// A grenade // - instantiates a explosion prefab when hitting a surface // - then destroys itself

 var explosionPrefab : Transform;

  function OnCollisionEnter(collision : Collision) {
 // Rotate the object so that the y-axis faces along the normal of the surface
    var contact : ContactPoint = collision.contacts[0];
    var rot : Quaternion = Quaternion.FromToRotation(Vector3.up, contact.normal);
    var pos : Vector3 = contact.point;
    Instantiate(explosionPrefab, pos, rot);
    // Destroy the projectile
    Destroy (gameObject);
      }

http://unity3d.com/support/documentation/ScriptReference/Collider.OnCollisionEnter.html

http://unity3d.com/support/documentation/ScriptReference/Object.Destroy.html

If you have the code in place for your character dieing, you only got to call that function.

So basically you would create something like:

private void CheckDeath(int Hp)     
 {

 if (hp = 0)    
 { 
    -execute wathever code you have for dieing, could be a message, together with a red overlay on the screen. And code to revive-    
 }
 }

And then for the touching itself, you would need a collider, but I haven't worked with those yet. (The basics should be in the link Robert posted.)