Families of Welsh NHS and social care workers who die in service as a result of Covid-19 will be entitled to a lump-sum payment of £60,000.
Health Minister Vaughan Gething's announcement was made at the same time as that about a similar scheme in England.
The minister said he hoped the scheme would provide "peace of mind".
But the doctor's union, BMA Cymru Wales, said the payments did not go far enough.
Eligible beneficiaries will receive a payment of £60,000 under the scheme, which will last for the duration of the Covid-19.
Mr Gething said: "Our front-line workers in the NHS and social care sector are going above and beyond to deliver care and services for patients and to the most vulnerable in our communities across Wales.
"Their bravery on the front line of this pandemic is something the whole nation is thankful and proud of."
The one-off payment of £60,000 would be available for families of all NHS and social care staff.
In addition, members of the NHS Pension Scheme are already entitled to full death-in-service benefits, which include a separate lump-sum and further payments to dependants.
BMA Cymru Wales wants all families of all NHS staff, regardless of whether they are in the scheme or not and including people returning to service, to receive the full benefit as well as the £60,000 lump-sum.
"We are disappointed that our calls for families of doctors working on the front line to receive full death-in-service benefits during this pandemic have been rejected by Welsh Government," Dr David Bailey, chairman of BMA Welsh Council, said.
But Plaid Cymru AM Rhun ap Iorwerth said news of the payment was an "overdue yet welcome announcement".
Welsh Conservative health spokeswoman Angela Burns broadly welcomed the news but added: "The devil is always in the detail."
A Welsh Government spokesperson said: "The scheme announced for Wales extends across health and social care giving equal recognition to staff who we know are going above and beyond to care for people in a range of settings."