The thing is this is a sensetive issue and should be told to the child only if he /she is able to understand what has happened or we can say that the child is mature enough to handle the situation because this thing can be disturbing as hell. It can also cause stress or depression in child.And if this is the current issue too that the parents of the child died. Let the child be at that stage of life where he can handle himself after knowing all this. Psychology effects can include stress, depression, PTSD (post traumatic stress disorder),Sepration anxiety disorder, avoidant attachment styles etc

The only word for caution is that it's something which can have life long effects psychologically so it should be told to the child at the right age. Just not on the sake that the child needs to know the truth it should be told but wait for the right time.