I don't think it's a question of harm. As for what I'd do, that would depend on the situation. If I answered the question, I would offer what I think, making it clear that that's what I think. But if the child were young enough, and were asking me to find out "the simple truth" rather than what I thought, I would probably tell them it's a question better answered by his or her parents. Especially if it involved specifics like "Is my grandma in heaven?" or "Will I die?"
For the most part, what I tell my son is the truth, though surrounded what I consider to be an appropriate perspective.[1] I think moral authority is important as a parent, and I think that is more solidly gained by telling your child the truth, so that they know they can ask a question of you and you'll give them a straight, true answer, as best you can. Lying about your own foibles, as PG points out, is a "cheap" method of gaining moral authority that backfires badly.
[1] I think a lot of "lies" we tell children have to do with that surrounding perspective. When we lie to avoid discussing certain subjects, it's because a child is not yet equipped to understand enough of the surrounding perspective to make it worth trying to understand the "truth".