46%			0.48%			0.52%	d
Expenses net of waiver and payments by affiliates and expense reduction		0.42%			0.45%			0.46%	e		0.48%	e		0.52%	d,e
Net investment income		5.22%			5.09%			4.81%			3.88%			2.99%
Supplemental data
Net assets, end of year (000’s)		$322,794			$285,046			$286,502			$241,792			$292,802
Portfolio turnover rate		22.58%			18.22%			37.97%			59.00%			51.58%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Global Bond VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 2
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$16.83			$16.51			$16.25			$15.80			$17.99
Income from investment operationsa:
Net investment incomeb		0.82			0.81			0.76			0.56			0.46
Net realized and unrealized gains (losses)		(0.53	)		(0.49	)		(0.45	)		(0.10	)		(1.17)
Total from investment operations		0.29			0.32			0.31			0.46			(0.71)
Less distributions from:
Net investment income and net foreign currency gains		(1.21	)		—			—			—			(1.39)
Net realized gains		—			—			(0.05	)		(0.01	)		(0.09)
Total distributions		(1.21	)		—			(0.05	)		(0.01	)		(1.48)
Net asset value, end of year		$15.91			$16.83			$16.51			$16.25			$15.80
Total returnc		1.63%			1.94%			1.93%			2.94%			(4.30)%
Ratios to average net assets
Expenses before waiver and payments by affiliates and expense reduction		0.78%			0.81%			0.78%			0.78%			0.77%
Expenses net of waiver and payments by affiliates		0.69%			0.72%			0.71%			0.73%			0.77%	d
Expenses net of waiver and payments by affiliates and expense reduction		0.67%			0.70%			0.71%	e		0.73%	e		0.77%	d,e
Net investment income		4.97%			4.84%			4.56%			3.63%			2.74%
Supplemental data
Net assets, end of year (000’s)		$2,389,610			$2,544,900			$2,730,081			$2,812,535			$2,971,667
Portfolio turnover rate		22.58%			18.22%			37.97%			59.00%			51.58%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Global Bond VIP Fund (continued)

	Year Ended December 31,
	2019			2018			2017			2016			2015
Class 4
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year		$17.19			$16.88			$16.62			$16.18			$18.38
Income from investment operationsa:
Net investment incomeb		0.82			0.81			0.76			0.56			0.46
Net realized and unrealized gains (losses)		(0.55	)		(0.50	)		(0.45	)		(0.11	)		(1.21	)
Total from investment operations		0.27			0.31			0.31			0.45			(0.75)
Less distributions from:
Net investment income and net foreign currency gains		(1.19	)		—			—			—			(1.36	)
Net realized gains		—			—			(0.05	)		(0.01	)		(0.09	)
Total distributions		(1.19	)		—			(0.05	)		(0.01	)		(1.45)
Net asset value, end of year		$16.27			$17.19			$16.88			$16.62			$16.18
Total returnc		1.48%			1.84%			1.76%			2.87%			(4.39)%
Ratios to average net assets
Expenses before waiver and payments by affiliates and expense reduction		0.88%			0.91%			0.88%			0.88%			0.87%
Expenses net of waiver and payments by affiliates		0.79%			0.82%			0.81%			0.83%			0.87%	d
Expenses net of waiver and payments by affiliates and expense reduction		0.77%			0.80%			0.81%	e		0.83%	e		0.87%	d,e
Net investment income		4.87%			4.74%			4.46%			3.53%			2.64%
Supplemental data
Net assets, end of year (000’s)		$90,272			$94,312			$98,934			$96,798			$103,045
Portfolio turnover rate		22.58%			18.22%			37.97%			59.00%			51.58%

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TGB-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Templeton Global Bond VIP Fund

	Principal   Amount*				Value
Foreign Government and Agency Securities 53.6%
Argentina 1.4%
a Argentina Treasury Bill,
Strip, 3/30/20		727,627,800		ARS	$	8,716,924
Strip, 4/28/20		372,737,900		ARS		5,705,752
Strip, 5/28/20		18,428,800		ARS		247,759
Strip, 7/29/20		250,727,500		ARS		3,571,061
Strip, 10/29/20		111,260,670		ARS		1,192,200
a Argentine Bonos del Tesoro,
18.20%, 10/03/21		820,823,000		ARS		4,380,067
16.00%, 10/17/23		844,288,000		ARS		4,054,197
senior note, 15.50%, 10/17/26		1,668,306,000		ARS		7,520,531
Government of Argentina,
a,b FRN, 52.564%, (ARS Badlar + 2.00%), 4/03/22		24,036,000		ARS		207,140
a,c Index Linked, 4.00%, 3/06/20		4,138,000		ARS		79,566
senior note, 4.50%, 2/13/20		9,351,000				4,737,123
						40,412,320
Brazil 10.2%
Letra Tesouro Nacional,
Strip, 7/01/20		164,331	d	BRL		40,047,602
Strip, 4/01/21		25,610	d	BRL		6,016,225
Strip, 7/01/21		34,210	d	BRL		7,925,081
Nota do Tesouro Nacional,
10.00%, 1/01/21		38,520	d	BRL		10,075,369
10.00%, 1/01/23		522,145	d	BRL		144,434,647
10.00%, 1/01/25		69,029	d	BRL		19,732,747
10.00%, 1/01/27		194,573	d	BRL		57,027,393
						285,259,064
Colombia 1.5%
Government of Colombia,
senior bond, 7.75%, 4/14/21		2,386,000,000		COP		749,123
senior bond, 4.375%, 3/21/23		362,000,000		COP		107,900
senior bond, 9.85%, 6/28/27		576,000,000		COP		220,313
Titulos de Tesoreria,
senior bond, B, 11.00%, 7/24/20		9,167,000,000		COP		2,901,358
senior bond, B, 7.00%, 5/04/22		10,237,000,000		COP		3,258,171
senior bond, B, 10.00%, 7/24/24		40,977,000,000		COP		14,787,427
senior bond, B, 7.50%, 8/26/26		35,134,200,000		COP		11,681,517
senior bond, B, 6.00%, 4/28/28		29,113,600,000		COP		8,825,768
						42,531,577
Ghana 1.3%
Government of Ghana,
24.75%, 3/01/21		690,000		GHS		129,752
16.25%, 5/17/21		7,250,000		GHS		1,242,075
24.50%, 6/21/21		80,000		GHS		14,931
24.75%, 7/19/21		1,190,000		GHS		217,887
18.75%, 1/24/22		26,840,000		GHS		4,578,628

TGB-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Principal   Amount*			Value
Foreign Government and Agency Securities (continued)
Ghana (continued)
Government of Ghana, (continued)
17.60%, 11/28/22		370,000	GHS	$	60,655
19.75%, 3/25/24		26,840,000	GHS		4,544,524
19.00%, 11/02/26		80,510,000	GHS		12,829,028
senior bond, 19.75%, 3/15/32		80,510,000	GHS		12,941,206
senior note, 21.50%, 3/09/20		1,270,000	GHS		223,563
senior note, 18.50%, 6/01/20		500,000	GHS		86,886
senior note, 18.25%, 9/21/20		480,000	GHS		85,630
senior note, 16.50%, 3/22/21		1,730,000	GHS		299,596
					37,254,361
India 8.5%
Government of India,
senior bond, 8.20%, 2/15/22		500,000,000	INR		7,308,586
senior bond, 8.35%, 5/14/22		212,700,000	INR		3,124,054
senior bond, 8.08%, 8/02/22		1,783,000,000	INR		26,123,511
senior bond, 8.13%, 9/21/22		28,000,000	INR		411,489
senior bond, 9.15%, 11/14/24		2,409,000,000	INR		37,204,341
senior note, 8.27%, 6/09/20		1,222,000,000	INR		17,382,832
senior note, 7.80%, 4/11/21		1,980,300,000	INR		28,436,043
senior note, 8.79%, 11/08/21		653,000,000	INR		9,586,112
senior note, 8.15%, 6/11/22		1,621,000,000	INR		23,714,667
senior note, 6.84%, 12/19/22		98,000,000	INR		1,395,664
senior note, 7.16%, 5/20/23		133,700,000	INR		1,917,161
senior note, 8.83%, 11/25/23		2,983,900,000	INR		45,219,121
senior note, 7.68%, 12/15/23		1,376,000,000	INR		20,082,065
senior note, 6.79%, 5/15/27		1,142,800,000	INR		15,975,657
					237,881,303
Indonesia 4.3%
Government of Indonesia,
senior bond, FR34, 12.80%, 6/15/21		324,406,000,000	IDR		25,693,085
senior bond, FR35, 12.90%, 6/15/22		71,229,000,000	IDR		5,922,022
senior bond, FR39, 11.75%, 8/15/23		5,491,000,000	IDR		464,337
senior bond, FR40, 11.00%, 9/15/25		46,856,000,000	IDR		4,054,946
senior bond, FR43, 10.25%, 7/15/22		147,832,000,000	IDR		11,690,791
senior bond, FR44, 10.00%, 9/15/24		4,454,000,000	IDR		365,207
senior bond, FR46, 9.50%, 7/15/23		226,780,000,000	IDR		17,967,598
senior bond, FR47, 10.00%, 2/15/28		12,000,000	IDR		1,011
senior bond, FR52, 10.50%, 8/15/30		6,960,000,000	IDR		619,168
senior bond, FR59, 7.00%, 5/15/27		47,752,000,000	IDR		3,444,199
senior bond, FR61, 7.00%, 5/15/22		244,849,000,000	IDR		18,040,254
senior bond, FR63, 5.625%, 5/15/23		258,951,000,000	IDR		18,300,507
senior bond, FR64, 6.125%, 5/15/28		37,000,000	IDR		2,518
senior bond, FR70, 8.375%, 3/15/24		78,915,000,000	IDR		6,081,269
senior bond, FR71, 9.00%, 3/15/29		51,222,000,000	IDR		4,140,930

Annual Report         TGB-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Principal   Amount*				Value
Foreign Government and Agency Securities (continued)
Indonesia (continued)
Government of Indonesia, (continued)
senior bond, FR73, 8.75%, 5/15/31		60,845,000,000		IDR	$	4,874,171
						121,662,013
Mexico 13.8%
Government of Mexico,
senior bond, M, 8.00%, 6/11/20		3,814,000	e	MXN		20,295,348
senior bond, M, 6.50%, 6/10/21		18,568,200	e	MXN		97,825,192
senior bond, M, 6.50%, 6/09/22		20,792,500	e	MXN		109,369,579
senior bond, M, 8.00%, 12/07/23		7,653,700	e	MXN		42,143,000
senior note, M, 7.25%, 12/09/21		21,545,600	e	MXN		114,862,459
f Mexican Udibonos, Index Linked, 2.50%, 12/10/20		390,212	g	MXN		2,042,832
						386,538,410
Norway 3.8%
h,i Government of Norway,
144A, Reg S, 3.75%, 5/25/21		292,429,000		NOK		34,429,996
144A, Reg S, 2.00%, 5/24/23		280,579,000		NOK		32,601,666
144A, Reg S, 3.00%, 3/14/24		235,699,000		NOK		28,610,139
144A, Reg S, 1.75%, 3/13/25		89,312,000		NOK		10,366,297
						106,008,098
South Korea 8.4%
Korea Monetary Stabilization Bond,
senior note, 2.14%, 6/02/20		14,858,000,000		KRW		12,895,172
senior note, 2.05%, 10/05/20		31,280,000,000		KRW		27,201,172
Korea Treasury Bond,
senior note, 1.75%, 6/10/20		7,615,000,000		KRW		6,598,876
senior note, 3.00%, 3/10/23		3,919,000,000		KRW		3,555,113
senior note, 2.25%, 9/10/23		88,312,000,000		KRW		78,535,720
senior note, 1.875%, 3/10/24		33,811,000,000		KRW		29,697,429
senior note, 1.375%, 9/10/24		68,301,810,000		KRW		58,811,499
senior note, 3.00%, 9/10/24		18,500,000,000		KRW		17,070,783
						234,365,764
j Supranational 0.4%
Inter-American Development Bank, senior bond, 7.50%, 12/05/24		200,000,000		MXN		10,835,562
Total Foreign Government and Agency Securities   (Cost $1,705,706,010)						1,502,748,472
U.S. Government and Agency Securities 12.5%
United States 12.5%
U.S. Treasury Note,
1.125%, 7/31/21		15,143,000				15,029,970
1.125%, 8/31/21		162,828,000				161,571,131
1.50%, 8/31/21		146,172,000				145,932,893
1.125%, 9/30/21		3,497,000				3,468,088
1.50%, 9/30/21		15,768,000				15,742,483
2.125%, 12/31/21		3,953,000				3,994,169

TGB-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

			Principal   Amount*			Value
U.S. Government and Agency Securities (continued)
United States (continued)
U.S. Treasury Note, (continued)
2.625%, 7/15/21				3,801,000		$	3,860,335
Total U.S. Government and Agency Securities (Cost $350,270,002)							349,599,069
	Number of Contracts		Notional           Amount*
Options Purchased 0.2%
Calls - Over-the-Counter
Currency Options 0.1%
AUD/JPY, Counterparty CITI, January Strike Price 79.00 JPY, Expires 1/23/20		1		31,568,000	AUD		4,674
AUD/JPY, Counterparty CITI, February Strike Price 79.45 JPY, Expires 2/12/20		1		16,870,000	AUD		6,534
AUD/JPY, Counterparty CITI, February Strike Price 82.35 JPY, Expires 2/12/20		1		2,664,000	AUD		73
AUD/JPY, Counterparty CITI, April Strike Price 79.30 JPY, Expires 4/22/20		1		14,227,000	AUD		32,772
AUD/JPY, Counterparty CITI, May Strike Price 84.00 JPY, Expires 5/06/20		1		11,838,000	AUD		2,525
AUD/JPY, Counterparty CITI, May Strike Price 86.63 JPY, Expires 5/06/20		1		13,022,000	AUD		1,005
AUD/JPY, Counterparty CITI, May Strike Price 78.75 JPY, Expires 5/07/20		1		11,838,000	AUD		43,782
AUD/JPY, Counterparty CITI, May Strike Price 85.50 JPY, Expires 5/07/20		1		47,352,000	AUD		5,249
AUD/JPY, Counterparty CITI, November Strike Price 84.33 JPY, Expires 11/12/20		1		8,878,000	AUD		13,505
AUD/JPY, Counterparty CITI, December Strike Price 82.15 JPY, Expires 12/21/20		1		35,514,000	AUD		131,220
AUD/USD, Counterparty HSBK, April Strike Price $0.77, Expires 4/30/20		1		14,798,000	AUD		3,364
AUD/USD, Counterparty HSBK, May Strike Price $0.77, Expires 5/04/20		1		18,644,000	AUD		5,324
AUD/USD, Counterparty HSBK, May Strike Price $0.77, Expires 5/07/20		1		11,838,000	AUD		2,542
AUD/USD, Counterparty MSCO, May Strike Price $0.77, Expires 5/12/21		1		21,309,000	AUD		116,457
USD/JPY, Counterparty CITI, March Strike Price 111.15 JPY, Expires 3/20/20		1		29,582,000			39,226
USD/JPY, Counterparty CITI, March Strike Price 111.40 JPY, Expires 3/30/20		1		34,512,000			45,763
USD/JPY, Counterparty CITI, September Strike Price 112.24 JPY, Expires 9/22/20		1		38,210,000			134,881
USD/MXN, Counterparty CITI, March Strike Price 20.78 MXN, Expires 3/09/20		1		19,068,000			15,026
USD/MXN, Counterparty CITI, March Strike Price 18.40 MXN, Expires 3/30/20		1		11,441,000			473,051
USD/MXN, Counterparty CITI, March Strike Price 21.92 MXN, Expires 3/30/20		1		17,162,000			7,500
USD/MXN, Counterparty CITI, May Strike Price 20.50 MXN, Expires 5/11/20		1		21,843,000			96,917
USD/MXN, Counterparty CITI, May Strike Price 20.09 MXN, Expires 5/12/20		1		19,994,000			137,979
USD/MXN, Counterparty CITI, May Strike Price 20.92 MXN, Expires 5/12/20		1		7,801,000			23,520
USD/MXN, Counterparty CITI, May Strike Price 20.87 MXN, Expires 5/14/20		1		43,998,000			143,566
USD/MXN, Counterparty CITI, May Strike Price 20.58 MXN, Expires 5/15/20		1		13,730,000			59,684
USD/MXN, Counterparty CITI, July Strike Price 21.03 MXN, Expires 7/30/20		1		12,204,000			81,864
USD/MXN, Counterparty CITI, September Strike Price 21.94 MXN, Expires 9/03/20		1		47,671,000			230,632
USD/MXN, Counterparty CITI, September Strike Price 21.70 MXN, Expires 9/08/20		1		47,623,000			276,261

