Here's some info on the death of a fable 2 char. One can only hope you wont drop lvls already achieved like FFXI which indeed is the worst part of that game.
The initial design was that if the player's character died, then the character's children would take over as being playable (if they had any). This did not work, however, as play-testers harvested children as dozens of extra lives, prompting Lionhead developers to create another new "death" system.
The second design was that the player's character would not die at all; rather, he or she would fall unconscious instead. The enemies would then injure the character while they were unconscious by beating, kicking or stabbing them, leaving permanent and humiliating scars. Falling unconscious could be avoided with one of three sacrifices: gold, reputation or experience.
At the Game Developers Conference in 2008, Peter Molyneux indicated that the design for death had changed due to player feedback during play testing. It was found that players would rather turn off their console than subject their character to permanent disfigurement.
On the 24th of June 2008, Dene Carter, creative director of Fable II, revealed the new design. Upon losing all health, the hero falls and loses an unspecified amount of experience; this experience is exchanged for a 'burst' of energy, allowing one last 'Blaze of Glory' in which the player rises to their feet and knocks all enemies away, leaving the player momentarily safe from harm.