What do you say to someone who lost a loved one?

Recently a friend of mine told me that their cousin passed away due to  cancer. My immediate reaction was "I'm sorry to hear that." When I said it, I was genuinely upset and sympathetic for the pain that they were feeling, but when I think about what I said, it doesn't make much sense. So this leads me to wonder about the common things people say in this situation:

• "I'm sorry to hear that." - Well too bad, you heard it.
• "What happened?" - Really? You want them to re-live the trauma by retelling it?
• "My condolences." - Wow you really put some effort into that one.
• "Sorry for your loss." - This isn't an account balance, it's someone's life.
• "You're in our thoughts and prayers." - Yeah I don't even want to touch this one.
• "That's terrible." - You don't say?

What should someone say when they hear this news? I can' t figure it out. I guess there's nothing you can really say to improve the situation. When I hear such awful news, I want to acknowledge to the person that I feel bad for them and I hope they deal with the situation as best as possible and don't become depressed because of it. How do you communicate this without being belittling?

I think the next time this happens, I'll just be quiet and not say anything. Maybe that's the appropriate response.