In the Sending Preferences you can choose the general model and preferences for encryption.
This setup is appropriate, if you just want to improve your privacy by sending emails encyrpted instead of unencrypted if that's possible.
The effect is like sending emails as letters instead of postcards. Unlike postcards, letters usually hide their contents while in transit.
Note however that as with letters you can't be sure that nobody is opening the letter while it is in transit (although, some technical effort is necessary for that).
A concrete risk is that you accidentally use "faked keys" you got from somewhere or somebody claiming that the key belongs to the person you want to send emails to. To avoid this risk, you can either use the trust model of PGP (see below) or you should always verify, whether the fingerprint of a public key is correct.