As the security feature of Hotmail, it will ask for phone number or alternate email address during sign up (can be added later from Account settings) so that if user’s account has been compromised from outsiders, Hotmail can verify that user by sending Hotmail Login code also called security code to their phone or email. It is a bit annoying task as you see normally but this will help you a lot if you forget your password or account has been hacked or blocked.
During sign up process for creating new account in Hotmail, you have to give phone number and alternate email address. But they are optional fields so many users leave them blank. Don’t do so as it is one of the trusted verification process deemed by Hotmail service provider. You can just answer the security question for verification but chance persists that answer can be guessed by intruders. So if you are creating genuine personal account, you must give own phone number and alternate email address along with answering security question so that in future need, you can rely on any one of them.
When you forget password during Hotmail Login, there is option of resetting the password. And at one point during process of resetting the password, you have to enter Hotmail Login code sent to you by Hotmail. This Hotmail login code can be received via phone number or alternate email address you provided during sign up. The Hotmail service will ask you about how to send a security code to you. You can choose one of phone number or alternate email address. Once you receive a code, enter same and get your account verified. Although this process seems tedious, there is no other choice than doing so to get your account secured. And if your account get used by outsider or lose memory of password, this will come to your aid instantly. As most people say ‘Prevention is better than cure’, follow this too by giving additional information to Hotmail so that they can help you and you do not have to lose hold of your account in future.