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Comment on is contract important for medical alert and PERS / still time to reserve private meeting at ISC
June 8,  2021
Comment on is contract important for medical alert and PERS from article on May 28, 2021
     Interesting observations in your article on May 28, 2021, but if you look at the actuarial table for low voltage system activations or the lifespan of an account, the earliest likely event on the table is the PERS system. It only stands to reason that healthy people do not generally purchase a PERS system compared to those who are not healthy people.
     So what does that mean? It means that the opportunity of get an actual signal that the user is in distress is high. Intrusion and fire systems do trip, but as we have seen, 95+% of those signals are user or system error. Considering that a signal from a PERS system is mostly a person generated activation it stands to reason that there is a high probably that the user is distress.
     So, to the point, does a PERS system, more or less, require a contract? My answer is yes, definitely.
     The exposure is substantial from the customers estate who is most probably managed by immediate family members who may think that the PERS system should have avoided the tragic loss of their loved one.
Intrusion systems can go for 20 years without an actual attack, just as a fire alarm can go for 20 as well, but the PERS system is greatly reduced by the very nature that the user has knowledge of health conditions which prompted the purchase in the first place.
     As for valuations, it would be interesting if there was PERS industry statistics about the projected life of a PERS system. I have seen estimates that a residential alarm system has a life of at least 7 years can this be said for a PERS system as well? I don't think so. I recently read an article about the valuation of alarm accounts that are old and that they are a downward pressure on a typical valuation. Now I don't know if that is true or not, but as it refers to PERS, if the average system life is only 18 months (I don't know if 18 months is correct) how could a PERS company be worth 30X of the RMR?
     But back to the original thought, contracts are essential, PERIOD.
Bart A. Didden, Executive Claims Manager
Security America Reassurance Group, Inc. - SARG
     In all fairness to the consultants who presented the webinar I referred to in my May 28, 2021 article, they did state that contracts were used with medical alert customers. It just struck me that they didn't think it was a very important component of the medical alert business, and that's where I think they were in error.
     I don't know that medical alert would be valued at 30 X RMR. I think that the expected life-span of a medical alert account is less than other alarm systems. If medical alert is a small part of the alarm contract portfolio then those contracts may be bundled with the others and fetch more than 30X, but if the it's a medical alert portfolio I think the valuation would be something less than 30X.
     When you are offering medical alert, whether you are referring to it as Medical Alert or PERS or some other kind of emergency notification related to medical assistance, you should be using a separate contract, the PERS Agreement. The Standard PERS agreement is offered for single state or as a nationwide form, because PERS lends itself to nationwide sales, distribution and monitoring. If you mean "panic" for PERS you can use the Standard Residential or Commercial All in One agreements. Once you offer medical alert use the PERS agreement.
     Those experts on topic are welcome to contribute their knowledge.

ISC schedule
          I’ll be at ISC in July and we are now scheduling private meetings and participation in round table discussions, topics and guest speakers TBA.  Time for private meetings are limited so please reach out to Stacy Spector, Esq at 516 987 8428 or  Concierge Clients with appointments are all set. 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301