I got that fed up with outlook asking for password I decided to change it to an IMAP account as per below.
This is on a Windows 7 machine using outlook 2013.
1/ Open up control panel
2/ Open Mail (32bit)
3/ Click on E-mail accounts
4/ Select new
5/ Select E-mail accounts (Next)
6/ Select Manual setup or additional server types (Next)
7/ Select POP or IMAP (Next)
8/ Input your name and email address
9/ Under account type select IMAP
10/ Incoming mail server type imap.outlook.com
11/ Outgoing mail server type smtp.outlook.com
12/ Fill in user name and password
13/ Click on more settings
14/ Under Outgoing server click on Requires authentication
15/ Under advanced
Incoming server (IMAP) type 993 and select SSL
Outgoing server (SMTP) type 587 and select TLS
Confirm above details before selecting OK
16/ On previous screen select next (Test account settings will probably be greyed out)
17/ Your account settings will be tested and you should receive 2 confirmation messages.
Delete your original email account (Exchange) if not already done this before starting.