I was going to tell you you're paying too much for the life insurance until you explained about your situation. It's worth shopping around if you have other options for the life insurance. You might be able to do better. But, you can probably be sure that the work plan will pay out in the event of your death; something from the States might or might not.
I was going to say the same thing.
Good point, but no we don't have kids. Hadn't thought if it that way before though.
Kids are why most of us have life insurance. If my one of us had died young, the other would've been able to support himself or herself -- BUT if we'd needed to support ourselves PLUS two kids PLUS saving, it would've been difficult. That's why we have life insurance, though now that our kids are almost grown, we'll probably drop it in the coming years.
Ask yourself this question: If you died today, what would your wife need to continue to live comfortably? Would she stay where you are, or would she come home to the US? How much would it cost for her to have a house and the things she'd need? And include a cushion so she wouldn't have to work during the months she'd be in transition. That's how much life insurance you need.
Same question: If she died, what would you need to go on? How would the loss of her salary change your life?
If you have kids in the future, you'd need to include the cost of services that would've been provided by the spouse who died (day care, cleaning service, whatever you think you'd need), and the cost of college education.