After you click Update now another screen will appear. This screen will have pre-selected 'Ultimate protection' (as shown below). You may not want this as is it costs you, so you have to decide whether you really want to pay. AVG give you a free 30 day trial of this if you want to try it and it is not too difficult to down grade to the Basic version at a later stage. Personally I have found the Basic version adequate for my needs.
So if you want to stay with the Basic version, select Basic protection (as shown below) and continue installing the update.
I hope you have found this helpful and feel free to check out my other posts or get in touch with me if you have any questions.