Annual Report         TGB-13

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional   Amount*			Value
Options Purchased (continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
USD/MXN, Counterparty CITI, September Strike Price 20.85 MXN, Expires 9/17/20		1		43,738,000		$	475,038
USD/MXN, Counterparty GSCO, March Strike Price 21.20 MXN, Expires 3/12/20		1		45,800,000			24,045
USD/MXN, Counterparty JPHQ, April Strike Price 20.11 MXN, Expires 4/24/20		1		21,999,000			118,377
USD/MXN, Counterparty JPHQ, May Strike Price 20.47 MXN, Expires 5/13/20		1		25,142,000			117,841
USD/MXN, Counterparty JPHQ, July Strike Price 20.90 MXN, Expires 7/27/20		1		12,571,000			90,059
USD/MXN, Counterparty MSCO, February Strike Price 19.65 MXN, Expires 2/20/20		1		76,275,000			200,985
USD/MXN, Counterparty MSCO, February Strike Price 20.98 MXN, Expires 2/20/20		1		38,137,000			9,611
USD/MXN, Counterparty MSCO, March Strike Price 21.58 MXN, Expires 3/05/20		1		38,137,000			10,144
USD/MXN, Counterparty MSCO, March Strike Price 24.81 MXN, Expires 3/05/20		1		19,068,000			381
USD/MXN, Counterparty MSCO, March Strike Price 21.36 MXN, Expires 3/10/20		1		71,507,000			29,103
USD/MXN, Counterparty MSCO, March Strike Price 20.90 MXN, Expires 3/12/20		1		12,400,000			9,337
USD/MXN, Counterparty MSCO, June Strike Price 21.45 MXN, Expires 6/15/20		1		12,400,000			35,786
USD/MXN, Counterparty MSCO, September Strike Price 22.33 MXN, Expires 9/04/20		1		38,137,000			148,963
USD/MXN, Counterparty MSCO, September Strike Price 25.97 MXN, Expires 9/04/20		1		38,137,000			30,052
							3,434,618
Puts - Over-the-Counter
Currency Options 0.1%
AUD/JPY, Counterparty CITI, May Strike Price 69.54 JPY, Expires 5/06/20		1		9,470,000	AUD		21,030
AUD/JPY, Counterparty CITI, May Strike Price 70.65 JPY, Expires 5/06/20		1		5,919,000	AUD		17,705
AUD/JPY, Counterparty CITI, May Strike Price 74.48 JPY, Expires 5/06/20		1		9,470,000	AUD		84,300
AUD/JPY, Counterparty CITI, May Strike Price 75.05 JPY, Expires 5/06/20		1		5,919,000	AUD		62,441
AUD/JPY, Counterparty CITI, May Strike Price 65.55 JPY, Expires 5/07/20		1		5,919,000	AUD		4,876
AUD/JPY, Counterparty CITI, May Strike Price 73.25 JPY, Expires 5/07/20		1		19,730,000	AUD		123,512
AUD/JPY, Counterparty CITI, July Strike Price 72.00 JPY, Expires 7/21/20		1		71,027,000	AUD		537,731
AUD/JPY, Counterparty CITI, November Strike Price 66.78 JPY, Expires 11/12/20		1		4,439,000	AUD		22,821
AUD/JPY, Counterparty CITI, November Strike Price 69.18 JPY, Expires 11/12/20		1		2,664,000	AUD		20,316
AUD/JPY, Counterparty CITI, November Strike Price 72.78 JPY, Expires 11/12/20		1		11,098,000	AUD		157,054
AUD/JPY, Counterparty CITI, November Strike Price 74.00 JPY, Expires 11/12/20		1		7,990,000	AUD		140,216
AUD/JPY, Counterparty CITI, December Strike Price 65.85 JPY, Expires 12/21/20		1		17,757,000	AUD		94,653
AUD/USD, Counterparty HSBK, April Strike Price $0.68, Expires 4/30/20		1		19,730,000	AUD		64,525
AUD/USD, Counterparty HSBK, May Strike Price $0.68, Expires 5/04/20		1		24,662,000	AUD		68,663
AUD/USD, Counterparty HSBK, May Strike Price $0.66, Expires 5/05/20		1		19,730,000	AUD		32,325

TGB-14         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional   Amount*				Value
Options Purchased (continued)
Puts - Over-the-Counter (continued)
Currency Options (continued)
AUD/USD, Counterparty HSBK, May Strike Price $0.65, Expires 5/07/20		1		23,676,000		AUD	$	22,759
AUD/USD, Counterparty HSBK, May Strike Price $0.68, Expires 5/07/20		1		11,838,000		AUD		35,717
AUD/USD, Counterparty MSCO, August Strike Price $0.67, Expires 8/12/20		1		67,082,000		AUD		324,205
USD/JPY, Counterparty CITI, March Strike Price 100.11 JPY, Expires 3/20/20		1		29,582,000				16,389
USD/JPY, Counterparty CITI, March Strike Price 105.29 JPY, Expires 3/20/20		1		59,164,000				185,302
USD/JPY, Counterparty CITI, March Strike Price 104.61 JPY, Expires 3/30/20		1		69,025,000				201,760
USD/JPY, Counterparty CITI, September Strike Price 104.48 JPY, Expires 9/22/20		1		76,420,000				909,245
USD/MXN, Counterparty CITI, March Strike Price 18.35 MXN, Expires 3/06/20		1		20,319,000				22,879
USD/MXN, Counterparty CITI, March Strike Price 18.68 MXN, Expires 3/09/20		1		14,301,000				52,041
USD/MXN, Counterparty CITI, May Strike Price 18.31 MXN, Expires 5/14/20		1		11,000,000				26,774
USD/MXN, Counterparty CITI, September Strike Price 19.11 MXN, Expires 9/03/20		1		23,836,000				341,689
USD/MXN, Counterparty GSCO, March Strike Price 18.57 MXN, Expires 3/12/20		1		7,630,000				19,403
USD/MXN, Counterparty JPHQ, January Strike Price 18.50 MXN, Expires 1/27/20		1		9,428,000				5,449
USD/MXN, Counterparty MSCO, March Strike Price 18.92 MXN, Expires 3/10/20		1		9,534,000				73,564
								3,689,344
Total Options Purchased (Cost $25,728,033)								7,123,962
Total Investments before Short Term Investments (Cost $2,081,704,045)								1,859,471,503
			Principal           Amount*
Short Term Investments 31.2%
Foreign Government and Agency Securities 6.4%
Argentina 0.1%
a Argentina Treasury Bill,
k 2/26/20 - 5/13/20				213,440,180		ARS		2,472,579
Strip, 8/27/20				55,163,710		ARS		631,486
a,b Government of Argentina, FRN, 70.253%, (ARPP7DRR), 6/21/20				33,173,610		ARS		290,168
								3,394,233
Brazil 0.1%
Letra Tesouro Nacional, Strip, 1/01/20				14,770	d	BRL		3,673,940

Annual Report         TGB-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

			Principal Amount*				Value
Short Term Investments (continued)
Foreign Government and Agency Securities (continued)
Japan 4.4%
k Japan Treasury Discount Bill,
1/14/20 - 9/23/20				10,261,900,000		JPY	$	94,460,695
1/27/20				3,147,000,000		JPY		28,961,145
								123,421,840
Mexico 0.7%
k Mexico Treasury Bill, 1/02/20 - 2/27/20				34,885,960	l	MXN		18,264,160
Norway 0.8%
h,i,k  Norway Treasury Bill, 144A, Reg S, 3/18/20 - 9/16/20				199,761,000		NOK		22,659,429
South Korea 0.3%
Korea Monetary Stabilization Bond, senior note, 2.16%, 2/02/20				7,615,000,000		KRW		6,592,038
Total Foreign Government and Agency Securities (Cost $177,374,759)								178,005,640
U.S. Government and Agency Securities (Cost $3,897,414) 0.1%
United States 0.1%
U.S. Treasury Note, 1.25%, 1/31/20				3,900,000				3,898,777
Total Investments before Money Market Funds (Cost $2,262,976,218)								2,041,375,920
			Shares
Money Market Funds (Cost $691,092,548) 24.7%
United States 24.7%
m,n Institutional Fiduciary Trust Money Market Portfolio, 1.26%				691,092,548				691,092,548
Total Investments (Cost $2,954,068,766) 97.5%								2,732,468,468
Options Written (0.5)%								(13,186,703	)
Other Assets, less Liabilities 3.0%								83,394,741
Net Assets 100.0%							$	2,802,676,506
	Number of Contracts		Notional Amount*
o Options Written (0.5)%
Calls - Over-the-Counter
Currency Options (0.2)%
AUD/JPY, Counterparty CITI, January Strike Price 76.70 JPY, Expires 1/23/20		1		27,603,000		AUD		(89,053	)
AUD/JPY, Counterparty CITI, February Strike Price 75.90 JPY, Expires 2/12/20		1		16,870,000		AUD		(152,352	)
AUD/JPY, Counterparty CITI, February Strike Price 77.28 JPY, Expires 2/12/20		1		8,878,000		AUD		(28,723	)
AUD/JPY, Counterparty CITI, February Strike Price 78.18 JPY, Expires 2/12/20		1		5,327,000		AUD		(7,431	)
AUD/JPY, Counterparty CITI, April Strike Price 75.95 JPY, Expires 4/22/20		1		14,227,000		AUD		(185,173	)
AUD/JPY, Counterparty CITI, May Strike Price 76.00 JPY, Expires 5/06/20		1		24,860,000		AUD		(332,621	)

TGB-16         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional Amount*			Value
o Options Written(continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
AUD/JPY, Counterparty CITI, May Strike Price 76.50 JPY, Expires 5/07/20		1		23,676,000	AUD	$	(260,547	)
AUD/JPY, Counterparty CITI, May Strike Price 77.35 JPY, Expires 5/07/20		1		11,838,000	AUD		(89,391	)
AUD/JPY, Counterparty CITI, December Strike Price 75.70 JPY, Expires 12/21/20		1		35,514,000	AUD		(791,309	)
AUD/USD, Counterparty HSBK, April Strike Price $0.71, Expires 4/30/20		1		14,798,000	AUD		(114,006	)
AUD/USD, Counterparty HSBK, May Strike Price $0.71, Expires 5/04/20		1		18,644,000	AUD		(176,143	)
AUD/USD, Counterparty HSBK, November Strike Price $0.71, Expires 11/05/20		1		11,838,000	AUD		(171,870	)
AUD/USD, Counterparty HSBK, November Strike Price $0.80, Expires 11/05/20		1		23,676,000	AUD		(20,184	)
AUD/USD, Counterparty HSBK, May Strike Price $0.78, Expires 5/05/21		1		19,730,000	AUD		(84,986	)
AUD/USD, Counterparty MSCO, August Strike Price $0.74, Expires 8/12/20		1		25,156,000	AUD		(108,605	)
AUD/USD, Counterparty MSCO, May Strike Price $0.74, Expires 5/12/21		1		42,617,000	AUD		(481,276	)
USD/JPY, Counterparty CITI, March Strike Price 108.91 JPY, Expires 3/20/20		1		59,164,000			(387,643	)
USD/JPY, Counterparty CITI, March Strike Price 109.16 JPY, Expires 3/30/20		1		69,025,000			(419,396	)
USD/JPY, Counterparty CITI, September Strike Price 108.77 JPY, Expires 9/22/20		1		76,420,000			(937,138	)
USD/MXN, Counterparty CITI, January Strike Price 19.96 MXN, Expires 1/30/20		1		6,102,000			(2,807	)
USD/MXN, Counterparty CITI, March Strike Price 21.82 MXN, Expires 3/06/20		1		11,853,000			(2,572	)
USD/MXN, Counterparty CITI, March Strike Price 19.95 MXN, Expires 3/30/20		1		22,882,000			(95,738	)
USD/MXN, Counterparty CITI, May Strike Price 19.34 MXN, Expires 5/12/20		1		9,997,000			(167,270	)
USD/MXN, Counterparty CITI, May Strike Price 22.85 MXN, Expires 5/14/20		1		21,999,000			(16,235	)
USD/MXN, Counterparty CITI, May Strike Price 22.91 MXN, Expires 5/21/20		1		4,212,000			(3,290	)
USD/MXN, Counterparty CITI, September Strike Price 23.00 MXN, Expires 9/03/20		1		23,836,000			(64,643	)
USD/MXN, Counterparty CITI, September Strike Price 24.30 MXN, Expires 9/08/20		1		15,874,000			(24,557	)
USD/MXN, Counterparty CITI, September Strike Price 20.06 MXN, Expires 9/17/20		1		21,869,000			(425,133	)
USD/MXN, Counterparty CITI, September Strike Price 22.40 MXN, Expires 9/17/20		1		21,869,000			(91,653	)
USD/MXN, Counterparty GSCO, March Strike Price 19.49 MXN, Expires 3/12/20		1		15,250,000			(94,550	)
USD/MXN, Counterparty GSCO, March Strike Price 22.11 MXN, Expires 3/12/20		1		15,250,000			(3,141	)
USD/MXN, Counterparty JPHQ, May Strike Price 21.54 MXN, Expires 5/13/20		1		15,714,000			(28,442	)
USD/MXN, Counterparty JPHQ, July Strike Price 22.30 MXN, Expires 7/27/20		1		12,571,000			(35,676	)
USD/MXN, Counterparty MSCO, February Strike Price 20.15 MXN, Expires 2/20/20		1		114,412,000			(110,636	)
USD/MXN, Counterparty MSCO, March Strike Price 22.56 MXN, Expires 3/05/20		1		28,603,000			(2,946	)
USD/MXN, Counterparty MSCO, March Strike Price 20.49 MXN, Expires 3/10/20		1		23,835,000			(28,459	)
USD/MXN, Counterparty MSCO, March Strike Price 22.87 MXN, Expires 3/12/20		1		9,300,000			(986	)

Annual Report         TGB-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

	Number of Contracts		Notional Amount*			Value
o Options Written (continued)
Calls - Over-the-Counter (continued)
Currency Options (continued)
USD/MXN, Counterparty MSCO, June Strike Price 24.20 MXN, Expires 6/15/20		1		6,200,000		$	(3,205	)
USD/MXN, Counterparty MSCO, September Strike Price 24.56 MXN, Expires 9/04/20		1		57,205,000			(76,712	)
USD/MXN, Counterparty MSCO, September Strike Price 22.46 MXN, Expires 9/10/20		1		4,767,000			(18,148	)
							(6,134,646	)
Puts - Over-the-Counter
Currency Options (0.3)%
AUD/JPY, Counterparty CITI, July Strike Price 68.00 JPY, Expires 7/21/20		1		31,568,000	AUD		(101,246	)
AUD/USD, Counterparty MSCO, August Strike Price $0.64, Expires 8/12/20		1		16,771,000	AUD		(26,077	)
USD/JPY, Counterparty CITI, March Strike Price 102.84 JPY, Expires 3/20/20		1		59,164,000			(77,505	)
USD/JPY, Counterparty CITI, March Strike Price 100.13 JPY, Expires 3/30/20		1		34,512,000			(25,125	)
USD/JPY, Counterparty CITI, September Strike Price 100.03 JPY, Expires 9/22/20		1		38,210,000			(195,521	)
USD/MXN, Counterparty CITI, March Strike Price 18.96 MXN, Expires 3/06/20		1		19,049,000			(156,735	)
USD/MXN, Counterparty CITI, March Strike Price 19.38 MXN, Expires 3/06/20		1		11,430,000			(248,660	)
USD/MXN, Counterparty CITI, March Strike Price 19.37 MXN, Expires 3/09/20		1		28,603,000			(610,245	)
USD/MXN, Counterparty CITI, May Strike Price 19.55 MXN, Expires 5/11/20		1		21,843,000			(589,695	)
USD/MXN, Counterparty CITI, May Strike Price 19.69 MXN, Expires 5/12/20		1		7,801,000			(251,153	)
USD/MXN, Counterparty CITI, May Strike Price 19.24 MXN, Expires 5/14/20		1		32,999,000			(558,211	)
USD/MXN, Counterparty CITI, May Strike Price 20.58 MXN, Expires 5/15/20		1		13,730,000			(969,159	)
USD/MXN, Counterparty CITI, May Strike Price 19.09 MXN, Expires 5/21/20		1		4,212,000			(54,457	)
USD/MXN, Counterparty CITI, September Strike Price 19.76 MXN, Expires 9/03/20		1		47,671,000			(1,459,019	)
USD/MXN, Counterparty GSCO, March Strike Price 19.40 MXN, Expires 3/12/20		1		19,100,000			(425,090	)
USD/MXN, Counterparty JPHQ, January Strike Price 19.00 MXN, Expires 1/27/20		1		25,142,000			(194,197	)
USD/MXN, Counterparty JPHQ, April Strike Price 19.36 MXN, Expires 4/24/20		1		21,999,000			(447,636	)
USD/MXN, Counterparty MSCO, March Strike Price 19.05 MXN, Expires 3/12/20		1		9,300,000			(98,161	)
USD/MXN, Counterparty MSCO, June Strike Price 19.05 MXN, Expires 6/15/20		1		9,300,000			(116,501	)
USD/MXN, Counterparty MSCO, September Strike Price 19.76 MXN, Expires 9/10/20		1		14,301,000			(447,664	)
							(7,052,057	)
Total Options Written (Premiums received $18,573,066)							(13,186,703	)

TGB-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

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

^aSecurities denominated in Argentine Peso have been designated as Level 3 investments. See Note 11 regarding fair value measurements.

