[quote=ERode]
Actually...out of curiousity...what does it mean when they die? Grimm have no souls, so they aren't even alive the first place. Thus...can Umbra even insta-kill Grimm? XD
[/quote]

It doesn't affect the soul, but rather the body. It relies on a wound on the physical body rather than access to the soul. Imagine an Eldar Witchblade from Warhammer 40K - extingueshes life and frees the soul.
 But it very rarely goes red - maybe about a minute every couple of days. Its also activated by dire situations, and cannot "chain", for lack of a better word, instant kills. Literally, one chance every three or four days to get one instant kill - with the right control, its an almost negligable ability. As long as it doesn't just start insta-killing everyone at once