Death

There will be a death penalty, and the developers do not want to penalise characters to a great extent. When you die you can either choose to Soul Walk, or respawn.

Soul Walk
If you choose to Soul Walk you rise at your location as what would be best described as a ghost. The goal is to run as far and fast away from the danger as possible, and after a while you will respawn at the position you walked to. The Soul Walk feature has an hour cooldown. If you die within an hour you will be forced to respawn.

Respawn
If you choose to respawn, your character will be resurrected at latest bind point with your total vitality (not health, a separate stat) lowered by 10% [citation needed]. To get rid of the death penalty, you have to go to a Soul Mender, found in large cities or occasionally throughout the world. If you do not visit a soul mender and you let your vitality reach zero, each death thereafter will lower your stats. You can revert back to your normal self after speaking with a Soul Mender.

Source: game textbox explaining death.