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

^cRedemption price at maturity and coupon payment are adjusted for inflation. See Note 1(g).

^dPrincipal amount is stated in 1,000 Brazilian Real Units.

^ePrincipal amount is stated in 100 Mexican Peso Units.

^fPrincipal amount of security is adjusted for inflation. See Note 1(g).

^gPrincipal amount is stated in 100 Unidad de Inversion Units.

^hSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At December 31, 2019, the aggregate value of these securities $128,667,527, representing 4.6% of net assets.

ⁱSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At December 31, 2019, the aggregate value of these securities was $128,667,527, representing 4.6% of net assets.

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

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

^lPrincipal amount is stated in 10 Mexican Peso Units.

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

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

^oSee Note 1(c) regarding written options.

At December 31, 2019, the Fund had the following forward exchange contracts outstanding. See Note 1(c).

Forward Exchange Contracts

Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Norwegian Krone		DBAB		Buy		55,158,000		6,042,130			1/03/20	$	241,980	$	—
Norwegian Krone		DBAB		Sell		55,158,000		6,002,481			1/03/20		—		(281,628	)
Indian Rupee		BNDP		Sell		845,797,600		11,795,518			1/07/20		—		(54,254	)
South Korean Won		HSBK		Sell		42,561,000,000		35,642,744			1/08/20		—		(1,180,910	)
Indian Rupee		BNDP		Sell		237,955,000		3,262,004			1/13/20		—		(70,919	)
Australian Dollar		JPHQ		Sell		25,330,000		1,857,929,916	JPY		1/14/20		—		(669,494	)
Australian Dollar		JPHQ		Buy		30,315,000		20,592,191			1/15/20		686,601		—
Australian Dollar		JPHQ		Sell		30,315,000		21,239,144			1/15/20		—		(39,649	)
Indian Rupee		CITI		Sell		1,193,580,000		16,299,058			1/16/20		—		(416,672	)
Euro		SCNY		Buy		657,000		728,351			1/17/20		9,245		—
Euro		SCNY		Sell		657,000		729,999			1/17/20		—		(7,597	)
South Korean Won		HSBK		Sell		13,984,825,441		11,645,772			1/17/20		—		(456,026	)
Euro		DBAB		Buy		8,405,717		9,318,073			1/23/20		122,438		—
Euro		DBAB		Sell		8,405,717		9,572,598			1/23/20		132,087		—
Japanese Yen		BNDP		Buy		8,410,370,000		78,389,498			1/24/20		—		(894,194	)
South Korean Won		HSBK		Sell		39,774,174,559		34,043,429			1/28/20		—		(382,773	)
South Korean Won		HSBK		Sell		24,029,880,977		20,533,095			1/30/20		—		(266,594	)
Euro		JPHQ		Buy		32,859,900		36,702,197			2/03/20		228,471		—
Euro		JPHQ		Sell		32,859,900		37,139,573			2/03/20		208,906		—
Indian Rupee		HSBK		Sell		1,629,025,341		22,680,715			2/03/20		—		(109,444	)
Brazilian Real		JPHQ		Sell		57,125,400		13,876,503			2/04/20		—		(325,376	)
Indian Rupee		HSBK		Sell		1,466,662,182		20,355,351			2/05/20		—		(158,841	)
Indian Rupee		BNDP		Sell		852,858,400		11,897,887			2/06/20		—		(29,730	)
Indian Rupee		HSBK		Sell		640,177,000		8,967,948			2/06/20		14,779		—
South Korean Won		DBAB		Sell		13,920,000,000		11,536,549			2/10/20		—		(515,157	)

Annual Report         TGB-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Swiss Franc		UBSW		Buy		17,378,212		15,815,628	EUR		2/10/20	$	229,475	$	—
South Korean Won		HSBK		Sell		75,818,000,000		65,152,531			2/12/20		—		(492,303	)
Swiss Franc		GSCO		Buy		17,055,038		15,526,600	EUR		2/12/20		219,776		—
Swedish Krona		DBAB		Buy		208,032,300		19,486,343	EUR		2/13/20		345,053		—
Indian Rupee		HSBK		Sell		320,909,148		4,432,937			2/14/20		—		(51,195	)
Indian Rupee		HSBK		Sell		833,252,000		11,493,924			2/18/20		—		(144,189	)
Indian Rupee		JPHQ		Sell		1,513,957,170		20,894,416			2/20/20		—		(246,546	)
Australian Dollar		JPHQ		Sell		30,315,000		2,169,386,883	JPY		2/21/20		—		(1,276,844	)
Euro		SCNY		Buy		4,975,000		5,554,463			2/24/20		43,955		—
Euro		SCNY		Sell		4,975,000		5,583,691			2/24/20		—		(14,726	)
Australian Dollar		CITI		Sell		35,702,533		2,552,418,685	JPY		2/25/20		—		(1,523,879	)
Australian Dollar		JPHQ		Sell		52,305,500		3,751,062,779	JPY		2/25/20		—		(2,124,746	)
Euro		HSBK		Sell		25,253,559		2,980,010,839	JPY		2/25/20		—		(911,320	)
Japanese Yen		CITI		Buy		3,408,578,000		32,453,406			2/26/20		—		(987,032	)
Japanese Yen		CITI		Sell		3,408,578,000		31,992,750			2/26/20		526,376		—
Norwegian Krone		DBAB		Buy		135,189,000		15,096,988			2/26/20		307,939		—
Norwegian Krone		DBAB		Sell		135,189,000		14,712,047			2/26/20		—		(692,880	)
Indian Rupee		SCNY		Sell		945,558,000		12,802,898			2/27/20		—		(390,812	)
Japanese Yen		CITI		Buy		2,324,212,100		22,107,225			2/27/20		—		(649,983	)
Japanese Yen		CITI		Sell		2,324,212,100		21,816,254			2/27/20		359,012		—
Japanese Yen		JPHQ		Buy		2,297,161,600		21,849,209			2/27/20		—		(641,699	)
Euro		BZWS		Buy		22,495,165		25,171,078			2/28/20		149,085		—
Euro		BZWS		Sell		22,495,166		25,278,830			2/28/20		—		(41,333	)
Indian Rupee		SCNY		Sell		1,135,539,000		15,415,847			2/28/20		—		(427,004	)
Japanese Yen		CITI		Buy		4,463,423,000		42,753,688			2/28/20		—		(1,544,803	)
Japanese Yen		CITI		Sell		4,463,423,000		41,898,391			2/28/20		689,506		—
Brazilian Real		JPHQ		Sell		71,627,700		17,345,621			3/03/20		—		(431,994	)
Indian Rupee		SCNY		Sell		2,362,358,000		32,036,751			3/03/20		—		(905,775	)
Australian Dollar		CITI		Sell		23,089,500		1,653,613,051	JPY		3/06/20		—		(953,750	)
Japanese Yen		HSBK		Buy		1,385,935,670		13,063,576			3/06/20		—		(262,580	)
Japanese Yen		HSBK		Sell		1,385,935,670		13,219,153			3/06/20		418,157		—
Japanese Yen		JPHQ		Buy		1,316,291,430		12,420,546			3/06/20		—		(262,809	)
Japanese Yen		JPHQ		Sell		1,316,291,430		12,511,845			3/06/20		354,108		—
South Korean Won		DBAB		Sell		13,919,000,000		11,576,978			3/06/20		—		(483,022	)
South Korean Won		GSCO		Sell		44,346,000,000		38,184,871			3/09/20		—		(244,987	)
Euro		BOFA		Buy		17,090,572		19,106,336			3/10/20		144,160		—
Euro		BOFA		Sell		17,090,572		19,044,024			3/10/20		—		(206,472	)
Australian Dollar		HSBK		Sell		19,340,000		1,424,410,340	JPY		3/12/20		—		(433,081	)
Australian Dollar		JPHQ		Sell		22,880,000		1,707,432,812	JPY		3/12/20		—		(306,328	)
Australian Dollar		HSBK		Sell		9,830,000		730,865,415	JPY		3/13/20		—		(156,371	)
Swedish Krona		DBAB		Buy		208,032,400		19,479,054	EUR		3/13/20		344,041		—
Indian Rupee		JPHQ		Sell		415,137,830		5,684,873			3/16/20		—		(94,174	)
South Korean Won		HSBK		Sell		7,007,000,000		5,956,307			3/18/20		—		(119,049	)
South Korean Won		CITI		Sell		4,215,000,000		3,580,682			3/20/20		—		(74,317	)
Euro		GSCO		Buy		1,230,811		1,374,970			3/23/20		12,563		—
Euro		GSCO		Sell		1,230,811		1,379,468			3/23/20		—		(8,064	)

TGB-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Japanese Yen		HSBK		Buy		5,242,851,400		49,342,826			3/23/20	$	—	$	(869,524	)
Japanese Yen		HSBK		Sell		5,242,851,400		50,052,760			3/23/20		1,579,457		—
Japanese Yen		JPHQ		Buy		3,549,117,130		33,375,614			3/23/20		—		(561,900	)
Japanese Yen		JPHQ		Sell		3,549,117,130		33,804,818			3/23/20		991,104		—
Norwegian Krone		DBAB		Buy		110,414,000		12,349,592			3/23/20		232,549		—
Norwegian Krone		DBAB		Sell		110,414,000		12,107,329			3/23/20		—		(474,812	)
Japanese Yen		CITI		Buy		4,452,680,000		41,757,642			3/24/20		—		(587,524	)
Japanese Yen		CITI		Sell		240,000,000		2,256,205			3/24/20		37,131		—
Japanese Yen		JPHQ		Buy		921,145,640		8,744,741			3/24/20		—		(227,696	)
Japanese Yen		JPHQ		Sell		921,145,640		8,774,153			3/24/20		257,108		—
Norwegian Krone		DBAB		Buy		83,053,000		9,236,218			3/24/20		228,030		—
Norwegian Krone		DBAB		Sell		83,053,000		9,038,208			3/24/20		—		(426,040	)
Euro		HSBK		Sell		25,254,215		2,985,553,322	JPY		3/25/20		—		(867,108	)
Euro		BZWS		Buy		11,247,583		12,570,367			3/31/20		115,950		—
Euro		BZWS		Sell		11,247,583		12,462,265			3/31/20		—		(224,052	)
Euro		CITI		Sell		22,979,200		2,707,863,964	JPY		3/31/20		—		(871,035	)
Euro		SCNY		Buy		12,544,218		14,017,424			3/31/20		131,388		—
Euro		SCNY		Sell		12,544,218		13,905,768			3/31/20		—		(243,045	)
Brazilian Real		CITI		Buy		206,375,000		44,333,097	EUR		4/01/20		1,146,824		—
Euro		BOFA		Buy		17,079,724		19,098,667			4/08/20		175,391		—
Euro		BOFA		Sell		17,079,724		18,978,477			4/08/20		—		(295,581	)
Euro		GSCO		Buy		2,045,000		2,286,562			4/08/20		21,172		—
Euro		GSCO		Sell		2,045,000		2,272,915			4/08/20		—		(34,818	)
Mexican Peso		CITI		Sell		157,383,000		7,836,511			4/08/20		—		(359,325	)
Euro		UBSW		Buy		8,311,299		9,309,154			4/09/20		70,531		—
Euro		UBSW		Sell		8,311,299		9,247,151			4/09/20		—		(132,533	)
Euro		BZWS		Buy		7,003,000		7,832,985			4/14/20		72,681		—
Euro		BZWS		Sell		7,003,000		7,785,515			4/14/20		—		(120,151	)
Euro		BOFA		Buy		17,769,000		19,910,449			4/15/20		150,170		—
Euro		BOFA		Sell		17,769,000		19,824,340			4/15/20		—		(236,279	)
Euro		GSCO		Buy		1,789,884		2,001,811			4/15/20		18,909		—
Euro		GSCO		Sell		1,789,884		1,996,758			4/15/20		—		(23,962	)
Swedish Krona		DBAB		Buy		208,032,300		19,139,791	EUR		4/15/20		715,903		—
Euro		GSCO		Buy		1,231,111		1,381,337			4/23/20		9,239		—
Euro		GSCO		Sell		1,231,111		1,390,047			4/23/20		—		(528	)
Euro		UBSW		Buy		11,641,500		13,050,936			4/24/20		99,296		—
Euro		UBSW		Sell		11,641,500		13,116,769			4/24/20		—		(33,464	)
Euro		HSBK		Buy		19,488,000		21,817,496			4/27/20		200,249		—
Euro		HSBK		Sell		19,488,000		21,942,319			4/27/20		—		(75,427	)
Euro		BOFA		Buy		32,470,000		36,410,137			4/29/20		279,374		—
Euro		BOFA		Sell		33,910,662		38,077,605			4/29/20		—		(239,785	)
Euro		GSCO		Buy		2,855,793		3,205,499			4/29/20		21,407		—
Euro		GSCO		Sell		2,855,793		3,209,112			4/29/20		—		(17,795	)
Euro		SCNY		Buy		12,300,264		13,789,519			4/29/20		109,178		—
Euro		SCNY		Sell		12,300,264		13,820,762			4/29/20		—		(77,935	)
Indian Rupee		JPHQ		Sell		1,986,473,600		27,399,636			4/29/20		—		(102,548	)

