A lower rate for a defined initial period, then adjustments on a schedule with caps at every step. If your realistic horizon is shorter than that initial period, you are paying less for insurance you were never going to use.
Every ARM caps the first adjustment, each one after, and the total over the life of the loan. Those three numbers describe your actual worst case, and they are the only numbers that matter when deciding.
The median American homeowner moves or refinances well before year ten. If that is you, thirty years of rate insurance is a premium you will never collect on.
The rate resets to an index plus a fixed margin, subject to the caps. We model the worst case at your first adjustment before you sign, so nothing about it is a surprise later.