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This step of the wizard called "Backup creation settings” allows you to specify the parameters of the backup creation process for this maintenance policy: folder, backup naming rules and the storage period. Backups are created by corresponding Tasks included into QMB Jobs. That is why the type of a backup and the frequency of its creation are defined by a particular QMB Job of in a policy and its schedule.

Recovery model - recovery model applied for the databases of a maintenance policy. Changes to the model are made with a wizard after creating or editing the policy.

The database recovery model defines the date to which the data will be restored to in case of an accident. For instance, the Full recovery model implies that the data can be restored virtually to the instant when the system crashed or any other preceding moment, given that there is a full backup and the necessary backups of the transaction log. When the Simple model is used, data can only be recovered to the date of the most recent backup. See more details https://msdn.microsoft.com/en-us/library/ms189275.aspx 

Backup folder – a full path to a folder on the SQL server that will contain database backups created by the maintenance policy. You need to specify an existing folder.

Create subfolders - this option allows you to create backups in different subdirectories. For example, for different databases. The hierarchy and naming rules for subfolders are given in the text template. In the template text you can specify placeholders (see below for a description of what placeholders are). This option is not available for Ola Hallengren policies.

Naming of backups – this parameter sets the backup file naming rules. This option is not available for Ola Hallengren policies. The following placeholders can be used in the string. They will be replaced by corresponding values in file names:

%instance%	Name of the SQL server instance
%weeknumber%	Week number. Sometimes, the week number in the names of backup files is used for sorting
%database%	Database name
%backuptype%	Backup type: Full, Diff or Log
%date%	Date in the yyyymmdd format
%timestamp%	Date and time in the yyyyddmm_hhmmss format
%date2%	Date in the ddmmyyyy format
%timestamp2%	Date and time in the ddmmyyyy_hhmmss format
%startweek%	Date of the first day of the week in the ddmmyyyy format (Monday)
%endweek%	Date of the last day of the week in the ddmmyyyy format  (Sunday)
%compress%	The marker is replaced by the _cmp string if shrinking of backups is enabled on the SQL server. If the server does not support shrinking or this parameter is disabled, an empty field is inserted.

Create an XML Restoration Plan - when selecting this option, the program will automatically create an XML restoration plan immediately after the backup has been successfully created. Enabling this option allows you to keep your XML restoration plan up-to-date. In this field you must specify the file name of the XML restoration plan.

Delete old backups after their expiry – if you enable this option, you will need to specify the storage period for database backups. 

Full backup creation strategy – informs the program when to create backups. The parameter does not affect the creation of full backups (this is defined by tasks in the QMB Jobs of a maintenance policy). The parameter only affects the list of storage duration units. That is, if a full backup is created once a week, the storage duration cannot be set in days. Otherwise, the sequence of backups will be broken – for example, when a full backup is deleted (as an outdated one), while the disk still has backups of logs and differential backups that cannot be used for restoring data without a full backup.

Storage period for backups – a period in days, weeks or months. Backups are always stored for one full period to avoid breaking the sequence of backups.

Copy new and modified  backup files - this option enables you to specify settings for additional backup copying to a networked or local folder. If the policy does not have saved settings for copying files, then during setup a form will open called Settings for Copying.