I'm currently playing as a paladin on normal difficulty and I'm late in chapter 2, without having died once since the beginning.
Now, with stats and equipment, I have over 500 HP and 80-90 resistances so it's pretty impossible to die fighting even high level monsters.
It's interesting to see if I succeed completing the entire game without dying. Are there insta-death situations at the end of chapter 2 or in chapter 3?

That's pretty impressive. I've died quite a bit. I'm not on Act III yet so I don't know if there is any instant death scenarios or not. Good luck.

I have started the game several times but never completed it, and at first I have died too, but once you learn several tricks you can easily avoid death:

- don't open rocks, stumps, barrels in the wilderness until you have plenty of HP (usually after level 10), the traps can one hit you
- buy items with "of divine invulnerability" property form stores, they add up to give you good resistances right from start. I spent a lot of time on shops as they change the inventory every time you speak with the shop owner, so I keep looking for a better item
- look for weapon with "Azazel" property as it doubles the damage done, now I'm using an warhammer of Azazel and with additional lighting damage that can one hit spiders/giant bats/walking dead
- for tougher monsters use seals liberally, I always stock up on vidergo, mirael and elgaroth before going to clear a map. Killing a lot of monsters at once with area of effect seals reduces the boredom of grinding through all of them individually, and you can keep bosses at a distance with elgaroth since it also slows them
- invest in disciple identification at the beginning, it will save you a lot of money otherwise spent for identification, which you can now use to buy seals and better equipment.

I agree that this is pretty impressive. And to answer your question: I don't think there are any insta-death situations in the game, but some of the boss characters in Act III could pose a threat (if they are lucky). I remember a few such fights with my priest that otherwise didn't have much trouble throughout the game - they just cast a few spells against me that disorientated me, paralysed me, slowed me and I was done.

You're right. I guess I was so paralyzed by the look at my poor priest trying to escape that magical boxes didn't cross my mind at all...