Trade in through Apple

Please someone illuminate me on this as if I was a 5 year old. I get overwhelmed and want to know if I’m making the right choice. I currently have 16 pro max paid off through tmobile and want to upgrade to 18 pro max. My current plan is the old essentials plan for around $65+tax. Is this picture correct? Would my plan be upgraded automatically or do I need to upgrade my plan beforehand?