There is no biblical basis for that statement. Nowhere in the bible does it say that when we die, we become angels. Some may be able to dig up some evidence that when people die they go to heaven, but it does not say they become angels. Child deaths are very sad, and if there is a God, he is not a loving one if he takes a life just to make something he seems to feel he needs for extra help.
Why is it when children die their parents are told that God wanted another angel in heaven? Is that true? It is painful to tell grieving parents.
It's a bunch of crap. There is NO good reason to lose a child, whatsoever.
People are at such a loss for comforting words they are desperate for something comforting to say, so they go with whatever they hear someone else say.
The best is a hug and a sincere " sorry for your loss"
Trying to explain it, make it seem better is inappropriate , even if it's well meaning.
Individuals who respond that way, are usually attempting to soften the blow, for others.
But that is not a proper way to do it, no.
First, it draws on false realities that dishonor and trivialize God.
Second, it is not being straightforward and truthful, and does not address real issues.
For example: Parents who lose a child, do not have to fear that their child will grow up without them, since the child is now 'asleep' in a state of painless, timeless, peaceful 'rest'- death. And are awaiting to arise to meet their parents, again.
Under divine influence, the Apostle Paul put it this way:
"And I have hope toward God, which hope these men also look forward to, that there is going to be a resurrection of both the righteous and the unrighteous."- Acts 24:15
So parents will enjoy seeing their children, again. And likely, just as the child was, when they lost it; only in perfect health!
"But there are new heavens and a new earth that we are awaiting according to his promise, and in these righteousness is to dwell."- 2 Peter 3:13