This may be their way of preparing themselves, (or you) for the fact that she is getting older and closer to her death.
It could also be that they are simply saying this because that's what they have seen other people say when they are old.
It could also be that they are tying to be humorous.
If you are unsure why they say this then you should probably ask them why. Something simple like:
Why do you say that Nan?
Be prepared this will probably lead to a conversation about her(their) death.
If you are not prepared for a serious conversation you could stick to some responses that tell them how you feel. Such as:
No way, You'll make it to 101.
or
You better stick around. I'll miss you when your gone.
These responses effectively tell them "I love you and don't want you to die." with out being too serious. I'm sure you'll find you feel better as you express how you feel to them.
I recommend you ask them "why" sooner rather than later. From your question it sounds like the thought of their death disturbs you more than less. Having that talk with them should help you to sort out these hard feelings about their passing on. Or at least to start sorting out your feelings.