diff --git a/src/components/auth/PasswordSetupDialog.tsx b/src/components/auth/PasswordSetupDialog.tsx
index a39d5157..accdba40 100644
--- a/src/components/auth/PasswordSetupDialog.tsx
+++ b/src/components/auth/PasswordSetupDialog.tsx
@@ -19,14 +19,16 @@ interface PasswordSetupDialogProps {
   open: boolean;
   onOpenChange: (open: boolean) => void;
   onSuccess: () => void;
-  provider: OAuthProvider;
+  provider?: OAuthProvider;
+  mode?: 'standalone' | 'disconnect';
 }
 
 export function PasswordSetupDialog({
   open,
   onOpenChange,
   onSuccess,
-  provider
+  provider,
+  mode = 'standalone'
 }: PasswordSetupDialogProps) {
   const [password, setPassword] = useState('');
   const [confirmPassword, setConfirmPassword] = useState('');
@@ -73,8 +75,17 @@ export function PasswordSetupDialog({
             <DialogTitle>Set Up Password</DialogTitle>
           </div>
           <DialogDescription>
-            You need to set a password before disconnecting your {provider} account.
-            This ensures you can still access your account.
+            {mode === 'disconnect' && provider ? (
+              <>
+                You need to set a password before disconnecting your {provider} account.
+                This ensures you can still access your account.
+              </>
+            ) : (
+              <>
+                Add a password to your account for increased security. You'll be able to 
+                sign in using either your password or your connected social accounts.
+              </>
+            )}
           </DialogDescription>
         </DialogHeader>
 
diff --git a/src/components/settings/SecurityTab.tsx b/src/components/settings/SecurityTab.tsx
index 4c6386db..dda9b028 100644
--- a/src/components/settings/SecurityTab.tsx
+++ b/src/components/settings/SecurityTab.tsx
@@ -26,6 +26,8 @@ export function SecurityTab() {
   const [loadingIdentities, setLoadingIdentities] = useState(true);
   const [disconnectingProvider, setDisconnectingProvider] = useState<OAuthProvider | null>(null);
   const [passwordSetupProvider, setPasswordSetupProvider] = useState<OAuthProvider | null>(null);
+  const [hasPassword, setHasPassword] = useState(false);
+  const [addPasswordMode, setAddPasswordMode] = useState<'standalone' | 'disconnect'>('standalone');
 
   // Load user identities on mount
   useEffect(() => {
@@ -33,10 +35,24 @@ export function SecurityTab() {
   }, []);
 
   const loadIdentities = async () => {
-    setLoadingIdentities(true);
-    const fetchedIdentities = await getUserIdentities();
-    setIdentities(fetchedIdentities);
-    setLoadingIdentities(false);
+    try {
+      setLoadingIdentities(true);
+      const fetchedIdentities = await getUserIdentities();
+      setIdentities(fetchedIdentities);
+      
+      // Check if user has email/password auth
+      const hasEmailProvider = fetchedIdentities.some(i => i.provider === 'email');
+      setHasPassword(hasEmailProvider);
+    } catch (error) {
+      console.error('Failed to load identities:', error);
+      toast({
+        title: 'Error',
+        description: 'Failed to load connected accounts',
+        variant: 'destructive',
+      });
+    } finally {
+      setLoadingIdentities(false);
+    }
   };
 
   const handleSocialLogin = async (provider: OAuthProvider) => {
@@ -63,6 +79,7 @@ export function SecurityTab() {
     if (!safetyCheck.canDisconnect) {
       if (safetyCheck.reason === 'no_password_backup') {
         // Show password setup dialog
+        setAddPasswordMode('disconnect');
         setPasswordSetupProvider(provider);
         toast({
           title: "Password Required",
@@ -103,21 +120,30 @@ export function SecurityTab() {
   };
 
   const handlePasswordSetupSuccess = async () => {
-    toast({
-      title: "Password Set",
-      description: "You can now disconnect your social login."
-    });
-    
     // Refresh identities to show email provider
     await loadIdentities();
     
-    // Proceed with disconnect
-    if (passwordSetupProvider) {
+    if (addPasswordMode === 'disconnect' && passwordSetupProvider) {
+      toast({
+        title: "Password Set",
+        description: "You can now disconnect your social login."
+      });
       await handleUnlinkSocial(passwordSetupProvider);
       setPasswordSetupProvider(null);
+    } else {
+      toast({
+        title: 'Password Added',
+        description: 'You can now sign in using your email and password.',
+      });
+      setPasswordSetupProvider(null);
     }
   };
 
+  const handleAddPassword = () => {
+    setAddPasswordMode('standalone');
+    setPasswordSetupProvider('google' as OAuthProvider);
+  };
+
   // Get connected accounts with identity data
   const connectedAccounts = [
     {
@@ -150,27 +176,38 @@ export function SecurityTab() {
           onOpenChange={(open) => !open && setPasswordSetupProvider(null)}
           onSuccess={handlePasswordSetupSuccess}
           provider={passwordSetupProvider}
+          mode={addPasswordMode}
         />
       )}
 
       <div className="space-y-8">
-        {/* Change Password */}
+        {/* Password Section - Conditional based on auth method */}
         <div className="space-y-4">
           <div className="flex items-center gap-2">
             <Key className="w-5 h-5" />
-            <h3 className="text-lg font-medium">Change Password</h3>
+            <h3 className="text-lg font-medium">{hasPassword ? 'Change Password' : 'Add Password'}</h3>
           </div>
           
           <Card>
             <CardHeader>
               <CardDescription>
-                Update your password to keep your account secure. {user?.identities?.some(i => i.provider === 'totp') && 'Two-factor authentication will be required.'}
+                {hasPassword ? (
+                  <>Update your password to keep your account secure. {user?.identities?.some(i => i.provider === 'totp') && 'Two-factor authentication will be required.'}</>
+                ) : (
+                  'Add password authentication to your account for increased security and backup access.'
+                )}
               </CardDescription>
             </CardHeader>
             <CardContent>
-              <Button onClick={() => setPasswordDialogOpen(true)}>
-                Change Password
-              </Button>
+              {hasPassword ? (
+                <Button onClick={() => setPasswordDialogOpen(true)}>
+                  Change Password
+                </Button>
+              ) : (
+                <Button onClick={handleAddPassword}>
+                  Add Password
+                </Button>
+              )}
             </CardContent>
           </Card>
         </div>