Annual Report         TGB-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Euro		BOFA		Sell		33,910,662		38,086,761			4/30/20	$	—	$	(233,014	)
Euro		CITI		Sell		22,979,200		2,779,793,824	JPY		4/30/20		—		(210,731	)
Euro		GSCO		Buy		13,037,050		14,602,148			4/30/20		129,998		—
Euro		GSCO		Sell		13,037,050		14,638,912			4/30/20		—		(93,233	)
Euro		HSBK		Sell		25,974,891		29,216,947			4/30/20		—		(135,236	)
Brazilian Real		JPHQ		Sell		64,790,800		15,630,734			5/05/20		—		(402,227	)
Swiss Franc		UBSW		Buy		17,378,212		15,829,025	EUR		5/08/20		229,342		—
Swiss Franc		GSCO		Buy		17,055,038		15,539,898	EUR		5/12/20		219,772		—
Swedish Krona		DBAB		Buy		208,032,300		19,542,908	EUR		5/13/20		251,128		—
Euro		HSBK		Sell		1,800,000		2,005,992			5/14/20		—		(29,821	)
Indian Rupee		JPHQ		Sell		451,390,000		6,129,685			5/18/20		—		(105,381	)
Euro		BOFA		Sell		10,878,191		12,169,758			5/20/20		—		(138,154	)
Euro		GSCO		Sell		1,898,500		2,124,232			5/20/20		—		(23,788	)
Australian Dollar		JPHQ		Sell		60,630,000		4,397,043,441	JPY		5/21/20		—		(1,894,254	)
Euro		BOFA		Sell		7,066,000		7,919,573			5/21/20		—		(75,610	)
Euro		GSCO		Sell		1,230,811		1,379,124			5/21/20		—		(13,540	)
Euro		JPHQ		Sell		21,878,395		24,516,274			5/21/20		—		(239,144	)
Euro		HSBK		Sell		50,507,118		6,015,152,722	JPY		5/22/20		—		(1,349,823	)
Euro		JPHQ		Sell		26,361,295		29,500,003			5/22/20		—		(329,677	)
Japanese Yen		JPHQ		Buy		2,297,117,500		21,392,415			5/26/20		—		(77,257	)
Euro		MSCO		Sell		30,744,500		34,286,266			5/27/20		—		(514,168	)
Euro		BOFA		Sell		27,627,938		30,796,586			5/29/20		—		(480,038	)
Euro		BZWS		Sell		11,247,583		12,585,820			5/29/20		—		(147,176	)
Euro		JPHQ		Sell		6,775,311		7,592,787			6/04/20		—		(80,178	)
Euro		SCNY		Sell		17,972,751		20,144,776			6/05/20		—		(210,434	)
Japanese Yen		HSBK		Buy		1,385,935,690		13,139,372			6/08/20		—		(269,733	)
Japanese Yen		HSBK		Sell		1,385,935,690		13,288,611			6/08/20		418,972		—
Japanese Yen		JPHQ		Buy		1,316,291,430		12,493,638			6/08/20		—		(270,708	)
Japanese Yen		JPHQ		Sell		1,316,291,430		12,591,391			6/08/20		368,461		—
Australian Dollar		HSBK		Sell		29,370,000		2,163,795,505	JPY		6/12/20		—		(588,710	)
Australian Dollar		JPHQ		Sell		44,900,000		3,317,676,979	JPY		6/12/20		—		(809,636	)
Euro		JPHQ		Sell		6,775,311		7,873,725			6/15/20		195,491		—
Norwegian Krone		JPHQ		Buy		199,051,400		21,751,993			6/15/20		931,145		—
Swedish Krona		DBAB		Buy		208,032,300		19,454,271	EUR		6/15/20		340,105		—
Swedish Krona		DBAB		Buy		208,032,400		19,823,937	EUR		6/15/20		—		(78,816	)
Norwegian Krone		JPHQ		Buy		197,840,000		21,751,989			6/16/20		793,105		—
Mexican Peso		CITI		Sell		539,656,000		26,544,132			6/17/20		—		(1,272,678	)
Norwegian Krone		JPHQ		Buy		202,667,400		22,486,869			6/19/20		608,348		—
Japanese Yen		JPHQ		Buy		1,776,469,130		16,798,461			6/22/20		—		(289,353	)
Japanese Yen		JPHQ		Buy		2,360,520,000		21,781,741			6/22/20		155,076		—
Japanese Yen		JPHQ		Sell		1,776,469,130		17,004,749			6/22/20		495,641		—
Japanese Yen		BNDP		Buy		4,489,315,360		42,878,248			6/24/20		—		(1,153,375	)
Euro		CITI		Sell		22,979,200		2,707,404,380	JPY		6/30/20		—		(894,117	)
Euro		UBSW		Buy		1,922,305		2,166,765			7/23/20		16,889		—
Euro		UBSW		Sell		1,922,305		2,182,681			7/23/20		—		(972	)
Swiss Franc		UBSW		Buy		17,378,212		15,841,579	EUR		8/10/20		229,551		—

TGB-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

Forward Exchange Contracts (continued)

Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Swiss Franc		GSCO		Buy		17,055,038		15,552,652	EUR		8/12/20	$	219,125	$	—
Australian Dollar		JPHQ		Sell		30,315,000		2,154,483,985	JPY		8/21/20		—		(1,293,352	)
Australian Dollar		CITI		Sell		35,607,467		2,527,369,963	JPY		8/24/20		—		(1,547,053	)
Australian Dollar		JPHQ		Sell		52,305,500		3,724,936,182	JPY		8/24/20		—		(2,157,243	)
Euro		HSBK		Sell		25,253,559		2,984,142,320	JPY		8/24/20		—		(913,204	)
Japanese Yen		CITI		Buy		2,796,566,000		27,059,295			8/31/20		—		(967,271	)
Norwegian Krone		JPHQ		Buy		177,591,200		19,683,519			9/21/20		549,242		—
Euro		CITI		Sell		45,958,400		5,496,240,519	JPY		9/30/20		—		(1,064,370	)
Euro		GSCO		Buy		17,044,025		19,273,383			10/05/20		177,689		—
Euro		GSCO		Sell		17,044,025		19,070,900			10/05/20		—		(380,172	)
Mexican Peso		CITI		Sell		161,485,000		7,836,491			10/08/20		—		(353,608	)
Mexican Peso		CITI		Sell		121,288,000		5,877,353			10/09/20		—		(273,221	)
Euro		HSBK		Sell		33,800,018		37,982,433			10/13/20		—		(610,413	)
Mexican Peso		CITI		Sell		404,375,000		19,555,619			10/13/20		—		(939,283	)
Mexican Peso		CITI		Sell		595,223,000		28,888,991			10/15/20		—		(1,270,439	)
Euro		BOFA		Sell		5,251,819		5,944,009			10/16/20		—		(53,647	)
Euro		HSBK		Sell		8,692,000		9,833,042			10/16/20		—		(93,352	)
Mexican Peso		CITI		Sell		545,017,000		26,695,974			10/16/20		—		(915,808	)
Swiss Franc		UBSW		Buy		17,378,212		15,853,718	EUR		11/09/20		229,864		—
Swiss Franc		GSCO		Buy		17,055,038		15,564,006	EUR		11/12/20		220,221		—
Total Forward Exchange Contracts												$	19,229,919	$	(55,309,610	)
Net unrealized appreciation (depreciation)														$	(36,079,691	)

*In U.S. dollars unless otherwise indicated.

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

At December 31, 2019, the Fund had the following interest rate swap contracts outstanding. See Note 1(c).

Interest Rate Swap Contracts

Description	Payment Frequency		Maturity Date		Notional Amount		Value/ Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts
Receive Floating 3-month USD LIBOR		Quarterly
Pay Fixed 2.378%		Semi-Annual		11/18/46	$	122,400,000	$	(7,546,995	)
Receive Floating 3-month USD LIBOR		Quarterly
Pay Fixed 2.537%		Semi-Annual		4/13/47		72,700,000		(7,043,492	)
Receive Floating 3-month USD LIBOR		Quarterly
Pay Fixed 2.587%		Semi-Annual		7/27/47		36,700,000		(4,218,306	)
Receive Floating 3-month USD LIBOR		Quarterly
Pay Fixed 2.980%		Semi-Annual		2/20/48		15,638,000		(3,188,070	)
Receive Floating 3-month USD LIBOR		Quarterly
Pay Fixed 3.002%		Semi-Annual		2/22/48		15,638,000		(3,265,695	)
Receive Floating 3-month USD LIBOR		Quarterly

Annual Report         TGB-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Global Bond VIP Fund (continued)

Interest Rate Swap Contracts (continued)

Description	Payment Frequency		Maturity Date		Notional Amount		Value/ Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts (continued)
Pay Fixed 3.019%		Semi-Annual		2/23/48	$	15,638,000		$  (3,325,652	)
Total Interest Rate Swap Contracts								$(28,588,210	)

See Note 9 regarding other derivative information.

See Abbreviations on page TGB-41.

TGB-24       Annual Report      |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Templeton Global Bond VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers		$2,262,976,218
Cost - Non-controlled affiliates (Note 3e)		691,092,548
Value - Unaffiliated issuers		$2,041,375,920
Value - Non-controlled affiliates (Note 3e)		691,092,548
Cash		4,228,331
Restricted cash for OTC derivative contracts (Note 1d)		338,000
Restricted currency, at value (cost $8,561,188) (Note 1e)		8,460,563
Foreign currency, at value (cost $584,333)		584,945
Receivables:
Capital shares sold		2,187,485
Interest		26,637,260
Affiliates		3,311
Deposits with brokers for:
OTC derivative contracts		44,250,000
Centrally cleared swap contracts		35,603,884
Variation margin on centrally cleared swap contracts		3,043,102
Unrealized appreciation on OTC forward exchange contracts		19,229,919
Other assets		357
Total assets		2,877,035,625
Liabilities:
Payables:
Capital shares redeemed		1,355,574
Management fees		872,939
Distribution fees		530,725
Deposits from brokers for:
OTC derivative contracts		338,000
Options written, at value (premiums received $18,573,066)		13,186,703
Unrealized depreciation on OTC forward exchange contracts		55,309,610
Deferred tax		1,080,755
Accrued expenses and other liabilities		1,684,813
Total liabilities		74,359,119
Net assets, at value		$2,802,676,506
Net assets consist of:
Paid-in capital		$2,936,200,505
Total distributable earnings (losses)		(133,523,999	)
Net assets, at value		$2,802,676,506

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TGB-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

December 31, 2019

	Templeton Global Bond VIP Fund
Class 1:
Net assets, at value		$ 322,794,357
Shares outstanding		19,408,120
Net asset value and maximum offering price per share		$16.63
Class 2:
Net assets, at value		$2,389,609,852
Shares outstanding		150,200,845
Net asset value and maximum offering price per share		$15.91
Class 4:
Net assets, at value		$ 90,272,297
Shares outstanding		5,547,129
Net asset value and maximum offering price per share		$16.27

TGB-26         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Templeton Global Bond VIP Fund
Investment income:
Dividends:
Non-controlled affiliates (Note 3e)	$	13,662,877
Interest: (net of foreign taxes)~
Unaffiliated issuers		148,767,579
Total investment income		162,430,456
Expenses:
Management fees (Note 3a)		13,216,398
Distribution fees: (Note 3c)
Class 2		6,202,773
Class 4		321,517
Custodian fees (Note 4)		975,950
Reports to shareholders		321,729
Professional fees		91,604
Trustees’ fees and expenses		17,334
Other		390,060
Total expenses		21,537,365
Expense reductions (Note 4)		(473,116	)
Expenses waived/paid by affiliates (Note 3e)		(2,582,188	)
Net expenses		18,482,061
Net investment income		143,948,395
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:#
Unaffiliated issuers		(27,018,737	)
Written options		6,474,760
Foreign currency transactions		(3,592,489	)
Forward exchange contracts		103,625,245
Swap contracts		(38,566,387	)
Net realized gain (loss)		40,922,392
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(54,652,582	)
Translation of other assets and liabilities denominated in foreign currencies		188,524
Forward exchange contracts		(40,855,477	)
Written options		5,386,363
Swap contracts		(47,284,879	)
Change in deferred taxes on unrealized appreciation		797,356
Net change in unrealized appreciation (depreciation)		(136,420,695	)
Net realized and unrealized gain (loss)		(95,498,303	)
Net increase (decrease) in net assets resulting from operations	$	48,450,092

~Foreign taxes withheld on interest	$	3,599,403
#Net of foreign taxes	$	356,110

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TGB-27

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Global Bond VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	143,948,395		$	148,925,933
Net realized gain (loss)		40,922,392			29,395,004
Net change in unrealized appreciation (depreciation)		(136,420,695	)		(118,382,692	)
Net increase (decrease) in net assets resulting from operations		48,450,092			59,938,245
Distributions to shareholders:
Class 1		(22,427,340	)		—
Class 2		(175,601,316	)		—
Class 4		(6,224,019	)		—
Total distributions to shareholders		(204,252,675	)		—
Capital share transactions: (Note 2)
Class 1		55,417,128			(7,760,972	)
Class 2		(21,954,185	)		(237,044,140	)
Class 4		758,324			(6,392,585	)
Total capital share transactions		34,221,267			(251,197,697	)
Net increase (decrease) in net assets		(121,581,316	)		(191,259,452	)
Net assets:
Beginning of year		2,924,257,822			3,115,517,274
End of year	$	2,802,676,506		$	2,924,257,822

TGB-28         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Templeton Global Bond VIP Fund

1.  Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

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

Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal

repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

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

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

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

b.  Foreign Currency Translation

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

Annual Report         TGB-29

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

b.  Foreign Currency Translation (continued)

events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

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 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.

TGB-30         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

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

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

The Fund invested in value recovery instruments (VRI) primarily to gain exposure to economic growth. Periodic payments from VRI are dependent on established benchmarks for underlying variables. VRI has a notional amount, which is used to calculate amounts of payments to holders. Payments are recorded upon receipt as realized

gains in the Statement of Operations. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.

See Note 9 regarding other derivative information.

d.  Restricted Cash

At December 31, 2019, the Fund held restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s custodian and is reflected in the Statement of Assets and Liabilities.

e.  Restricted Currency

At December 31, 2019, 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, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax

Annual Report         TGB-31

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

f.  Income and Deferred Taxes (continued)

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 the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of

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

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income in the Statement of Operations.

h.  Accounting Estimates

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

i.  Guarantees and Indemnifications

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

TGB-32         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

2. Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		5,087,795		$	89,164,653			3,298,930		$	57,215,991
Shares issued in reinvestment of distributions		1,330,210			22,427,340			—			—
Shares redeemed		(3,257,868	)		(56,174,865	)		(3,741,198	)		(64,976,963)
Net increase (decrease)		3,160,137		$	55,417,128			(442,268	)	$	(7,760,972)
Class 2 Shares:
Shares sold		7,233,859		$	119,112,193			10,132,393		$	169,096,447
Shares issued in reinvestment of distributions		10,873,146			175,601,316			—			—
Shares redeemed		(19,122,225	)		(316,667,694	)		(24,289,543	)		(406,140,587)
Net increase (decrease)		(1,015,220	)	$	(21,954,185	)		(14,157,150	)	$	(237,044,140)
Class 4 Shares:
Shares sold		692,994		$	11,712,750			816,409		$	13,930,984
Shares issued in reinvestment of distributions		376,529			6,224,019			—			—
Shares redeemed		(1,010,027	)		(17,178,445	)		(1,191,456	)		(20,323,569)
Net increase (decrease)		59,496		$	758,324			(375,047	)	$	(6,392,585)

3. Transactions with Affiliates

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

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

Annual Report         TGB-33

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

3. Transactions with Affiliates (continued)

a. Management Fees

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

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

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.459% 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 for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	663,563,266	$	798,168,118	$	(770,638,836	)		$     —		$     —	$	691,092,548		691,092,548	$	13,662,877

TGB-34         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond 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, 2019, the custodian fees were reduced as noted in the Statement of Operations.

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	1,874,982
Long term		56,256,007
Total capital loss carryforwards	$	58,130,989

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from ordinary income	$	204,252,675	$	—

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:

Cost of investments	$	2,934,655,844
Unrealized appreciation	$	122,990,545
Unrealized depreciation		(402,219,586	)
Net unrealized appreciation (depreciation)	$	(279,229,041	)
Distributable earnings-undistributed ordinary income	$	205,698,317

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

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $960,302,670 and $367,338,225, respectively.

7. Credit Risk

At December 31, 2019, the Fund had 13.5% 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.

Annual Report         TGB-35

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

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, 2019, the Fund had 1.8% of its net assets denominated in Argentine Pesos, which has restricted currency repatriation since September 2019, and had restructured certain issues of its debt. Political and economic conditions in Argentina could continue to affect the value of the Fund’s holdings.

