Yes we should add the tag.
Using Secespitus' excellent tag creation question for this situation.
1. Ask yourself how many questions you have about this topic: is this probably the only one or is this a topic you want to ask about more regularly?
I can imagine a few questions I may like to ask related to death. Specifically relating to writing a eulogy and dealing with the plot fallout of a major characters death.
2. Look through the existing questions: how many already use the word or similar words and might profit from the tag?
I already found 177 questions that may use this tag. It is a very common topic and many of those would benefit from the tags existence.
3. Look through the existing tags: is one of them already encompassing what you are trying to convey?
No existing tags even come vaguely close to this topic. This is the main reason I raised this because there is no suitable tag for questions about it.
4. Look through Meta: have there been similar requests or precedent cases where something similar has been created/denied?
The only meta post that comes up in a search is discussing a specific question where this tag would have been useful. There has been no previous discussion about creating a tag for it.
5. Think about the sites scope: do you think that a lot of people will profit from these tags when they are asking questions about the specific topic of the site you are on?
I can see plenty of scope for this to be beneficial to the site. Adding tags like this helped the related links to be more relevant to the actual question. Currently if reading a question about death you would have to search to find other, similar questions. By adding the tags it would make them show up in the related list. This would also help to reduce the number of duplicates we receive as related questions show up when asking a question.
6. Think about the tag's scope: is it well-defined and obvious to users coming to the site?
With a decent tag wiki and usage guidance I can't see how this tag would be confusing. "This tag is for questions about death in writing. Portraying character deaths and discussions on the concept of death should all use this tag.". Seems obvious to me.
Combining all these things I think that yes we should create this tag. It is useful, well-defined and popular. I don't see a clear case for making an additional tag for character-death at this stage. A single tag should be sufficient to cover both topics.
Suggested tag wiki
Tag Info:
This tag is for questions about death in writing. Portraying character deaths and discussions on the concept of death should all use this tag.
Tag Wiki:
Death is a concept commonly explored in all forms of writing. This tag should be used for any question which relates to the topic of death, including the deaths of characters, representing death within the narrative, portraying death as a concept, and the plot implications of death within a work.
Examples of questions that should use this tag:
Related tags: plot characters combat horror