In my game me and the other players chose a "difficult level" before every quest:
Easy: The killed Hero is teleported in the starting room and loses every equipment not worn, the 50% of gold and the Fate Points are restored to 7.
Normal: The killed Hero keeps every equipment, loses any Fate Point earned during the Quest but it's not allowed to him or her to play until the begin of the next quest.
Hard: The killed Hero loses everything, but his or her equipment and gold can be taken by other players. The player must play with another Hero.
Nightmare: The miniature and the sheet of the killed Hero are burnt, the player is stoned to death and if or she is still alive, must buy a new miniature, in addition the player will be slapped for the rest of the GM life.
+ Other planes lie beyond the reach Of normal sense and common roads But they are no less real Than what we see or touch or feel. +