9. Other Derivative Information

At December 31, 2019, investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on centrally cleared swap contracts	$	—		Variation margin on centrally cleared swap contracts	$	28,588,210	a
Foreign exchange contracts	Investments in securities, at value		7,123,962	b	Options written, at value		13,186,703
	Unrealized appreciation on OTC forward exchange contracts		19,229,919		Unrealized depreciation on OTC forward exchange contracts		55,309,610
Totals		$	26,353,881			$	97,084,523

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

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

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Swap contracts	$	(38,566,387	)	Swap contracts	$	(47,284,879	)
Foreign exchange contracts	Investments		(6,438,453	)a	Investments		(18,604,071	)a
	Written options		6,474,760		Written options		5,386,363
	Forward exchange contracts		103,625,245		Forward exchange contracts		(40,855,477	)
Value recovery instruments	Investments		4,142,988	a	Investments		(3,416,727	)a
Totals		$	69,238,153			$	(104,774,791	)

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

TGB-36         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

For the year ended December 31, 2019, the average month end notional amount of options and swap contracts, the average month end contract value for forward exchange contracts and average month end fair value of VRI, were as follows:

Options	$	1,251,647,862
Swap contracts	$	624,427,846
Forward exchange contracts	$	3,393,437,312
VRI	$	3,866,835

See Note 1(c) regarding derivative financial instruments.

At December 31, 2019, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented     in the Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward exchange contracts		$19,229,919		$55,309,610
Options purchased		7,123,962		—
Options written		—		13,186,703
Total		$26,353,881		$68,496,313

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

At December 31, 2019, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Receiveda,b			Cash Collateral Receivedb			Net Amount (Not less than zero)
Counterparty
BNDP	$	—	$	—		$	—		$	—		$	—
BOFA		749,095		(749,095	)		—			—			—
BZWS		337,716		(337,716	)		—			—			—
CITI		8,283,830		(8,283,830	)		—			—			—
DBAB		3,261,253		(2,952,355	)		—			(308,898	)		—
GSCO		1,313,319		(1,313,319	)		—			—			—
HSBK		2,866,833		(2,866,833	)		—			—			—
JPHQ		7,154,533		(7,154,533	)		—			—			—
MSCO		988,588		(988,588	)		—			—			—
SCNY		293,766		(293,766	)		—			—			—
UBSW		1,104,948		(166,969	)		(912,419	)		—			25,560
Total	$	26,353,881	$	(25,107,004	)	$	(912,419	)	$	(308,898	)	$	25,560

Annual Report         TGB-37

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

9. Other Derivative Information (continued)

At December 31, 2019, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the             Statement of  Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledgedb			Net Amount   (Not less   than zero)
Counterparty
BNDP	$	2,202,472	$	—		$	—	$	(2,202,472	)	$	—
BOFA		1,958,580		(749,095	)		—		(1,110,000	)		99,485
BZWS		532,712		(337,716	)		—		—			194,996
CITI		27,548,305		(8,283,830	)		—		(19,264,475	)		—
DBAB		2,952,355		(2,952,355	)		—		—			—
GSCO		1,363,668		(1,313,319	)		—		—			50,349
HSBK		11,494,216		(2,866,833	)		—		(7,890,000	)		737,383
JPHQ		15,966,164		(7,154,533	)		—		(8,811,631	)		—
MSCO		2,033,544		(988,588	)		—		(860,000	)		184,956
SCNY		2,277,328		(293,766	)		—		(1,950,000	)		33,562
UBSW		166,969		(166,969	)		—		—			—
Total	$	68,496,313	$	(25,107,004	)	$	—	$	(42,088,578	)	$	1,300,731

^aAt December 31, 2019, the Fund received U.K. Treasury Bonds as collateral for derivatives.

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

See Abbreviations on page TGB-41.

10. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

TGB-38         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

11. Fair Value Measurements

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

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

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

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

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

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Foreign Government and Agency Securities:
Argentina	$	—	$	4,737,123	$	35,675,197	$	40,412,320
All Other Foreign Government and Agency Securities		—		1,462,336,152		—		1,462,336,152
U.S. Government and Agency Securities		—		349,599,069		—		349,599,069
Options Purchased		—		7,123,962		—		7,123,962
Short Term Investments:
Argentina		—		—		3,394,233		3,394,233
All Other Short Term Investments		691,092,548		178,510,184		—		869,602,732
Total Investments in Securities	$	691,092,548	$	2,002,306,490	$	39,069,430	$	2,732,468,468
Other Financial Instruments:
Forward Exchange Contracts	$	—	$	19,229,919	$	—	$	19,229,919
Restricted Currency (ARS)		—		—		8,460,563		8,460,563
Total Other Financial Instruments		—		19,229,919		8,460,563		27,690,482
Receivables:
Interest (ARS)	$	—	$	—	$	1,601,869	$	1,601,869
Liabilities:
Other Financial Instruments:
Options Written	$	—	$	13,186,703	$	—	$	13,186,703
Forward Exchange Contracts		—		55,309,610		—		55,309,610
Swap Contracts		—		28,588,210		—		28,588,210
Total Other Financial Instruments	$	—	$	97,084,523	$	—	$	97,084,523
Payables:
Deferred Tax (ARS)	$	—	$	—	$	4,066	$	4,066

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

Annual Report         TGB-39

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond VIP Fund (continued)

11. Fair Value Measurements (continued)

A reconciliation of assets and/or liabilities 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, 2019, the reconciliation of assets and/or liabilities, is as follows:

	Balance at Beginning of Year		Purchases		Sales			Transfer Into Level 3a		Transfer Out of Level 3		Cost Basis Adjustmentsb		Net Realized Gain (Loss)			Net Unrealized Appreciation (Depreciation)			Balance at End of Year		Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Year End
Asset:
Investments in Securities:
Foreign Government and Agency Securities Argentina		$—	$	1,661,146	$	—		$	32,311,758		$—		$6,120,948	$	—			$(4,418,655	)	$	35,675,197		$	1,811,665
Short Term Investments:
Argentina		—		2,708,215		(272,318	)		61,987		—		589,992		(368,640	)		674,997			3,394,233			389,219
Total Investment in Securities		$—	$	4,369,361	$	(272,318	)	$	32,373,745		$—		$6,710,940	$	(368,640	)		$(3,743,658	)	$	39,069,430		$	2,200,884
Other Financial Instruments:
Restricted Currency (ARS)		$—	$	11,877,831	$	(4,435,314	)	$	1,914,857		$—		$            —	$	(1,233,844	)		$    337,033		$	8,460,563		$	(100,625	)
Receivables:
Interest (ARS)		$—	$	2,433,160	$	(4,025,141	)	$	3,346,481		$—		$            —	$	(1,837,839	)		$ 1,685,208		$	1,601,869		$	4,208
Liabilities:
Payables:
Deferred Tax (ARS)		$—	$	—	$	—		$	5,437		$—		$            —	$	—			$      (1,371	)	$	4,066		$	(1,371	)

^aTransferred into Level 3 as a result of the unavailability of a quoted market price in an active market for identical securities or as a result of the unreliability of the foreign exchange rate and other significant observable valuation inputs.

^bMay include accretion, amortization, partnership adjustments, and/or other cost basis adjustments.

TGB-40         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Templeton Global Bond 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, 2019, are as follows:

Description	Fair Value at End of Year		Valuation Technique		Unobservable Inputs		Amount		Impact to Fair Value if Input Increasesa
Assets:
Investments in Securities:
Foreign Government and Agency Securities
Argentina	$	35,675,197		Market comparables		Implied Foreign exchange rate		75.1 ARS/USD		Decrease	b
Short Term Investments
Argentina		3,394,233		Market comparables		Implied Foreign exchange rate		75.1 ARS/USD		Decrease	b
Other Financial Instruments:
Restricted Currency (ARS)		8,460,563		Market comparables		Implied Foreign exchange rate		75.1 ARS/USD		Decrease	b
All otherc		1,601,869
Liabilities:
All otherc		4,066

^aRepresents the directional change in the fair value that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.

^bRepresents a significant impact to fair value but not net assets.

^cIncludes fair value of immaterial assets and/or liabilities developed using various valuation techniques and unobservable inputs. May also include values derived using private transaction prices or non-public third party pricing information which is unobservable.

12. 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		Currency		Selected Portfolio
BNDP	BNP Paribas SA	ARS	Argentine Peso	ARPP7DRR	Argentina Central Bank 7 Day Repo Rate
BOFA	Bank of America Corp.	AUD	Australian Dollar	BADLAR	Argentina Deposit Rates Badlar Private Banks ARS
BZWS	Barclays Bank PLC	BRL	Brazilian Real	FRN	Floating Rate Note
CITI	Citigroup, Inc.	COP	Colombian Peso	LIBOR	London InterBank Offered Rate
DBAB	Deutsche Bank AG	EUR	Euro
GSCO	The Goldman Sachs Group, Inc.	GHS	Ghanaian Cedi
HSBK	HSBC Bank PLC	IDR	Indonesian Rupiah
JPHQ	JP Morgan Chase & Co.	INR	Indian Rupee
MSCO	Morgan Stanley	JPY	Japanese Yen
SCNY	Standard Chartered Bank	KRW	South Korean Won
UBSW	UBS AG	MXN	Mexican Peso
		NOK	Norwegian Krone
		USD	United States Dollar

Annual Report         TGB-41

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund”) as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

TGB-42         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Global Bond VIP Fund

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Internal Revenue Code. This election will allow shareholders of record as of the 2020 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

Annual Report         TGB-43

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Templeton Growth VIP Fund

This annual report for Templeton Growth VIP Fund covers the fiscal year ended December 31, 2019.

Class 4 Performance Summary as of December 31, 2019

Average annual total return of Class 4 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.

Periods ended 12/31/19	1-Year	5-Year	10-Year
Average Annual Total Return	+14.97%	+3.45%	+6.13%

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

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

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

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/10–12/31/19)

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 All Country World Index (ACWI). 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.

Annual Report         TG-1

TEMPLETON GROWTH VIP FUND

Fund Goal and Main Investments

The Fund seeks long-term capital growth. Under normal market conditions, the Fund invests predominantly in equity securities (primarily common stocks) of companies located anywhere in the world, including developing markets.

Fund Risks

All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in developing markets involve heightened risks related to the same factors. Because the Fund may invest its assets in companies in a specific region, including Europe, it is subject to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Political, social or economic disruptions in the region, even in countries in which the Fund is not invested, may adversely affect the value of securities held by the Fund. Current political and financial uncertainty surrounding the European Union (EU) and the financial instability of some countries in the EU may increase market volatility and the economic risk of investing in companies in Europe. 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, smaller company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. For comparison, the Fund’s benchmark, the MSCI ACWI, posted a +27.30% total return for the period under review.¹

Geographic Composition

Based on Total Net Assets as of 12/31/19

Economic and Market Overview

Global developed and emerging market stocks, as measured by the MSCI ACWI, posted strong returns during the reporting period. Although global economic growth slowed from 2018, interest-rate cuts from many central banks and the easing of trade tensions near period-end contributed to the generally positive environment for equities worldwide. Reflecting investor optimism and slowing but resilient economic growth, stocks advanced in every major region of the globe.

In the U.S., solid economic growth also supported equities, as healthy consumer spending and a strong labor market kept the economy afloat. The unemployment rate fell during the year, reaching 3.5% in September, November and December 2019, the lowest recorded unemployment rate in 50 years.² Wages also grew, albeit at a moderate pace, and inflation remained persistently low. In addition, deficit spending by the U.S. government boosted current growth at the expense of long-term debt. Despite the strength in the consumer sector, some parts of the economy struggled, particularly heavy industry. Annual industrial production contracted late in the reporting period, manufacturing output stalled and capital spending declined.

The U.S. Federal Reserve (Fed) provided a substantial boost to equity markets early in the reporting period as it shifted to a more accommodative monetary policy. In January 2019, the Fed signaled the end of its tightening cycle and cut the federal funds rate three times thereafter, lowering it to a

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

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

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

TG-2         Annual Report

TEMPLETON GROWTH VIP FUND

range of 1.50%–1.75%. Stocks responded positively to the interest-rate cuts and gained further in December 2019 after the Fed indicated it would likely leave interest rates unchanged in 2020.

Growth slowed overall in the eurozone, particularly in Germany and Italy. Germany, which is heavily reliant on exports, was adversely affected by the trade conflict between the U.S. and China and the resulting slowdown in global trade. In Italy, political uncertainty and budget concerns caused the country’s annual gross domestic product (GDP) growth to stall in 2019’s first quarter before accelerating in the second quarter. Despite sluggish economic conditions, European developed market equities, as measured by the MSCI Europe Index, posted strong returns overall, as easing trade tensions buoyed investor optimism and an electoral victory by the Conservative Party in the U.K. alleviated uncertainty surrounding Brexit. Although the European Central Bank left its headline refinancing rate unchanged, it lowered the deposit rate and restarted its bond-buying stimulus program, further supporting stocks.

Economic growth in Asia was relatively solid overall, despite slowdowns in several large emerging market countries, such as China and India. Japan’s economy grew amid the Bank of Japan’s sizable stimulus program. The trade war between the U.S. and China provided the backdrop for Asian stocks, which rose and fell in sync with investor sentiment regarding a trade deal. A phase one trade agreement between the two countries reached in December 2019 propelled Asian developed and emerging market stocks, which ultimately ended with strong returns over the 12-month period, as measured by the MSCI All Country Asia Index.

Emerging market stocks overall experienced several sharp selloffs and subsequent rebounds throughout the reporting period before ending with gains. In aggregate, economic growth slowed somewhat from 2018 but remained solid, although there was some variation among individual countries. Many central banks in emerging markets cut interest rates throughout the reporting period which, along with resilient GDP growth, provided a supportive environment for equities. Russian stocks posted the highest returns among emerging markets as the threat of further sanctions receded and a solid fiscal environment reassured investors. Overall, global emerging markets, as measured by the MSCI Emerging Markets Index, posted robust returns for the period.

Investment Strategy

Our investment philosophy is bottom up, value oriented and long term. When choosing equity investments for the Fund, we focus on the market price of a company’s securities relative to our evaluation of the company’s potential long-term earnings, asset value and cash flow. Our analysis includes an assessment of the potential impacts of material environmental, social and governance (ESG) factors on the long-term risk and return profile of a company. We also consider a company’s price/earnings ratio, price/cash flow ratio, profit margins and liquidation value.

The Fund may, from time to time, seek to hedge (protect) against currency risks, using certain currency-related derivative instruments. The Fund may also use a variety of equity-related derivatives for various purposes including enhancing Fund returns, increasing liquidity and gaining exposure to particular markets in more efficient or less expensive ways.

Manager’s Discussion

During the 12 months under review, key detractors from the Fund’s performance relative to the MSCI ACWI included stock selection and an underweighting in the information technology (IT) sector, stock selection in the communication services sector, and stock selection and an overweighting in the energy sector.³

There were no IT holdings among the Fund’s 10 biggest relative detractors; however, the sector included one of the top 10 relative contributors during the year, South Korean electronics firm Samsung Electronics. We believe broad IT sector performance during the year was driven mostly by multiples expansion, not by fundamentals, which actually deteriorated in 2019. Within the IT sector, we have avoided what we considered to be expensive, momentum-driven stocks, finding opportunities instead among hardware companies with restructuring potential and, occasionally, mature software firms with healthy cash flows and new growth opportunities.

In the communication services sector, Luxembourg-based satellite operator SES, Chinese language internet search company Baidu and Chinese telecommunication firm China Mobile hurt relative results. Shares of SES declined as investors, in our view, reacted too negatively to a regulatory ruling that we believe will likely prove less value-destructive

3. The IT sector comprises communications equipment; electronic equipment, instruments and components; software; and technology hardware, storage and peripherals in the SOI. The communication services sector comprises diversified telecommunication services, interactive media and services, media and wireless telecommunication services in the SOI. The energy sector comprises oil, gas and consumable fuels in the SOI.

