Yes, but it's entirely in your control. Read on for more thoughts...
From a game design standpoint, I have always struggled thematically with the idea that death isn't permanent. It breaks the suspension of disbelief. Although gamers are very much used to it, I suggest there are better ways of handling game continuation than a simple re-spawn. Re-spawn with some sort of arbitrary penalty is in my opinion even worse, as it requires the player to further rework their own mental image of what death 'means' in this particular game. This requires mental effort that detracts from the experience.
Therefore, if 'realistic' death is desirable, how can we avoid frustrating players?
One source of inspiration can be found in action movies. Protagonists constantly appear to be coming within an inch of death, and then escaping it at the last minute. I'm thinking of Ethan Hunt or James Bond, but there are many more examples. It's exciting to watch as it still feels dangerous, yet deep within us we know they're going to make it. Occasionally the illusion collapses and we think "how could they possibly have escaped from that??" but it's way better than them getting obliterated and then popping up again in full health 30 seconds later. (As an aside, I love how Wreck-it Ralph handled the disconnect between in-game death and 'real' death.)
This is the plan with death in Sol Trader. I want to create an environment where players feel like they're constantly escaping real danger. For example, all ships will be fitted with an escape capsule which will be reliable, which means that if your ship gets blown up, then you'll zoom off to the nearest planet. There are penalties: you'll be short on a ship, have lost your deposit (if you hired it) and incur the wrath of the owner - all things you'll have to figure out how to deal with. You also have the option of selling the escape capsule to save on weight and make a bit of extra money at the start, but if you get blown up without one, game over. You can also decide whether to provide them for your passengers: if you don't, and they die, then their relatives are *not* going to be happy. The poorer you are, and the more enemies you've made, the more likely you are to take a risk and not carry a capsule, or to take on missions to dangerous areas, and the greater chance of dying as a result.
This doesn't break the common understanding of death, yet still provides penalties and interesting gameplay choices. Death is ultimately in your control - you can choose to take a short cut but at very high risk. There won't be any way to die when landed on a regular city - you'll just make enough enemies that you'll be terrified to leave :)