So if someone gets a Game-Over, the savefile is gone? Gee, that's a really annoying feature if the player is negligent on saving. Then again, you can easily thwart this with manual backups. Nevertheless, if you want Permadeath of party members, then you can do that through Common Eventing (Parallel Process Common Event or something and make a conditional asking if this party member is in knockout then you remove him).
For the hero itself, I suppose you can do that, it'll be similar to the lines of a temporary save, just find the Game Over screen and get the code for the save deletion...I suppose. I don't know, this is all just assumptions.