When you lose all or a chosen percent of your health, a Menu will appear and asks you which one of these items you want to trade to restore your health. When you don't have enough items or choose nothing from the menu, depending on the settings, you either die, respawn at one of the cities or a location you can select with a spell, or the game will exit to the main menu.

Arkay mark: a dark stone which can be found in the loot.
Filled grand soul gem
Filled black soul gem
Dragon soul
Gold

You can disable or change the required amount for each item in the mcm menu or set it to zero for cheating. If you don't want to see the menu, you can disable it and trade items automatically, based on their priority. When the menu is disabled, items with higher priority will be removed first. If two or more items have the same priority, one of them will be chosen randomly. You can change their priority and other settings from the MCM menu.

You can revive yourself without trading by using one of these Items:

Scroll of revival: If you cast it, you will be revived automatically for one minute.
Scroll of sacrifice: If you cast it on an NPC that satisfies its conditions, that NPC will die instead of you for 30 secs.
Healing Potion: When your health drops to zero, You have 6 seconds to open your inventory and revive yourself with healing potions.

Spell versions of the scroll of revival and sacrifice are in a chest at Falkreath's hall of the dead. They can be used by the player once per day.

You can choose to lose some or all of your items before respawning. If you enable this option you can take back your items by activating your soul mark which is either a grand soul gem or your dead body and is placed where you died or you can revive yourself by sacrificing someone with the sacrifice spell. instead of activating the soul mark, there is an option to send your items to a boss chest or retrieve your items by killing a nearby enemy or a spawned one.

You can also toggle losing your items permanently whenever you respawn before finding them.

Other than losing items these curses can infect you:

Disease: you'll be infected by a random vanilla disease that gets worse with each respawn.
Skill: you lose some of your skills or experience (Probably not compatible with mods like "Skyrim Skill Uncapper").
Silence: you can't talk to NPCs or shout.
Ghost: You'll become a ghost and NPCs will attack you on sight.
Arkay's curse:  50% worse prices, 50% harder persuasion and intimidation and 25 points lower Health, Stamina and Magicka.
Slavery: You'll be sold into slavery (Requires the Simple slavery mod).
Rape: Requires Sexlab, OStim or FlowerGirls.
Prison: When you have a bounty and a guard is nearby.

Respawn points can be set to one of these locations:

Inn
Hall of the dead
Last place player slept
A custom place chosen by mark spell.
Checkpoint: which is a close location that you visited.
Nearby: Similar to checkpoints but it could send you to a map marker in the current hold.
The throat of the World

Mark and recall spells could also be used for travel, either free or in exchange for arkay marks. On the debug page if Information is enabled, currently lost items can be viewed by clicking on their numbers on the right side (Requires UIExtensions).

Some of the MCM settings can be locked from the debug page. You can set a maximum number of respawns, after reaching that number of respawns if you don't have any items for revival you'll die. Also, you can make it a permanent death (Requires PapyrusUtil) and prevent yourself from loading saves from that character after using all allowed respawns.

Hard Requirement

SKSE
SkyUI
UIExtensions

Soft Requirements

PapyrusUtil
FISSES
powerofthree's Papyrus Extender
SexLab
Flower Girls
OStim Standalone
Simple Slavery ++
Sanguine Debauchery enhanced: SD+ 

Compatibility

This mod should be compatible with almost anything except mods that do the same thing or remove the essential flag from the player.

List of known incompatible mods:

Death Souls

SM Essential Player

SexLab Defeat (if Bleedout is enabled)

Dragons Souls - Death is Highly Overrated

Death Alternative - Your Money or Your Life

SkyTweak (if Bleedout is enabled on the Scripts page)

VioLens - A Killmove Mod: Either place this mod lower than Violens in your load order or enable 'Player KillMove immunity' in its MCM Menu.

Survival Mod: You can't revive/respawn after freezing to death, but it can be disabled by installing "Conner's Survival Mode" and disabling “Death From Cold” from the MCM menu.

Installation

Copy files to Skyrim data directory. start the game and change the setting from the mcm menu. If you have other mods that change the level list, create a Bashed Patch with Wrye Bash or a Smashed Patch with Mator Smash.

Uninstallation

make sure you are not in Falkreath's hall of the dead. Stop the mod, remove its files (if you don't stop it, your character remains essential), rebuild your Bashed Patch, and then use a Save cleaner like this to remove its scripts from your save file.

Credits

SKSE Team Creators of SkyUI Saerileth for Arkay mark model and texture