Annual Report         TG-3

TEMPLETON GROWTH VIP FUND

than initially feared. We remain positive on the stock given its strong balance sheet and healthy dividend yield, as well as our expectation of renewed growth from the firm’s core business over a long-term investment horizon. China Mobile’s shares declined amid concerns about elevated 5G capital expenditures and continued security scrutiny of Chinese telecommunication services companies. We continue to believe the stock offers undemanding valuations, attractive dividend yields and a solid competitive position in a secular growth market.

In the energy sector, Hong Kong-listed oil and gas firm Kunlun Energy and U.K.-based integrated energy firm BP dampened relative performance. Kunlun Energy’s shares declined due to investor concerns about government-led energy reforms. BP reported higher oil and gas production but disappointed investors hoping for a dividend increase. The company has made solid progress selling assets to shore up its balance sheet and, in our view, could potentially benefit from firmer oil prices and rising production following years of investment.

Other key detractors from relative performance included Israel-based generic drugmaker Teva Pharmaceutical Industries and U.S. drug retailer Walgreens Boots Alliance.

Conversely, stock selection and an underweighting in the materials sector contributed to the Fund’s relative performance.⁴ Within the sector, shares of Canadian mining company Wheaton Precious Metals rallied as the price of gold broke out of a six-year trading range. Anticipating an eventual move higher in gold prices given record-high debt levels, historically low interest rates, escalating geopolitical turmoil and renewed central bank buying, we maintained a modest precious metals allocation as a portfolio hedge and diversifier.

Other notable contributors included U.S. beauty products firm Coty (not held at period-end), U.S.-listed pharmaceutical products company Allergan, U.S. bank Citigroup and French lender BNP Paribas. Citigroup’s share price reached a post-financial crisis high at year-end as the steeper yield curve—with yields on long-term U.S. Treasuries higher than short-term U.S. Treasuries—aided profitability and improving conditions abroad buoyed sentiment at the global bank. We believe Citigroup remains one of the cheapest major U.S. banks and one of the few with material scope to benefit from ongoing self-help measures. BNP Paribas benefited from solid results at its fixed income unit and from more benign European economic conditions. In our view, BNP Paribas is a

Top 10 Holdings

12/31/19

Company Sector/Industry, Country	% of Total Net Assets
Allergan PLC		3.0%
Pharmaceuticals, U.S.
BNP Paribas SA		2.6%
Banks, France
Singapore Telecommunications Ltd.		2.5%
Diversified Telecommunication Services, Singapore
Walgreens Boots Alliance Inc.		2.4%
Food & Staples Retailing, U.S.
Samsung Electronics Co. Ltd.		2.3%
Technology Hardware, Storage & Peripherals, South Korea
Gilead Sciences Inc.		2.3%
Biotechnology, U.S.
Sanofi		2.3%
Pharmaceuticals, France
Takeda Pharmaceutical Co. Ltd.		2.2%
Pharmaceuticals, Japan
ING Groep NV		2.2%
Banks, Netherlands
The Kroger Co.		2.2%
Food & Staples Retailing, U.S.

diverse, high-quality European bank with an excellent track record of managing credit risk and maintaining profitability in various economic conditions.

From a geographic perspective, all major regions where the Fund invested during the period detracted from relative performance. Significant detractors included stock selection and overweightings in Europe and Asia, as well as stock selection and an underweighting in North America.

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

4. The materials sector comprises metals and mining in the SOI.

TG-4         Annual Report

TEMPLETON GROWTH VIP FUND

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Annual Report         TG-5

TEMPLETON GROWTH VIP FUND

Class 4 Fund Expenses

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

Actual Fund Expenses

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

Hypothetical Example for Comparison with Other Mutual Funds

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

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

		Actual   (actual return after expenses)		Hypothetical   (5% annual return before expenses)
Share Class	Beginning Account Value 7/1/19	Ending     Account     Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Ending Account Value 12/31/19	Fund-Level Expenses Paid During Period 7/1/19–12/31/191, 2	Net Annualized Expense Ratio2
Class 4	$1,000	$1,072.70	$6.43	$1,019.00	$6.26	1.23%

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.

TG-6         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Financial Highlights

Templeton Growth VIP Fund

	Year Ended December 31,
	2019		2018		2017			2016		2015
Class 1
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$12.44		$16.24		$13.93			$13.54		$14.85
Income from investment operationsa:
Net investment incomeb		0.30		0.28		0.29			0.26		0.28
Net realized and unrealized gains (losses)		1.30		(2.42)		2.30			0.96		(1.17)
Total from investment operations		1.60		(2.14)		2.59			1.22		(0.89)
Less distributions from:
Net investment income		(0.40)		(0.35)		(0.28)			(0.31)		(0.42)
Net realized gains		(2.49)		(1.31)		—			(0.52)		—
Total distributions		(2.89)		(1.66)		(0.28)			(0.83)		(0.42)
Net asset value, end of year		$11.15		$12.44		$16.24			$13.93		$13.54
Total returnc		15.43%		(14.61)%		18.77%			9.90%		(6.24)%
Ratios to average net assets
Expensesd		0.86%		0.83%		0.82%	e		0.82%		0.80%
Net investment income		2.52%		1.90%		1.94%			2.01%		1.96%
Supplemental data
Net assets, end of year (000’s)		$97,988		$354,164		$466,207			$453,997		$468,548
Portfolio turnover rate		19.69%		29.25%		26.46%			22.88%		20.92%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Growth VIP Fund (continued)

	Year Ended December 31,
	2019		2018		2017			2016		2015
Class 2
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$12.21		$15.97		$13.70			$13.32		$14.61
Income from investment operationsa:
Net investment incomeb		0.26		0.24		0.25			0.23		0.25
Net realized and unrealized gains (losses)		1.28		(2.38)		2.26			0.94		(1.16)
Total from investment operations		1.54		(2.14)		2.51			1.17		(0.91)
Less distributions from:
Net investment income		(0.36)		(0.31)		(0.24)			(0.27)		(0.38)
Net realized gains		(2.49)		(1.31)		—			(0.52)		—
Total distributions		(2.85)		(1.62)		(0.24)			(0.79)		(0.38)
Net asset value, end of year		$10.90		$12.21		$15.97			$13.70		$13.32
Total returnc		15.15%		(14.85)%		18.50%			9.62%		(6.49)%
Ratios to average net assets
Expensesd		1.11%		1.08%		1.07%	e		1.07%		1.05%
Net investment income		2.27%		1.65%		1.69%			1.76%		1.71%
Supplemental data
Net assets, end of year (000’s)		$659,412		$625,311		$879,521			$876,128		$921,895
Portfolio turnover rate		19.69%		29.25%		26.46%			22.88%		20.92%

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

^bBased on average daily shares outstanding.

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

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

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL HIGHLIGHTS

Templeton Growth VIP Fund (continued)

	Year Ended December 31,
	2019		2018		2017			2016		2015
Class 4
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$12.36		$16.13		$13.83			$13.44		$14.73
Income from investment operationsa:
Net investment incomeb		0.26		0.23		0.24			0.22		0.23
Net realized and unrealized gains (losses)		1.29		(2.40)		2.28			0.94		(1.16)
Total from investment operations		1.55		(2.17)		2.52			1.16		(0.93)
Less distributions from:
Net investment income		(0.35)		(0.29)		(0.22)			(0.25)		(0.36)
Net realized gains		(2.49)		(1.31)		—			(0.52)		—
Total distributions		(2.84)		(1.60)		(0.22)			(0.77)		(0.36)
Net asset value, end of year		$11.07		$12.36		$16.13			$13.83		$13.44
Total returnc		14.97%		(14.88)%		18.38%			9.47%		(6.54)%
Ratios to average net assets
Expensesd		1.21%		1.18%		1.17%	e		1.17%		1.15%
Net investment income		2.17%		1.55%		1.59%			1.66%		1.61%
Supplemental data
Net assets, end of year (000’s)		$27,330		$28,238		$38,798			$43,286		$47,777
Portfolio turnover rate		19.69%		29.25%		26.46%			22.88%		20.92%

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

^bBased on average daily shares outstanding.

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

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

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

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TG-9

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Statement of Investments, December 31, 2019

Templeton Growth VIP Fund

	Country		Shares		Value
Common Stocks 91.3%
Air Freight & Logistics 1.1%
United Parcel Service Inc., B		United States		70,479	$	8,250,272
Automobiles 0.6%
Hero Motocorp Ltd.		India		141,930		4,859,394
Banks 16.7%
Bangkok Bank PCL, fgn		Thailand		1,397,560		7,487,767
Bank of Ireland Group PLC		Ireland		581,690		3,184,706
Barclays PLC		United Kingdom		3,966,533		9,437,342
BNP Paribas SA.		France		349,237		20,690,966
Citigroup Inc.		United States		161,090		12,869,480
Credit Agricole SA		France		745,066		10,799,539
HSBC Holdings PLC		United Kingdom		522,657		4,081,424
ING Groep NV		Netherlands		1,451,656		17,399,632
KB Financial Group Inc.		South Korea		280,494		11,561,985
Standard Chartered PLC		United Kingdom		1,321,833		12,471,999
Sumitomo Mitsui Financial Group Inc.		Japan		271,960		10,105,125
Wells Fargo & Co.		United States		203,257		10,935,227
						131,025,192
Beverages 1.8%
Kirin Holdings Co. Ltd.		Japan		322,500		7,092,478
Suntory Beverage & Food Ltd.		Japan		165,960		6,940,770
						14,033,248
Biotechnology 2.3%
Gilead Sciences Inc.		United States		276,080		17,939,678
Building Products 0.7%
Compagnie de Saint-Gobain		France		137,620		5,633,189
Capital Markets 0.6%
UBS Group AG		Switzerland		319,324		4,034,244
Value Partners Group Ltd.		Hong Kong		990,540		610,165
						4,644,409
Communications Equipment 0.1%
a CommScope Holding Co. Inc.		United States		44,070		625,353
Consumer Finance 0.2%
Capital One Financial Corp.		United States		15,088		1,552,706
Diversified Telecommunication Services 5.1%
China Telecom Corp. Ltd., ADR		China		98,965		4,076,368
Deutsche Telekom AG		Germany		233,410		3,813,809
Singapore Telecommunications Ltd.		Singapore		7,759,230		19,438,452
Telefonica SA.		Spain		901,225		6,293,497
Verizon Communications Inc.		United States		99,251		6,094,011
						39,716,137
Electronic Equipment, Instruments & Components 0.5%
Kyocera Corp.		Japan		53,000		3,647,941

TG-10         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Growth VIP Fund (continued)

	Country		Shares		Value
Common Stocks (continued)
Food & Staples Retailing 5.6%
The Kroger Co.		United States		587,760	$	17,039,162
Seven & i Holdings Co. Ltd.		Japan		215,860		7,951,117
Walgreens Boots Alliance Inc.		United States		316,929		18,686,134
						43,676,413
Food Products 2.1%
Kellogg Co.		United States		242,010		16,737,412
Gas Utilities 0.7%
Kunlun Energy Co. Ltd.		China		6,156,650		5,435,847
Health Care Providers & Services 1.3%
AmerisourceBergen Corp.		United States		60,567		5,149,406
Cardinal Health Inc.		United States		98,308		4,972,419
						10,121,825
Household Durables 1.6%
Panasonic Corp.		Japan		1,366,580		12,945,886
Industrial Conglomerates 3.8%
CK Hutchison Holdings Ltd.		Hong Kong		1,636,400		15,603,162
Siemens AG		Germany		110,732		14,471,984
						30,075,146
Insurance 2.1%
Aegon NV		Netherlands		684,036		3,119,845
China Life Insurance Co. Ltd., H.		China		4,891,020		13,589,131
						16,708,976
Interactive Media & Services 0.9%
a Baidu Inc., ADR		China		55,840		7,058,176
Leisure Products 1.4%
a Mattel Inc.		United States		831,780		11,270,619
Machinery 0.8%
a Navistar International Corp.		United States		210,030		6,078,268
Marine 1.0%
A.P. Moeller-Maersk AS, B		Denmark		5,400		7,786,529
Media 2.6%
Comcast Corp., A		United States		174,363		7,841,104
SES SA, IDR		Luxembourg		901,520		12,637,620
						20,478,724
Metals & Mining 1.9%
Wheaton Precious Metals Corp.		Canada		496,476		14,772,703
Multi-Utilities 2.9%
E.ON SE		Germany		1,029,259		10,993,196
Veolia Environnement SA		France		429,630		11,423,681
						22,416,877

Annual Report         TG-11

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Growth VIP Fund (continued)

	Country		Shares		Value
Common Stocks (continued)
Oil, Gas & Consumable Fuels 8.5%
Apache Corp.		United States		522,540	$	13,371,799
BP PLC		United Kingdom		2,232,011		13,941,378
Eni SpA		Italy		674,349		10,471,019
Exxon Mobil Corp.		United States		157,870		11,016,169
Husky Energy Inc.		Canada		527,660		4,233,957
Royal Dutch Shell PLC, B		United Kingdom		467,119		13,855,243
						66,889,565
Pharmaceuticals 13.3%
Allergan PLC		United States		122,834		23,482,176
Bayer AG		Germany		207,926		16,977,735
Merck KGaA		Germany		72,694		8,588,415
Roche Holding AG		Switzerland		42,833		13,899,201
Sanofi		France		177,087		17,798,014
Takeda Pharmaceutical Co. Ltd.		Japan		440,170		17,546,045
a Teva Pharmaceutical Industries Ltd., ADR		Israel		608,540		5,963,692
						104,255,278
Real Estate Management & Development 2.4%
CK Asset Holdings Ltd.		Hong Kong		796,840		5,752,121
Mitsui Fudosan Co. Ltd.		Japan		365,950		8,997,639
Sun Hung Kai Properties Ltd.		Hong Kong		281,500		4,309,761
						19,059,521
Software 1.6%
Oracle Corp.		United States		231,028		12,239,864
Specialty Retail 1.4%
Kingfisher PLC		United Kingdom		3,939,045		11,321,038
Technology Hardware, Storage & Peripherals 2.3%
Samsung Electronics Co. Ltd.		South Korea		373,630		18,035,237
Wireless Telecommunication Services 3.4%
a Bharti Airtel Ltd.		India		856,685		5,472,315
China Mobile Ltd.		China		1,020,100		8,574,689
Vodafone Group PLC		United Kingdom		6,673,513		12,971,726
						27,018,730
Total Common Stocks (Cost $640,457,062)						716,310,153
			Principal   Amount*
Short Term Investments 5.0%
U.S. Government and Agency Securities (Cost $199,987) 0.0%†
b FFCB, 1/02/20		United States	$	200,000		200,000

TG-12         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

STATEMENT OF INVESTMENTS

Templeton Growth VIP Fund (continued)

	Country		Principal   Amount*		Value
Short Term Investments (continued)
Time Deposits 5.0%
National Australia Bank Ltd, 1.45%, 1/02/20		Australia	$	20,000,000	$	20,000,000
Royal Bank of Canada, 1.56%, 1/02/20		Canada		19,000,000		19,000,000
Total Time Deposits (Cost $39,000,000)						39,000,000
Total Investments (Cost $679,657,049) 96.3%						755,510,153
Other Assets, less Liabilities 3.7%						29,219,519
Net Assets 100.0%					$	784,729,672

See Abbreviations on page TG-24.

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

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

^aNon-income producing.

