This study explores the growing burden of out-of-pocket (OOP) health expenditures and their implications for informal sector workers. Despite their economic significance, informal workers often lack adequate financial protection against healthcare costs. This study used thematic review methodology and adopted a deductive realist orientation for reviewing existing literature to analyse patterns and impacts of OOP expenditures on their livelihoods and vulnerabilities through the identification of five themes across the literature. The evidence highlights that there is a structural vulnerability loop in which informality breeds exclusion, exclusion breeds OOP dependence, and OOP dependence breeds the kind of financial catastrophe that reproduces poverty across generations. Evidence and discussion of the study indicate that there is an urgent need for inclusive policy interventions aimed at protecting informal workers and improving health equity.