I want character death to be feared and have meaning. However, I don't like to kill off a character someone "loves" and worked hard to put together. So when death rears its ugly head, I was thinking to offer two options. One, a player can choose to die and make a new character if that appeals to them. Two, they receive one of the following penalties (determined randomly on a 1d6 roll):
1-3: lose a random magic item (if none, roll again).
4-5: take on a 4 point saving throw and skill penalty (the saving throw and all skills as associated with a random ability score) until gain 1,000 or your current level x 200 experience points, whichever is greater. If already currently penalized in this manner roll again.
6: lose the use of a random daily or encounter power (duration same as above and the power can't be retrained until the duration expires and the character levels up again, and if already penalized 1 daily must randomly determine an encounter power or vice-versa).
If already penalized twice, must lose a penalty before gaining another. All penalties may entail some story explanation/development as well.
Thoughts on the above or other alternatives to character death?