Original Post
I'm throwing this idea out there for people to play with. Suppose your game world has an afterlife? That is, your content is split into two parts: The earthly life, which has levelling and permadeath; and Heaven (or Hell if you prefer, or both) which has no permadeath, but also no levelling. (No XP gain in the afterlife, in other words - you had your chance at learning things when you were mortal.) Both sides have quests and whatnot, and might interact in other ways. To prevent the afterlife from becoming clogged with level-1 characters that died from fighting a bilge rat (NetHack, I'm looking at you...) there would be a level cap for getting into the afterlife; there might even be different afterlives for different levels. (Which gives you the following tradeoff: Do you suicide at level 39 and become one of the most powerful people in the Third Heaven, or go on into the forties and risk becoming a lowly spear-carrier in the Fourth Heaven?) What do you think?