Dr. Rif`at Fawzi, professor of Shari`ah at Cairo Univ., states: “Although we are informed by Allah that martyrs are alive and enjoying a special life after their martyrdom, they are like all human beings in the sense they leave this worldly life and their spirits abandon their bodies. Almighty Allah says:
“Think not of those, who are slain in the way of Allah, as dead. Nay, they are living. With their Lord they have provision. Jubilant (are they) because of that which Allah hath bestowed upon them of His bounty, rejoicing for the sake of those who have not joined them but are left behind: that there shall no fear come upon them neither shall they grieve. They rejoice because of favor from Allah and kindness, and that Allah wasteth not the wage of the believers.” (al `Imran: 169-71)
We should better call them martyrs, but there is nothing wrong if we use the expression “pass away” or “die” for them in the sense that they have left this worldly life. Thus, we say that “so-and-so of the Companions of the Prophet (including the martyrs among them) died in such-and-such year” meaning that they left the worldly life to the Hereafter. But we should not say that they have died believing that they are no more alive in contradiction to what Allah informed us.
As for the rule or criterion by which we call someone a martyr, we know from the Sunnah of the Prophet that those who are killed in the battlefield while fighting in the Cause of Allah, the drowned person, one killed unjustly, etc. are martyrs. Deeds are judged according to intention. We are to judge them according to what is apparent for us but it is Allah who will judge their intentions. It may happen that we regard someone as a martyr while Allah knows that he is otherwise. This is our human judgment according to what is apparent to us. But Allah will hold everyone accountable according to his inner intentions.