An IUL illustration shows two sets of numbers, and the difference between them is the answer to what the carrier can change. The current column is built on what the carrier is doing today. This year's cap. This year's participation rate. This year's cost-of-insurance rates. Any bonus or multiplier that isn't guaranteed. The guaranteed column is built on the worst the contract allows. Everything in the current column can move toward the guaranteed column at the carrier's discretion. Nothing can move past it.
Start with what's locked. The floor is guaranteed, usually 0%, and a carrier can't lower it. The minimum cap is guaranteed, and it's low, often a single-digit number well under what the policy was sold at. The maximum cost-of-insurance rates are guaranteed. They come off a standard mortality table, and the current charges can't go above them. The minimum declared rate on the fixed account is guaranteed. Anything with the word "guaranteed" next to it on the schedule page is the carrier's outer limit.
Now what's not. The current cap can be cut at the start of any new segment, and it has been, across the industry, when options got expensive. The participation rate and the spread work the same way. Current cost-of-insurance rates can be raised toward the guaranteed maximums, and some carriers have done that on older blocks of business. A bonus or multiplier that shows in the current column and not the guaranteed one can be reduced or dropped.
Two rules limit how it happens. Changes apply to a whole class of policies, so the carrier can't single out one contract because it's well funded or because the insured got sick. And changes to charges generally come with written notice, which is the letter people file without reading. Cap changes often don't get a letter at all. They show up on the annual statement or the segment renewal notice.
Here's the test to run before you fund a policy. Get an illustration at a rate below the current cap, and two points under is a fair stress case. Then get one at the guaranteed column all the way through. The guaranteed column will look terrible, because it assumes everything goes to the worst allowed value at once and stays there for fifty years. The point is to see what your funding has to be for the policy to survive it, and whether you'd notice in time if things drifted that way.
Then make sure you read the annual statement for the cap and the charge lines every year, and compare to the year before. What the charges are, and the order they come out, is in the charges that come out before your index credit lands. Say the cap has dropped three years running on a policy you funded to the original illustration. Get a new in-force illustration at the new cap before another premium goes in.