What is health insurance?

Health insurance is a form of protection. It is intended to protect you if you fall ill. The idea is that you sign up to a health insurance program with a health insurance provider. This program is called your health insurance policy. You pay a fixed amount of money on a regular basis, usually monthly, to your health insurance provider. Depending on your policy, you are more or less protected in case of illness. Your policy also affects the amount of money that you are required to pay. This amount is called your monthly premium. In exchange for these payments, when you need to pay for healthcare in the future, your provider will cover the cost of medical treatment.


Your health insurance policy can take different forms. It can cover just you or your whole family. Depending on what policy you choose, it can also cover different potential health costs. If you already have a health insurance policy, you should understand what your policy does and does not include. And there are important categories of treatment that you should know about:

  • In-patient treatments are treatments where your medical treatment takes place in a hospital or healthcare centre. This involves being hospitalised.
  • Day-patient treatments are treatments where you attend a hospital or a healthcare centre on a regular basis to deal with a problem. This does not involved being hospitalised.
  • Out-patient treatments are treatments that do not involve you being hospitalised. These include health investigations and medical check ups.

Your monthly premium will change depending on a range of factors. The main factors health insurance providers usually consider are age and medical history. Unfortunately, most policies will not cover pre-existing health conditions. For example, if you have a heart condition or epilepsy. So if you do start a health insurance program, you should make sure you understand how your individual policy works.


Health insurance is a safety guarantee for the future. If you do not have health insurance, then if you or one of your family fall seriously ill, you will be forced to pay for the treatment yourself. It is important to think about worst case scenarios. If the cost of medical treatment is really high, you may be forced into debt or poverty to pay for it. 6% of the world’s population falls into extreme poverty each year for this very reason. Health insurance allows you to anticipate these possible health costs. It avoids a worst case scenario.


Most people who have health insurance live in cities. Usually, they are government or private sector workers. In some African countries, these workers are required to have health insurance. In these countries, both employers and employees pay into their health insurance program. Workers in the informal sector (for example farmers or street sellers) make up 70% of the African population. Usually, these workers do not have health insurance. This is because informal sector workers must voluntarily join a health insurance program. This is understandable; many have never considered the benefits of health insurance. And some are unsure of their options for taking out health insurance. For example, in most African countries, insurance programs are private schemes.

Some countries – like Nigeria, Ghana and Uganda – do have public insurance schemes. The important thing to realise is that, increasingly, there are more and more options for taking out health insurance in different African countries. So even if you think a health insurance is not a realistic option for you at the moment, you should keep up to date with how the situation develops. And if you do have health insurance, the really key thing to remember is that when you do have a problem, you need to make sure you claim back the money you spend. This requires you to keep all your policy details and paperwork safe.



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