I recently ran into this problem, and I’m not a parent.
My friend has a five year old, who I adore. I’m almost like an aunt to her. I take her out a lot - to McDonalds, up to Virginia City to tourist it up, or just to my house to play video games.
Well, between my parents house (they’re “Grandma KK and Grandpa Gonzo”), and McDonalds, there’s a cemetery that has obvious headstones. The little girl has never had to deal with death before, so she had no idea what they were.
“What’s with the stones, Tasha?”
Well, I’m not going to lie to her. “Those are headstones, Bella.”
Well, it went on from there - I explained to her that headstones mark the graves of people who have died. Being in the newspaper business I don’t use the phrase “passed on” very often, and that’s what has been used around her, so I had to explain the entire concept of death to her. I told her that everyone is alive and after they’re done living, they aren’t alive anymore - that’s death. She’s a quick one, though, so she got that. Then she was quiet for a while while she ate her hamburger.
“Tasha, are you going to die?” “Some day.” “When?” Then I had to explain to her that the problem with death is that you can’t predict when it’s going to happen. She didn’t like that, but she accepted it. Then she asked me if she was going to die. “Everyone has to die some day, Bella. Nothing lives forever.”
She was very upset for a while, not because she would die, but because she thought her mom would replace her with another kid, like a pet. I explained to her, calmly, that most likely by the time she died she wouldn’t be little anymore, and her mom would either not be able to have kids, or have died herself. Oddly, she wasn’t as upset at the concept of her mother dying as she was of her mother replacing her.
Well, she seemed to have handled it well so we dropped it. I warned my friend of what had happened but nothing weird went on, and we all pretty much figured Bella had put it out of her head.
Well, a few weeks later a soldier from our area died in Iraq - the first one from our area. I had to film some of the funeral procession and the counter-protest (the Phelps gang threatened to show up) for work, and my friend wanted to come - she and Bella wanted to stand across the place his service was going to be at with an American flag. So I brought them with me.
Well, we get to the actual cemetery because I’m filming the community response, and Bella bursts into tears.
“What’s wrong?” My friend asks her. Bella looks at me accusingly. “You didn’t tell me there would be stones!”
We’d been talking about how the soldier had died in Iraq, and had explained the concept of bravery to her, but she hadn’t grasped that he was really dead until she saw the headstones. 
I know it’s a long story, but there’s a point to it - kids are a lot smarter than people give them credit for. Your daughter isn’t much older than my friend’s daughter. She’ll be sad, and scared for a while - you’ll probably have to deal with a few sleepless nights. But she’ll get it, and she’ll pick herself up from it (with the help of yourself, of course).
While I’m at it, I’m very, very sorry for your loss. I hope ya’ll get through this alright.
~Tasha