DS1 understood death (as in a final separation) before he was three, and it led to months of devastating meltdown hades. I only twigged too late that his grandparents had been taking him to the cemetery of fine days, talking care of family graves, and it never occurred to them that their grandson would spend evenings screaming in fear of dying and being buried, and being separated from us. I asked for advice on the mothering gifted forum, but none of it (be factual, be truthful, talk about the circle of life, or conversely, talk about heaven, talk about God, about the undying soul...) worked for him, he was simply having none of it. Didn't want to die, didn't want to be buried, did not want his soul to go to heaven ("how would that work if I am underground? I won't even be able to SEE!"). He insisted that he wanted to live in a house with both of us for ever and ever, and the only thing that somewhat worked was my reassuring him that I'd take care of it. Talk about lying to your kid with the best intentions!
The best advice I ever got was from ultramarina IIRRC,who said that she did not only firmly deny that any of their family was in danger of dying (on the grounds that if anyone did, they'd have bigger problems than whether that was a lie) but also simply forbade her kid to even worry about death, as that was an adult responsibility and not her child's concern.
Oddly, this worked for us.
