Background: High out-of-pocket (OOP) healthcare expenditure remains a major barrier to equitable healthcare access in Nigeria, exposing households to financial hardship. The Sokoto State Contributory Healthcare Management Agency (SOCHEMA) was established to enhance financial risk protection; however, successful implementation depends on civil servants’ readiness to participate. Aim: To assess awareness and knowledge of the Contributory Health Insurance Scheme (CHIS), willingness to participate, and healthcare financing patterns among civil servants in Sokoto State, Nigeria. Materials and Methods: A descriptive cross-sectional study was conducted among permanent civil servants across selected ministries using a two-stage sampling technique to recruit 250 participants. Data were collected using a pretested structured questionnaire and analyzed with IBM SPSS version 26. Descriptive statistics were used to summarize sociodemographic characteristics, awareness, knowledge, willingness to participate, and healthcare financing practices. Results: Of 250 questionnaires distributed, 239 were analyzed (response rate: 95.6%). Awareness of health insurance was high (96.2%); however, most respondents had poor knowledge of CHIS principles (72.4%), and only 32.2% were enrolled in any health insurance scheme. Willingness to enroll was high (82.8%), with 83.3% willing to enroll family members and a mean proposed monthly premium of ₦10,954. Out-of-pocket payment remained predominant (98.0%), with respondents reporting borrowing money (45.6%) or selling personal belongings (31.8%) to finance healthcare. Conclusion: Despite limited functional knowledge, civil servants demonstrated strong readiness for contributory health insurance. Strengthened health insurance education and accelerated implementation of SOCHEMA benefit packages are essential to translate willingness into enrollment and reduce OOP expenditure toward universal health coverage.