Resurrection of dead characters is a difficult topic when it comes to fantasy in general and to RPGs in specific. To make it short, I am not a fan of death being an effect on a PC that can be removed with the casting of a spell. Once a character in the party has access to this spell, players can mostly expect their characters to live forever. As long as the cleric survies the battle, everyone is probably going to be fine. If the time limits are generous, then it becomes mostly a matter of having the money and transporting the body to a high level NPC, which can become an available option much earlier in the game. This significantly changes the game and doesn’t really line up with pretty much any fantasy fiction. It just doesn’t seem right for my prefered style of Sword & Sorcery and so I created the aspect of life and death in the Ancient Lands around the assumption that resurrection is impossible. There is no soul separated from the body and once the life has been extinguished it is forever gone. Nothing there to bring back into the world of the living.
However, resurrected NPCs can be pretty cool when used sparingly. The undead sorcerer. The returned hero of old. The helpful ghost. I don’t really want to have these completely banished from my campaign.
One possible solution, that I think could be quite fun, is to make it possible to return a body back to life but the resulting creature ends up being somewhat odd. It looks like the person and has the memories of the person, but ultimately it’s something different. A magical construct. For antagonistic NPCs this is good enough. They can still be villains without any special limitations. For helpful NPCs this would still allow them to perform some kind of task that benefits the PCs, but they can’t really return back to their old life. Of course, you can get endlessly philosophical about the question whether a being with the same appearance and memories would be the same person or an artificial fake, or perhaps a separate but still fully human twin. I think usually they would be, but I believe it should be possible to come up with ideas to make them sufficiently similar but different that they would not be welcomed back into their old lives. That’s another step to be figured out later.
But regardless of how the world reacts to such resurrected characters, the players might and will quite possibly have very different oppinions. Players might have no problem with playing a character who has all the traits of their old one but has only philosophically changed. To make it effective, resurrected PCs should be unappealling to play on a continous base. One quick and easy solution would be to make it impossible for them to gain any more XP. This might make it appealing to have the character complete his last quest for dramatic reasons while not really offering much incentive to keep going after that. Another nice limitation that might help in making the characters unnatural nature apparent would be to not make this return to life permanent. Maybe it lasts only a month or a year after the character is gone for good or it takes continual magical rituals to preserve this temporary return to the world of the living.