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[ubuntu] installing ubuntu 16.10 in virtualbox 5.1.16

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Hello,
I can't find the "post as a beginner" so I'm posting here.
I'm trying to install Ubuntu 16.10 64 bit in Virtualbox 5.1.16. I've gotten as far as the third screen (installation type) which has the choices of:1. Erase disk and install Ubuntu.2. Encrypt the new Ubuntu installation for security. 3. Use LVM with the new Ubuntu installation. 4. Something else.
I assume choice 1 is the right one since Ubuntu is being installed in virtualbox and not on my physical hard disk. However, the warning "Warning: This will delete all your programs, documents, photos, music, and any other files in all operating systems." stopped me. What disc are they talking about? Surely not my physical hard disk? Since I'm installing Ubuntu on a completely empty virtual disk in Virtualbox, they couldn't mean that disk could they? Probably being paranoid, but I do not want to do something stupid like erase my real hard disk.
Thanks in advance for an answer
willcej

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