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

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

	Templeton Growth VIP Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$679,657,049
Value - Unaffiliated issuers	$755,510,153
Cash	197,146
Foreign currency, at value (cost $27,041,023)	27,083,323
Receivables:
Investment securities sold	232,331
Capital shares sold	13,306
Dividends and interest	2,629,540
European Union tax reclaims	783,907
Other assets	130
Total assets	786,449,836
Liabilities:
Payables:
Investment securities purchased	26,201
Capital shares redeemed	300,820
Management fees	546,685
Distribution fees	146,903
Reports to shareholders	137,329
Deferred tax	388,289
Accrued expenses and other liabilities	173,937
Total liabilities	1,720,164
Net assets, at value	$784,729,672
Net assets consist of:
Paid-in capital	$707,926,170
Total distributable earnings (losses)	76,803,502
Net assets, at value	$784,729,672
Class 1:
Net assets, at value	$ 97,987,671
Shares outstanding	8,784,532
Net asset value and maximum offering price per share	$11.15
Class 2:
Net assets, at value	$659,411,963
Shares outstanding	60,473,438
Net asset value and maximum offering price per share	$10.90
Class 4:
Net assets, at value	$ 27,330,038
Shares outstanding	2,468,207
Net asset value and maximum offering price per share	$11.07

TG-14         Annual Report  |  The accompanying notes are an integral part of these financial statements.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

	Templeton Growth VIP Fund
Investment income:
Dividends: (net of foreign taxes)*
Unaffiliated issuers	$   28,318,210
Interest:
Unaffiliated issuers	573,162
Income from securities loaned:
Unaffiliated issuers (net of fees and rebates)	50,429
Non-controlled affiliates (Note 3e)	87,077
Total investment income	29,028,878
Expenses:
Management fees (Note 3a)	7,019,870
Distribution fees: (Note 3c)
Class 2	1,604,456
Class 4	97,819
Custodian fees (Note 4)	51,910
Reports to shareholders	180,621
Professional fees	107,455
Trustees’ fees and expenses	5,596
Other	38,324
Total expenses	9,106,051
Expenses waived/paid by affiliates (Note 3e)	(15,725)
Net expenses	9,090,326
Net investment income	19,938,552
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers	(13,454,965)
Foreign currency transactions	(129,722)
Net realized gain (loss)	(13,584,687)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers	128,566,054
Translation of other assets and liabilities denominated in foreign currencies	(3,746)
Change in deferred taxes on unrealized appreciation	(388,289)
Net change in unrealized appreciation (depreciation)	128,174,019
Net realized and unrealized gain (loss)	114,589,332
Net increase (decrease) in net assets resulting from operations	$134,527,884
*Foreign taxes withheld on dividends.	$   2,130,837

The accompanying notes are an integral part of these financial statements.  |  Annual Report         TG-15

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Templeton Growth VIP Fund
	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	19,938,552		$	21,598,649
Net realized gain (loss)		(13,584,687	)		145,036,204
Net change in unrealized appreciation (depreciation)		128,174,019			(344,182,476	)
Net increase (decrease) in net assets resulting from operations		134,527,884			(177,547,623	)
Distributions to shareholders:
Class 1		(20,901,613	)		(44,508,681	)
Class 2		(139,418,589	)		(82,384,314	)
Class 4		(6,044,047	)		(3,542,055	)
Total distributions to shareholders		(166,364,249	)		(130,435,050	)
Capital share transactions: (Note 2)
Class 1		(275,115,440	)		(7,474,527	)
Class 2		82,734,600			(59,234,414	)
Class 4		1,233,451			(2,120,747	)
Total capital share transactions		(191,147,389	)		(68,829,688	)
Net increase (decrease) in net assets		(222,983,754	)		(376,812,361	)
Net assets:
Beginning of year		1,007,713,426			1,384,525,787
End of year	$	784,729,672		$	1,007,713,426

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

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Notes to Financial Statements

Templeton Growth VIP Fund

1. Organization and Significant Accounting Policies

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

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

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

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

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

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

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

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

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at

Annual Report         TG-17

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a.  Financial Instrument Valuation (continued)

the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, the VC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

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

b.  Foreign Currency Translation

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

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

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

c.  Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2019, the fund had no securities on loan.

TG-18         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

d. Income and Deferred Taxes

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

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

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

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax

years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

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.

Annual Report         TG-19

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

1. Organization and Significant Accounting Policies (continued)

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, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended December 31,
	2019						2018
	Shares			Amount			Shares			Amount
Class 1 Shares:
Shares sold		68,873		$	790,173			751,581		$	10,285,009
Shares issued in reinvestment of distributions		2,083,910			20,901,613			3,065,336			44,508,681
Shares redeemed		(21,838,635	)		(296,807,226	)		(4,049,692	)		(62,268,217)
Net increase (decrease)		(19,685,852	)	$	(275,115,440	)		(232,775	)	$	(7,474,527)
Class 2 Shares:
Shares sold		3,619,417		$	39,550,989			2,342,753		$	33,884,634
Shares issued in reinvestment of distributions		14,197,412			139,418,589			5,773,252			82,384,314
Shares redeemed		(8,538,686	)		(96,234,978	)		(11,984,334	)		(175,503,362)
Net increase (decrease)		9,278,143		$	82,734,600			(3,868,329	)	$	(59,234,414)
Class 4 Shares:
Shares sold		148,576		$	1,690,506			154,144		$	2,180,515
Shares issued in reinvestment of distributions		605,616			6,044,047			245,125			3,542,055
Shares redeemed		(571,458	)		(6,501,102	)		(518,871	)		(7,843,317)
Net increase (decrease)		182,734		$	1,233,451			(119,602	)	$	(2,120,747)

3. Transactions with Affiliates

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

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

TG-20         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

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:

Annualized Fee Rate	Net Assets
1.000%	Up to and including $100 million
0.900%	Over $100 million, up to and including $250 million
0.800%	Over $250 million, up to and including $500 million
0.750%	Over $500 million, up to and including $1 billion
0.700%	Over $1 billion, up to and including $5 billion
0.675%	Over $5 billion, up to and including $10 billion
0.655%	Over $10 billion, up to and including $15 billion
0.635%	Over $15 billion, up to and including $20 billion
0.615%	In excess of $20 billion

For the year ended December 31, 2019, the gross effective investment management fee rate was 0.819% of the Fund’s average daily net assets.

b. Administrative Fees

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

c. Distribution Fees

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

d. Transfer Agent Fees

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

Annual Report         TG-21

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

3. Transactions with Affiliates (continued)

e. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	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		Income from securities loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%		$12,394,593		$156,184,244		$(168,578,837	)		$—		$—		$—		—		$87,077

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, 2019, these purchase and sale transactions aggregated $0 and $7,221,547, 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, 2019, there were no credits earned.

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

On December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$1,856,399
Long term	3,209,150
Total capital loss carryforwards	$5,065,549

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	35,138,144	$	33,715,376
Long term capital gain		131,226,105		96,719,674
	$	166,364,249	$	130,435,050

TG-22         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

At December 31, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:

Cost of investments	$	693,867,257
Unrealized appreciation	$	128,868,370
Unrealized depreciation		(67,225,474)
Net unrealized appreciation (depreciation)	$	61,642,896
Distributable earnings:
Undistributed ordinary income	$	19,829,425

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, 2019, aggregated $160,700,800 and $558,032,335, 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. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.

8. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 7, 2020, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 5, 2021, for a total of $2 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, 2019, the Fund did not use the Global Credit Facility.

Annual Report         TG-23

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

NOTES TO FINANCIAL STATEMENTS

Templeton Growth VIP Fund (continued)

9.  Fair Value Measurements

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

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

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

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

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

A summary of inputs used as of December 31, 2019, in valuing the Fund’s assets carried at fair value, is as follows:

	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:a
Equity Investments	$	716,310,153	$	—	$	—	$	716,310,153
Short Term Investments		—		39,200,000		—		39,200,000
Total Investments in Securities	$	716,310,153	$	39,200,000	$	—	$	755,510,153

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

10.  Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Abbreviations

Selected Portfolio
ADR	American Depositary Receipt
FFCB	Federal Farm Credit Bank
IDR	International Depositary Receipt

TG-24         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Report of Independent Registered Public Accounting Firm

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 (the “Fund") as of December 31, 2019, the related statement of operations for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2019 (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, 2019, 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, 2019 and the financial highlights for each of the five years in the period ended December 31, 2019 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, 2019 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 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

Annual Report         TG-25

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Tax Information (unaudited)

Templeton Growth VIP Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $131,226,105 as a long term capital gain dividend for the fiscal year ended December 31, 2019.

Under Section 854(b)(1)(A) of the Internal Revenue Code, the Fund hereby reports 19.63% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2019.

At December 31, 2019, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Internal Revenue Code. This election will allow shareholders of record as of the 2020 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

TG-26         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Index Descriptions

The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes for the NR or Net Return Index). They do not reflect any fees, expenses or sales charges.

For Russell Indexes: Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company.

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

Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index measures the performance of U.S. Treasury bills that have a remaining maturity of greater than or equal to one month and less than three months.

Bloomberg Barclays U.S. Aggregate Bond Index is a market capitalization-weighted index representing the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

Bloomberg Barclays U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes U.S. dollar-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.

Bloomberg Barclays U.S. Corporate High Yield Bond Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and Standard & Poor’s is Ba1/BB+/BB+ or below.

Bloomberg Barclays U.S. Government Index: Intermediate Component is the intermediate component of the Barclays U.S. Government Index, which includes public obligations of the U.S. Treasury with at least one year to final maturity and publicly issued debt of U.S. government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. government.

Bloomberg Barclays U.S. High Yield Very Liquid Index is a component of the U.S. Corporate High Yield Index designed to track a more liquid component of the U.S. dollar-denominated, high-yield fixed-rate corporate bond market.

Bloomberg Barclays U.S. Treasury Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with at least one year until final maturity.

Consumer Price Index (CPI) is a commonly used measure of the inflation rate.

FTSE^® EPRA^®/NAREIT^® Developed Index is a free float-adjusted index designed to measure the performance of publicly traded real estate securities in the North American, European and Asian real estate markets.

FTSE World Government Bond Index is a market capitalization-weighted index consisting of investment-grade world government bond markets.

J.P. Morgan (JPM) Global Government Bond Index (GGBI) tracks total returns for liquid, fixed-rate, domestic government bonds with maturities greater than one year issued by developed countries globally.

Lipper Multi-Sector Income Funds Classification Average is calculated by averaging the total returns of all funds within the Lipper Multi-Sector Income Funds Classification in the Lipper Open-End underlying funds universe. Lipper Multi-Sector Income Funds are defined as funds that seek current income by allocation of assets among different fixed income securities sectors (not primarily in one sector except for defensive purposes), including U.S. and foreign governments, with a significant portion rated below investment grade. For the 12-month period ended 12/31/19, there were 324 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

Lipper VIP General U.S. Government Funds Classification Average is an equally weighted average calculation of performance figures for all funds within the Lipper General U.S. Government Funds classification in the Lipper VIP underlying funds universe. Lipper General U.S. Government

Annual Report         I-1

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

INDEX DESCRIPTIONS

Funds invest primarily in U.S. government and agency issues. For the 12-month period ended 12/31/19, there were 26 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

MSCI All Country Asia Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in developed and emerging markets in Asia.

MSCI All Country World Index (ACWI) is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed and emerging markets.

MSCI All Country World Index (ACWI) ex USA Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed and emerging markets, excluding the U.S.

MSCI Europe, Australasia, Far East (EAFE) Index is a free float-adjusted market capitalization-weighted index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.

MSCI Emerging Markets (EM) Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global emerging markets.

MSCI USA High Dividend Yield Index is based on the MSCI USA Index, its parent index, and includes large- and mid-capitalization stocks. The index is designed to reflect the performance of equities in the parent index (excluding real estate investment trusts) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent.

MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets.

Russell 1000^® Growth Index is market capitalization weighted and measures performance of those Russell 1000^® Index companies with relatively higher price-to-book ratios and higher forecasted growth rates.

Russell 1000^® Index is market capitalization weighted and measures 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 2000^® Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000^® Index, which represent a small amount of the total market capitalization of the Russell 3000^® Index.

Russell 2000^® Value Index is market capitalization weighted and measures performance of those Russell 2000^® Index companies with relatively lower price-to-book ratios and lower forecasted growth rates.

Russell 3000^® Growth Index is market capitalization weighted and measures performance of those Russell 3000^® Index companies with relatively higher price-to-book ratios and higher forecasted growth rates.

Russell Midcap^® Growth Index is market capitalization weighted and measures performance of those Russell Midcap^® Index companies with relatively higher price-to-book ratios and higher forecasted growth rates.

Russell Midcap^® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000^® Index, which represents a modest amount of the Russell 1000^® Index’s total market capitalization.

Standard & Poor’s^® 500 Index (S&P 500^®) is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance.

Standard & Poor’s^®/International Finance Corporation Investable (S&P/IFCI) Composite Index is a free float-adjusted, market capitalization-weighted index designed to measure equity performance in global emerging markets.

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Board Members and Officers

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 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	134	Bar-S Foods (meat packing company)
One Franklin Parkway				(1981-2010).
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) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2017	113	Hess Corporation (exploration of oil and gas) (2014-present).
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) and member of various other boards of trustees and advisory boards; 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) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2014	134	Avis Budget Group Inc. (car rental) (2007-present), Omnicom Group Inc. (advertising and marketing communications services) (2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present)
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).
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906	Lead Independent Trustee	Trustee since 2005 and Lead Independent Trustee since March 2019	134	Hess Corporation (exploration of oil and gas) (1993-present), Canadian National Railway (railroad) (2001-present), White Mountains Insurance Group, Ltd. (holding company) (2004-present), Santander Consumer USA Holdings, Inc. (consumer finance) (2016-present), RTI International Metals, Inc. (manufacture and distribution of titanium) (1999-2015) and H.J. Heinz Company (processed foods and allied products) (1994-2013).
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).

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Independent Board Members (continued)

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
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2009	134	Boeing Capital Corporation (aircraft financing) (2006-2013).
Principal Occupation During at Least the Past 5 Years:
Executive Vice President, Counselor and Senior Advisor to Boeing Chairman and Board of Directors, The Boeing Company (aerospace company) (2019-present); member of the Executive Council, The Boeing Company (2006-present) and formerly, General Counsel, The Boeing Company (2006-2019) and Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2007	134	The Southern Company (energy company) (2014-present; previously 2010-2012), Graham Holdings Company (education and media organization) (2011-present) and Cbeyond, Inc. (business communications provider) (2010-2012).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017-present); John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; previously 2011-2012); and formerly, 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).
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
**Gregory E. Johnson (1961)	Trustee	Since 2013	146	None
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, 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 39 of the investment companies in Franklin Templeton; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994-2015).
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906	Chairman of the Board, and Trustee	Chairman of the Board since 2013, and Trustee since 1988	134	None
Principal Occupation During at Least the Past 5 Years:
Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 37 of the investment companies in Franklin Templeton.
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 41 of the investment companies in Franklin Templeton.

BOD-2         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Interested Board Members and Officers (continued)

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
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906	Treasurer, Chief Financial Officer and Chief Accounting Officer	Since 2009	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years: Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton; and officer of 24 of the investment companies in Franklin Templeton.
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906	Vice President and Co-Secretary	Vice President since 2009 and Co-Secretary since 2019	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years: Senior Associate General Counsel, Franklin Templeton; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906	Chief Executive Officer – Finance and Administration	Since 2017	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years: Senior Vice President, Franklin Templeton Services, LLC; officer of 41 of the investment companies in Franklin Templeton; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).
Robert Lim (1948) One Franklin Parkway San Mateo, CA 94403-1906	Vice President – AML Compliance	Since 2016	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years: Vice President, Franklin Templeton Companies, LLC; Chief Compliance Officer, Franklin Templeton Distributors, Inc. and Franklin Templeton Investor Services, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Edward D. Perks (1970) One Franklin Parkway San Mateo, CA 94403-1906	President and Chief Executive Officer – Investment Management	Since 2018	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years: President and Director, Franklin Advisers, Inc.; and officer of eight of the investment companies in Franklin Templeton (since December 2018).
Robert C. Rosselot (1960)	Chief	Since 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street	Compliance
Fort Lauderdale, FL 33301-1923	Officer
Principal Occupation During at Least the Past 5 Years: Director, Global Compliance, Franklin Templeton; Vice President, Franklin Templeton Companies, LLC; officer of 41 of the investment companies in Franklin Templeton; and formerly, Senior Associate General Counsel, Franklin Templeton (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013).
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: Associate General Counsel, Franklin Templeton; and officer of 41 of the investment companies in Franklin Templeton.

