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While in space, your character's corpse is always inside a capsule (also known as “pod”). When the ship you are flying explodes, your capsule is ejected from it and you have one last chance to escape death. If you don't, and your pod gets destroyed, then your character dies.

When your pod is destroyed and your active clone dies, you lose all the plugged-in implants and consumed boosters that clone had. Your consciousness is then transferred immediately to your medical clone located at your home station.

If your active clone doesn't have any implants, then you don't lose anything on death. If you are far away from your home station, you can dock your ship (or self-destruct it if you don't care about its cost) and then self-destruct your pod to be immediately moved to your home station. You can also destroy your active clone to move to your home station by going to the Clone Bay window (a service available inside some stations) and click the “Self Destruct” button.