Is this person a native U.S. English speaker? If so, is it possible that he asked "How's life?", not, "How is your life?" ? "How's life?" or "How's things?" or "How's life treating you?" are all pretty common slang for asking how someone is doing and what they have happening in their lives. I would simply answer " life is fantastic, thank you for asking." :)

En contestación a "¿Cómo estás? y "Cómo está tu vida? puedes responder por igual en ambos casos "estoy bien, gracias." In reply to "How are you? and "How's your life? you can answer equally in both cases "I'm fine, thank you."

For how is your life you can also answer "good thanks". I say this phrase regularly.

How is your life ? Your friend needs you to explain more than ( I'm fine ) . Sounds like he/she is close friend , so you may tell him a brief about your family status , your job , your girlfriend / boyfriend .. etc. Or you may cut it out with ( I'm fine ).

Hi Luz, It will depend on who this guy is. If he is important to you or not will depend on how you answer. you can either say, " My life is great , Thank you , see you later." or "My life is great , how about yours?" There is never a wrong answer just how you want to be perceived. Is he a friend or not? You decide.