how to die for fun and profit

This is the only good idea I've ever come up with on my own. Someone else definitely had this idea first. On the plus side, this one's actually been playtested.

I am somehow all of these people, simultaneously.

Fate points (also called actions points, etc.) in RPGs usually take the form of an abstract resource which can be expended to e.g. reroll a save, get an extra attack, or famously in Warhammer Fantasy Roleplay, to simply Not Die. While there are certainly situations where such a mechanic is appropriate, I don't think it suits the gamefeel I'm going for in my OSR-type campaigns.

At least, not during "regular play."

Fate points in my game are not associated with characters, but with players. They are gained by either dying or retiring, and can be traded in at character generation to gain mechanical advantages, like extra ability score rerolls, extra starting money, or starting at 2nd level (at the high end).

During play, my players and I have noticed this system has several positive effects on gameplay:

I haven't had any players try to game the system by essentially churning characters for fate points yet. Not only do people tend to get attached to their characters, it seems most people recognize that the rewards really are just there to soften the blow; not at all worth grinding for (except maybe for bragging rights, almost like the high score board on an arcade machine).

boring rules part

(These are pulled from an old version of my house rules. They haven't been reviewed in awhile, so feel free to criticize/suggest additions! My rules for character generation are: 3d6 in order, B/X style ability score modifiers, reroll one ability score or starting hp, swap two ability scores not rerolled, if the sum of ability mods is less than -1 character may be mulliganed.)

Fate points are a resource which allow you to counteract some of the randomness of character generation. They are awarded to you either upon the death or successful retirement of a character. Once fate points have been given for a particular character, that character may never be played again.

One fate point is awarded per level of the character. An additional point is awarded if that character was the first time you played a particular class. Two additional points are given if the character established and controlled a stronghold at the time of death or retirement.

Fate points may be expended to gain mechanical benefits during the character generation process, at the following costs:

1 One extra ability score swap.
1 One extra ability score reroll.
2 Freely assign ability scores.
3 Reroll one ability score 4d6 drop lowest.
3 Start with a loyal 0-level retainer.
4 Start with maximum first level HP.
5 Double starting money or start with 100 sp, whichever is higher.
5 Start with half of the experience required for next level.
7 Roll all ability scores 4d6 drop lowest, in order.
10 Reroll one ability score 5d6 drop lowest.
12 Start at second level.

A system like this is certainly not appropriate for all groups. If you have a long-running campaign with an open table, however, I invite you to try adding this system to your game. Have fun dying!