A 'pay as you go' style of health insurance policy is to be introduced in a bid to target young people and those who have dropped their policies.

The GloHealth plan allows people to buy a cheap 'cash plan' with the option to upgrade to full cover if they need hospital treatment.

The company will sell insurance covering GP visits, scans, tests and small sums for each night spent in hospital for as little as €395.

Two new cash plans are expected at the start of next month.

A two-year waiting period for hospital treatment for those who buy the cash plan will be waived, according to the Irish Independent.

It is understood that the cash plan will not cover the cost of hospital treatment and a consultant's fee for procedures done in hospital.

But customers will have the option to upgrade to full hospital plans without having to endure a waiting period.

Main rivals VHI, Laya and Aviva may copy this new scheme, which would give more options to their consumers.

Irish Independent personal finance editor Charlie Weston says customers can upgrade to a full hospital plan if necessary.

He told Newstalk Breakfast it will be a big lure for younger customers.