Health Secretary Matt Hancock announced the measure at the daily Downing Street press briefing on Monday.
Matt Hancock also announced 82 NHS workers and 16 social care staff have died after contracting COVID-19.
Mr Hancock said: “Families of staff who die from coronavirus in the course of their essential frontline work will receive a £60,000 payment.
“Of course, nothing replaces the loss of a loved one but we want to do everything we can to support families who are dealing with this grief.”
He said he felt a “deep personal sense of duty that we must care for their loved ones” as he confirmed the government was setting up a life assurance scheme.
The Health Secretary also announced that the scheme is being looked at for other front line professions.
Some NHS services that have been paused on from the pandemic will also be reopened from Tuesday.
Urgent services such as cancer care and mental health support…