Every IUL contract has a fixed account sitting next to the index accounts, and hardly anyone chooses to put a dollar in it. It works like the general account inside a whole life policy. The carrier declares an interest rate and changes it from time to time. It also guarantees the rate won't drop below a minimum written into the contract, usually a low single-digit number. Interest is credited daily or monthly on whatever's in there, not at the end of a segment, so money in the fixed account earns from the day it arrives.
That last part is the reason it exists. Index segments open on set dates and run a full term, usually a year. Premium that shows up between those dates has to wait somewhere. It waits in the fixed account, or an interim account, earning the declared rate until the next sweep. Fixed-rate loans often work the same way. The borrowed amount moves into a loan account that earns a fixed rate. The loan interest gets charged against that same account. When the two rates match, you've got what people call a wash loan.
The trade-off is the one you'd expect. There's no cap, participation rate, or spread on it, and it never credits a zero year, because the declared rate is what it is regardless of the index. But no upside either. In a year the index credits 9%, the fixed account credits its declared rate, and on most illustrations the index options come out ahead over long stretches. The fixed account is the steady option.
Three situations where it's the right place for at least part of the money. One, you're within a few years of drawing income and a zero year followed by a loan would hurt. Two, the declared rate is close to the current cap, which can happen when rates move fast, and at that point you're taking index risk for very little extra. Three, you want something above zero on part of the account value so that charges in a down year don't erode the whole thing.
Allocation changes usually take effect when a segment matures, and for new premium they apply at the next sweep. Check the declared rate on your annual statement and on any rate letter the carrier sends. Some carriers raise it when rates rise. Some don't, and they don't announce that either. If part of your account value is sitting in the fixed account and you don't remember picking it, that's usually the default from the application. Changing it takes a one-page form.
Look at the allocation page of your last statement. If the fixed account holds more than you intended, or less than you'd want two years before income starts, that's the number to change before the next segment opens rather than after.