Having just had my beloved MIL pass away 2 weeks ago on Saturday past from pancreatic cancer, we decided to tell the kids that "Nanna was very sick with a very bad illness and unfortunately she died from it, so is no longer with us anymore. BUT she's now with grandad and they're both the brightest stars in the night sky". At 7yo DS cried as he kind-of understood that we wouldn't see nanna anymore, but DD at 6yo, didn't understand about death (MIL was the 1st death to happen to someone close, in the family, since she was born).
It was the hardest thing I've had to do in my whole life, and I've faced some very tough events in my life to say the least, including hearing that my best friend had died when I was 9yo.
Telling kids that a loved one has died, I suppose, depends on what age they are and how to put it in words that are age appropriate for them IYSWIM.
Personally speaking, I believe that death is just a transition stage between this life and the next. It's like your essence/spirit/soul is leaving one body and being prepared to live in the next one, if that makes sense.
Anyway, going to bed now, but i hope you can use something out of what I've posted.