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What is meant by "live zero" and "dead zero" in sensors ?

If a signal shows zero value, there are two possibilities.  First, that the actual value of the process variable is zero, live zero.  A speed signal can show zero if the actual speed zero.  The signal can also be zero if the connection to the tachometer is broken, dead zero. 

Thus the analog signal which carries the process variable should indicate whether the zero is a genuine value of the process variable.  

This distinction can be made in analog signal formats such as the 4...20 mA.  In this format, the value is zero when the mA is 4.  This indicates that the circuit is healthy and that the reading is accurate.

If the value of the mA is 0, then it indicates a wire break.

Other examples of formats with live-zero function are the 1...5 V and 10...50 mV.