Final answer:
A long-term care rider provides financial access for extended care when a policyholder is unable to perform ADLs, whereas a Living Needs (Terminal Illness) rider allows for early death benefits in the case of a terminal illness with short life expectancy.
Step-by-step explanation:
A long-term care rider is an addition to a life insurance policy that allows policyholders to access some of the death benefits for long-term care if they become unable to perform a certain number of Activities of Daily Living (ADLs). In contrast, a Living Needs (Terminal Illness) rider or accelerated death benefit rider, allows policyholders to access a portion of the death benefits early if they are diagnosed with a terminal illness with a limited life expectancy, typically 12 months or less. Therefore, the key difference is that a long-term care rider is designed for extended care needs, not limited to terminal illnesses, while a Living Needs rider is specifically for terminal illness situations.