It’s important to update iPhone?

Normally its recommended to download and install the updates as they are released by Apple.

They fix issues and patch vulnerabilities to keep your iPhone secure.

Whenever the update notification shows up, it is recommended you proceed with the update at your earliest convenience.

If you have Automatic updates turned on, it will apply them automatically for you during the night when the iPhone is connected to power and Wi-Fi.

It is a good idea to update the iPhone whenever Apple releases an update. At this time for the iPhone XS, the latest iOS is 14.2. If you decide to update, make sure that you make a current backup of your iPhone in case of problems. See this for updating your iPhone. Update your iPhone, iPad, or iPod touch - Apple Support