Enabling two-factor authentication is a great way to add an additional level of protection to your Microsoft account. Even if your password is stolen, your account is still protected because two-factor authetication requires an additional level of verification to log in. Microsoft calls their version of two-factor authentication "two-step verification" and it works by providing you with a random code that must be entered in additional to your password when you log in. Microsoft offers three ways to generate the verification code. It can be sent via e-mail, SMS message or using a token generator app on your mobile phone.