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According to the rules, the Witch may replace her familiar if it is killed or lost.
While the Witch unfortunately loses additional spells stored in the familiar (above the minimum gained by level), there is a hidden benefit: the Witch can request an entirely different type of familiar, thereby creating a major and sudden shift in the "theme" of her spells and character.
For example, a Witch with a bat familiar will have a "shadow and illusion" theme to her character; by replacing the bat with a toad, the Witch suddenly takes on a "shapeshifter" theme.
One might argue that a Witch could exploit this fact by killing or losing familiars in order to select a spellcasting theme which better suits her needs. It is not apparent from the rules that such a strategy is prohibited or frowned upon by the "otherworldly power."