When a character hits 0 HP, they are Dead. If every character is Dead (or Ashes), the game ends and you need to form a new party to continue. Obviously this is a Status you want to avoid. Death can be reversed with the Cleric's Surmandum Spell, but there is a chance the Spell will fail and turn the character to Ashes instead. A safer (but expensive) option is to spend 500 Gold at a healer.