No, the soul does not cease to exist after death. The Bible clearly teaches us in the New Testament that we continue on after death. We will go over those Scriptures; but before we do, those who affirm soul sleep often refer to the Old Testament and obtain their doctrine from it alone.
- Eccl. 9:5, For the living know they will die; but the dead do not know anything, nor have they any longer a reward, for their memory is forgotten."
- Eccl. 12:7, "then the dust will return to the earth as it was, and the spirit will return to God who gave it."
Often, the case with people who hold this position and refer to Ecclesiastes forget the context. The first three verses of Ecclesiastes say,
"The words of the Preacher, the son of David, king in Jerusalem. 2 “Vanity of vanities,” says the Preacher, “Vanity of vanities! All is vanity.” 3 What advantage does man have in all his work which he does under the sun?"
Notice that he is writing about things from a human perspective--from that which is "under the sun." He is not providing doctrinal statements about life after death. From the human perspective, when you die, the dead don't know anything in that the spirit returns to God who gave it. But neither one of these statements means that the soul ceases to exist. Of course the pro-soul sleep advocate will say that "the dead not knowing anything" means they don't exist. But again, this is written from the perspective of people on earth. Also, we do not interpret the New Testament in light of the Old. It is the New Testament that interprets the Old Testament. This is why we look to what the Word of God says in totality.
"And six days later Jesus took with Him Peter and James and John his brother, and brought them up to a high mountain by themselves. 2 And He was transfigured before them; and His face shone like the sun, and His garments became as white as light. 3 And behold, Moses and Elijah appeared to them, talking with Him. 4 And Peter answered and said to Jesus, “Lord, it is good for us to be here; if You wish, I will make three tabernacles here, one for You, and one for Moses, and one for Elijah.” 5 While he was still speaking, behold, a bright cloud overshadowed them; and behold, a voice out of the cloud, saying, “This is My beloved Son, with whom I am well-pleased; listen to Him!” 6 And when the disciples heard this, they fell on their faces and were much afraid. 7 And Jesus came to them and touched them and said, “Arise, and do not be afraid.” 8 And lifting up their eyes, they saw no one, except Jesus Himself alone."
This is known as the Transfiguration of Christ. What is important to note is that Moses and Elijah were both alive in their, so to speak, dead state. In other words, they are not united in their resurrected bodies because the general resurrection has not yet happened. Therefore, we can clearly see that there are at least two people who are alive, after death, who are not in their physical bodies.
“Now there was a certain rich man, and he habitually dressed in purple and fine linen, gaily living in splendor every day. 20 “And a certain poor man named Lazarus was laid at his gate, covered with sores, 21 and longing to be fed with the crumbs which were falling from the rich man’s table; besides, even the dogs were coming and licking his sores. 22 “Now it came about that the poor man died and he was carried away by the angels to Abraham’s bosom; and the rich man also died and was buried. 23 “And in Hades he lifted up his eyes, being in torment, and saw Abraham far away, and Lazarus in his bosom. 24 “And he cried out and said, ‘Father Abraham, have mercy on me, and send Lazarus, that he may dip the tip of his finger in water and cool off my tongue; for I am in agony in this flame.’ 25 “But Abraham said, ‘Child, remember that during your life you received your good things, and likewise Lazarus bad things; but now he is being comforted here, and you are in agony. 26 ‘And besides all this, between us and you there is a great chasm fixed, in order that those who wish to come over from here to you may not be able, and that none may cross over from there to us.’ 27 “And he said, ‘Then I beg you, Father, that you send him to my father’s house--28 for I have five brothers--that he may warn them, lest they also come to this place of torment.’ 29 “But Abraham said, ‘They have Moses and the Prophets; let them hear them.’ 30 “But he said, ‘No, Father Abraham, but if someone goes to them from the dead, they will repent!’ 31 “But he said to him, ‘If they do not listen to Moses and the Prophets, neither will they be persuaded if someone rises from the dead.’”
We can see in the story of Lazarus and the rich man that after each have died, both were conscious and self-aware. Jesus is obviously teaching that the soul survives after death. Still, there are those who will say that this is a parable. Of course, the problem with this theory is that parables don't have proper names in them. In this case there is a specific individual named: Lazarus. Also, if it were a parable, then what is Jesus saying with the illustration of consciousness after death and before the resurrection? The most logical answer is that Jesus was teaching us that there is life after death.
2 Cor. 5:8
"we are of good courage, I say, and prefer rather to be absent from the body and to be at home with the Lord."
Paul is telling us that he would rather be outside of his body, "absent from the body," and be at home with the Lord. If soul sleep is a true doctrine, then how is it possible to be outside of the body and also be home with the Lord? It wouldn't make any sense.
2 Cor. 12:1-4
"Boasting is necessary, though it is not profitable; but I will go on to visions and revelations of the Lord. 2 I know a man in Christ who fourteen years ago--whether in the body I do not know, or out of the body I do not know, God knows--such a man was caught up to the third heaven. 3 And I know how such a man--whether in the body or apart from the body I do not know, God knows--4 was caught up into Paradise, and heard inexpressible words, which a man is not permitted to speak."
In order to properly understand this section of Scripture we need to know what is meant by the term "third heaven." In the Jewish theology there were three "heavens." The first heaven deals with the atmospheric region (Deuteronomy 11:17; 28:12; Judges 5:4; Acts 14:17). The second heaven deals with the region of outer space (Psalm 19:4,6; Jeremiah 8:2; Isaiah 13:10). The third heaven is God's dwelling place (1 Kings 8:30; Psalm 2:4; Matthew 5:16).
So, when Paul says that knew someone who was caught up to the third heaven, he was speaking about entering into that dwelling place of God. What is important is that it occured either in the body or out of the body of which he did not know. If soul sleep is a true doctrine, it could not be said that such a person who is outside of his body (who had died) was also with God at the same time. It just wouldn't make any sense. Therefore, soul sleep is wrong.