Annual Report         BOD-3

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Interested Board Members and Officers (continued)

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
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, Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton.
Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President and Co-Secretary	Vice President since 2011 and Co-Secretary since January 2019	Not Applicable	Not Applicable
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 41 of the investment companies in Franklin Templeton.

*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton 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: Effective March 12, 2019, John B. Wilson ceased to be a trustee of the Trust.

Note 3: 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 currently serves as a director of Avis Budget Group, Inc. (2007-present) 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.

BOD-4         Annual Report

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

SHAREHOLDER INFORMATION

Shareholder Information

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Annual Report         SI-1

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Franklin Templeton Variable Insurance Products Trust (FTVIP) shares are not offered to the public; they are offered and sold only to: (1) insurance company separate accounts (Separate Account) to serve as the underlying investment vehicle for variable contracts; (2) certain qualified plans; and (3) other mutual funds (funds of funds).

Authorized for distribution to investors in Separate Accounts only when accompanied or preceded by the current prospectus for the applicable contract, which includes the Separate Account and the FTVIP prospectuses. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. The prospectus contains this and other information; please read it carefully before investing.

To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.

	Annual Report
	Franklin Templeton Variable Insurance Products Trust
	Investment Managers	Fund Administrator	Distributor
	Franklin Advisers, Inc.	Franklin Templeton Services, LLC	Franklin Templeton Distributors, Inc.
	Franklin Mutual Advisers, LLC
	Franklin Templeton
	Institutional, LLC
	Templeton Asset
	Management Ltd.
	Templeton Global Advisors Limited
	Templeton Investment
	Counsel, LLC
© 2020 Franklin Templeton Investments. All rights reserved.			VIP4 A 02/20

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

    (2) The audit committee financial expert is Mary C. Choksi and she is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(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 $874,816 for the fiscal year ended December 31, 2019 and $831,712 for the fiscal year ended December 31, 2018.

(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 $210,000 for the fiscal year ended December 31, 2019 and $194,500 for the fiscal year ended December 31, 2018. The services for which these fees were paid included tax compliance services related to year-end, tax consulting services related to the operating agreement and term sheet for the launch of a new fund, and professional fees in connection with tax treatment of equipment lease transactions and with an Indonesia withholding tax refund claim.

(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 $0 for the fiscal year ended December 31, 2019 and $8,838 for the fiscal year ended December 31, 2018. 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 $183,244 for the fiscal year ended December 31, 2019 and $95,000 for the fiscal year ended December 31, 2018. The services for which

these fees were paid included valuation services related to fair value engagement, benchmarking services in connection with the ICI TA survey, account maintenance project, assets under management certification, and the issuance of an Auditors’ Certificate for South Korean regulatory shareholder disclosures.

(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 $393,244 for the fiscal year ended December 31, 2019 and $298,338 for the fiscal year ended December 31, 2018.

(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.	N/A
Item 7.   Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.	N/A
Item 8.   Portfolio Managers of Closed-End Management Investment Companies.	N/A
Item 9.   Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.	N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A

Item 13. Exhibits.

(a)(1) Code of Ethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer—Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer—Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Franklin Templeton Variable Insurance Products Trust

By	S\ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer – Finance and Administration

Date February 28, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	S\ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer – Finance and Administration

Date February 28, 2020

By	S\ GASTON GARDEY
	Gaston Gardey
	Chief Financial Officer and Chief Accounting Officer

Date February 28, 2020

EX-99.CODE

Code of Ethics for Principal Executives & Senior Financial Officers

Procedures Revised December 10, 2018  

FRANKLIN TEMPLETON FUNDS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVES AND

SENIOR FINANCIAL OFFICERS

I. Covered Officers and Purpose of the Code

This code of ethics (the “Code”) applies to the Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer (the “Covered Officers,” each of whom is set forth in Exhibit A) of each investment company advised by a Franklin Resources subsidiary and that is registered with the United States Securities & Exchange Commission (“SEC”) (collectively, “FT Funds”) for the purpose of promoting:

• Honest and ethical conduct, including the ethical resolution of actual or apparent conflicts of interest between personal and professional relationships;

• Full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by or on behalf of the FT Funds;

• Compliance with applicable laws and governmental rules and regulations;

• The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• Accountability for adherence to the Code.

Each Covered Officer will be expected to adhere to a high standard of business ethics and must be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

* Rule 38a-1 under the Investment Company Act of 1940 (“1940 Act”) and Rule 206(4)-7 under the Investment Advisers Act of 1940 (“Advisers Act”) (together the “Compliance Rule”) require registered investment companies and registered investment advisers to, among other things, adopt and implement written policies and procedures reasonably designed to prevent violations of the federal securities laws (“Compliance Rule Policies and Procedures”).

CONFIDENTIAL INFORMATION. This document is the proprietary product of Franklin Templeton Investments. It may NOT be distributed outside the company unless it is made subject to a non-disclosure agreement and/or such release receives authorization by an FTI Chief Compliance Officer. Any unauthorized use, reproduction or transfer of this document is strictly prohibited. Franklin Templeton Investments © 2014. All Rights Reserved.

FTI Compliance Procedures Standards of Business Conduct

II. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.

Franklin Resources, Inc. has separately adopted the Code of Ethics and Business Conduct (“Business Conduct”), which is applicable to all officers, directors and employees of Franklin Resources, Inc., including Covered Officers. It summarizes the values, principles and business practices that guide the employee’s business conduct and also provides a set of basic principles to guide officers, directors and employees regarding the minimum ethical requirements expected of them. It supplements the values, principles and business conduct identified in the Code and other existing employee policies.

Additionally, the Franklin Templeton Funds have separately adopted the FTI Personal Investments and Insider Trading Policy governing personal securities trading and other related matters. The Code for Insider Trading provides for separate requirements that apply to the Covered Officers and others, and therefore is not part of this Code.

Insofar as other policies or procedures of Franklin Resources, Inc., the Funds, the Funds’ adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. Please review these other documents or consult with the Legal Department if have questions regarding the applicability of these policies to you.

III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his or her service to, the FT Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of apposition with the FT Funds.

Certain conflicts of interest arise out of the relationships between Covered Officers and the FT Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the FT Funds because of their status as “affiliated persons” of the FT Funds. The FT Funds’ and the investment advisers’ compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the FT Funds, the investment advisers and the fund administrator of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the FT Funds, for the adviser, the administrator, or

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FTI Compliance Procedures Standards of Business Conduct

for all three), be involved in establishing policies and implementing decisions that will have different effects on the adviser, administrator and the FT Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the FT Funds, the adviser, and the administrator and is consistent with the performance by the Covered Officers of their duties as officers of the FT Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the FT Funds’ Boards of Directors (“Boards”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the FT Funds.

Each Covered Officer must:

• Not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the FT Funds whereby the Covered Officer would benefit personally to the detriment of the FT Funds;

• Not cause the FT Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the FT Funds;

• Not retaliate against any other Covered Officer or any employee of the FT Funds or their affiliated persons for reports of potential violations that are made in good faith;

• Report at least annually the following affiliations or other relationships:¹

• all directorships for public companies and all companies that are required to file reports with the SEC;

• any direct or indirect business relationship with any independent directors of the FT Funds;

• any direct or indirect business relationship with any independent public accounting firm (which are not related to the routine issues related to the firm’s service as the Covered Persons accountant); and

• any direct or indirect interest in any transaction with any FT Fund that will benefit the officer (not including benefits derived from the advisory, sub-advisory, distribution or service agreements with affiliates of Franklin Resources).

These reports will be reviewed by the Legal Department for compliance with the Code.

There are some conflict of interest situations that should always be approved in writing by Franklin Resources General Counsel or Deputy General Counsel, if material. Examples of these include²:

• Service as a director on the board of any public or private Company.

¹  Reporting of these affiliations or other relationships shall be made by completing the annual Directors and Officers Questionnaire and returning the questionnaire to Franklin Resources Inc, General Counsel or Deputy General Counsel.

²  Any activity or relationship that would present a conflict for a Covered Officer may also present a conflict for the Covered Officer if a member of the Covered Officer’s immediate family engages in such an activity or has such a relationship. The Cover Person should also obtain written approval by FT’s General Counsel in such situations.

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FTI Compliance Procedures Standards of Business Conduct

• The receipt of any gifts in excess of $100 from any person, from any corporation or association.

• The receipt of any entertainment from any Company with which the FT Funds has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety. Notwithstanding the foregoing, the Covered Officers must obtain prior approval from the Franklin Resources General Counsel for any entertainment with a value in excess of $1000.

• Any ownership interest in, or any consulting or employment relationship with, any of the FT Fund’s service providers, other than an investment adviser, principal underwriter, administrator or any affiliated person thereof.

• A direct or indirect financial interest in commissions, transaction charges or spreads paid by the FT Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

• Franklin Resources General Counsel or Deputy General Counsel will provide a report to the FT Funds Audit Committee of any approvals granted at the next regularly scheduled meeting.

IV. Disclosure and Compliance

• Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the FT Funds;

• Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the FT Funds to others, whether within or outside the FT Funds, including to the FT Funds’ directors and auditors, and to governmental regulators and self-regulatory organizations;

• Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the FT Funds, the FT Fund’s adviser and the administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the FT Funds file with, or submit to, the SEC and in other public communications made by the FT Funds; and

• It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

V. Reporting and Accountability

Each Covered Officer must:

• Upon becoming a covered officer affirm in writing to the Board that he or she has received, read, and understands the Code (see Exhibit B);

• Annually thereafter affirm to the Board that he has complied with the requirements of the Code; and

• Notify Franklin Resources’ General Counsel or Deputy General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself is a violation of this Code.

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FTI Compliance Procedures Standards of Business Conduct

Franklin Resources’ General Counsel and Deputy General Counsel are responsible for applying this Code to specific situations in which questions are presented under it and have the authority to interpret this Code in any particular situation.³ However, the Independent Directors of the respective FT Funds will consider any approvals or waivers⁴ sought by any Chief Executive Officers of the Funds.

The FT Funds will follow these procedures in investigating and enforcing this Code:

• Franklin Resources General Counsel or Deputy General Counsel will take all appropriate action to investigate any potential violations reported to the Legal Department;

• If, after such investigation, the General Counsel or Deputy General Counsel believes that no violation has occurred, The General Counsel is not required to take any further action;

• Any matter that the General Counsel or Deputy General Counsel believes is a violation will be reported to the Independent Directors of the appropriate FT Fund;

• If the Independent Directors concur that a violation has occurred, it will inform and make a recommendation to the Board of the appropriate FT Fund or Funds, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer;

• The Independent Directors will be responsible for granting waivers, as appropriate; and

• Any changes to or waivers of this Code will, to the extent required, are disclosed as provided by SEC rules.⁵

VI. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the FT Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the FT Funds, the FT Funds’ advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The FTI Personal Investments and Insider Trading Policy, adopted by the FT Funds, FT investment advisers and FT Fund’s principal underwriter pursuant to Rule 17j-1 under the Investment Company Act, the Code of Ethics and Business Conduct and more detailed policies and procedures set forth in FT’s Employee Handbook are separate requirements applying to the Covered Officers and others, and are not part of this Code.

³  Franklin Resources General Counsel and Deputy General Counsel are authorized to consult, as appropriate, with members of the Audit Committee, counsel to the FT Funds and counsel to the Independent Directors, and are encouraged to do so.

⁴  Item 2 of Form N-CSR defines “waiver” as “the approval by the registrant of a material departure from a provision of the code of ethics” and “implicit waiver,” which must also be disclosed, as “the registrant’s failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer” of the registrant. See Part X.

⁵ See Part X.

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FTI Compliance Procedures Standards of Business Conduct

VII. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the FT Funds’ Board including a majority of independent directors.

VIII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the FT Funds’ Board and their counsel.

IX. Internal Use

The Code is intended solely for the internal use by the FT Funds and does not constitute an admission, by or on behalf of any FT Funds, as to any fact, circumstance, or legal conclusion.

X. Disclosure on Form N-CSR

Item 2 of Form N-CSR requires a registered management investment company to disclose annually whether, as of the end of the period covered by the report, it has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these officers are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, it must explain why it has not done so.

The registrant must also: (1) file with the SEC a copy of the code as an exhibit to its annual report; (2) post the text of the code on its Internet website and disclose, in its most recent report on Form N-CSR, its Internet address and the fact that it has posted the code on its Internet website; or (3) undertake in its most recent report on Form N-CSR to provide to any person without charge, upon request, a copy of the code and explain the manner in which such request may be made. Disclosure is also required of amendments to, or waivers (including implicit waivers) from, a provision of the code in the registrant’s annual report on Form N-CSR or on its website. If the registrant intends to satisfy the requirement to disclose amendments and waivers by posting such information on its website, it will be required to disclose its Internet address and this intention.

The Legal Department shall be responsible for ensuring that:

• a copy of the Code is filed with the SEC as an exhibit to each Fund’s annual report; and

• any amendments to, or waivers (including implicit waivers) from, a provision of the Code is disclosed in the registrant’s annual report on Form N-CSR.

In the event that the foregoing disclosure is omitted or is determined to be incorrect, the Legal Department shall promptly file such information with the SEC as an amendment to Form N-CSR.

In such an event, the Fund Chief Compliance Officer shall review the Code and propose such changes to the Code as are necessary or appropriate to prevent reoccurrences.

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FTI Compliance Procedures Standards of Business Conduct

EXHIBIT A

Persons Covered by the Franklin Templeton Funds

Code of Ethics

December 2018

FRANKLIN GROUP OF FUNDS

Edward Perks	President and Chief Executive Officer – Investment Management
Rupert H. Johnson, Jr.	Chairman of the Board and Vice President – Investment Management
Don Taylor	President and Chief Executive Officer – Investment Management
Sonal Desai)	President and Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Gaston R. Gardey	Chief Financial Officer and Chief Accounting Officer and Treasurer

FRANKLIN MUTUAL SERIES FUNDS

Peter Langerman	Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer and Chief Accounting Officer

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Mat S. Gulley	Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer and Chief Accounting Officer

TEMPLETON GROUP OF FUNDS

Manraj S. Sekhon	President and Chief Executive Officer – Investment Management
Michael Hasenstab, Ph.D.	President and Chief Executive Officer – Investment Management
Norman Boersma	President and Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer, Chief Accounting Officer and Treasurer

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FTI Compliance Procedures Standards of Business Conduct

Exhibit B

ACKNOWLEDGMENT FORM

Franklin Templeton Funds Code of Ethics

For Principal Executives and Senior Financial Officers

Instructions:

1. Complete all sections of this form.

2. Print the completed form, sign, and date.

3. Submit completed form to FT’s General Counsel c/o Code of Ethics Administration within 10 days of becoming a Covered Officer and by February 15th of each subsequent year.

Inter-office mail:	Code of Ethics Administration, Global Compliance SM-920/2
Fax:	(650) 312-5646
E-mail:	Code of Ethics Inquiries & Requests (internal address);
	lpreclear@franklintempleton.com (external address)

Covered Officer’s Name:

Title:

Department:

Location:

Certification for Year Ending:

To: Franklin Resources General Counsel, Legal Department

I acknowledge receiving, reading and understanding the Franklin Templeton Fund’s Code of Ethics for Principal Executive Officers and Senior Financial Officers (the “Code”). I will comply fully with all provisions of the Code to the extent they apply to me during the period of my employment. I further understand and acknowledge that any violation of the Code may subject me to disciplinary action, including termination of employment.

Signature Date signed

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EX-99.CERT

Exhibit 13 (a) (2)

I, Matthew T. Hinkle, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Templeton Variable Insurance Products Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

2/28/2020

S\ MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Exhibit 13 (a) (2)

I, Gaston Gardey, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Templeton Variable Insurance Products Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

2/28/2020

S\ GASTON GARDEY

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer

EX-99.906 CERT

Exhibit 13 (b)

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew T. Hinkle, Chief Executive Officer of the Franklin Templeton Variable Insurance Products Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2019 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: 2/28/2020

S\ MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Exhibit 13 (b)

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Gaston Gardey, Chief Financial Officer of the Franklin Templeton Variable Insurance Products Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2019 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: 2/28/2020

S\ GASTON GARDEY

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer