Is loss of life a punishment?

On the authority of Abu Yahya Suhaib bin Sinan radhyallahu anhu it is related that the Prophet (ﷺ) said,

“How amazing is the affair of the believer. There is good for him in everything and that is for no one but the believer. If good times come his way, he expresses gratitude to Allah and that is good for him, and if hardship comes his way, he endures it patiently and that is better for him.”[1]

Death of a close relative may be a punishment for the individual who is impatient; if he is patient then it’s a mean of betterment.

We actually determine whether a calamity is to increase our eeman, to test our faith, to punish us or to remind us. It depends on how we respond to it. If we are off the path and calamity took us on the path then it would be considered a reminder. If we are negligent and a calamity comes to us and we bear it patiently, then it was a test of our patience and increases our eeman. If we are negligent and it comes to us and we don’t reflect and we suffer-only then we determine ultimately whether calamity is punishment, test, reminder etc.[2]

Reference:

[1] Muslim: Hadith 2999

[2] http://islamqa.info/en/ref/71236