...You can put the file on any portable storage you keep with you (USB sticks, phones, music players...) to add an extra layer of security - even if someone knows the master password, if they don't have the key file, they can't get in!
Worried you might forget the master password? Password Protector comes with a recovery system that allows you to securely recover your passwords if you forget your master password or lose the key file (see Documentation for more information).