The pilot was undergoing a stage check by a Certified Flight Instructor (CFI) in preparation for the Commercial Practical flight test. The simulated emergency scenario of illumination of the low fuel light required the pilot to pick a spot and land promptly. He chose a flat area, and noted obstructions, including high power lines. About 300 feet above ground level (agl), he began to slow the helicopter, and check his gauges. The airspeed was about 50 knots, with the rate of descent between 400-500 feet per minute (fpm). He applied carburetor heat, and noted that the manifold pressure was below 18 inches. About 30-45 seconds later, the low rotor revolutions per minute (rpm) warning light illuminated along with the sounding of the corresponding warning horn. The pilot noted a very high vertical descent and he entered an autorotation by applying down collective and aft cyclic. The low rotor rpm horn and light extinguished. The CFI recalled that they were about 200 feet agl and 40-43 knots on final during the maneuver. He heard a noise reduction followed by the low rotor rpm horn and light. He lowered the collective and rolled on throttle. There were no immediate effects so he lowered the collective all the way, and applied aft cyclic aggressively. The rpm was 94-97 percent. With the aft cyclic, he was able to gain rpm, but little to no forward speed. The ground was approaching rapidly, and he pulled up on the collective. The helicopter fell straight down, hit hard, and rolled to the left; it sustained substantial damage. The instructor sustained serious injuries. The engine was operating, so the pilot turned off the ignition. He reported no mechanical irregularities prior to beginning the maneuver.