Why isn't this script not deleting the parent, am I ment to add a loop?

This is because it only runs once, when the server first boots up. You should do:

while true do
    if script.Parent.Generator.Health <= 0 then
        script.Parent:Destroy()
    end
    wait()
end

edit: if someone sees this, the comment's reply is actually the more "correct" answer. try

script.Parent.Generator:GetPropertyChangedSignal("Health"):Connect(function()
    if script.Parent.Generator.Health <= 0 then
        script.Parent:Destroy()
    end
end)

this will run more efficiently