I think if a child is old enough to ask about death, they are old enough to hear the answer. My grandad died when I was 7 and I wish I'd been allowed to the funeral but I wasn't. It was all hushed up although I would have preferred to discuss the death and ask questions.
Death is natural and happens to everyone and everything. Children experience pets dying and leaves falling off the trees and I think they can grasp the concept better than many people realise, obviously depending on their age and what has happened.